OIDD 101 Lecture Notes - Lecture 10: Integer Programming, Binary Constraint, Net Present Value
8 Apr 2015
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Opim 101 - operations & information management - lecture 10: integer models. In many settings, you can"t allow some/all decision variables to take fractional values. Ex) can"t build fractional number of aircraft. Ex) must either keep a service facility open or closed. Integer variable = variable that can only take integer values. Binary variable = variable that can only take 0 or 1 values. An integer model = lp model where some or all decision variables are integer. Ex) capital budgeting: a manufacturing company, abc inc. , is considering opening new plants at the following 8 locations: philadelphia, chicago, boston, phoenix, san. Abc has a capital budget of million. Net present values (proxy for profitability of plants) and capital requirements for plants are: To make objective variables binary in solver, introduce a new constraint on the objective variable cells that reads bin .
