Wants to downsize by closing some stores

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Reference no: EM131128724

Twobucks Coffee Company currently operates 12 coffee shops in downtown Nashville. The company has been losing money and wants to downsize by closing some stores. Its policy has been to saturate the downtown area with stores so that one is virtually always in the sight of a potential or current customer. However, the company's new policy is to have enough stores so that each is within 5 minutes' walking distance of another store. The company would also like to have annual operating costs of no more than $900,000.

The following table shows the coffee shops within 5 minutes' walking distance of another shop and the average annual cost of the existing stores:

Store Location

Annual Average

Operating Cost ($) Stores Within 5 Minutes' Walking Distance

1. 3rd Street	456	3rd Street, Rose Street
2. 10th Street	207	10th Street, South Street, Broad Street
3. South Street	139	South Street, Hill Street, 10th Street
4. Mulberry Avenue	246	Mulberry Avenue, Beamer Boulevard
5. Rose Street	177	Rose Street, 3rd Street, Church Street
6. Wisham Avenue	212	Wisham Avenue, Broad Street, 23rd Avenue
7. Richmond Road	195	Richmond Road, Broad Street
8. Hill Street	170	Hill Street, South Street
9. 23rd Avenue	184	23rd Avenue, Wisham Avenue
10. Broad Street	163	Broad Street, Wisham Avenue, Richmond Road,
		10th Street
11. Church Street	225	Church Street, Rose Street, Beamer Boulevard
12. Beamer Boulevard	236	Beamer Boulevard, Mulberry Avenue, Church
		Street

Formulate and solve a linear programming model that will select the minimum number of stores the company will need to achieve its new policy objective.

Reference no: EM131128724

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