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Solving the Fixed Charge Problem by Ranking the Extreme Points

Published: 01 April 1968 Publication History

Abstract

<P>An algorithm for ranking the basic feasible solutions corresponding to a linear programming problem in increasing order of the linear objective function is described. An application of this algorithm for obtaining the minimal cost solution to a fixed charge problem is given. This algorithm can be applied in general to solve any fixed charge problem. However, the algorithm works efficiently when the problem is nondegenerate and the range in the values of the variable costs is large compared to the fixed charges. This algorithm can also be applied when the fixed charge part of the cost function is replaced by a concave function.</P>

References

[1]
W. M. HIESCH AND G. B. DANTZIG, "Notes on Linear Programming: Part XIX, The Fixed Charge Problem," Rand Research Memorandum No. 1383, Santa Monica, Calif., (1954).
[2]
W. M. HIESCH AND A. J. HOFFMAN, "Extreme Varieties, Concave Functions and the Fixed Charge Problem," Communications on Pure and Applied Mathematics, Vol. XIV, No. 3 (August 1961).
[3]
M. L. BALINSKI, "Fixed Cost Transportation Problems," Naval Res. Log. Quart. 8, No. 1 (1961).
[4]
H. W. KUHN AND W. J. BAUMOL, "An Approximate Algorithm for the Fixed Charges Transportation Problem," Naval Res. Log. Quart. 9 (1962).
[5]
A. S. MANNE, "Plant Location under Economies of Scale Decentralization and Computation," Management Sci. 11, No. 2 (1964).
[6]
D. GATE, The Theory of Linear Economic Models, McGraw-Hill, New York, 1960.

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Published In

cover image Operations Research
Operations Research  Volume 16, Issue 2
April 1968
233 pages

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INFORMS

Linthicum, MD, United States

Publication History

Published: 01 April 1968

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