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.
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- Dudzinski, Krzysztof & Walukiewicz, Stanislaw, 1987. "Exact methods for the knapsack problem and its generalizations," European Journal of Operational Research, Elsevier, vol. 28(1), pages 3-21, January.
- Kameshwaran, S. & Narahari, Y. & Rosa, Charles H. & Kulkarni, Devadatta M. & Tew, Jeffrey D., 2007. "Multiattribute electronic procurement using goal programming," European Journal of Operational Research, Elsevier, vol. 179(2), pages 518-536, June.
- Gabriel R. Bitran & Arnoldo C. Hax, 1981. "Disaggregation and Resource Allocation Using Convex Knapsack Problems with Bounded Variables," Management Science, INFORMS, vol. 27(4), pages 431-441, April.
- Paul H. Zipkin, 1980. "Simple Ranking Methods for Allocation of One Resource," Management Science, INFORMS, vol. 26(1), pages 34-43, January.
- Keely L. Croxton & Bernard Gendron & Thomas L. Magnanti, 2003. "A Comparison of Mixed-Integer Programming Models for Nonconvex Piecewise Linear Cost Minimization Problems," Management Science, INFORMS, vol. 49(9), pages 1268-1273, September.
- Bretthauer, Kurt M. & Shetty, Bala, 2002. "The nonlinear knapsack problem - algorithms and applications," European Journal of Operational Research, Elsevier, vol. 138(3), pages 459-472, May.
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