A simple algorithm for the source-induced fixed-charge transportation problem

A simple algorithm for the source-induced fixed-charge transportation problem

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Article ID: iaor20062320
Country: United Kingdom
Volume: 55
Issue: 12
Start Page Number: 1275
End Page Number: 1280
Publication Date: Dec 2004
Journal: Journal of the Operational Research Society
Authors: ,
Keywords: programming: nonlinear
Abstract:

The fixed-charge problem is a non-linear programming problem of practical interest in business and industry. The sourced-induced fixed-charge transportation problem (SIFCTP) is a variation of the regular fixed-charge transportation problem (FCTP) in which a fixed cost is incurred for every supply point that is used in the solution, along with a variable cost that is proportional to the amount shipped. This problem is significantly different from the widely studied FCTP, where a fixed cost is incurred upon activation of a route. The introduction of the fixed costs in addition to variable costs results in the objective function being a step function. Therefore, fixed-charge problems are usually solved using sophisticated analytical or computer software. This paper deviates from that approach. It presents a computationally simple algorithm for the solution of source-induced fixed-charge problems. The results of empirical tests of the effectiveness of the proposed algorithm are presented.

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