During 2001, many European markets for mobile phones reached saturation. Because of this, mobile phone operators started to shift their focus from growth and market share to cutting costs. One way to do this is to reduce spending on international calls. These calls are routed through network operating companies called carriers. The carriers charge per call-minute for each destination, and they often use a discount on total business volume to price their services. A mobile phone operator must decide how to allocate destinations to carriers. V-Mobile, a mobile phone operator in Denmark, must make such a decision for a T-month planning horizon when it has C carriers to choose from, D destinations for its customers’ calls, and there are I price intervals for a typical carrier. (These intervals define a carrier’s discount structure.) The inputs include the following:A. The price per call-minute for destination d from carrier c in price interval i in month tB. The (forecasted) number of call-minutes for destination d in month tC. The lower and upper limits for carrier c in price interval iD. The lower and upper limits on capacity (number of call-minutes) for carrier c in month tE. The penalty per call-minute (to discourage poor-quality options) for carrier c to destination d in month t