Business, Legal & Accounting Glossary
An analytical method that can be used to determine the solution to a capital rationing problem.
Zero-one integer programming (also known as ‘0-1’ integer programming) is a mathematical method for arriving at a solution when there are two mutually exclusive possibilities by employing a succession of binary functions, namely yes (‘1’) and no (‘0’) answers.
In the field of finance, zero-one integer programming is frequently used to solve capital rationing difficulties, optimise investment returns, and assist with planning, production, transportation, and other challenges.
Integer programming is a type of mathematical programming or optimization in which equations are used to solve issues. The phrase “mathematical programming” refers to the fact that the purpose of problem solving is to select programmes of action. Assigning a basic yes/no value can be an effective technique to create a linear problem-solving framework for identifying inefficiencies.
The most fundamental instructions executed by a computer are binary codes, which consist simply of ones and zeros. These codes are directly converted into the “on” and “off” states of the electricity flowing through the actual circuits of the computer. In essence, these simple codes serve as the foundation for “machine language,” the most fundamental type of computer language. These on and off positions can alternatively be interpreted as a “yes” or “no” response to a logical function.
Of course, no human could create current software programmes by explicitly programming ones and zeros. Instead, human programmers must rely on several layers of abstraction that allow them to express their orders in a more human-friendly way. Modern programmers, in particular, issue commands in so-called “high-level languages,” which employ intuitive syntax such as full English phrases and sentences, as well as common logical operators such as “And,” “Or,” and “Else.”
However, these high-level directives must eventually be translated into machine code. Rather than doing so manually, programmers rely on assembly languages, which are designed to translate between high-level and low-level languages automatically.
A simple example of how zero-one integer programming could be used in capital rationing is to determine the amount of product development projects that a corporation can accomplish by a specific date or within a certain budget. For example, a number of variables for each project can be assigned values that result in a binary decision of 1 (yes) or 0 (no) about whether or not to include the project in a budget. This can be useful for businesses that are unsure about a specific business decision and want a simple approach to evaluate the options.
Integer programming
Law of one price
Linear programming
Mathematical programming
One cancels the other
One factor apt
One man picture
One sided one way market
One tail test
One way market
Quadratic programming
Zero balance account
Zero beta portfolio
Zero cost collar
Zero coupon bond
Zero curve
Zero growth model
Zero investment portfolio
Zero minus tick
Zero or low coupon bonds
Zero plus tick
Zero prepayment assumption
Zero sum game
Zero uptick
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This glossary post was last updated: 7th January, 2022 | 0 Views.