Module b Flashcards
represents the essential features of an object, system or problem without unimportant details
A simplified version of reality
model
_____ models are cheaper, faster and safer than constructing and manipulating real systems
Mathematical
models that seek to maximize or minimize some objective function while satisfying a set - linear programming
Optimization Models:
: A mathematical technique designed to help operations managers plan and make decisions necessary to allocate resources
Linear Programming (LP)
Many operations management decisions involve trying to make the most effective use of resources – LP problems seek to ________ some quantity
maximize or minimize
: the presence of restrictions, or constraints, limits the degree to which we can pursue our objective
constraints
controllable input variable that represents the key decisions a manager must make to achieve an objective
Generally use x1, x2, x3, etc. to represent decision variables
Decision variables:
: the evaluation criteria (often maximizing profit or minimizing cost)
Objective Function:
The constant terms in the objective function
Objective Function Coefficients:
solutions that satisfy all constraints
Feasible Solutions:
: any feasible solution that optimizes the objective function
Optimal Solution:
a constraint that forms the optimal corner point of the feasible solution space
Binding constraint:
when the optimal values of decision variables are substituted into a (greater than or equal to) constraint and the resulting value exceeds the right side value
of the feasible solution space
Surplus:
when the optimal values of decision variables are substituted into a (less than or equal to) constraint and the resulting value is less than the right side value
slack
used to assess the impact of potential changes to parameters of an LP model
Sensitivity analysis
There are three types of potential changes:
Objective function changes
Right-hand-side (RHS) values of constraints
Constraint coefficients
the range of values for the coefficients in the objective function over which the solution of the decision variables remain the same
Range of optimality:
: the range of values for the right-hand side (RHS) of a constraint over which the shadow price remains the same
Range of feasibility:
the amount by which the value of the objective function would change with a one-unit change in the RHS value of the constraint
Shadow price:
_____ is only valid when the RHS changes are within the Range of Feasibility
Shadow price
