Pauline’s, the Queen of Big Screen, is a chain of electronics stores specializing in big-screen televisions. In late January, the week before the Super Bowl, Pauline’s always has a big sale. This January, two of its seven stores have excess supply of Mitsubishi 50-inch televisions, and the other five are requesting additional shipments. The word from Mitsubishi is that the orders will not arrive until after the Super Bowl. Hence, Pauline’s has decided to redistribute some of its current inventory among its seven stores.
a. What assumption about the individual transportation costs in the standard transportation model will most likely be violated in this situation?
b. The network shown in the figure for problem 8 shows the stores with excess demand (the Downtown store and Harbor Boulevard store), the stores requesting additional televisions (stores at Taylor Mall, Ocean View Center, Edison Heights, Cypress Hill, and Regents Street), and the mileages between them. The network also shows the amount of excess supply, the demands, and the distances between those stores with supply and those with demand.
Transportation costs are figured at $0.50 per mile per television. This cost must be added to the fixed labor charges for loading and unloading, given in the following table.
How should the stock of 50-inch Mitsubishi television sets be redistributed prior to Super Bowl Sunday?
c. If each store requesting additional stock must receive at least 50% of its request, how should the stock of 50-inch Mitsubishi television sets be redistributed prior to Super Bowl Sunday?
d. What would happen if Pauline’s insisted that every store requesting additional stock receive at least 75% of its request?