An efficient algorithm to allocate shelf space

Shelf space is one of the most important resources of a retail firm. This paper formulates a model and proposes an approach which is similar to the algorithm used for solving a knapsack problem. Subject to given constraints, the proposed heuristic allocates shelf space item by item according to a descending order of sales profit for each item per display area or length. Through the use of simulations, the performances of objective value and the computational efficiency of this method are evaluated. Three options are also proposed for improving the heuristics. Compared to an optimal method, the improved heuristic is shown to be a very efficient algorithm which allocates shelf space at near-optimal levels.     

The static stochastic knapsack problem with normally distributed item sizes

This paper develops exact and heuristic algorithms for a stochastic knapsack problem where items with random sizes may be assigned to a knapsack. An item’s value is given by the realization of the product of a random unit revenue and the random item size. When the realization of the sum of selected item sizes exceeds the knapsack capacity, a penalty cost is incurred for each unit of overflow, while our model allows for a salvage value for each unit of capacity that remains unused. We seek to maximize the expected net profit resulting from the assignment of items to the knapsack. Although the capacity is fixed in our core model, we show that problems with random capacity, as well as problems in which capacity is a decision variable subject to unit costs, fall within this class of problems as well. We focus on the case where item sizes are independent and normally distributed random variables, and provide an exact solution method for a continuous relaxation of the problem. We show that an optimal solution to this relaxation exists containing no more than two fractionally selected items, and develop a customized branch-and-bound algorithm for obtaining an optimal binary solution. In addition, we present an efficient heuristic solution method based on our algorithm for solving the relaxation and empirically show that it provides high-quality solutions.     

On branching heuristics for the bi-objective 0/1 unidimensional knapsack problem

This paper focuses on branching strategies that are involved in branch and bound algorithms when solving multi-objective optimization problems. The choice of the branching variable at each node of the search tree constitutes indeed an important component of these algorithms. In this work we focus on multi-objective knapsack problems. In the literature, branching heuristics used for these problems are static, i.e., the order on the variables is determined prior to the execution. This study investigates the benefit of defining more sophisticated branching strategies. We first analyze and compare a representative set of classic branching heuristics and conclude that none can be identified as the best overall heuristic. Using an oracle, we highlight that combining branching heuristics within the same branch and bound algorithm leads to considerably reduced search trees but induces high computational costs. Based on learning adaptive techniques, we propose then dynamic adaptive branching strategies that are able to select the suitable heuristic to apply at each node of the search tree. Experiments are conducted on the bi-objective 0/1 unidimensional knapsack problem.     

Multi-Path Approach for Reliability-Redundancy Allocation Using a Scaling Method

The reliability-redundancy allocation problem is an optimization problem that achieves better system reliability by determining levels of component redundancies and reliabilities simultaneously. The problem is classified with the hardest problems in the reliability optimization field because the decision variables are mixed-integer and the system reliability function is nonlinear, non-separable, and non-convex. Thus, iterative heuristics are highly recommended for solving the problem due to their reasonable solution quality and relatively short computation time. At present, most iterative heuristics use sensitivity factors to select an appropriate variable which significantly improves the system reliability. The sensitivity factor represents the impact amount of each variable to the system reliability at a designated iteration. However, these heuristics are inefficient in terms of solution quality and computation time because the sensitivity factor calculations are performed only at integer variables. It results in degradation of the exploration and growth in the number of subsequent continuous nonlinear programming (NLP) subproblems. To overcome the drawbacks of existing iterative heuristics, we propose a new scaling method based on the multi-path iterative heuristics introduced by Ha (2004). The scaling method is able to compute sensitivity factors for all decision variables and results in a decreased number of NLP subproblems. In addition, the approximation heuristic for NLP subproblems helps to avoid redundant computation of NLP subproblems caused by outlined solution candidates. Numerical experimental results show that the proposed heuristic is superior to the best existing heuristic in terms of solution quality and computation time.     

