Effective algorithm and heuristic for the generalized assignment problem

We present new Branch-and-Bound algorithm for the generalized assignment problem. A standard subgradient method (SM), used at each node of the decision tree to solve the Lagrangian dual, provides an upper bound. Our key contribution in this paper is a new heuristic, applied at each iteration of the SM, which tries to exploit the solution of the relaxed problem, by solving a smaller generalized assignment problem. The feasible solution found is then subjected to a solution improvement heuristic. We consider processing the root node as a Lagrangian heuristic. Computational comparisons are made with new existing methods.