Allocation of resources according to a fractional objective

The problem considered is that of the allocation of resources to activities according to a fractional measure given by the ratio of “return” to “cost”. The return is the sum of returns from the activities, each activity being described by a concave return function. There is a positive fixed cost and...

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Bibliographic Details
Published in:European journal of operational research 1978-01, Vol.2 (2), p.116-124
Main Author: Mjelde, K.M.
Format: Article
Language:English
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Summary:The problem considered is that of the allocation of resources to activities according to a fractional measure given by the ratio of “return” to “cost”. The return is the sum of returns from the activities, each activity being described by a concave return function. There is a positive fixed cost and a variable cost that depend linearly on the allocations. Properties related to the uniqueness of optimal solutions and the number of non-zero allocations are derived. A method is given by which any set of feasible allocations can be used to derive an upper bound of the optimal value of the objective function: optimal and almost-optimal allocations can be recognized. Allocations can be generated by a fast incremental method that is described. The method utilizes data in sequential order and can be used to solve large problems.
ISSN:0377-2217
1872-6860
DOI:10.1016/0377-2217(78)90107-8