Aggregation-based decomposition for multi-divisional models

The aggregation theory of mathematical programming is used to study decentr alization in convex programming models. A two-level organization is conside red and a aggregation-disaggregation scheme is applied to such a divisional ly organized enterprise. In contrast to the known aggregation techniques, w here the decision variables/production planes are aggregated, it is propose d to aggregate resources allocated by the central planning department among the divisions. This approach results in a decomposition procedure, in whic h the central unit has no optimization problem to solve and should only ave rage local information provided by the divisions.