From the course: Excel Supply Chain Analysis: Solving Transportation Problems
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Describe fixed cost and facility opening problems - Microsoft Excel Tutorial
From the course: Excel Supply Chain Analysis: Solving Transportation Problems
Describe fixed cost and facility opening problems
- [Instructor] In previous chapters, we looked at problems where we needed to use all of the resources available to us. In this chapter, we will look at facility open and close problems. And that's where we might not need to use all the resources at our disposal. We could, for example, leave a distribution closed rather than pay the fixed cost of opening it. There are several elements to a facility open and close problem. As I mentioned, our capacity is such that we might not need to use all of our resources. And, also, that facilities that are used incur a fixed cost. So, for example, it might cost you $10,000 to operate a warehouse for a month. As with our other problems, we're assuming demand is given and doesn't change, so it is deterministic. And also, that there is a known distance between each source and destination. That means that our cost will also be deterministic. And, of course, the goal is to find the…
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