Develop a model yield the three selected carriers


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Q: Office Sharjah Manufacturing (OSM) produces office supplies but outsources the delivery of its products to third-party carriers. OSM ships to 20 retailers in the GCC from its manufacturing facility and has asked a variety of carriers to bid on its business. Seven carriers have responded with bids. The resulting bids (in AED per truckload) are shown in the tables below. Because dealing with too many carriers can be burdensome, OSM would like to limit the number of carriers it uses to three. Also, for customer relationship reasons, OSM wants each city to be assigned to only one carrier (that is, there is no splitting of the demand to a given city across carriers).

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Develop a model that will yield the three selected carriers and the city-carrier assignments that minimize the cost of shipping. Solve the model using Lingo and report the solution.

OSM is not sure whether three is the correct number of carriers to select. Run the model you developed for allowable carriers varying from 1 up to 7. Based on your results, how many carriers would you recommend and why?

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Operation Management: Develop a model yield the three selected carriers
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