Contract Awards 1 |
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| A
large software company with 4 separate buildings in different states, has
offers from 3 different |
| floppy
disk manufacturers to supply their monthly need of new diskettes. To whom
should the |
| contracts be
awarded to minimize cost? |
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| Bids per 1000
diskettes |
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Building 1 |
Building 2 |
Building 3 |
Building 4 |
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| Manufacturer
1 |
$50 |
$45 |
$48 |
$52 |
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| Manufacturer
2 |
$52 |
$48 |
$51 |
$54 |
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| Manufacturer
3 |
$49 |
$51 |
$50 |
$52 |
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| Contracts awarded per 1000
diskettes |
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Building 1 |
Building 2 |
Building 3 |
Building 4 |
Total |
Available |
| Manufacturer
1 |
5 |
5 |
5 |
5 |
20 |
25 |
| Manufacturer
2 |
5 |
5 |
5 |
5 |
20 |
30 |
| Manufacturer
3 |
5 |
5 |
5 |
5 |
20 |
25 |
| Total |
15 |
15 |
15 |
15 |
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| Required |
20 |
25 |
15 |
15 |
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| Total Cost |
$3,010 |
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| Problem |
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| A
large software company with 4 different buildings in different states, needs
a large supply of |
| diskettes
on a monthly basis in each of those buildings. The company has 3 different
offers from |
| several floppy disk manufacturers. Which offer or
combination of offers should the company |
| accept in
order to minimize cost? |
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| Solution |
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| 1) The variables are the number of diskettes to buy from
each manufacturer. On worksheet |
| Award1 these
are given the name Contracts. |
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| 2) The contracts awarded need to meet the demand of the
software company and should not |
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number of diskettes available from each manufacturer. This gives |
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Contracts_given >= Contracts_required |
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Total_contracts <= Contracts_available |
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| Besides these
constraints, we also have the logical constraint |
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Contracts >= 0 via the Assume Non-Negative option |
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| 3) The objective is to minimize cost. In Award1 this cell is given the name
Total_Cost. |
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| Remarks |
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| Models
like the one discussed here are often used by the government. A common
example is the |
| contracts that are awarded to companies to supply fuel for
airbases. Normally, we have further |
| constraints on the bids from each supplier, such as a
minimum number of diskettes in this case. |
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the Award2 worksheet we will see how to handle such a constraint. |
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