| Abstract: | ABSTRACT A large manufacturer of telephone directories purchases about 100,000 tons of paper annually from several paper mills on the basis of competitive bids. The awards are subject to several constraints. The principal company constraint is that the paper must be purchased from at least three different suppliers. The principal external constraints are: 1) one large paper mill requires that if contracted to sell the company more than 50,000 tons of paper, it must be enabled to schedule production over the entire year; 2) the price of some bidders is based on the condition that their award must exceed a stipulated figure. The paper shows that an optimal purchasing program corresponds to the solution of a model which, but for a few constraints, is a linear programming formulation with special structure. The complete model is solved by first transforming it into an almost transportation type problem and then applying several well-known L.P. techniques. |
