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Session 14

The document describes a county's plan to develop new recreational facilities within a $3.5 million budget, listing different facility types with their costs, land requirements, and monthly usage. It establishes ranked goals of spending the entire budget, serving at least 15,000 monthly users, using no more than 55 acres of land, and keeping annual maintenance costs below $80,000. The county has decided to build at least 15 facilities and will use a ranked goals optimization model to determine the best combination and number of facilities.

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SURAJ KUMAR
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24 views

Session 14

The document describes a county's plan to develop new recreational facilities within a $3.5 million budget, listing different facility types with their costs, land requirements, and monthly usage. It establishes ranked goals of spending the entire budget, serving at least 15,000 monthly users, using no more than 55 acres of land, and keeping annual maintenance costs below $80,000. The county has decided to build at least 15 facilities and will use a ranked goals optimization model to determine the best combination and number of facilities.

Uploaded by

SURAJ KUMAR
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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How does GP satisfice the goals?

• Instead of trying to maximize or minimize the objective functions directly, as in


LP/IP, with GP we try to minimize deviations between the specified goals and
what we can actually achieve within the given constraints.

• Deviations can be either positive or negative, depending on whether we


overachieve or underachieve a specific goal.

• These deviations are not only real decision variables in the GP model, but they
are also the only terms in the objective function.

• The objective is to minimize some function of these deviation variables.


Weighted GP Approach
• Wilson’s GP model assumes that all four goals are equally important to its managers.
• However, it is common in practice for managers to rank different goals in some hierarchical fashion.

Formulating a weighted model

Goal Weight
1 – Achieve total sales of at least $180,000 5 Suppose, Wilson specifies
that the total sales goal is
2 – Achieve exterior doors sales of at least $70,000 1 five times as important as
3 – Achieve interior doors sales of at least $60,000 1 each of the other three sales
goals
4 – Achieve commercial doors sales of at least $35,000 1

Objective function
Let us understand the solution in excel

Minimize total weighted


– – – –
underachievement of goals = 5dT + dE + dI + dC
Weighted GP Approach
Drawbacks of the weighted goals approach:
1. First, it is appropriate to use only if all the goals (and hence, the deviation variables) are being measured in
the same units (such as dollars)
2. Second, even if all goals are measured in the same units, it is not always easy to assign suitable weights for
the different deviation variables.

How about reducing the importance of the total sales goal to two and half times?

To overcome these two drawbacks with the weighted GP approach, we will now examine an alternate approach
— the ranked, or prioritized, goals approach—for solving GP problems
Ranked GP Approach
Formulating a ranked goal model

Goal 1: Achieve total sales of at least $180,000


Goal 2: Achieve exterior doors sales of at least $70,000
Goal 3: Achieve interior doors sales of at least $60,000
Goal 4: Achieve commercial doors sales of at least $35,000
Goal 5*: Achieve steel usage of as close to 9,000 pounds as possible

*Suppose Wilson plans to switch to a different type of steel for the next production period and therefore wants
to use up the current availability as much as possible.
Ranked GP Approach
Formulating a ranked goal model
Lower ranked goals are considered only after higher ranked goals are met

Rank R1: Goal 1


Rank R2: Goal 5
Rank R3: Goals 2, 3, and 4

New deviation variable(s)


Goal 5*: Achieve steel usage of as close to 9,000 pounds as possible
–
dS = amount by which the steel usage goal is underachieved
+
dS = What about this?

–
4E + 3I + 7C + dS = 9,000 (steel usage goal)
Ranked GP Approach
Objective function
– – – – –
Minimize ranked deviations = R1(dT ) + R2(dS ) + R3(dE + dI + dC )

subject to
– +
70E + 110I + 110C + dT - dT = 180,000 (total sales goal)
–
4E + 3I + 7C + dS = 9,000 (steel usage goal )
– +
70E + dE - dE = 70,000 (exterior doors sales goal)
– +
110I + dI - dI = 60,000 (interior doors sales goal)
– +
110C + dC - dC = 35,000 (commercial doors sales goal)
2E + 4I + 3C ≤ 6,000 (forming time)
2E + 3I + 4C ≤ 5,200 (assembly time)
– + – – +
E, I, C, dT, dT, dS, dE, dE,
– + – +
dI, dI, dC, dC ≥ 0
Ranked GP Approach
Objective function – first LP model
Minimize rank R1 deviations = dT–

Objective function – second LP model


Minimize rank R2 deviations = dS–

Additional constraint
–
dT = optimal value from rank R1 solution

Objective function – third LP model


– – –
Minimize rank R3 deviations = dE + dI + dC

Additional constraints
Let us solve this in Excel now
–
dT = optimal value from rank R1 solution
–
dS = optimal value from rank R2 solution
Chapter 6, Problem 34
Pendelton County plans to develop several new recreational facilities that must be completed within
the $3.5 million budget. A survey of county residents has resulted in information about the types of
facilities that county residents would like to see built, as described in the following table. The table
also shows the cost to construct and maintain each facility, the acres each facility will require, and
the average monthly usage of each facility. The county has decided that at least 15 facilities will

be built and has set aside 55 acres to be used for construction.


Chapter 6, Problem 34
The county has also established the following list
of ranked goals:

Rank 1: It would like to spend the entire budget.

Rank 2: It would like to build enough facilities so


that 15,000 people or more each month can

use them.

Rank 3: It wants to avoid using more than the 55


acres that have been set aside for the project.

Rank 4: It would like to avoid spending more


than $80,000 per year on maintenance costs for
the new facilities.

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