INFM 718 A LBSC 705 Information For Decision
INFM 718 A / LBSC 705 Information For Decision Making Lecture 4
Overview • Linear Programming Recap – Modeling – Graphical Solution Approach – In-Class Exercises 2. 2 and 2. 3 • Excel Solution Approach (Solver) – Maximization Example – In-Class Exercises 2. 1, 2. 2 and 2. 3 in Solver – Minimization Example
Linear Programming • Decision models that involve decision variables whose feasible values are bounded by a set of constraints, aiming to maximize utility/profit, or minimize loss/cost.
Modeling LP Problems • • What are the decision variables? What is the goal (max. /min. )? Maximize/Minimize what? What are the constraints?
Modeling
Graphical Solution
Graphical Solution • Solve for inequalities that intersect at the Optimal Solution Point.
In-Class Exercises • 2. 2 • 2. 3
Excel Approach (Solver) • Build a spreadsheet representation of the model. • Define the target cell, max. /min and constraints in Solver • Let Solver solve.
Spreadsheet Representation Decision variables Constraints Value of objective function at OSP. Values of decision variables at optimal solution point. (Leave blank. ) Contributions to objective function Cells in red type are formulas; other cell values are entered manually.
Solver Definition
Solver Definition
Solver Definition
Solver Definition
Let Solver Solve
Solver Solution
Exercises • Solve the following using Solver: – Maximization Example – In-Class Exercises 2. 1, 2. 2, and 2. 3 – Minimization Example
- Slides: 17