31

A graphical method to solve a family of

allocation problems
Rene Victor Valqui V I D A L

pie is the case

Instttute of Mathematical Stattstws and Operations Research.

Techmcal Unn,ersttv of Denmark, L.vngt~r, Denmark

r,(x,)=p,(1-e-~'"),

Received December 1982

Revised April 1983

This paper discusses the classical resource allocation problem. By very elementary arguments on Lagrangian duality it is
shown that this problem can be reduced to a single one-dimensional maximization of a differentiable concave function.
Moreover, a simple graphical method is developed and applied
to a family of well-known problems from the literature.

p,,k,>O

that will be theoretically discussed in Section 2.

Thereafter, in Section 3, a simple graphical method
is developed and illustrated by solving a numerical
example. In Section 4, examples from the literature that have been solved by unnecessary
cumbersome algorithms are shown to possess similar properties to the case discussed in Section 2.
Finally, the main conclusions will be outlined in
Section 5.

2. An example
1. Introduction

Let us first consider the following problem:

Within the fields of production planning, capital
budgeting, stratified sampling, marketing and
search theory, the following problem is usually
formulated:

(4)

t--]

s u b j e c t to

F ( X ) = max ~ r,(x,),

F ( X ) = max ~, p,(1 - e-~'~'),

(1)

subject to

x.
O<~x,<~X

(5)
for i = 1,2 ..... N,

(6)

Ex,=x.

(21

t=l

a,~x,<<,b,,

i = 1 ..... N,

(3)

where the decision variable x, is the amount of

effort allocated to the ith activity and the returns
r,(x,) are differentiable, strictly concave and increasing functions.
General algorithms to solve problem (1)-(3)
have been developed by Srikantan [9], Vidal [10].
Sanathanan [7], and Bitran and Hax [1].
Here we will be dealing with a special family of
problem (1)-(3), that due to the special structure
of the functions r,(x,) permits the development of
a very easy straightforward approach. One exam-

where the decision variable x, is the amount of

effort allocated to the ith activity and p,, k, > O.
are the parameters of the return obtained from the
t th activity.
Wilkinson and Gupta [12] have developed an
algorithm to solve problem (1)-(3) based on dynamic programming. Later, Luss and Gupta [5]
have developed an algorithm to solve this same
problem based on the Kuhn-Tucker conditions.
Our analysis will be based on the well-known
results of Lagrangian duality [11 ].
The Langrangian problem is
N

L ( u ) = max Y'~ { p , ( 1 - e - ~ , ' , ) - u x , }

N

North-Holland
European Journal of Operational Research 17 (1984) 31 - 34

= E max{ p , ( 1 - e " ' , ) - u x ,

0377-2217/84/$3.00 '-"' 1984, Elsevier Science Publishers B.V. (North-Holland)

R. K V. Vidal / A graphical method to solve allocanon problems

32

subject

to

O<~xi~X for i = 1,2 ..... N,

where u ~: 0, is scalar, denominated multiplier in
Everett's sense. The sufficient conditions say that
if we find u* and x,*(u*), the solution to L(u*), so
that
N

~. xt(u* ) = X,

(7)

i-I

then, the x,*(u*) are the solution to the original

problem (4)-(6). Moreover, since our problem
F ( X ) is concave such a u* will always exist.
Now the Lagrangian problem is the addition of
N subproblems so that

L,(u)-~max{p,(l - e - * , " ' ) - ux, },

0 = logo ( u ) ,

x,*=A,+ B,a,

s,=

The subproblem has always a solution for u ~ 0

(Weierstrass' theorem). The optimal solution, x,* is
either a boundary point or an interior point. If it is
an interior point, and since the objective function
is differentiable, it also has to be a stationary point
so that

or

log, (u)

"k,

k,

log, ( piki )

k,

'

(12)
(13)

It is obvious that the graph of x,* (0) is easy to

draw, due to the linear function (I I). Furthermore,
(7) becomes
N

Ex*(O)=X

(14)

t--]

dr, = d{ p , ( l - e - ' , ' , ) } = u

dx,
dx,

log, (p,k,)

(11)

where

A, =

O~x,<~X.

(10)

(9) becomes

(8)

subject to

x" =

X,* = X. Figure 1 illustrates the optimal function

x*,(u). Then it is sufficient to find u*, so that (7) is
satisfied, to determine the optimal solution to
problem (4)-(6). Horst [2] gives a theoretical discussion of problem (1)-(3) along the above mentioned Lagrangian duality principles.
What is special in problem (4)-(6) is the fact
that we are able to obtain explicitly x*,(u), given
by (9). Moreover, introducing the one-to-one
transformation

(9)

If x,* < 0 then reset x,* -- 0; if x,* > X then reset

and the function (9(X) obtained from (14) is piecewise linear. The graph of (9(X) is found by identifying the points at which (9(X) changes its slope.
Once we have found 0(X), given X we can find
0", that replaced in the graph of x,*((9) will give
the optimal values of x,*. This straightforward
approach is illustrated in the next section by solving a numerical example.

3. A simple graphical approach

Px k

X ~

Fig. I. T h e f u n c t i o n x,*(u).

