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Haier Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd. Rinso manufactures the washers at four...
3. Haier Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd. Rinso manufactures the washers at four locations: New York, Fort Worth, San Diego, and Minneapolis. Due to varying production and transportation costs, the profit Haier earns on each 1,000 units depends on where they were produced and where they were shipped. The following table gives the accounting department estimates of the dollar profit per unit. (Shipment will be made in lots of 1,000). The supply (capacity) and demand information is also given in the table.Given profit maximization as a criterion, Haier would like to determine how many motors should be produced at each plant and how many motors should be shipped from each plant to each destination.From/ToNewYorkFort WorthSan DiegoMinneapolisSupplyBoulder7118 13100,000 Macon201712 10100,000 Gary8181316150,000Requirements50,00070,000 60,00080,000