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Optimization &amp; Linear Programming ppt

# Optimization &amp; Linear Programming ppt -...

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Optimization Problems have: Decision variables (can be varied) Objective function (what are we optimizing?) Constraints (typically, business rules) In Excel: Changing cells -> decision variables Target cell -> contains the objective (one) to be  minimized or maximized Constraints -> formulas or cells 2
A feasible solution satisfies all constraints  But may not be optimum The feasible region is the set of all feasible  solutions An infeasible solution violates at least one of the  constraints The optimal solution is the feasible solution that  optimizes the objective It is possible that no feasible solution exists 3

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An algorithm that works well in solving linear  programming problems (a set of linear  inequalities) is the simplex method This is implemented in Excel via the Solver add-in  (included in Excel for free) Tools -> Solver Must be turned on via Tools -> Add-ins 4
Use Pony Espresso.xls from Bb Pony Expresso Regular Coffee: \$1.25 Premium Latte: \$2.00 Premium Mocha: \$2.25 Under capacity constraints Max cups: 500 Max premium: 350 Max Mocha: 125 How can Pony Expresso maximize its revenue? by optimally deciding how many cups to produce for each kinds of

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Optimization &amp; Linear Programming ppt -...

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