Let us consider the numerical example given in

Table 1 [12]. Parameters A, (12) and B, (13) are
given in Table 2.
Figure 2 shows the graph for functions x,*(O) as
given by (11) and the condition x,*~[0, X]. These
functions are very easy to draw on a sheet of
paper.
We have seen that the graph for the piecewise
linear function 0(X), that specifies the optimal 0*
for a given value of X, can be drawn by identifying

R. V.V. Vidal

/ A graphical method to solve allocation problems

33

Table 1
A numerical example; X = l0 b. N = 4
Activity

p,
k,
p,k,

3-106
3-10 -~
9

4.106
2.10 -6
8

2.106
10 -6
2

106
10 -6
1
.-.* 1 -

Table 2
A and B parameters

:</I0;:

Activity

A,
- B,

0,73.106
0,33.106

1,04.106
0,5.106

0,69.106
106

0
100

-1

Fig. 3. Graph of O(X).

the points 0, where there is a change of slope.

These are the points (0~,02 . . . . . 0s) shown in Fig. 2,
whose numerical values are easily calculated from
Table 2 and are given in Table 3 together with the
corresponding values of X.
Now we can easily draw the graph for O(X),
this is shown in Fig. 3. That is, given a value of X,
from Fig. 3 we can obtain the value of 0", and,
with this value, from Fig. 2 we can obtain the
values of x,*. Thus for X = 106, we get 0* = 0.93,
and the optimal solution will be
x~' = 4.24.105,

x~ = 5.76- 105,

-1

X,/lO ~

1
2
3
4
5
6
7
8

2.21
2.08
0.69
0.08
0
- 0.31
-0.818
-1

0
0.0436
1.1973
2.3136
2.42
3.142
3.818
4

x~' = x~ = 0.
Notice that we are able to generate easily the
optimal solution for all permissible values of X,
and the numerical values can directly be read from
the graphs or easily calculated, if more precision is
needed, using a pocket calculator. Moreover, our
approach is not an algorithm but a straightforward
procedure based on some geometrical properties of
the problem that are easy to understand and therefore easy to implement.

Table 3
The function 0 ( X )

xl2:i

Fig. 2. Graph of x,*(0).

4. A family of problems
The approach described in Section 3 to solve
problem (4)-(5) can be applied to other problems
of the type (1)-(3) as far as we are able to find
similar suitable transformations as (10) and (11).
Table 4 gives other examples from the literature
where such transformations can be found.

34

R. V. V. Vidal / A graphical method to solve allocation problems

Table 4
Other examples
r, ( x, )

A,

B,

Reference

p, (1 - k , / x , )

__1

v/p~,

Srikantan [9]

p ,.k , > 0

~[ff

- p,x, t
p, > O,k > 2

u I/*-1

( - p , xf )x l / k

p , / ( a , - x, )
p ,,a , > 0

__1
Ilrff

a,

-V~ ,

Jensen [31

p,

Luss and
Gupta [5]

p, logc(1 + m , x i)
p,.m , > 0

p , x , / ( a , + x,)
p,.a, > 0

m~

__1

- m,

Luenberger 161

p2

Sivazlian and
Stanfel [81

2p,~,
p, > 0

Klein {4I
- I

U2

5. Conclusions

By very elementary arguments on Lagrangian

duality, it is shown that a family of the classical
resource allocation problem, that has been solved
in the literature by unnecessary cumbersome algorithms, possesses some geometrical properties that
permits the development of a very simple
straightforward approach. The simplicity of the
method has been shown by solving a well-known
example from the literature. Moreover. we have
been able to identify several examples from the
available literature where a similar approach could
easily be developed.

[3]
[41
[5]

[6]
[7]
[8]

[9]
[10]

References
[11]
[1] G.R. Bitran and A.C. Hax, On the solution of convex
knapsack problems with bounded variables, Proc. 9th International

Mathematical

Programming

Symposium,

Budapest (1976) 357-367.

[2] R. Horst, On reducing a resource allocation problem to a

[12]

single one-dimensional minimization of a differentiable

convex function, Operational Res. 32 ( 1981 ) 821-824.
A. Jensen, A Distribution Model Applicable to Economics
(Munksgaard, Copenhagen, 1954).
M. Klein, Some production planning problems, Naval Res.
Logist. Quart. 4 (1957) 269-286.
H. Luss and S.K. Gupta, Allocation of effort resources
among competing activities, Operanons Res. 28 (1975)
360-366.
D.G. Luenberger, Optimization by Vector Space Methods
(Wiley, New York, 1969).
L. Sanathanan, On an allocation problem with multistage
constraints, Operations Res. 19 (1971) 1647-1663.
B.D. Sivazlian and L.E. Stanfel, Opnmtzation Techniques
in Operations Research (Prentice-Hall. Englewood Cliffs.
N J, 1975).
K.S. Srikantan, A problem in optimum allocation. Operations Res. 11 (1963) 265-273.
R.V.V. Vidal, Operations research in production planning,
Ph.D. thesis, IMSOR, The Technical University of Denmark (1970}.
R.V.V. Vidal, Notes on static and dynamic optimization,
IMSOR, Technical University of Denmark (1976).
C. Wilkinson and S.K. Gupta, Allocating promotional
effort to competing activities, a dynamic programming
approach, Proc. 5th International Conference on Operational Research, Venice (1969) 419-432.