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Capacities of the respective depots and the number of buses required at the starting points of the respective routes are specified. The problem has two objectives - one primary and another secondary. The primary objective is to minimize the capital expenditure to be incurred in constructing a new depot plus the present value of the expenditure to be incurred in total dead mileage over a planning horizon. The secondary objective is to minimize the maximum of the dead mileage of individual buses. 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