Multicriteria Decision Making

Goal Programming Goal Programming

Industrial Engineering Department Graphical Interpretation of Goal Programming
Institut Teknologi Sepuluh Nopember
Surabaya

Quantitative Modeling & Industrial Policy Analysis (Q-Lab)

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Introduction Overview
Study of problems with several criteria, multiple criteria,
▪ In many situations, a company wants to achieve
instead of a single objective when making a decision.
several objectives. Given limited resources, it may
Two techniques discussed: goal programming, and the
prove impossible to meet all objectives simultaneously.
analytical hierarchy process.
▪ If the company can prioritize its objectives, then goal
Goal programming is a variation of linear programming
programming can be used to make good decisions.
considering more than one objective (goals)
in the objective function.
The analytical hierarchy process develops a score for each
decision alternative based on comparisons of each under
different criteria reflecting the decision makers preferences.

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 Goal Programming Goal Programming
Goal programming may be used to solve linear
programs with multiple objectives, with each objective For each priority level, the objective function is
viewed as a "goal". to minimize the (weighted) sum of the goal
In goal programming, di+ and di- , deviation variables, deviations.
are the amounts a targeted goal i is overachieved or Previous "optimal" achievements of goals are
underachieved, respectively.
added to the constraint set so that they are not
The goals themselves are added to the constraint set degraded while trying to achieve lesser priority
with di+ and di- acting as the surplus and slack variables.
goals.
One approach to goal programming is to satisfy goals in
a priority sequence. Second-priority goals are pursued
without reducing the first-priority goals, etc.

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Goal Programming Approach Goal Programming Approach

Step 1: Decide the priority level of each goal. Step 5: Set up the new linear program.
Step 2: Decide the weight on each goal. Consider the next-lower priority level goals and
If a priority level has more than one goal, for formulate a new objective function based on these
each goal i decide the weight, wi , to be placed on goals. Add a constraint requiring the achievement of
the deviation(s), di+ and/or di-, from the goal. the next-higher priority level goals to be maintained.
Step 3: Set up the initial linear program. The new linear program might be:
Min w1d1+ + w2d2- Min w3d3+ + w4d4-
s.t. Functional Constraints, s.t. Functional Constraints,
and Goal Constraints Goal Constraints, and
Step 4: Solve this linear program. w1d1+ + w2d2- = k
If there is a lower priority level, go to step 5. Go to step 4. (Repeat steps 4 and 5 until all
Otherwise, a final optimal solution has been reached. priority levels have been examined.)

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 Formulation – Goal Constraints Formulation – Goal Constraints (2)

At least one or both deviational variables in a goal

constraint must equal zero.
The objective function in a goal programming model seeks
to minimize the deviation from goals in the order of the goal
priorities.
Logically, a good compromise solution seeks to minimize
the amount by which each goal is violated.

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Example – Fairville Case Goal Constraints – Example (2)

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 Formulation – Objective Function Formulation – Objective Function (2)

How can we optimize a multi-objective model with • Based on Fairville’s Case:

conflicting goals? • Thus, the compromise solution seeks to satisfy the
Two methods have been developed for this purpose: following four objectives as much as possible:
▪ (1) the weights method and
▪ (2) the preemptive method.
Both methods are based on converting the multiple
objectives into a single function.

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The Weights Method The Weights Method - Example

TopAd, a new advertising agency with 10 employees, has received a
contract to promote a new product. The agency can advertise by
radio and television. The following table gives the number of people
reached daily by each type of advertisement and the cost and labor
requirements

The contract prohibits TopAd from using more than 6 minutes of

radio advertisement. Additionally, radio and television
advertisements need to reach at least 45 million people. TopAd has
a budget goal of $100,000 for the project. How many minutes of
radio and television advertisement should TopAd use?
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 The Weights Method – Example (2) The Preemptive Method

Subject to

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The Preemptive Method (2) The Preemptive Method (3)

The proposed column-dropping modification needlessly

complicates GP. In this presentation, we show that the same
results can be achieved in a more straightforward manner using
the following steps:

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 The Preemptive Method - Example The Preemptive Method – Example (2)
Refers to TopAd case

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Goal Programming Goal Programming

Model Formulation (1 of 2) Model Formulation (2 of 2)
Beaver Creek Pottery Company Example: Adding objectives (goals) in order of importance (i.e.
Maximize Z = $40x1 + $50x2 priorities), the company:

subject to: Does not want to use fewer than 40 hours of labor per
1x1 + 2x2  40 hours of labor day.
4x1 + 3x2  120 pounds of clay Would like to achieve a satisfactory profit level of
x1, x2  0 $1,600 per day.
Where: x1 = number of bowls produced Prefers not to keep more than 120 pounds of clay on
x2 = number of mugs produced hand each day.
Would like to minimize the amount of overtime.

