Integer Programming (IP) - Expanded:
Integer programming extends linear programming by requiring some or all decision
variables to be integers. This is crucial for problems with discrete decisions, such as
yes/no choices or quantities that must be whole numbers.
Types:
o Binary Integer Programming (BIP): Variables can only be 0 or 1.
o Mixed Integer Programming (MIP): Some variables are integers, and others are
continuous.
Branch-and-Bound: A common algorithm that systematically explores the solution
space by dividing it into smaller subproblems and eliminating regions that cannot contain
the optimal solution.
Applications: Facility location, scheduling, routing, project management, and capital
budgeting.
Example: A company needs to decide which warehouses to open from a set of potential
locations to minimize transportation costs while meeting customer demand. This is a
binary integer programming problem because the decision is whether to open a
warehouse (1) or not (0).