GOAL PROGRAMMING BY USING EXCEL SOLVER

N. Gayathri1, C. Lourdus Monica2.

Assistant Professor1, Student2,

Sri Krishna Arts and Science College, Coimbatore, Tamilnadu, India.

ABSTRACT

Real world problems are mainly based on multiple objectives rather than single objective.
Today, in management sectors, most of the producers are more concerned about their own
sense than the economical issues. It is necessary for all the managers to do their best to make
as much effort as possible to increase the products. It is obvious that one of the ways is to
apply mathematical programming model for the management systems. Application of a
multi-objective programming model like goal programming model is an important tool for
studying various aspects of management systems. In this paper we present a digital approach
to solve linear goal programming by using Microsoft Excel Solver.

INTRODUCTION

Goal programming is one of the most widely used methodologies in operations research
and management science, and encompasses most classes of multiple objective programming
models. In traditional linear programming models we optimise the single quantifiable
objective such as profit, output, cost ect. However, setting clear-cut targets instead of simple
maximization or minimization of objectives is always advantages in the pursuit of business
problems.

In modern business world each and every business unit, however small may be, definitely
will have multiple goals. Achievements of multiple goal objectives often create difficulties
especially when goals are conflicting. In a situation with diversified objectives the
complexity of the problem gets multiplied. Goal programming techniques are often useful in
solving such problems with multiple and diversified goals. In such models the solution
heavily depends upon the listed out priorities to the diversified objectives. Given the clearly
established priority goals, the goal programming technique tries to minimize the deviation of
each one of them from their respective target levels according to their listed out priorities. In
such models, the goals are satisfied in a given sequential order, higher goals taking priorities,
lower goals are pushed to lower levels. In the final solution, some goals may be over-satisfied
and some others may be under-satisfied. Thus compromising rather than optimising is the
correct approach in goal programming. In the model formation, therefore, we incorporae all
goals and try to solve them having the priority in mind.

Thus in goal programming, all the objects are assigned to specific target levels for
achievement. Goal programming treats these targets as goals to aspire for and not as absolute
constraints. It then attempts to find an optimal solution that comes as “close as possible” to
the targets in the order of specified priorities.

The concept of Goal programming was introduced by Charles and Cooper in 1961 by
incorporating a method for solving infeasible linear programming problem involving various
conflicting constraints. In 1965 Ijiri developed the model based on appropriate priorities for
various goals and in the form of weightage for the same priority goals. Thus it is very much
clear that the objective function formulation is not for optimum, as in the case of linear
programming, but as far as possible very near to it. The latter work of Lee (1972) and Ignizio
shows several applications of goal programming business world. The goal programming is
solved either by graphical method or by a suitably modified Simplex method.

WEIGHTS METHOD:

In the weights method, a single objective function is formed as the weighted sum of the
function representing the goals of the problem. Suppose that the goal programming model has
n goals and that the ith goal is given as

Minimize Gi , i= 1,2,.......,n

The combined objective function used in the weights method is then defined as

Minimize z = w1G1 + w2G2 +............+wnGn

The parameters wi, i= 1,2,.....n, are positive weights that reflect the decision marker’s
preferences regarding the relative importance of each goal. The determination of the specific
values of these weights is subjective. Indeed, the apparently sophisticated analytic procedures
developed in the literature are still rooted in subjective assessments.

EXCEL SOLVER:

In Excel, Solver is part of a suite of commands sometimes called what-if analysis tools. With
Solver, you can find an optimal (maximum or minimum) value for a formula in one cell — called
the objective cell — subject to constraints, or limits, on the values of other formula cells on a
worksheet. Solver works with a group of cells — called decision variable cells — that participate in
computing the formulas in the objective and constraint cells. Solver adjusts the values in the decision
variable cells to satisfy the limits on constraint cells and produce the result you want for the objective
cell.

Solver works with a group of cells, called decision variables or simply variable cells that
are used in computing the formulas in the objective and constraint cells. Solver adjusts the
values in the decision variable cells to satisfy the limits on constraint cells and produce the
result you want for the objective cell. The objective, constraint and decision variable cells and the
formulas interrelating them form a Solver model; the final values found by Solver are a solution for
this model. Solver uses a variety of methods, from linear programming and nonlinear optimization to
genetic and evolutionary algorithms, to find solutions.
PROBLEM:

A Project manager is trying to determine the quantities of three types of products to products.
Producing one unit of product 1 will need 40 employees and 2 tons of raw material, and it
will bring the company 5 crores of profit. For the product 2 the values are 30, 4 and 8
respectively. For product 3, these values are 20, 3 and 4. The manager wants to meet three
goals

i. The maximum number of employees that can be allotted for producing these products
is 100.
ii. There are 10 tons of raw material in the Warehouse. The Manager wants to consume
them all, no more or no less.
iii. The total profit is expected to be at least 30 crores.