One-dimensional heuristics adapted for two-dimensional rectangular strip packing

We consider two-dimensional rectangular strip packing without rotation of items and without the guillotine cutting constraint. We propose two iterative heuristics. The first one, SVC(SubKP), is based on a single-pass heuristic SubKP which fills every most bottom-left free space in a one-dimensional knapsack fashion, that is, considering only item widths. It appears especially important to assign suitable ‘pseudo-profits’ in this knapsack problem. The second heuristic BS(BLR) is based on the known randomized framework Bubble-Search. It generates different item sequences and runs a new sequence-based heuristic Bottom-Left-Right (BLR), a simple modification of the Bottom-Left heuristic. We investigate the solution sets of SubKP and BLR and their relation to each other. In the tests, SVC(SubKP) improves the results for larger instances of the waste-free classes of Hopper and Turton and, on average, for the tested non-waste-free classes, compared to the latest literature. BS(BLR) gives the best results in some classes with smaller number of items (20,40).     

Relaxation heuristics for a generalized assignment problem

We propose relaxation heuristics for the problem of maximum profit assignment of n tasks to m agents (n > m), such that each task is assigned to only one agent subject to capacity constraints on the agents. Using Lagrangian or surrogate relaxation, the heuristics perform a subgradient search obtaining feasible solutions. Relaxation considers a vector of multipliers for the capacity constraints. The resolution of the Lagrangian is then immediate. For the surrogate, the resulting problem is a multiple choice knapsack that is again relaxed for continuous values of the variables, and solved in polynomial time. Relaxation multipliers are used with an improved heuristic of Martello and Toth or a new constructive heuristic to find good feasible solutions. Six heuristics are tested with problems of the literature and random generated problems. Best results are less than 0.5% from the optimal, with reasonable computational times for an AT/386 computer. It seems promising even for problems with correlated coefficients.     

A heuristic algorithm for the multidimensional zero-one knapsack problem

Computational and theoretical aspects of a new heuristic for the multidimensional zero-one knapsack problem are studied. Its computational efficiency is compared with two other well-known heuristics.     

A multidimensional knapsack model for asset-backed securitization

Securitization is a financial operation which allows a financial institution to transform financial assets, for instance mortgage assets or lease contracts, into marketable securities. We focus the analysis on a real case of a bank for the leasing. Once the securitization characteristics, such as size and times of the operation, have been defined, the profit for the financial institution—Italease Bank for the Leasing in our case—depends on how the financial assets to use in the securitization are selected. We show that the selection problem can be modelled as a multidimensional knapsack problem (MDKP). Some formal arguments suggest that there may exist a prevailing constraint in the MDKP. Such an idea is used in the design of some simple heuristics which turn out to be very effective.     

Two-level evolutionary approach to the survivable mesh-based transport network topological design

The complete topology design problem of survivable mesh-based transport networks is to address simultaneously design of network topology, working path routing, and spare capacity allocation based on span-restoration. Each constituent problem in the complete design problem could be formulated as an Integer Programming (IP) and is proved to be NP\mathcal{NP} -hard. Due to a large amount of decision variables and constraints involved in the IP formulation, to solve the problem directly by exact algorithms (e.g. branch-and-bound) would be impractical if not impossible. In this paper, we present a two-level evolutionary approach to address the complete topology design problem. In the low-level, two parameterized greedy heuristics are developed to jointly construct feasible solutions (i.e., closed graph topologies satisfying all the mesh-based network survivable constraints) of the complete problem. Unlike existing “zoom-in”-based heuristics in which subsets of the constraints are considered, the proposed heuristics take all constraints into account. An estimation of distribution algorithm works on the top of the heuristics to tune the control parameters. As a result, optimal solution to the considered problem is more likely to be constructed from the heuristics with the optimal control parameters. The proposed algorithm is evaluated experimentally in comparison with the latest heuristics based on the IP software CPLEX, and the “zoom-in”-based approach on 28 test networks problems. The experimental results demonstrate that the proposed algorithm is more effective in finding high-quality topologies than the IP-based heuristic algorithm in 21 out of 28 test instances with much less computational costs, and performs significantly better than the “zoom-in”-based approach in 19 instances with the same computational costs.     

A Genetic Algorithm for the Multidimensional Knapsack Problem

In this paper we present a heuristic based upon genetic algorithms for the multidimensional knapsack problem. A heuristic operator which utilises problem-specific knowledge is incorporated into the standard genetic algorithm approach. Computational results show that the genetic algorithm heuristic is capable of obtaining high-quality solutions for problems of various characteristics, whilst requiring only a modest amount of computational effort. Computational results also show that the genetic algorithm heuristic gives superior quality solutions to a number of other heuristics.     

