Case study 1: 407 ETR Highway Extension
1- How can the 407 partnership board improve its procurement process?
• What are the challenges for the 407 partnership board?
• Evaluate the current recommendation of the procurement team. Can it be
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improved? If so, how?
2- Develop mathematical programming models to help Planelles make a decision.
• Option 1: Build a LP model with no-discount option (i.e., the cost will be 100
percent for supplier 3).
• Option 2: Build a different model that also decides whether the discount option
for supplier 3 will be used or not.
• In each model, identify the key components of the aggregate sourcing problem,
including the objective, decision variables, and constraints.
3- Are the capacities of the suppliers important? Which ones are more important? How great a saving might the partnership obtain if there were no capacity restrictions?
4- Which suppliers would you choose to try to negotiate with to increase their capacity?
5- Which supplier offers the lowest cost overall?
6- Is the 3 percent discount important? If so, can you quantify the benefit?
7- Is the 50 percent rule important? If so, can you quantify it?
8- What is your recommendation to Planelles? What would you recommend to the board for the procurement process going forward?
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