Yeager National Bank Case Solution

Objective Function: Minimization

(Minimization of number of days)

4 Locations of Lock-box

1.       Phoenix

2.       Salt Lake City

3.       Atlanta

4.       Boston

Assignment model has created a dummy location of lock-box because locations of lock-box were less then customer zone.

5 Customer Zone

1.       Northwest

2.       Southwest

3.       Central

4.       Northwest

5.       Southeast

Assignment model has been used to solve the case.

 Assignment Model

Solution

Assignment List

 

(Amount in $1000s)

This assignment list shows the job assigned to cost

Phoenix is assigned to southwest at $180

Salt Lake City is assigned to northwest at $160

Atlanta is assigned to southeast at $200

Boston is assigned to northeast at $360

Total cost is $900

Profit

Phoenix is assigned to southwest at profit of $27               (180*15 %=27)

Salt Lake City is assigned to northwest at profit of $24     (160*15 %=24)

Atlanta is assigned to southeast at profit of $30                 (200*15 %=30)

Boston is assigned to northeast at profit of $54                 (360*15 %=54)

Total profit is $135                                                           (900*15 %=135)

Managerial Report

Optimal Cost (z) $ 900 (amounts in $1000s)

·         Central = slack, it means Yeager National Bank performing no activity in central customer zone.

·         Southwest ,Yeager National Bank  will locate the lock-box in Phoenix as it is giving minimum days  and minimum cost

·         Northwest, Yeager National Bank will locate the lock-box in Salt Lake City because it is giving minimum days and cheaper cost.

·         Southeast, Yeager National Bank will locate the lock-box in Atlanta because it is giving minimum days and minimum cost.

·         Northeast, Yeager National Bank will locate its lock-box in Boston because it is giving minimum days and minimum cost.