Canonical Duality Theory and Algorithm for Solving Bilevel Knapsack Problems with Applications

Abstract: A novel canonical duality theory (CDT) is presented for solving general bilevel mixed integer nonlinear optimization governed by linear and quadratic knapsack problems. It shows that the challenging knapsack problems can be solved analytically in term of their canonical dual solutions. The existence and uniqueness of these analytical solutions are proved. NP-Hardness of the knapsack problems is discussed. A powerful CDT algorithm combined with an alternative iteration and a volume reduction method is proposed for solving the NP-hard bilevel knapsack problems. Application is illustrated by a benchmark problem in optimal topology design. The performance and novelty of the proposed method are compared with the popular commercial codes.