A Problem of Assigning Suppliers to Plants

This paper examines a particular problem of assigning suppliers to plants. The problem is formulated as a fixed charge assignment problem where the objective is to find the minimum cost assignment of n sources (suppliers) to m sinks (item-plant demands). The problem is similar to the classical assignment problem, the key difference being that in addition to the cost of each assignment there is a fixed charge for each source which is a function of the subset of sinks assigned to the source. A mixed-integer linear programming formulation for the solution of the problem is presented. It is shown that this formulation is easily modified to solve transportation type problems. An example application is discussed and computational results are reported using the IBM mixed-integer programming package, MPSX370-MIP.