An Application of Mixed Integer Programming in the Direct Mail Industry

The object is to help a mailing list compilation company (M.C.R.B.) to select the most promising types of mailing lists for development and to schedule the development of the selected lists in one of the two available production facilities. A mixed integer programming model is used to perform the selection and the scheduling task. The formulation of the model places the solution technique in the general family of “project selection” models. The problem was solved using CDC's OPHELIE II code. The size of the program is 229 rows by 871 variables of which 65 are zero-one. As a result of the study, management substantially modified the company's product mix and reduced the level of production resources employed. There was a marked improvement in the profitability of the Company.