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Case Problem: Stateline Shipping and Transport Company
Rachel is considering using each of the plant and waste disposal sites as intermediate shipping points. Now, there is a possibility to reduce the transportation coat by utilizing alternative routes. For example, as per the given cost table, cost to transport from Kingsport to Duras is $17. Instead of this route, if we transport first from Kingsport to Macon and then from Macon to Duras the cost is only $15 (4 + 11). We have to recalculate the transportation cost considering all possibilities. For this, we are given transportation costs from various plants to plants and sites to sites in attached MS Excel Spreadsheet.
Solve the model you developed in #3 (above) and clearly describe the results. Plants were labeled 1 through 6, waste facilities labeled A through C. Problem was set up in 2 Stages: Stage 1 = shipment from plants to intermediate/final location; Stage 2 = shipment from intermediate to final location.
Objective function: Solver add-on solution in MS Excel yielded the following results: 19 bbl of wastes shipped from Kingsport to Macon to Duras, 16 bbl of wastes shipped from Kingsport to Los Canos, 26 bbl of wastes shipped from Danville to Los Canos, 42 bbl of wastes shipped from Macon to Duras, 17 bbl of wastes shipped from Selma to Macon to Duras, 36 bbl of wastes shipped from Selma to Columbus to Whitewater, 29 bbl of wastes shipped from Columbus to Whitewater, 38 bbl of wastes shipped from Allentown to Danville to Los Canos.
The results show that Rachel can save some dollars per week. Rachel can save by using a few routes that involve intermediate points.
An example would be 17 bbl of wastes shipped from Selma to Macon to Duras. The cost analysis fails to consider the actual physical risks of dealing with potentially hazardous industrial waste if there is spillage. The dropping off and picking up of waste at intermediate sites may cause a time delay, which may impact the risk of the waste becoming a potential hazard. Also, the additional handling of the waste associated with loading and unloading at intermediate sites may cause increased risk of a problem. Even though Polychem has agreed to handle the wastes at no additional cost, there may be additional risk that has not been evaluated.
Date: Oct 17,2021