Efficient algorithms for solving multiconstraint zero-one knapsack problems to optimality

The multiconstraint 0–1 knapsack problem is encountered when one has to decide how to use a knapsack with multiple resource constraints. Even though the single constraint version of this problem has received a lot of attention, the multiconstraint knapsack problem has been seldom addressed. This paper deals with developing an effective solution procedure for the multiconstraint knapsack problem. Various relaxation of the problem are suggested and theoretical relations between these relaxations are pointed out. Detailed computational experiments are carried out to compare bounds produced by these relaxations. New algorithms for obtaining surrogate bounds are developed and tested. Rules for reducing problem size are suggested and shown to be effective through computational tests. Different separation, branching and bounding rules are compared using an experimental branch and bound code. An efficient branch and bound procedure is developed, tested and compared with two previously developed optimal algorithms. Solution times with the new procedure are found to be considerably lower. This procedure can also be used as a heuristic for large problems by early termination of the search tree. This scheme was tested and found to be very effective.     

Experimental analysis of heuristics for the bottleneck traveling salesman problem

In this paper we develop efficient heuristic algorithms to solve the bottleneck traveling salesman problem (BTSP). Results of extensive computational experiments are reported. Our heuristics produced optimal solutions for all the test problems considered from TSPLIB, JM-instances, National TSP instances, and VLSI TSP instances in very reasonable running time. We also conducted experiments with specially constructed ‘hard’ instances of the BTSP that produced optimal solutions for all but seven problems. Some fast construction heuristics are also discussed. Our algorithms could easily be modified to solve related problems such as the maximum scatter TSP and testing hamiltonicity of a graph.     

Variable Fixing Algorithms for the Continuous Quadratic Knapsack Problem

We study several variations of the Bitran–Hax variable fixing method for the continuous quadratic knapsack problem. We close the gaps in the convergence analysis of several existing methods and provide more efficient versions. We report encouraging computational results for large-scale problems.     

Lagrangian heuristics for scheduling new product development projects in the pharmaceutical industry

To stay ahead of their competition, pharmaceutical firms must make effective use of their new product development (NPD) capabilities by efficiently allocating its analytical, clinical testing and manufacturing resources across various drug development projects. The resulting project scheduling problems involve coordinating hundreds of testing and manufacturing activities over a period of several quarters. Most conventional integer programming approaches are computationally impractical for problems of this size, while priority rule-driven heuristics seldom provide consistent solution quality. We propose a Lagrangian decomposition (LD) heuristic that exploits the special structure of these problems. Some resources (typically manpower) are shared across all on-going projects while others (typically equipment) are specific to individual project categories. Our objective function is a weighted discounted cost expressed in terms of activity completion times. The LD heuristics were subjected to a comprehensive experimental study based on typical operational instances. While the conventional “Reward–Risk” priority rule heuristic generates duality gaps between 47–58%, the best LD heuristic achieves duality gaps between 10–20%. The LD heuristics also yield makespan reductions of over 30% over the Reward–Risk priority rule.     

Tabu search for solving the black-and-white travelling salesman problem

The black-and-white travelling salesman problem (BWTSP) is an extension to the well-known TSP by partitioning the set of vertices into black and white vertices, and imposing cardinality and length constraints between two consecutive black vertices in a Hamiltonian tour. BWTSP has various applications in aircraft routing, telecommunication network design and logistics. In this paper, we develop several tabu search (TS) heuristics for solving the BWTSP. Our TS is built upon a new efficient neighbourhood structure, which exploits both the permutation and knapsack features of BWTSP. We also embed our TS as a heuristic procedure to improve the upper bound in a mixed-integer linear programming method. Extensive computational experiment on both benchmark and randomly generated instances shows effectiveness and efficiency of our algorithms. Our algorithms are able to obtain optimal and near optimal solutions to small instances in seconds, and find feasible solutions to large instances that have not been solved by the existing methods in the literature.     

