Internalizing the External Effects of Layoffs.
Abstract
There is a social disruption any time a factory lays off workers. The layoff affects both the community and the factory's productivity, so it is modelled as incurring a fixed cost added to the quadratic layoff costs of an HMMS production smoothing model. Whereas HMMS was an unconstrained quadratic, there is a quadratic program. By solving the dual quadratic program it is shown that this intertemporal quadratic program has special structure yielding great computational advantage. For example, in a T period problem, an optimum can be obtained in T pivots. Two solution procedures are given for the layoff problem, an exact branch and bound procedure and an intelligent heuristic which has yielded identical results on every test problem to data. The heuristic is very fast. (Modified author abstract)
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1973
- Accession Number
- AD0761069
Entities
People
- David Rutenberg
- Peter Welam
Organizations
- Carnegie Mellon University