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 Goal Programming: Goal Constraints (1 of 3) Goal Programming: Objective Function (2 of 3)

x1 + 2x2 = 40 - d1- + d1+ Let Pi= Priority i, where i = 1, 2, 3, and 4.

Labor goals constraint (1, less than 40 hours labor; 4,
40x1 + 50 x2 = 1,600 - d2- + d2+ minimum overtime):
Minimize P1d1-, P4d1+

4x1 + 3x2 = 120 - d3- + d3+ Add profit goal constraint (2, achieve profit of $1,600):
Minimize P1d1-, P2d2-, P4d1+

x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0 Add material goal constraint (3, avoid keeping more than
120 pounds of clay on hand):
Minimize P1d1-, P2d2-, P3d3+, P4d1+

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Goal Programming Goal Programming

Goal Constraints and Objective Function (3 of 3) Graphical Interpretation (1 of 6)
Complete Goal Programming Model:
Minimize P1d1-, P2d2-, P3d3+, P4d1+
subject to:
Minimize P1d1-, P2d2-, P3d3+, P4d1+
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600 subject to:
x1 + 2x2 + d1- - d1+ = 40
4x1 + 3x2 + d3 - - d3 + = 120 40x1 + 50 x2 + d2 - - d2 + = 1,600
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0 4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

Figure 9.1
Goal Constraints

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 Goal Programming Goal Programming
Graphical Interpretation (2 of 6) Graphical Interpretation (3 of 6)

Minimize P1d1-, P2d2-, P3d3+, P4d1+ Minimize P1d1-, P2d2-, P3d3+, P4d1+
subject to: subject to:
x1 + 2x2 + d1- - d1+ = 40 x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600 40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120 4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0 x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

Figure 9.2 Figure 9.3

The First-Priority Goal: Minimize The Second-Priority Goal: Minimize

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Goal Programming Goal Programming

Graphical Interpretation (4 of 6) Graphical Interpretation (5 of 6)

Minimize P1d1-, P2d2-, P3d3+, P4d1+ Minimize P1d1-, P2d2-, P3d3+, P4d1+
subject to: subject to:
x1 + 2x2 + d1- - d1+ = 40 x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600 40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120 4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0 x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0

Figure 9.4 Figure 9.5

The Third-Priority Goal: Minimize The Fourth-Priority Goal: Minimize

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 Goal Programming Goal Programming
Graphical Interpretation (6 of 6) Computer Solution Using Excel (1 of 3)
Goal programming solutions do not always achieve all goals
and they are not optimal, they achieve the best or most
satisfactory solution possible.
Minimize P1d1-, P2d2-, P3d3+, P4d1+
subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +  0
x1 = 15 bowls
x2 = 20 mugs
d1+ = 15 hours Exhibit 9.4

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Goal Programming Goal Programming

Computer Solution Using Excel (2 of 3) Computer Solution Using Excel (3 of 3)

Exhibit 9.5
Exhibit 9.6

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 Goal Programming Goal Programming
Alternative Forms of Goal Constraints (1 of 2) Alternative Forms of Goal Constraints (2 of 2)
Changing fourth-priority goal limits overtime to 10 hours Complete Model with New Goals:
instead of minimizing overtime: Minimize P1d1-, P2d2-, P3d3 +, P4d4 +, 4P5d5 +, 5P5d6 +
d1+ + d4 - - d4+ = 10 subject to:
minimize P1d1 -, P2d2 -, P3d3 +, P4d4 + x1 + 2x2 + d1- - d1+ = 40
Addition of a fifth-priority goal- due to limited warehouse 40x1 + 50x2 + d2- - d2+ = 1,600
space, cannot produce more than 30 bowls and 20 mugs 4x1 + 3x2 + d3- - d3+ = 120
daily. d1+ + d4- - d4+ = 10
x1 + d5- - d5+ = 30
x1 - d5 + = 30 bowls x2 + d6- - d6+ = 20
x2 - d6 + = 20 mugs x1, x2, d1-, d1+, d2-, d2+, d3-, d3+, d4-, d4+, d5+, d6+  0
minimize P1d1 -, P2d2 -, P3d3 +, P4d4 +, 4P5d5 +, 5P5d6 +

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Goal Programming Goal Programming

Solution for Alternate Problem Using Excel (1 of 6) Solution for Alternate Problem Using Excel (2 of 6)

Minimize P1d1-, P2d2-, P3d3 +, P4d4 +, 4P5d5 +, 5P5d6 +

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50x2 + d2- - d2+ = 1,600
4x1 + 3x2 + d3- - d3+ = 120
d1+ + d4- - d4+ = 10
x1 + d5- - d5+ = 30
x2 + d6- - d6+ = 20
x1, x2, d1-, d1+, d2-, d2+, d3-, d3+, d4-, d4+, d5+, d6+  0

