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B&G, Construction is a commercial building company located in Tampa, Florida. The company has recently signed contracts to construct four buildings in different locations
B&G, Construction is a commercial building company located in Tampa, Florida. The company has recently signed contracts to construct four buildings in different locations throughout southern Florida. Each building project requires large amounts of cement to be delivered to the building sites. At B&G's request, three cement companies have submitted bids for supplying the cement for these jobs (i.e. deliver to project site). The following table summarizes the prices the three companies will charge per delivered ton of cement and the maximum amount of cement that each company can provide to B&G. Cost per Delivered Ton of Cement Project 2 $115 Project 3 $130 Max. Supply 525 Tons Company 1 Company 2 Company 3 Total Tons Project 1 $120 $100 $140 450 Tons Project 4 $125 $105 $165 $150 $110 450 Tons $95 550 Tons $14 300 Tons 275 Tons 350 Tons Needed B&G can contract with more than one supplier to meet the cement requirement for a given project. B&G wants to award contracts in a manner that can minimize the total cement procurement cost while meeting the demand for each project.
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