Budget constraints in logistics models

In: Naval research logistics: an international journal, Volume 8, Issue 3, p. 215-220

Abstract

AbstractIn application of operations research models in the area of logistics, important constraints are typically encountered in the form of limitations on the funds appropriated. A supply system must be operated within whatever budgeted funds are appropriated by Congress. In the present article, various possible types of budget constraints are discussed as well as their impact on certain types of operations research models. The possible misallocations that can result from the setting of specific budgets designated for particular purposes are discussed. The confusion existing in the literature concerning the type of constraints that are actually encountered versus those that are imposed upon the mathematical models is pointed out as well as the typical inconsistency of budget constraints and steady‐state models. The difference between a steady‐state budget and a transition‐phase budget is clarified.