Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 33

In Problem, National Foods would like to know what the effect would be on the optimal solution and the company's decision regarding its shipping if it negotiates with its suppliers in Sacramento, Jacksonville, and Ocala to increase their capacity to 25 tons per month. What would be the effect of negotiating instead with its suppliers at San Antonio and Montgomery to increase their capacity to 25 tons each
Problem
National Foods Company has five plants where it processes and packages fruits and vegetables. It has suppliers in six cities in California, Texas, Alabama, and Florida. The company owns and operates its own trucking system for transporting fruits and vegetables from its suppliers to its plants. However, it is now considering outsourcing all its shipping to outside trucking firms and getting rid of its own trucks. It currently spends $245,000 per month to operate its own trucking system. It has determined monthly shipping costs (in thousands of dollars per ton) of using outside shippers from each of its suppliers to each of its plants, as shown in the following table:
Should National Foods continue to operate its own shipping network or sell its trucks and outsource its shipping to independent trucking firms