Question

The Shiny Star Clothing company has launched a new clothing line (SKU number KT245) for export out of the port of Ningbo. You have been tasked with securing the trucking services to handle all of the container freight moves (TEUs) from your four plants to the port of Ningbo. Your plants are located in Chongqing, Beijing, Nanjing, and Shijiazhuang.

The lane information is as follows:

Origin	Distance to Ningbo (Km)	Expected Weekly Demand (TEUs)
Chongqing	1750	16
Beijing	1400	20
Nanjing	450	25
Shijiazhuang	1300	14

Currently Shiny Star Clothing has no contracts of any sort with trucking companies to the Ningbo location. You have decided to run an auction and to only invite your top 3 carriers (Red, Blue, and Green) to participate.

Suppose that the carriers have submitted the following bids in Yuan Renminbi per TEU per km.

Origin	Red	Blue	Green
Chongqing	7.50	9.00	8.60
Beijing	6.40	8.30	8.00
Nanjing	8.80	8.90	9.20
Shijiazhuang	7.80	9.20	8.40

Based on this data, how many TEUs will you award to each carrier in order to minimize total expected costs?

Red =

Blue =

Green =

What is the total expected weekly cost for this solution?

Answer 1

Costs In order to mininize total expected TEU's award to each caier ore - 75 Red I6 + 20 + 25 + I4 Blue Gireen TEU Per Km As in the aucton red has low Value (Pcr even origin. (i.e, As red submtHed low bid 'vahue) To tal expected wee CDSt As we chose red a,10,000 chongyin Beifing anfing shijia chwany = 7-5 X \6 x 1150 9,200 6.L 20 X I400- 99,000 = g.R X 28 X 450 - y,0 7.8 x |4 X 1300 [마이, G,30,160

Costs In order to mininize total expected TEU's award to each caier ore - 75 Red I6 + 20 + 25 + I4 Blue Gireen TEU Per Km As in the aucton red has low Value (Pcr even origin. (i.e, As red submtHed low bid 'vahue) To tal expected wee CDSt As we chose red a,10,000 chongyin Beifing anfing shijia chwany = 7-5 X \6 x 1150 9,200 6.L 20 X I400- 99,000 = g.R X 28 X 450 - y,0 7.8 x |4 X 1300 [마이, G,30,160