Principles of Operations Management, 2/E
Tutorial 3
Data Base Applications
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DATABASE APPLICATION
DUFFY PHARMACEUTICALS
Duffy Pharmaceuticals holds a dominant position in the southeast United States, with over 800 discount retail outlets. These stores are served with twice-weekly deliveries from Duffy's 13 warehouses, which in turn are supplied daily by seven factories that manufacture about 70% of all of the chain's products.
It is clear to Jo Ann Duffy, VP operations, that an additional warehouse is desperately needed to handle growth and backlogs. Three cities -- Mobile, Tampa, and Huntsville -- are under final consideration. The following table illustrates the current and proposed factory/warehouse capacities/demands and shipping costs per average box of supplies.
- Based on shipping costs only, which city should be selected for the new warehouse?
- Ocala's capacity, a study shows, can increase to 500 boxes per day. Would this affect your decision in part (a)?
- Because of a new intrastate shipping agreement, rates for shipping from each factory in Florida to each warehouse in Florida drop by $1 per carton. How does this affect your answer to parts (a) and (b)?
| Warehouse |
Atlanta GA |
New Orleans, LA |
Jackson, MS |
Birmiming-
ham, AL |
Mont-
gomery, AL |
Raleigh, NC |
Ashville, NC |
Colum-
bia, SC |
Capacity (Cartons per day) |
| Factory |
| Valdosta, GA |
$3 |
$5 |
$4 |
$3 |
$4 |
$6 |
$8 |
$8 |
500 |
| Ocala, FL |
4 |
6 |
5 |
5 |
6 |
7 |
6 |
7 |
300 |
| Augusta, GA |
1 |
4 |
3 |
2 |
2 |
6 |
7 |
8 |
400 |
| Stuart, FL |
3 |
5 |
2 |
6 |
6 |
5 |
5 |
6 |
200 |
| Biloxi, MS |
4 |
1 |
4 |
3 |
3 |
8 |
9 |
10 |
600 |
| Starkville, MS |
3 |
3 |
1 |
2 |
2 |
6 |
5 |
6 |
400 |
| Durham, NC |
4 |
8 |
8 |
7 |
7 |
2 |
2 |
2 |
500 |
| Requirements (cartons/day) |
150 |
250 |
50 |
150 |
100 |
150 |
150 |
300 |
|
| Warehouse |
Orlando, FL |
Miami, FL |
Jackson-
ville, FL |
Wilming-
ton, NC |
Charlotte, NC |
Mobile, AL |
Tampa, FL |
Hunts-
ville, AL |
Capacity (Cartons Per Day) |
| Factory |
| Valdosta, GA |
$9 |
$10 |
$8 |
$8 |
$11 |
$4 |
$6 |
$3 |
500 |
| Ocala, FL |
2 |
3 |
2 |
6 |
7 |
5 |
2 |
5 |
300 |
| Augusta, GA |
7 |
9 |
6 |
8 |
9 |
3 |
5 |
2 |
400 |
| Stuart, FL |
2 |
2 |
3 |
5 |
5 |
6 |
3 |
5 |
200 |
| Biloxi, MS |
7 |
13 |
9 |
8 |
8 |
2 |
6 |
3 |
600 |
| Starkville, MS |
6 |
8 |
7 |
7 |
8 |
3 |
6 |
2 |
400 |
| Durham, NC |
6 |
8 |
5 |
1 |
2 |
8 |
7 |
8 |
500 |
| Requirements (cartons/day) |
250 |
300 |
300 |
100 |
150 |
300 |
300 |
300 |
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