Bottling plants in California

Company QAW has two bottling plants in California and Alaska that can produce 10000 and 6000 bottles of mineral water per day, respectively. The company produces the mineral water in three bottle sizes namely 500mL, 1L and 1.5L where each size of bottle is procured from a different supplier. Both plants are able to handle all bottle sizes. The suppliers are able to deliver 4000 bottles of size 500mL, 5000 bottles of size 1L and 6000 bottles of size 1.5L, respectively.

The cost that the company needs to bear to receive each bottle: (i) 500mL: California: 50 cents, Alaska: 30 cents. (ii) 1L: California: 40 cents. Alaska: 40 cents. (iii) 1.5L: California: 20 cents, Alaska: 50 cents. (a) The company has hired you to report the optimal production plan that can minimize the total cost. You are required to use the North-West Corner Rule as part of the solution method. (b) The supplier of 500mL bottles has indicated that they may change the delivery fee for California. Identify the range of values that would be acceptable for this fee provided that the company wants the current basis to remain optimal.

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