Reallocating the cost of dependent decisions

Abstract

If some decisions depend, for their execution on the making of other decisions it may sometimes be possible to reallocate costs in such a way as to lead directly to the optimal set of decisions. It is shown how possible patterns of cost reallocation may be derived from the constraints of integer programming formulations of the problems. A number of practical problems are described with suggested patterns of cost reallocation. Ways in which numerical values may be derived for the cost reallocations are briefly surveyed