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Mid Term Cheat Sheet DMOP

The document summarizes key concepts related to linear optimization models including: 1) The components of an analytical model including decision variables, objective function, and constraints. 2) Key concepts in linear optimization problems including feasible region, optimal solution, binding constraints, and shadow prices. 3) How changes to parameters like availability of resources or objective function coefficients impact the optimal solution. 4) Examples of objective functions and constraints for different types of linear optimization problems like transportation, assignment, and custom molding.

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nupur
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617 views2 pages

Mid Term Cheat Sheet DMOP

The document summarizes key concepts related to linear optimization models including: 1) The components of an analytical model including decision variables, objective function, and constraints. 2) Key concepts in linear optimization problems including feasible region, optimal solution, binding constraints, and shadow prices. 3) How changes to parameters like availability of resources or objective function coefficients impact the optimal solution. 4) Examples of objective functions and constraints for different types of linear optimization problems like transportation, assignment, and custom molding.

Uploaded by

nupur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Steps to Build a Model Transportation Problem:

• Business Problem: Figure out ___ in order to • Business Problem: Minimizing total transportation cost while meeting the demand
maximize/ minimize ____ while considering • Decision variables: xᵢⱼ = # of units to ship from factory at i to store at j
resource constraints Shadow price of supplier : -ve or zero
• Objective function: Min c₁₁x₁₁ + c₁₂x₁₂ + ... + cₙₘxₙₘ
• Analytical Model: Shadow price of receiver : +ve or zero
• Constraints: (if D<S)
• Decision Variables (& No. of variables) 1) Supply constraints: Qty shipped out should not be more than available (i.e. ≤)
• Objective Function x₁₁ + x₁₂ + ... + x₁ₘ ≤ supply₁, …….., xₘ₁ + xₘ₂ + ... + xₘₘ ≤ supplyₘ
• Constraints 2) Demand constraints: Qty Shipped in should be greater than or equal to Qty Reqd (≥)
*Include Units x₁₁ + x₂₁ + ... + xₙ₁ = demand₁, …….., x₁ₘ + x₂ₘ + ... + xₙₘ = demandₘ
Graphical Model 3) Non-negativity : xᵢⱼ ≥ 0
• Plot the constraint lines & figure out feasible region * If D>S, then Supply constraints: Do not Ship < what is available to meet demand (≥ S1)
• Determine the coordinates of vertices by solving Demand constraint: Give me whatever is available (≤ D1)
simultaneous eqn in 2 variables NOTE: Optimal Solution will not always choose individual least expensive routes, it will
• Plug the vertices in the obj fn & compare the values choose routes such that total cost is minimised. SEE THE OVERALL COST!
• Figure our which vertex max / min the obj fn
Telecom Optics
Assumptions underlying a linear optimization model
• Single objective
• Linearity
• Divisibility: Variable can take fractional values
• Data certainty: Coeff. are not random variables

1. Feasible Region
• Feasible region is defined purely by the constraints;
Obj fund has no role
• Feasible region can be: Bounded, Unbounded,
Empty (for infeasible LP)
• LP can have redundant constraints which can be
omitted w/o affecting feasible solution

2. Optimal Solution
• Always on the vertices or edges i.e. multiple
solutions (but solver gives only corner points)
• Determined by Objective function

3. Binding Constraints
• Resources completely used @optimality
• Line passing through the optimal soln
• corresponding resources are critical resources
The time to complete task B, tB, is a constant (4 days),
• Binding const. are defined w.r.t. optimal sol. tA can take as long as 10 days, but can be shortened
• Check for non-neg cont. also, if x1 = 0 à Binding by assigning additional resources to the task. For
every unit of additional resource assigned to task A,
4. Shadow Price the completion time reduces by half a day. Let xA
• Marginal value of the resource or constraint denote the number of additional resources assigned
• Change in obj. fn w.r.t a small change in availability to task A (clearly xA >=0). Due to budget constraints
we can assign at most 18 additional units to task A
of resource (everything else const.) Which of the following is the correct linear program
• Unit : slope or derivative (∆Obj fn/ ∆constraint RHS) that minimizes the project completion time subject to
• Sh. P. is same b/w a range of resource availability these constraints?
• Sh. P. of Non-Binding constraint = 0
• Diminishing Marginal Val. (Sh P↓ w/ ↑ in RHS)

