UPS Charges Per Shipment Northwest Southwest Upper Midwest Seattle Denver St. Louis Atlanta Philadelphia

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Demand Growth rate 80%

UPS Charges per shipment

Column1 Northwest Southwest Upper Midwest


Seattle $2.00 $2.50 $3.50
Denver $2.50 $2.50 $2.50
St. Louis $3.50 $3.50 $2.50
Atlanta $4.00 $4.00 $3.00
Philadelphia $4.50 $5.00 $3.00

Total Demand - 2007 320,000 200,000 160,000


Total Demand - 2008 576,000 360,000 288,000
Total Demand - 2009 1,036,800 648,000 518,400
Total Demand - 2010 1,866,240 1,166,400 933,120

Column1 Northwest Southwest Upper Midwest


Seattle 0 0 0
Denver 1,866,240 1,166,400 933,120
St. Louis 0 0 0
Atlanta 0 0 0
Philadelphia 0 0 0

Inventory Cost
Column1 Warehouse Cost Inventory Holding Cost Total Cost Warehouse
Seattle $0 $0 $0
Denver $2,020,000 $660,000 $2,680,000
St. Louis $1,020,000 $805,000 $1,825,000
Atlanta $0 $0 $0
Philadelphia $1,324,240 $381,249 $1,705,489

Total Demand 8,310,600


Total Supply 10,000,000

Total Warehouse Cost $6,210,489


Shipping Cost $5,487,230.00
Total Cost $11,697,719 Objective Function

Constraints
Supply Constraints
Seattle 0 <= 0
Denver 4,000,000 <= 4,000,000
St. Louis 2,000,000 <= 2,000,000
Atlanta 0 <= 0
Philadelphia 2,310,600 <= 4,000,000

Northwest Southwest Upper Midwest


Demand Constraints 1,866,240 1,166,400 933,120
= = =
1,866,240 1,166,400 933,120
per shipment Small Warehouse

Lower Midwest Northeast Southeast Fixed Cost (&/yr) Var. Cost ($/unit flow)
$4.00 $5.00 $5.50 $300,000 $0.20
$3.00 $4.00 $4.50 $250,000 $0.20
$2.50 $3.00 $3.50 $220,000 $0.20
$2.50 $3.00 $2.50 $220,000 $0.20
$3.50 $2.50 $4.00 $240,000 $0.20

220,000 350,000 175,000


396,000 630,000 315,000
712,800 1,134,000 567,000
1,283,040 2,041,200 1,020,600

Lower Midwest Northeast Southeast Small Warehouse Large Warehouse


0 0 0 0 0
34,240 0 0 0 1
1,248,800 0 751,200 1 0
0 0 0 0 0
0 2,041,200 269,400 0 1
Lower Midwest Northeast Southeast
1,283,040 2,041,200 1,020,600
= = =
1,283,040 2,041,200 1,020,600
Large Warehouse

Fixed Cost (&/yr)2 Var. Cost ($/unit flow)3


$500,000 $0.20
$420,000 $0.20
$375,000 $0.20
$375,000 $0.20
$400,000 $0.20

Total Capacity
0
4,000,000
2,000,000
0
4,000,000

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