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

Red  correct 

 
Blue  

 
Green  

 
What is the total expected weekly cost for this solution?

To minimize the total expected costs, we need to select the carrier with the lowest cost per TEU per kilometer for each origin and then calculate the total cost for transporting the TEUs from each plant to Ningbo.

Here is the breakdown:

### 1. Chongqing (19 TEUs, 1750 km)
- Red: ¥7.50/TEU/km
- Blue: ¥9.00/TEU/km
- Green: ¥8.60/TEU/km

**Lowest cost carrier:** Red (¥7.50/TEU/km)
- Total cost for Chongqing: \( 19 \times 1750 \times 7.50 = ¥249,375 \)

### 2. Beijing (20 TEUs, 1400 km)
- Red: ¥6.40/TEU/km
- Blue: ¥8.30/TEU/km
- Green: ¥8.00/TEU/km

**Lowest cost carrier:** Red (¥6.40/TEU/km)
- Total cost for Beijing: \( 20 \times 1400 \times 6.40 = ¥179,200 \)

### 3. Nanjing (28 TEUs, 450 km)
- Red: ¥8.80/TEU/km
- Blue: ¥8.90/TEU/km
- Green: ¥9.20/TEU/km

**Lowest cost carrier:** Red (¥8.80/TEU/km)
- Total cost for Nanjing: \( 28 \times 450 \times 8.80 = ¥110,880 \)

### 4. Shijiazhuang (15 TEUs, 1300 km)
- Red: ¥7.80/TEU/km
- Blue: ¥9.20/TEU/km
- Green: ¥8.40/TEU/km

**Lowest cost carrier:** Red (¥7.80/TEU/km)
- Total cost for Shijiazhuang: \( 15 \times 1300 \times 7.80 = ¥152,100 \)

### Total Expected Weekly Cost:
\[
\text{Total cost} = ¥249,375 + ¥179,200 + ¥110,880 + ¥152,100 = ¥691,555
\]

### TEUs Awarded to Each Carrier:
- **Red**: All TEUs (82 TEUs in total)

### Summary:
- **Total expected weekly cost**: ¥691,555

Would you like to explore more scenarios or further details?

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1. What are the risks of awarding all TEUs to a single carrier?
2. How would the total cost change if another carrier was chosen for one or more origins?
3. What considerations should be made in case Red cannot fulfill all the demands?
4. How can you evaluate the potential impact of changes in transportation costs over time?
5. What is the role of contract negotiation after the auction is completed?
6. What other strategies could be used to ensure cost-effectiveness and reliability in logistics?
7. How might fuel surcharges affect the total cost?
8. What are the potential benefits of diversifying carriers?

**Tip:** Always consider the potential risks of relying on a single carrier, such as capacity issues or service disruptions.

Discover how to minimize total expected costs by allocating TEUs to carriers based on cost per TEU per kilometer. This problem involves optimization techniques in logistics, specifically linear programming methods. Explore detailed calculations and strategic decisions for cost-effective transport logistics.

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