Transportation Problem with Contractor Selection

In this article we address the transportation logistic problem of a company which has a number of warehouses and has to supply to a number of customers (retailer outlets). The problem facing the decision maker is to select contractors to transport the items from warehouses to retailer outlets at the minimum possible costs. Only one contractor must be given a contract to transport items from a particular warehouse. However, all the contractors can provide transportation facilities at all the warehouses if required by the company. We formulate a math model to address this problem and solve it using a math programming software. The following selections deal with the model formulation and the solution.