Boolean Variables in economic Models solved by linear Programming

Abstract

The article analyses the use of logical variables in economic models solved by linear programming. Focus is given to the presentation of the way logical constraints are obtained and of the definition of rules based on predicate logic. Emphasis is also put on the possibility to use logical variables in constructing a linear objective function on intervals. Such functions are encountered when costs or unitary receipts are different on disjunct intervals of production volumes achieved or sold. Other uses of Boolean variables are connected to constraint systems with conditions and the case of a variable that takes values from a finite set of integers. Key Words: linear programming, Boolean variable, economic model.