A CASE STUDY ON ASSIGNING

CONTRACTS TO BIDDERS
THROUGH ASSIGNMENT

Title
METHOD AND SYSTEMATIC
EVALUATION OF BIDS FROM
COMPETING FIRMS
 STATEMENT OF THE
PROBLEM

Statement

Problem
• What is the optimal assignment that will result in

of the
minimum total cost?
• What is the associated minimum Optimal Cost?
• What Table gives optimal assignment policy?
TOPIC
Using Operations Research and Assignment
Method to Assign Contracts to

Background
Bidders/Competing.

Topic and
Statement

Location
Problem
of the
BACKGROUND OF LOCATION
Dynamic Plastics, Inc. established in 1977 is a
manufacturer and marketer of plastic
packaging products.
Headquartered in Evansville, Indiana, it has over
50 facilities across the globe and more than
10,000 employees. The company is the 9th

Background
Location
largest Indiana headquartered company in
Fortune Magazine’s ranking.
The company has three core divisions: (1) Health,
Hygiene, and Specialties; (2) Consumer
Packaging; and (3) Engineered Materials.
Dynamic Plastics, Inc. claims to be the world's
leader in manufactured aerosol caps, and also

Background
provides one of the most extensive lines of

Location
container products. Dynamic Plastics, Inc. has
more than 200 clients, including firms as
Sherwin-Williams, Borden, McDonald's, Burger
King, Gillette, Procter & Gamble, Coca-Cola,
Wal-Mart, Kmart, and Hershey Foods.
 SITUATION
The company has just received a very large
contract and plans to subcontract part of the job.
The company has solicited bids for 6 subcontracts

Situation
from 3 firms. Each job is sufficiently large and
any firm can take only one job. The table below
shows the bids as well as the cost estimates (in US
dollars) for doing the job internally. Not more
than three jobs can be performed internally.
 Solution
Find the optimal assignment that will result in minimum total cost.
 1 2 3 4 5 6

1
44 67 41 53 48 64

Solution
2
46 69 40 45 45 68
3
43 73 35 51 44 62
I1
50 65 35 50 46 63
I2
50 65 35 50 46 63
I3
50 65 35 50 46 63
 Row Reduction
1 2 3 4 5 6

1
3 26 0 12 7 23

Solution
2
6 29 0 5 5 28
3
6 36 0 14 7 25
I1
15 30 0 15 11 28
I2
15 30 0 15 11 28
I3
15 30 0 15 11 28
 Column Reduction
1 2 3 4 5 6

1
0 0 0 7 2 0

Solution
2
3 3 0 0 0 5
3
3 10 0 9 2 2
I1
12 4 0 10 6 5
I2
12 4 0 10 6 5
I3
12 4 0 10 6 5
 Table (a)
1 2 3 4 5 6

1
0 0 0 7 2 0

Solution
Solution

2
3 3 0 0 0 5
3
3 10 0 9 2 2
I1
12 4 0 10 6 5
I2
12 4 0 10 6 5
I3
12 4 0 10 6 5
 Table (b)
1 2 3 4 5 6

1
0 0 2 7 2 0

Solution
Solution

2
3 3 2 0 0 5
3
1 8 0 7 0 0
I1
10 2 0 8 4 3
I2
10 2 0 8 4 3
I3
10 2 0 8 4 3
 Table (c)
1 2 3 4 5 6

1
0 0 4 7 2 0

Solution
Solution

2
3 3 4 0 0 5
3
1 8 2 7 0 0
I1
8 0 0 6 2 1
I2
8 0 0 6 2 1
I3
8 0 0 6 2 1
 Table (d)
1 2 3 4 5 6

1
0 0 5 7 2 0

Solution
Solution

2
3 3 5 0 0 5
3
1 8 3 7 0 0
I1
7 0 0 5 1 0
I2
7 0 0 5 1 0
I3
7 0 0 5 1 0
 Table (d)
1 2 3 4 5 6

1
0 0 5 7 2 0

Solution
Solution

2
3 3 5 0 0 5
3
1 8 3 7 0 0
I1
7 0 0 5 1 0
I2
7 0 0 5 1 0
I3
7 0 0 5 1 0

The associated minimum optimal cost is (44+45+44+65+35+63)= 296 dollars

BENEFITS
• Using Assignment Method gives optimal

Solution
assignment that will result in minimum
total cost and will be able to determine
associated minimum Optimal Cost.
• The company will be able to Save
Money.
• Optimal Allocation of Project Budget.
• To Avoid Inefficacies
• Provides a Good Working Condition to the

Solution
Employees of the Firm resulting to efficiency.
• To Allocate jobs according to Mastery of
each respective Firms.
Thank you!!

The End