Optimization of Multi-Contract Assignment to Contractors in Real Estate Projects

The assignments of projects involving multiple contracts to contractors involves a rigorous approach to determine the best number of contracts to assign. This requires an optimization process, especially when there is a set of projects to be initiated at the same time. The objective of this study is to formulate a mathematical program to optimize the assignment of contracts to contractors bidding for multiple contracts in a project. A general integer linear program is developed and applied to a real case study. The objective of the case study is to minimize the construction costs of a residential area composed of three villages. Several constraints are developed based on the restrictions on the project. These restrictions include the number of contracts available in the entire set of projects, the allowable number of contracts awarded in a single project per contractor, and the total number of contracts awarded to a single contractor in the set of all projects. In addition, constraints for the workload capacity of a contractor and the manhours capacity of a contractor are also considered. Subsequently the case study is solved using LINDO.