Hot and Cold is a European appliance company serving four markets: Scandinavia, Eastern Europe, Central Europe, and the United Kingdom (UK).
There are three existing plants: one each in France, Germany, and Finland. The data shows how much it costs in Euros to serve each market from each plant (in the case of the UK, based on today’s exchange rate; ignore the possibility that exchange rates might change.
Solve the network distribution problem for Hot and Cold. Determine which plant(s) should serve each market and what is the total cost. Hint: follow the examples we did in class.
Flag question: Question 1Question 14 pts
What is the total annual cost in millions of Euros of the distribution plan?
Flag question: Question 2Question 24 pts
Which of the following is true about the solution? Check ALL that apply.
Make a copy of Worksheet 1, label it Worksheet 2 (DO NOT DELETE completed Worksheet 1!!).
Your manager likes your work in Worksheet 1, but realizes there is a pressing matter related to “Brexit” to consider. As you may know, the UK decided to leave the European Union in part over disputes around trade. Unfortunately, Boris Johnson is threatening to impose a tariffof EUR 30 per unit on appliances made outside the UK and sold in the UK. Note: the tariff doesn’t apply to appliances exported from the UK, or appliances made and sold in the UK. Modify Worksheet 2 to account for the tariff.
Flag question: Question 3Question 34 pts
If the tariff is put in place, how should Hot and Cold respond? Check ALL that apply.
Flag question: Question 4Question 44 pts
How much would the proposed tariffs cost Hot and Cold in millions of Euro per year? Hint: compare worksheets 1 and 2.
Make another copy of Worksheet 1 and label it Worksheet 3 (Note: do not copy worksheet 2!! do not delete worksheet 1 or 2!!), to solve the following problem.
Flag question: Question 5Question 54 pts
Management is planning a marketing campaign to grow demand in Eastern Europe. Assuming that Hot and Cold properly re-optimizes its production and distribution plan to account for the growth, If demand in Eastern Europe grows by 30% next year, how much will it cost the company to meet the additional demand?
Give your answer in millions of Euros.
If the increased demand would not cost Hot and Cold anything, please enter 0 (and show this in your Worksheet 3).
Hint: model the production plan under the increased demand in Worksheet 3, then compare the solution to Worksheet 1.