Nonconvex piecewise linear knapsack problems

This paper considers the minimization version of a class of nonconvex knapsack problems with piecewise linear cost structure. The items to be included in the knapsack have a divisible quantity and a cost function. An item can be included partially in the given quantity range and the cost is a nonconvex piecewise linear function of quantity. Given a demand, the optimization problem is to choose an optimal quantity for each item such that the demand is satisfied and the total cost is minimized. This problem and its close variants are encountered in manufacturing planning, supply chain design, volume discount procurement auctions, and many other contemporary applications. Two separate mixed integer linear programming formulations of this problem are proposed and are compared with existing formulations. Motivated by different scenarios in which the problem is useful, the following algorithms are developed: (1) a fast polynomial time, near-optimal heuristic using convex envelopes; (2) exact pseudo-polynomial time dynamic programming algorithms; (3) a 2-approximation algorithm; and (4) a fully polynomial time approximation scheme. A comprehensive test suite is developed to generate representative problem instances with different characteristics. Extensive computational experiments show that the proposed formulations and algorithms are faster than the existing techniques.     

Bi-criteria optimization problems for decision rules

We consider bi-criteria optimization problems for decision rules and rule systems relative to length and coverage. We study decision tables with many-valued decisions in which each row is associated with a set of decisions as well as single-valued decisions where each row has a single decision. Short rules are more understandable; rules covering more rows are more general. Both of these problems—minimization of length and maximization of coverage of rules are NP-hard. We create dynamic programming algorithms which can find the minimum length and the maximum coverage of rules, and can construct the set of Pareto optimal points for the corresponding bi-criteria optimization problem. This approach is applicable for medium-sized decision tables. However, the considered approach allows us to evaluate the quality of various heuristics for decision rule construction which are applicable for relatively big datasets. We can evaluate these heuristics from the point of view of (i) single-criterion—we can compare the length or coverage of rules constructed by heuristics; and (ii) bi-criteria—we can measure the distance of a point (length, coverage) corresponding to a heuristic from the set of Pareto optimal points. The presented results show that the best heuristics from the point of view of bi-criteria optimization are not always the best ones from the point of view of single-criterion optimization.     

Construction heuristics for the asymmetric TSP

Non-Euclidean traveling salesman problem (TSP) construction heuristics, and especially asymmetric TSP construction heuristics, have been neglected in the literature by comparison with the extensive efforts devoted to studying Euclidean TSP construction heuristics. This state of affairs is at odds with the fact that asymmetric models are relevant to a wider range of applications, and indeed are uniformly more general that symmetric models. Moreover, common construction approaches for the Euclidean TSP have been shown to produce poor quality solutions for non-Euclidean instances. Motivation for remedying this gap in the study of construction approaches is increased by the fact that such methods are a great deal faster than other TSP heuristics, which can be important for real time problems requiring continuously updated response. The purpose of this paper is to describe two new construction heuristics for the asymmetric TSP and a third heuristic based on combining the other two. Extensive computational experiments are performed for several different families of TSP instances, disclosing that our combined heuristic clearly outperforms well-known TSP construction methods and proves significantly more robust in obtaining (relatively) high quality solutions over a wide range of problems.     

Resource capacity allocation to stochastic dynamic competitors: knapsack problem for perishable items and index-knapsack heuristic

In this paper we propose an approach for solving problems of optimal resource capacity allocation to a collection of stochastic dynamic competitors. In particular, we introduce the knapsack problem for perishable items, which concerns the optimal dynamic allocation of a limited knapsack to a collection of perishable or non-perishable items. We formulate the problem in the framework of Markov decision processes, we relax and decompose it, and we design a novel index-knapsack heuristic which generalizes the index rule and it is optimal in some specific instances. Such a heuristic bridges the gap between static/deterministic optimization and dynamic/stochastic optimization by stressing the connection between the classic knapsack problem and dynamic resource allocation. The performance of the proposed heuristic is evaluated in a systematic computational study, showing an exceptional near-optimality and a significant superiority over the index rule and over the benchmark earlier-deadline-first policy. Finally we extend our results to several related revenue management problems.     

An Algorithm for the 0-1 Equality Knapsack Problem

The 0-1 knapsack problem is a linear integer-programming problem with a single constraint and binary variables. The knapsack problem with an inequality constraint has been widely studied, and several efficient algorithms have been published. We consider the equality-constraint knapsack problem, which has received relatively little attention. We describe a branch-and-bound algorithm for this problem, and present computational experience with up to 10,000 variables. An important feature of this algorithm is a least-lower-bound discipline for candidate problem selection.