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This algorithm arose out of the necessity to handle setup effects in production scheduling, hence - inevitably - the acronym, "setup algorithm". However, the technique can be applied to a number of prevalent problems such as (certain) capital budgeting, media selection, plant/warehouse location, seasonal manpower leveling, lockbox, and others. The general model employs zero-one fixed cost (or setup) variables each of which dominates a set of continuous variables. Thus, if a fixed cost variable is at value one, the sum of the dominated set may take on any value up to a stated maximum. On the other hand, if the fixed cost variable is at value zero, all the dominated set is constrained to zero.

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Solving large scale mixed integer programs of the fixed cost type

Martin, Glenn T.
ACM SIGMAP Bulletin , Volume (15)
Association for Computing MachineryNov 1, 1973

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