Given above information, what is the minimum total shipping cost achievable for this supply chain?


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PoyrazTech is a global distributor of electrical parts and components. Its customers are electronics
companies in the United States, including computer manufacturers and audio/ visual product
The company contracts to purchase components and parts from manufacturers in İstanbul, Türkiye and it
has them delivered to warehouses in three European ports, Gdansk, Hamburg, and Lisbon. The various
components and parts are loaded into containers based on demand from U.S. customers. Each port has a
limited fixed number of containers available each month. The containers are then shipped overseas by
container ships to the ports of Norfolk, Jacksonville, New Orleans, and Galveston. From these seaports,
the containers are typically coupled with trucks and hauled to inland ports in Front Royal (Virginia),
Kansas City, and Dallas. There are a fixed number of freight haulers available at each port each month.
These inland ports are sometimes called “freight villages,” or intermodal junctions, where the containers
are collected and transferred from one transport mode to another (i.e., from truck to rail or vice versa).
From the inland ports, the containers are transported to PoyrazTech’s distribution centers in Fargo, Fort
Wayne, Denver, Tucson, and Cleveland.
Following are the handling and shipping costs ($/container) between each of the embarkation and
destination points along this overseas supply chain.
U.S. Port
4. Norfolk 5. Jacksonville 6. New Orleans 7. Galveston
1. Gdansk $1,725 $1,800 $2,345 $2,700
2. Hamburg $1,825 $1,750 $1,945 $2,320
3. Lisbon $2,060 $2,175 $2,050 $2,475
U.S. Port
Inland Port
8. Dallas 9. Kansas City 10. Front Royal
4. Norfolk $825 $545 $320
5. Jacksonville $750 $325 $270
6. New Orleans $675 $605 $510
7. Galveston $450 $690 $1,050
Inland Port
Distribution Center
11. Tucson 12. Denver 13. Fort Wayne 14. Fargo 15. Cleveland
8. Dallas $450 $375 $565 $420 $660
9. Kansas City $880 $520 $450 $380 $960
10. Front Royal $130 $390 $375 $450 $710
Following are the available containers at each port:
European Port Available Containers
1. Gdansk 128
2. Hamburg 207
3. Lisbon 161
Following are the available intermodal capacity at each port:
U.S. Port Intermodal Capacity (Containers)
4. Norfolk 85
5. Jacksonville 110
6. New Orleans 100
7. Galveston 130
Inland Port Intermodal Capacity (Containers)
8. Dallas 170
9. Kansas City 240
10. Front Royal 140
Following are the demand at each distribution center:
Distribution Center Demand (Containers)
11. Tucson 93
12. Denver 78
13. Fort Wayne 62
14. Fargo 109
15. Cleveland 74
As a business planning manager, your task is to determine the optimal shipments from each point of
embarkation to each destination along this supply chain that will result in the minimum total shipping
Please see next page.
Question #25 Given above information, what is the minimum total shipping cost achievable for this
supply chain?
A) $1,067,560
B) $1,114,755
C) $1,126,505
D) $1,155,820
E) $1,162,375
F) $1,164,515
G) $1,176,830
H) $1,186,715
I) $1,198,225
J) $1,201,165
K) Infeasible solution: cannot be solved, one or more of the requirements cannot be
L) None of the above.

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