Charge held over specific assets The debtor cannot sell the assets without the consent of the secured creditor or repaying the amount secured by the charge
A cost that is some value, say C, regardless of the level as long as the level is positive; otherwise the fixed charge is zero This is represented by Cv, where v is a binary variable When v=0, the fixed charge is 0; when v=1, the fixed charge is C An example is whether to open a plant (v=1) or not (v=0) To apply this fixed charge to the non-negative variable x, the constraint x <= Mv is added to the mathematical program, where M is a very large value, known to exceed any feasible value of x Then, if v=0 (e g , not opening the plant that is needed for x > 0), x=0 is forced by the upper bound constraint If v=1 (e g , plant is open), x <= Mv is a redundant upper bound Fixed charge problems are mathematical programs with fixed charges (See Myth MIP-3 to avoid misconception )
a charge held over specific assets (typically a mortgage in respect of property) which prevents a debtor from selling or otherwise dealing with the charged property without payment in settlement of the debt due to the chargeholder