The manger realizes that it probably will not be possible to attain these goals simultaneously.
Therefore he sets some penalty weights for unmet goals. If the project needs more than 100
employees, each extra employee is associated with a penalty of 5. The penalty weight is unit
less. If the total raw material needed is different from 10 tons, each ton that is below this goal
is associated with a penalty of 8, and each ton that is above this goal is associated with a
penalty of 12. If the profit is less than 30 crores, each crore under the goal is associated with a
penalty of 15. So, the manager wants to minimize the total penalty.

Solution:

Factors Unit contribution Goals Unit

Variables:

Xi is the amount of product i , i=1,2,3

40x1 + 30x2 + 20x3 ≤ 100 {Labour}

2x1 + 4x2 + 3x3 = 10 { Material}

5x1 + 8x2 +4x3 ≥ 30 {Profit}

Introduce three variables y1 , y2 , y3 to represents the deviations from the goals

y1 = 40x1 + 30x2 + 20x3 - 100 (Labour)

y2 = 2x1 + 4x2 + 3x3 - 10 (Material)

y3 = 5x1 + 8x2 +4x3 - 30 (Profit)

yi- represents the amount under the goal

yi = yi+ - yi- (yi+ , yi- ≥ 0)

40x1 + 30x2 + 20x3 – (y1+ - y1- ) = 100 (Labour)

2x1 + 4x2 + 3x3 – (y2+ - y2- ) = 10 (Material)

5x1 + 8x2 +4x3 – (y3+ - y3- ) = 30 (Profit)

Min z = p1+ y1+ + p1- y1- + p2+ y2+ + p2- y2- + p3+ y3+ + p3- y3-

40x1 + 30x2 + 20x3 – (y1+ - y1- ) = 100 (Labour)

2x1 + 4x2 + 3x3 – (y2+ - y2- ) = 10 (Material)

5x1 + 8x2 +4x3 – (y3+ - y3- ) = 30 (Profit)

xj ≥ 0 (j = 1,2,3) ; yi+ , yi- ≥ 0 (i = 1,2,3)

Min z = 0* y1+ + p1- y1- + p2+ y2+ + p2- y2- + p3+ y3+ + 0* y3-

40x1 + 30x2 + 20x3 – (y1+ - y1- ) = 100 (Labour)

2x1 + 4x2 + 3x3 – (y2+ - y2- ) = 10 (Material)

5x1 + 8x2 +4x3 – (y3+ - y3- ) = 30 (Profit)

xj ≥ 0 (j = 1,2,3) ; yi+ , yi- ≥ 0 (i = 1,2,3)

SOLVING USING EXCEL SOLVER:

Step 1:

Select the data menu from the menu bar in Microsoft Excel. Click the Solver command to
display the Solver Parameters dialog.
 Step 2:

In the Set Objective box, enter a cell reference or name for the objective cell. The objective
cell must contain a formula.
Do one of the following:

 If you want the value of the objective cell to be as large as possible, click Max.
 If you want the value of the objective cell to be as small as possible, click Min.
 If you want the objective cell to be a certain value, click Value Of, and then type the value in
the box.

You may leave the Set Objective box empty. In this case Solver finds values for the decision
variables that satisfy the constraints. Using the Value Of option has the same effect as defining a
constraint (see below) where the objective cell must be equal to the specified value.
Step 3:

In the Subject to the Constraints box, enter any constraints that you want to apply.

Enter the first constraint and click Add.

Enter the third constraint and click Add.

Any changes can be made to the constraints by selecting Change or Delete.

Step 4:

Click Solve and in the Solver Results dialog box, read the message at the top and the more
detailed explanation at the bottom of this dialog.
After reading these messages, do one of the following:

 To keep the final values in the decision variable cells, click Keep Solver Solution.
 To restore the values of the decision variable cells at the time you clicked Solve,
click Restore Original Values. Select the Return to Solver Parameters Dialog check
box if you want to modify the Solver model or re-solve as your next step.
Click OK or Cancel.

Optimal solution:

x1 =0 , x2 = 3.33 , x3 = 0

y1 = y1+ - y1- = 0 - 0 = 0

y2 = y2+ - y2- = 3.33 – 0 = 3.33

y3 = y3+ - y3- = 0 – 3.33 = -3.33

z = 90

CONCLUSION:

This paper presented an easy method to solve the goal programming by using Excel solver.
Optimization problems in many fields can be modelled and solved using Excel Solver. It does
not require knowledge of complex mathematical concepts behind the solution algorithms.
This way is particularly helpful for students who are non math majors and still want to take
these courses.
REFERENCE:

1. 5th Edition Operations Research Theory and Applications by J K Sharma.

2. Operations Research fourth edition by S Kalavathy.

3. Operations Research and Management Science by A. Ravi Ravindran.

4. Introduction to Operations Research by Frederick S.Hilliee and Gerald J. Lieberman.

5. Operations Research Theory and Applications by Dr. T.P.Singh.

6. Students Solution Manual for Operation Research by Wayne L. Winston.