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Chapter 10

Integer Programming

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 The Nature of Integer Programming
• One of the three key assumptions of linear programming is
the continuous–variables assumption, which requires
that the decision variables can take on any nonnegative
values (not just integer values) that fall within its feasible
range.
• A problem that fits linear programming except that some or
all of its decision variables are required to have integer
values is called an integer programming problem.
• If only some of the decision variables have this restriction,
the problem also is referred to as a mixed integer
programming problem.

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 Solving Integer Programming Problems

• Large integer programming problems can be considerably

more difficult to solve than similar linear programming
problems.
• This is not an issue for small problems (say, under a
hundred constraints and variables) but it can start taking a
long time to solve medium problems (say, hundreds of
constraints and variables). It might not even succeed in
reaching an optimal solution for larger problems (say, a few
thousand constraints and variables).
• Because of the challenges of solving larger integer
programming problems, it is important to think about when
integer constraints are truly needed.

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 When are Integer Constraints Needed?

• If the variable represents a rate (for example, production per

week), it is usually reasonable to have non–integer solutions.
• Even if a decision variable must be an integer, if the typical
values are large (say in the hundreds or thousands), it might be
reasonable to leave out the integer constraints and then simply
round to the nearest integer. With such large values, the
differences are usually relatively insignificant.
• If the values of the decision variables are not very large, then
rounding up or down typically does lead to significant
differences in the value of the objective function (on a
percentage basis). In this case, rounding is not reasonable and
integer constraints are needed.

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 Binary Decision Variables 1

• If the variable represents a rate (for example, production per

week), it is usually reasonable to have non–integer solutions.
• Even if a decision variable must be an integer, if the typical
values are large (say in the hundreds or thousands), it might be
reasonable to leave out the integer constraints and then simply
round to the nearest integer. With such large values, the
differences are usually relatively insignificant.
• If the values of the decision variables are not very large, then
rounding up or down typically does lead to significant
differences in the value of the objective function (on a
percentage basis). In this case, rounding is not reasonable and
integer constraints are needed.

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 Binary Variables
Binary decision variables are variables that can have only
two values, 0 and 1.
They are widely used in integer programming models to
represent yes–or–no decisions, where a value of 1
corresponds to a yes decision and a value of 0 corresponds
to a no decision.
Such models are called binary integer programming (BIP)
models.
Examples.
• Should we undertake a particular fixed project?
• Should we make a particular fixed investment?
• Should we locate a facility in a particular site?
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 California Manufacturing Company
• The California Manufacturing Company is a diversified
company with several factories and warehouses
throughout California, but none yet near Los Angeles or
San Francisco.
• A basic issue is whether to build a new factory near Los
Angeles or San Francisco, or perhaps even both.
• Management is also considering building at most one new
warehouse, but will restrict the choice to a city where a
new factory is being built.
Question: Should the California Manufacturing Company
expand with factories and/or warehouses near Los
Angeles and/or San Francisco?

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 Data for California Manufacturing

Net Present Capital

Decision Decision Value Required
Number Yes–or–No Question Variable (Millions) (Millions)
1 Build a factory near Los Angeles? x1 $8 $6
2 Build a factory near San Francisco? x2 5 3
3 Build a warehouse near Los Angeles? x3 6 5
4 Build a warehouse near San x4 4 2
Francisco?

Capital available: $10 million

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 Binary Decision Variables 2

Decision Decision Possible Interpretation of a

Number Variable Value Value of 1 Interpretation of a Value of 0
1 x1 0 or 1 Build a factory near Los Do not build this factory
Angeles
2 x2 0 or 1 Build a factory near Do not build this factory
San Francisco
3 x3 0 or 1 Build a warehouse near Do not build this warehouse
Los Angeles
4 x4 0 or 1 Build a warehouse near Do not build this warehouse
San Francisco

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 Algebraic Formulation 1

Let x1 = 1 if build a factory near L.A.; 0 otherwise

x2 = 1 if build a factory near S.F.; 0 otherwise
x3 = 1 if build a warehouse near Los Angeles; 0 otherwise
x4 = 1 if build a warehouse near San Francisco; 0 otherwise

Maximize NPV = 8 x1 + 5 x2 + 6 x3 + 4 x4 ($millions) subject to

Capital Spent: 6 x1 + 3 x2 + 5 x3 + 2 x4 £ 10 ($millions)

Max 1 Warehouse: x3 + x4 £ 1
Warehouse only if Factory: x3 £ x1
x4 £ x2
and

x1 , x2 , x3 , x4 are binary variables.

