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we have one more application of binary decision variables that we want to cover and thats what we call the fixed cost problem if you remember back to one of the first spreadsheets that I used at the beginning of the course we had a little decision model that involved making a decision about building a grandfather clock I guess it was and the problem was complicated slightly by the fact that there was a fixed cost associated with setting up to produce any clocks and it was handled in that spreadsheet by an if statement that ensured that the costs charged were a combination of fixed and variable unless the production quantity was 0 in which case there was no no fixed cost well its kind of an ugly way to handle it because it creates a problem thats not only nonlinear its discontinuously nonlinear and makes something thats really very hard for solver to deal with the way we deal with that is that we introduce a binary variable because there is a binary decision involved so in fact th
