D5 - gono-go integer program, where the decision variables...

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In a typical capital-budgeting problem, decisions involve the selection of a number of potential investments. The investment decisions might be to choose among possible plant locations, to select a configuration of capital equipment, or to settle upon a set of research-and-development projects. Often it makes no sense to consider partial investments in these activities, and so the problem becomes a
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Unformatted text preview: gono-go integer program, where the decision variables are taken to be x j = 0 or 1, indicating that the j th investment is rejected or accepted. Assuming that c j is the contribution resulting from the j th investment and that a i j is the amount of resource i , such as cash or manpower, used on the j th investment, we can state the problem formally as: Maximize...
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