The Shadow Price

November 8, 2011

Background The shadow price is one of the central concepts in sensitivity analysis (Which is analyzing how the solution changes depending upon changes to different variables, the objective being finding ranges of change where the solution is “sensitive” to changes in the variables. This can provide quantitative support for things like investing in certain areas of [...]

Read the full article →

What We Can Learn from the Link Flight Trainer

October 29, 2011

The Link Trainer was the first flight simulator to be widely used. It was used in many countries and was credited dramatically increasing the number pilots which could be inexpensively trained. Background The Link Trainer was developed back in 1929, although it developed through several incarnations which eventually included instrumentation and a course plotter.  However, [...]

Read the full article →

Feasible Solutions and Optimizer Time Outs

October 27, 2011

When the Optimizer Takes Too Long to Finish and Times Out There are two basic states for any sub-problem at the end of an optimizer run, either optimally solved or feasibly solved. All solutions will be feasible, therefore it is axiomatic. As we discussed earlier, just because a non-linear problem solves optimally, does not mean [...]

Read the full article →

Local Versus Global Optimum Solutions

October 27, 2011

Global Versus Local Optimums Non-linear optimization tends to be expressed as much more straightforward than it is. While linear optimization is straightforward, as soon as non-linear constraints are added things become much more complex. This of course has to happen in order to model the realities of the supply network. As soon as lot size [...]

Read the full article →

A Sensitivity Analysis Approach for Supply Chain Optimization

October 25, 2011

Background As is discussed in other articles on this blog, sensitivity analysis – which is the study of how the solution changes depending upon changes to different variables, the objective being finding ranges of change where the solution is “sensitive” to changes in the variables – is not often performed in supply chain optimization. Rather companies [...]

Read the full article →

Good Guidelines for Optimization with Spreadsheets

October 23, 2011

Background Whether using optimization with a spreadsheet for explaining how optimization works, or doing so to validate solutions in enterprise optimizers, or even using optimization for things like dividing optimization runs into intelligent segments, using an optimizer with a spreadsheet is one of the simplest ways to access the power of optimization. However, in order [...]

Read the full article →

Understanding the Difference Between Enterprise Optimizers and General Optimization Solvers

October 12, 2011

Background In this article I describe the benefits of using a modeling language to externally validate the results of optimization engines that are coded in enterprise software. This is how most people in companies interact with optimizers, however, there is an important distinction between optimizers in enterprise software versus optimizer engines/solvers that are in modeling [...]

Read the full article →

Metaheuristics

October 12, 2011

Background Most people who work in this area are familiar with the term heuristics, but much less so with the the term “metaheuristics.” Metaheuristics are important for problems which are computationally infeasble to solve with optimization. In computer science, metaheuristic designates a computational method that optimizes a problem by iteratively trying to improve a candidate [...]

Read the full article →

How Far is a Solution from the Optimal?

September 26, 2011

Background One common question is both what percentage of the overall solve was optimal. The way that this percentage is determined is by the number of sub-problems that the optimizer broke the problem down into, and what percentage of those solved optimally (i.e. met the objective function). For instance, the optimizer in SAP SNP breaks [...]

Read the full article →

The Popularizing of Optimization Mathematics with Spreadsheets

September 25, 2011

Background In doing research in different optimization mathematics I have observed how research papers do not include spreadsheet models along with their papers. Spreadsheet models can be purchased with several books that focus on optimization, however, this article investigates the benefits of including spreadsheet models more broadly. Placing Optimization Problems in Excel The fact that [...]

Read the full article →

← Previous Entries