5. Objective Function Coefficient


• Within a range of obj fn coeff. à same optimal sol

6. Reduced Cost (of a variable)


• = Marginal Benefit – Marginal Cost = MR - MC
• =Obj fn coeff– sumprod(Resource consump., Sh P.)
• Unit : Rate of Change
• Red. Cost = 0; when product ∈ optimal sol
• *** Used when engaging in a new activity
• Indicates how much the Obj fn coeff of the variable
must be improved before the variable is “utilized”
on its own merit (it is neither at max nor min).
• Regardless of whether you are maximizing or
minimizing, a positive reduced cost means
increasing x will increase the objective value and a
negative reduced cost means increasing x will
decrease the objective value. (MR –MC > 0)

Solver Errors:
• Solver could not find a feasible solution: Feasible
region = empty/ LP infeasible (Qty reqd ≥ available)
• Obj. cell values do not converge: Some constraints
are missed à region is very large/ unbounded

Types of Integer Problems


• All integer programs have linear equalities and
inequalities and some or all of the variables are
required to be integer
• If all variables are required to be integer, then it is
usually called a pure integer program
• If all variables are required to be 0 or 1, it is called a
binary integer program, or a 0-1 integer program
• If some variables can be fractional and others are
required to be integers, it is called a mixed linear
integer program (MILP)

Objective Function, Constraints for:


1) Custom Molder
2) Cosmos
3) Transportation problem
4) Frosty
Custom Molder Transportation Problem
• Business Problem: Figure out the quantities of 6-oz & 10-oz
glasses to produce in order to maximize profits while
considering the resource & demand constraints
• Decision variables: x₁ = # of 6oz glasses to produce; x2 = # 10
oz glasses to produce
• Objective function: Max 500x₁ + 450x₂ ($ per 100 cases)
• Constraints:
1) Production (Hrs): 6x₁ + 5x₂ ≤ 60
2) Storage (’00s cu. ft.): 10x₁ + 20x₂ ≤ 150
3) Demand for 6-oz Glasses (‘00s of cases): x₁ ≤ 8
4) Non-negativity : x₁, x₂ ≥ 0
# hrs of Molding-machine cap was inc from 60 to 61 hrs
• How is the feasible region impacted by this change? Increases
• New optimal objective value? Same (Inc is within limits)
• Per unit improvement in profit? Inc by Sh. P*Inc in qty of resp.
constraint= 78.5*1
Profit cont of 6oz glass is inc from $500 to $501 (per 100 cases)
• How is the feasible region impacted by this change? No change
• New optimal solution? No change
• New optimal objective value? Inc by (optimal qty of 6-oz
glass*Inc in Obj fn coeff = 6.43*1
New product : Prod time = 8 Hrs /100 cases; Storage Cap = 1000
cu ft /100 cases; Profit cont is $6.00 per case
• Should you produce? Red Cost = 600 – (8*Sh P of Prod cons +
10*Sh P of Stor Cap cons) Shortest Path Problem Assignment Problem
Astros & Cosmos
Objective function: Max (20*A + 30*C – 1000) Assignment Problem: # of supply locations = # of demand locations.
Constraints: Supply @each supply node = 1 & demand @each demand node = 1.
• A + 2*C ≤ 120 (Picture tube Hrs) Eqn = ∑(Unit Feasible Solution = 1-to-1 mapping
• A + C ≤ 96 (Chassis assembly Hrs) Contribution*xi – • Business Problem: Minimizing cost or time
• A ≤ 70 (Astros circuit boards) Variable Cost* xi ) – • Decision variables: xᵢⱼ = {0,1} ; 0 if task i is not assigned to resource
• C ≤ 50 (Cosmos circuit boards) Fixed Costs j; 1 if task is assigned to resource j and one job can only be worked
• A, C ≥ 0 (Non negativity) on by one person, with its respective costs Cij

We use the –ve sign for demand as a convention

Suppose that workers in the picture tube department are willing


to work overtime for $21/hr. How many hours of overtime, if
any, should they employ? – Sh. P is 15rs i.e maximum price
which should be paid to obtain an additional unit of re- source is
15 but we are demanded 21 so we should not use overtime.

• Business Problem: How many cartons should frosty purchase ?


• Decision variables: xᵢⱼ = # of units to ship from factory at i to store at j
• Objective function:

Southwest Airlines

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