ABSTRACT
The lock box problem involves the location of post office boxes within a company's distribution area. Customer remittances are mailed to these boxes and the checks are processed by a local bank. The problem is to locate the boxes in a way that will minimize processing cost and the opportunity costs associated with the remittances while in transit (float costs).
For m potential lock box locations and n customer groups, the problem can be formulated as a zero-one integer programming problem with mn + n variables and m + n constraints. The problem, however, can be partitioned in a way that results in a zero-one integer programming problem with only m variables. Once values have been established for these m variables, values for the remaining mn zero-one variables can be determined by a trivial process. Thus the problem reduces to determining values for the m zero-one variables. This is accomplished by an implicit enumeration procedure. Computational results are reported for problems involving up to 5050 variables.
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- 3.Ciochetto, F. F., Swanson, H. S., Lee, J. R. and Woolsey, R. E. D., "The Lock Box Problem and Some Startling But True Computational Results for Large Scale Systems", presented at the 41st National Meeting of the Operations Research Society of America, April 1972.Google Scholar
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- 6.Levy, F. K., "An Application of Heuristic Problem Solving to Accounts Receivable Management", Management Science, Vol. 12, pp. 236-244 (1966).Google ScholarDigital Library
Index Terms
- Computational experience with an algorithm for the lock box problem
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