A Comparison of Exact and Heuristic Approaches to Capital
| Authors | |
|---|---|
| Year of publication | 2009 |
| Type | Article in Periodical |
| Magazine / Source | International Journal of Business, Economics, Finance and Management |
| MU Faculty or unit | |
| Citation | |
| Web | http://www.waset.ac.nz/journals/ijbefms/v1.php |
| Field | Economy |
| Keywords | Capital budgeting; knapsack problem; GAMS; heuristic method; genetic algorithm |
| Description | This paper summarizes and compares approaches to solving the knapsack problem and its known application in capital budgeting. The first approach uses deterministic methods and can be applied to small-size tasks with a single constraint. We can also apply commercial software systems such as the GAMS modelling systém. However, because of NP-completeness of the problem, more complex problem instances must be solved by means of heuristic techniques to achieve an approximation of the exact solution in a reasonable amount of time. We show the problem representation and aparameter settings for a genetic algorithm framework. |