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 Spreadsheet Model 1

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 Parameter Analysis Report

The parameter analysis report shows the effect of varying the

amount of capital being made available for these
investments.

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 Management’s Conclusion
• Management’s initial tentative decision had been to make $10 million
of capital available.
• With this much capital, the best plan would be to build a factory near
both Los Angeles and San Francisco, but no warehouses.
• An advantage of this plan is that it only uses $9 million of this capital,
which frees up $1 million for other projects.
• A heavy penalty (a reduction of $4 million in total net present value)
would be paid if the capital made available were to be reduced below
$9 million.
• Increasing the capital made available by $1 million (to $11 million)
would enable a substantial ($4 million) increase in the total net present
value. Management decides to do this.
• With this much capital available, the best plan is to build a factory near
both cities and a warehouse near San Francisco.

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 Project Selection at Tazer Corp.
Tazer Corporation is searching for a new breakthrough drug.
Five potential research and development projects:

• Project Up: Develop a more effect antidepressant that doesn’t cause

mood swings.
• Project Stable: Develop a drug that addresses manic depression.
• Project Choice: Develop a less intrusive birth control method for
women.
• Project Hope: Develop a vaccine to prevent HIV infection.
• Project Release: Develop a more effective drug to lower blood
pressure.
$1.2 billion available for investment (enough for 2 or 3 projects).
Question: Which projects should be selected to research and
develop?
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 Data for the Tazer Project Selection Problem

Project 1 Project 2 Project 3 Project 4 Project 5

(Up) (Stable) (Choice) (Hope) (Release)
R&D investment ($million)* 400 300 600 500 200
Success rate 50% 35% 35% 20% 45%
Revenue if successful ($million) 1,400 1,200 2,200 3,000 600
Expected profit ($million) 300 120 170 100 70

*Only $1.2 billion is available for R&D investment.

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 Algebraic Formulation of Tazer Project Selection

Let xi = 1 if approve project i; 0 otherwise (for i = 1, 2, 3, 4,

and 5).
Maximize P = 300 x1 + 120 x2 + 170 x3 + 100 x4 + 70 x5 ($million)

subject to
R&D Budget:
400 x1 + 300 x2 + 600 x3 + 500 x4 + 200 x5 £ 1, 200($million)

and xi are binary (for i = 1, 2, 3, 4, and 5).

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 Spreadsheet for Tazer Project Selection Problem

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 Selection of Sites for Emergency Services: The
Caliente City Problem

• Caliente City is growing rapidly and spreading well beyond

its original borders.
• They still have only one fire station, located in the
congested center of town.
• The result has been long delays in fire trucks reaching the
outer part of the city.

Goal: Develop a plan for locating multiple fire stations

throughout the city.
New Policy: Response Time ≤ 10 minutes.

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 Response Time and Cost Data for Caliente City

Fire Station in Tract

1 2 3 4 5 6 7 8
Response times (minutes) for a fire in tract 1 2 8 18 9 23 22 16 28
2 9 3 10 12 16 14 21 25
3 17 8 4 20 21 8 22 17
4 10 13 19 2 18 21 6 12
5 21 12 16 13 5 11 9 12
6 25 15 7 21 15 3 14 8
7 14 22 18 7 13 15 2 9
8 30 24 15 14 17 9 8 3
Cost of station ($thousands) 350 250 450 300 50 400 300 200

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 Algebraic Formulation of Caliente City Problem

