In the Green Grass shipping model, we assumed that the plants are already built, so that in each month, the only decision is whether to open particular plants (at a monthly fixed cost). Consider instead a general location-shipping model of this type where the plants are not yet built. The company must first decide where to build plants, then how much to produce at the plants, and finally which customers to service from them. The problem is that the building costs are one-time costs, whereas other costs are monthly. How can you reconcile these two types of costs? What should you use as an objective to minimize? Illustrate your procedure on the Green Grass example, where the plant opening fixed costs are ignored—we assume that all plants that are built will remain open—but building costs (which you can make up) are given.
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