Problem 9-7 Offhaus Manufacturing produces office supplies, but outsources the d
ID: 465383 • Letter: P
Question
Problem 9-7
Offhaus Manufacturing produces office supplies, but outsources the delivery of its products to third-party carriers. Offhaus ships to twenty cities from its Dayton, Ohio manufacturing facility and has asked a variety of carriers to bid on its business. Seven carriers have responded with bids. The resulting bids (in dollars per truckload) are shown in the table below. For example, the table shows that Carrier 1 bid on the business to cities 11-20. The right side of the table provides the number of truckloads scheduled for each destination in the next quarter.
Click on the webfile logo to reference the data.
Because dealing with too many carriers can be a hassle, Offhaus would like to limit the number of carriers it uses to three. Also, for customer relationship reasons, Offhaus 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).
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
(a) Develop and solve a model that will yield the three selected carriers and the city-carrier assignments so as to minimize the cost of shipping. Choose the correct optimal solution. (i) Carrier 2: Assigned cities 1,3,4,5,6, and 9 Carrier 5: Assigned city 3 Carrier 7: Assigned city 7,8,and 10-20 (ii) Carrier 2: Assigned cities 2,3,4,5,6, and 9 Carrier 5: Assigned cities 7,8,and 10-20 Carrier 6: Assigned city 1 Total Cost: $435,404 Total Cost: $436,512 (iii) Carrier 5: Assigned cities 1,2, 6, 7, 8 and 10-20 Carrier 6: Assigned cities 3,4, and 5 Carrier 7: Assigned city 9 (iv) Carrier 1: Assigned cities 11and 12 Carrier 3: Assigned cities 13-20 Carrier 7: Assigned cities 1-10 Total Cost: $475,542 Total Cost: $385,519 - Select your answer -Option (i)Option (ii)Option (iii)Option (iv)Item 1 (b) Offhaus is not sure if there is the correct number of carriers to select. Run the model you developed in part a for allowable carriers varying from 1 up to 7. Based on results, how many carriers would you recommend and why? No of carriers recommended:The input in the box below will not be graded, but may be reviewed and considered by your instructor.
ScreenShot below is DATA in EXCEL
Explanation / Answer
a) The optimal solution which has three carriers and 20 cities and which minimizes the cost of the shipping is
Carrier 1 : Assigned cities 11 & 12
Carrier 3 : Assigned cities 13 to 20
Carrier 7 : Assigned cities 1 to 10
The cost of the project is $385,519
This is the optimal solution.
b) Number of carriers recommended are - 3
Three carriers are sufficient for covering all the 20 cities.
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