Anbessa City Bus Service Enterprise (ACBSE) is the only public enterprise that provides transport services in the city of Addis Ababa. The enterprise uses a fixed bus schedule system to serve passengers in more than 125 routes. However, the current bus assignment and scheduling system are becoming a challenge in the company’s operational performances. The objective of this paper is to develop an optimum bus assignment method using linear programming (LP). After a thorough analysis of the existing bus scheduling system, the LP model is developed and used to determine the optimal number of busses for each route in four shifts. The output of the LP-model is then validated with the performances of the existing systems. The findings of the study showed that the new model reveals better performances on the operating costs, bus utilization, and trips and distance covered compared with the existing scheduling system. The bus utilization is improved by the new system and cut costs on the one hand and improves the service quality to passengers on the other hand. The authors recommended the enterprise to adopt the new bus assignment system so that busses can be assigned based on the demand distribution of passengers for each route at a given shift.