Exhibit 9.7

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 Goal Programming Goal Programming
Solution for Alternate Problem Using Excel (3 of 6) Solution for Alternate Problem Using Excel (4 of 6)

Exhibit 9.9

Exhibit 9.8

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Goal Programming Goal Programming

Solution for Alternate Problem Using Excel (5 of 6) Solution for Alternate Problem Using Excel (6 of 6)

Exhibit 9.10

Exhibit 9.11

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 Example 2: Conceptual Products Example: Conceptual Products

Conceptual Products is a computer company that produces The company has four goals which are given below:
the CP400 and the CP500 computers. The computers use Priority 1: Meet a state contract of 200 CP400
different mother boards produced in abundant supply by the machines weekly. (Goal 1)
company, but use the same cases and disk drives. The CP400
models use two floppy disk drives and no zip disk drives Priority 2: Make at least 500 total computers weekly.
whereas the CP500 models use one floppy disk drive and one (Goal 2)
zip disk drive.
Priority 3: Make at least $250,000 weekly. (Goal 3)
The disk drives and cases are bought from vendors. There
are 1000 floppy disk drives, 500 zip disk drives, and 600 cases Priority 4: Use no more than 400 man-hours per
available to Conceptual Products on a weekly basis. It takes week. (Goal 4)
one hour to manufacture a CP400 and its profit is $200 and it
takes one and one-half hours to manufacture a CP500 and its
profit is $500.

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Example: Conceptual Products Example: Conceptual Products

Variables Goals
x1 = number of CP400 computers produced weekly (1) 200 CP400 computers weekly:
x2 = number of CP500 computers produced weekly x1 + d1- - d1+ = 200
di- = amount the right hand side of goal i is deficient (2) 500 total computers weekly:
di+ = amount the right hand side of goal i is exceeded x1 + x2 + d2- - d2+ = 500
Functional Constraints (3) $250(in thousands) profit:
Availability of floppy disk drives: 2x1 + x2 < 1000 .2x1 + .5x2 + d3- - d3+ = 250
Availability of zip disk drives: x2 < 500 (4) 400 total man-hours weekly:
Availability of cases: x1 + x2 < 600 x1 + 1.5x2 + d4- - d4+ = 400
Non-negativity:
x1, x2, di-, di+ > 0 for all i

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 Example: Conceptual Products Example: Conceptual Products
Objective Functions Formulation Summary
Min P1(d1-) + P2(d2-) + P3(d3-) + P4(d4+)
Priority 1: Minimize the amount of the stated
s.t. 2x1 +x2 < 1000
contract is not met: Min d1-
+x2 < 500
Priority 2: Minimize the number under 500 x1 +x2 < 600
computers produced weekly: Min d2- x1 +d1- -d1+ = 200
Priority 3: Minimize the amount under $250,000 x1 +x2 +d2- -d2+ = 500
earned weekly: Min d3- .2x1+ .5x2 +d3- -d3+ = 250
Priority 4: Minimize the man-hours over 400 used x1+1.5x2 +d4- -d4+ = 400
weekly: Min d4+ x 1 , x 2 , d 1 - , d 1 +, d 2 - , d 2 +, d 3 - , d 3 +, d 4 - , d 4 + > 0

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Example: Conceptual Products Example: Conceptual Products

Functional Constraints and Goal 1 Graphed
Graphical Solution, Iteration 1
To solve graphically, first graph the functional
constraints. Then graph the first goal: x1 = 200.
Note on the next slide that there is a set of points
that exceed x1 = 200 (where d1- = 0).

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 Example: Conceptual Products Example: Conceptual Products

Graphical Solution, Iteration 2 Goal 1 (Constraint) and Goal 2 Graphed

Now add Goal 1 as x1 > 200 and graph Goal 2:
x1 + x2 = 500. Note on the next slide that there is
still a set of points satisfying the first goal that also
satisfies this second goal (where d2- = 0).

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Example: Conceptual Products Example: Conceptual Products

Graphical Solution, Iteration 3 Goal 2 (Constraint) and Goal 3 Graphed
Now add Goal 2 as x1 + x2 > 500 and Goal 3:
.2x1 + .5x2 = 250. Note on the next slide that no
points satisfy the previous functional constraints
and goals and satisfy this constraint.
Thus, to Min d3-, this minimum value is
achieved when we Max .2x1 + .5x2. Note that this
occurs at x1 = 200 and x2 = 400, so that .2x1 + .5x2
= 240 or d3- = 10.

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