QUANTECH Flashcards
mathematical technique for finding the best uses of an organization’s resources
Linear Programming
a limit on the availability of resources
Constraint
expression which shows the relationship between the variables in the problem and the firm’s goals
Objective Function
the area containing all possible solutions to the problem which are feasible- those solutions which satisfy all the constraints in the problem
Area of feasible solutions
an efficient method in solving Linear Programming problem
Simplex method
variable used in Linear Programming to convert an inequality into an equation
Slack Variable
column containing all the variables in a solution in the simplex tableau
Product Mix Column
column in the simplex tableau which contains the profit or cost per unit for the variable in the solution
Cj column
column in any solution to a maximizing problem which has the largest positive value in the Cj -Zj row or which has the largest negative value in a minimizing problem
Optimum Column
a row in the simplex tableau which is replaced by the variable entering the new solution
Replaced row
elements which are common to both the optimum column and the rows representing variables in the solution
Intersectional Elements
row containing the opportunity costs of bringing one unit of a variable into the solution of a linear programming problem
ZJ row
contains the net benefit or loss occasioned by bringing one unit of a variable into the solution of a linear programming problem
Cj-Zj row
computational device used in linear programming to achieve an initial solution to the problem
Artificial Variable
concerned with selecting optimal routes between sources and destinations
Transportation Problem
special purpose algorithm for solving the transportation problem
Stepping Stone Method
demand equals supply
Balanced Condition
capacity constraints at sources and destinations in a transportation problem
Rim Requirements
systematic and logical procedure for setting up the initial solution to a transportation problem
Northwest corner rule
represents routes where no quantity between a source and a destination
Unused Squares
the net change in cost occasioned by a one-unit change in the quantity shipped
Improvement Index
used squares containing circled values that are in the solution
Stone Squares
inventory level at which it is appropriate to replenish stock
Reorder point
time required for the inventory to arrive after ab order is placed
Lead time
when available inventory is not sufficient to satisfy demand
Stock out
extra inventory held against the possibility of a stockout
Safety Stock
incurred each time an order is placed
Ordering Cost
referred to as holding cost; cost incurred in maintaining inventory
Carrying Cost
size of the order which minimizes the total annual cost of ordering and carrying inventory
Economic Order Quantity (EOQ)
a simplified special case of simplex method. This is a special procedure for transporting products from several sources to several destinations
Transportation Method
What are the the two common objectives of transportation Method
- To Minimize the Cost of shipping n units to x to destinations
- To Maximize Profit of shipping n units to x destinations
What are the steps in transportation method
STEPS:
1. Set up the Transportation Table
2. Develop an Initial Solution
3. Test the solution for improvement
4. Develop the Improved Solution
