Traditional linear program (LP) models are deterministic. The way that constraint limit uncertainty is handled is to compute the range of feasibility. After the optimal solution is obtained, typically by the simplex m...Traditional linear program (LP) models are deterministic. The way that constraint limit uncertainty is handled is to compute the range of feasibility. After the optimal solution is obtained, typically by the simplex method, one considers the effect of varying each constraint limit, one at a time. This yields the range of feasibility within which the solution remains feasible. This sensitivity analysis is useful for helping the analyst get a feel for the problem. However, it is unrealistic because some constraint limits can vary randomly. These are typically constraint limits based on expected inventory. Inventory may fall short if there are overdue deliveries, unplanned machine failure, spoilage, etc. A realistic LP is created for simultaneously randomizing the constraint limits from any probability distribution. The corresponding distribution of objective function values is created. This distribution is examined directly for central tendencies, spread, skewness and extreme values for the purpose of risk analysis. The spreadsheet design presented is ideal for teaching Monte Carlo simulation and risk analysis to graduate students in business analytics with no specialized programming language requirement.展开更多
Many Optimization problems in engineering and economic involve the challenging task of pondering both conflicting goals and random data. In this paper, we give an up-to-date overview of how important ideas from optimi...Many Optimization problems in engineering and economic involve the challenging task of pondering both conflicting goals and random data. In this paper, we give an up-to-date overview of how important ideas from optimization, probability theory and multicriteria decision analysis are interwoven to address situations where the presence of several objective functions and the stochastic nature of data are under one roof in a linear optimization context. In this way users of these models are not bound to caricature their problems by arbitrarily squeezing different objective functions into one and by blindly accepting fixed values in lieu of imprecise ones.展开更多
The current structure of Landmark University (LU) was induced by raising a generation of solution providers through a qualitative and life-applicable training system that focuses on values and creative knowledge by ma...The current structure of Landmark University (LU) was induced by raising a generation of solution providers through a qualitative and life-applicable training system that focuses on values and creative knowledge by making it more responsive and relevant to the modern-day demands of demonstration, industrialization and development. The challenge facing Landmark University is the question of which of its numerous projects they should invest to give maximum output with minimum input. In this paper, we maximize the Net Present Value (NPV) and maintain the net discount cash overflow of each project per period as contained and extracted as the secondary data of cash inflows of the Landmark University (LU) monthly financial statement and annual reports from 2012 to 2017 of which the documents have been regrouped as small and large scale projects as many enterprises make more use of the trial-and-error method and as such firms have been finding it difficult in allocating scarce resources in a manner that will ensure profit maximization and/or cost minimization with a simple and accurate decision making by the company through an optimization principle in selecting LU project under multi-period capital rationing using linear programming (LP) and integer programming (IP). The annual net cash flow which is the difference between the cash inflows and cash outflows during each period for the project was estimated and recorded. The discount factors were estimated at cost of capital of 10% for each cash flow per period with the corresponding NPV at 10% which revealed that the optimal decision achieves maximum returns of $110 × 102 and this assisted the project manager to select a large number of the variable projects that can maximize the profit which is far better than relying on an ad-hoc judgmental approach to project investment that could have cost 160 × 102 for the same project. Sensitivity analysis on the project parameters are also carried out to test the extent to which project selection is sensitive to changes in the parameters of the system revealed that a little reduction and or addition of reduced cost by certain amount or percentages to its corresponding coefficient in the objective function effect no changes in the shadow prices with solution values for variables (x1), (x4), (x5) and the optimal objective function.展开更多
文摘Traditional linear program (LP) models are deterministic. The way that constraint limit uncertainty is handled is to compute the range of feasibility. After the optimal solution is obtained, typically by the simplex method, one considers the effect of varying each constraint limit, one at a time. This yields the range of feasibility within which the solution remains feasible. This sensitivity analysis is useful for helping the analyst get a feel for the problem. However, it is unrealistic because some constraint limits can vary randomly. These are typically constraint limits based on expected inventory. Inventory may fall short if there are overdue deliveries, unplanned machine failure, spoilage, etc. A realistic LP is created for simultaneously randomizing the constraint limits from any probability distribution. The corresponding distribution of objective function values is created. This distribution is examined directly for central tendencies, spread, skewness and extreme values for the purpose of risk analysis. The spreadsheet design presented is ideal for teaching Monte Carlo simulation and risk analysis to graduate students in business analytics with no specialized programming language requirement.
文摘Many Optimization problems in engineering and economic involve the challenging task of pondering both conflicting goals and random data. In this paper, we give an up-to-date overview of how important ideas from optimization, probability theory and multicriteria decision analysis are interwoven to address situations where the presence of several objective functions and the stochastic nature of data are under one roof in a linear optimization context. In this way users of these models are not bound to caricature their problems by arbitrarily squeezing different objective functions into one and by blindly accepting fixed values in lieu of imprecise ones.
文摘The current structure of Landmark University (LU) was induced by raising a generation of solution providers through a qualitative and life-applicable training system that focuses on values and creative knowledge by making it more responsive and relevant to the modern-day demands of demonstration, industrialization and development. The challenge facing Landmark University is the question of which of its numerous projects they should invest to give maximum output with minimum input. In this paper, we maximize the Net Present Value (NPV) and maintain the net discount cash overflow of each project per period as contained and extracted as the secondary data of cash inflows of the Landmark University (LU) monthly financial statement and annual reports from 2012 to 2017 of which the documents have been regrouped as small and large scale projects as many enterprises make more use of the trial-and-error method and as such firms have been finding it difficult in allocating scarce resources in a manner that will ensure profit maximization and/or cost minimization with a simple and accurate decision making by the company through an optimization principle in selecting LU project under multi-period capital rationing using linear programming (LP) and integer programming (IP). The annual net cash flow which is the difference between the cash inflows and cash outflows during each period for the project was estimated and recorded. The discount factors were estimated at cost of capital of 10% for each cash flow per period with the corresponding NPV at 10% which revealed that the optimal decision achieves maximum returns of $110 × 102 and this assisted the project manager to select a large number of the variable projects that can maximize the profit which is far better than relying on an ad-hoc judgmental approach to project investment that could have cost 160 × 102 for the same project. Sensitivity analysis on the project parameters are also carried out to test the extent to which project selection is sensitive to changes in the parameters of the system revealed that a little reduction and or addition of reduced cost by certain amount or percentages to its corresponding coefficient in the objective function effect no changes in the shadow prices with solution values for variables (x1), (x4), (x5) and the optimal objective function.
