Network Optimization SCM/Ops Question

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PROTRAC is a manufacturer of diesel engines that has four assembly plants in Europe. They are located
in Leipzig (Germany), Nancy (France), Liege (Belgium) and Tilburg (Netherlands). The engines parts
come in kits from the United States for final assembly in Europe. The engines are shipped from the US to
three ports: in Amsterdam (Netherlands), Antwerp (Belgium) and Le Havre (France). Upon arrival at the
destination port, engines are shipped to the production plants.

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Demand at each Plant

Plant:      Leipzig     Nancy     Liege    Tilburg      Total

# engines
400           900         200        500         2000

PROTRAC negotiated contracts for a set maximum volume at each port:

Max Supply of Engines 

Port:      Amsterdam     Antwerp      Le Havre     Total

# engines     500              700              800          2000

The engines are transported by common carrier and charges are on a per-engine basis.

Cost to Transport an Engine from Port to Production Plant

  1. 1)  PROTRAC must decide how many engines to send from each harbor to each plant. Using solver in
    Excel determine the solution that would minimize cost for PROTRAC.

  2. 2)  Realizing that they may need more flexibility in their network, PROTRAC negotiated with a fourth
    port located in Rotterdam. The shipping costs from Rotterdam are included below. They can ship up
    to 300 engines through Rotterdam, on top of the capacity already available at of other ports. Would
    this solution save money for PROTRAC? If so, how much? If not, how much more expensive is it?

    Screen Shot 2015-04-27 at 7.23.02 PM.png

Conduct your computations in Excel using Solver. Please answer and question 1 and 2 into two separate
worksheets. Submit your Excel file.

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