Let x j = 1 if tract j is selected to receive a fire station; 0 otherwise

( j = 1, 2,...,8)
Minimize C = 350 x1 + 250 x2 + 450 x3 + 300 x4 + 50 x5 + 400 x6 + 300 x7 + 200 x8
subject to
Tract 1: x1 + x2 + x4 ³ 1
Tract 2 : x1 + x2 + x3 ³ 1
Tract 3: x2 + x3 + x6 ³ 1
Tract 4 : x1 + x4 + x7 ³ 1
Tract 5 : x5 + x7 ³ 1
Tract 6 : x3 + x6 + x8 ³ 1
Tract 7 : x4 + x7 + x8 ³ 1
Tract 8 : x6 + x7 + x8 ³ 1
and x j are binary (for j = 1, 2,...,8)
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 Spreadsheet Model for Caliente City Problem

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 Southwestern Airways Crew Scheduling

• Southwestern Airways needs to assign crews to cover all

its upcoming flights.
• We will focus on assigning 3 crews based in San Francisco
(SFO) to 11 flights.

Question: How should the 3 crews be assigned 3

sequences of flights so that every one of the 11 flights is
covered?

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 Southwestern Airways Flights

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 Data for the Southwestern Airways Problem

Access the text alternative for slide images.

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 Algebraic Formulation 2

Let x j = 1 if flight sequence j is assigned to a crew; 0 otherwise. ( j = 1, 2,...,12)

Minimize Cost = 2 x1 + 3 x2 + 4 x3 + 6 x4 + 7 x5 + 5 x6 + 7 x7 + 8 x8 + 9 x9 + 9 x10 + 8 x11 + 9 x12
(in $thousands).
subject to

Flight 1 covered: x1 + x4 + x7 + x10 ³ 1

Flight 2 covered: x2 + x5 + x8 + x11 ³ 1

: :
Flight 11 covered: x6 + x9 + x10 + x11 + x12 ³ 1
Three Crews: x1 + x2 + x3 + x4 + x5 + x6 + x7 + x8 + x9 + x10 + x11 + x12 £ 3

and
x j are binary ( j = 1, 2,...,12)

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 Spreadsheet Model 2

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 Wyndor with Setup Costs
Suppose that two changes are made to the original Wyndor problem:

1. For each product, producing any units requires a substantial one–

time setup cost for setting up the production facilities.
2. The production runs for these products will be ended after one week,
so D and W in the original model now represent the total number of
doors and windows produced, respectively, rather than production
rates. Therefore, these two variables need to be restricted to integer
values.

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 Graphical Solution to Original Wyndor Problem

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 Net Profit for Wyndor Problem with Setup Costs

Number of Units
Produced Net Profit ($) Doors Net Profit ($) Windows
0 0 (300) − 0 = 0 0 (500) − 0 = 0
1 1 (300) − 700 = − 400 1 (500) − 1,300 = − 800
2 2 (300) − 700 = − 100 2 (500) − 1,300 = − 300
3 3 (300) − 700 = 200 3 (500) − 1,300 = 200
4 4 (300) − 700 = 500 4 (500) − 1,300 = 700
5 Not feasible 5 (500) − 1,300 = 1,200
6 Not feasible 6 (500) − 1,300 = 1,700

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 Feasible Solutions for Wyndor with Setup Costs

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 Algebraic Formulation
Let D = Number of doors to produce,
W = Number of windows to produce,
y1 = 1 if perform setup to produce doors; 0 otherwise,
y2 = 1 if perform setup to produce windows; 0 otherwise .
Maximize P = 300 D + 500W – 700 y1 – 1,300 y2
subject to
Original Constraints:
Plant 1: D≤4
Plant 2: 2W ≤ 12
Plant 3: 3D + 2W ≤ 18

Produce only if Setup:

Doors: D ≤ 99 y1
and D ³ 0,W ³ 0, y1 and y2 are binary.
Windows: W ≤ 99 y2

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 Spreadsheet Model

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