CE 475

Systems Engineering I
Department of Civil Engineering

SET 3
INTROUDCTION TO OPTIMIZATION MODELING

Dr. Emmanuel A. Donkor

Department of Civil Engineering, College of Engineering
Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
OUTLINE

• Characteristics of Optimization problems

• Some definitions

• Sample formulation of a Linear Program

COPYRIGHT DR. EMMANUEL A. DONKOR 2

Optimization Case Study

A manufacturer of two products, Aqua and Hydro, wants to determine how many of
each item to manufacture in the next production cycle. Each Aqua requires 1 pump,
9hrs of labour and 12ft of tubing, while each Hydro requires 1 pump, 6hrs of labour
and 16ft of tubing. The manufacturer expects to have 200 pumps, 1566 production
hours and 2880ft of tubing for the upcoming production cycle. Each Aqua and Hydro
earns a profit of $350 and $300 respectively when sold. Assuming the manufacturer is
able to sell all products, how many of each product should the manufacturer produce
if he wants to maximize his profits during the next production cycle?
Source: adapted from Spreadsheet Modeling & Decision Analysis by Cliff Ragsdale

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Characteristics of Optimization Problems
Elements that characterize optimization problems

• Decisions
• Parameters (data)
• Objective function (performance measure)
• Constraints

NOTE: The key to formulating an optimization problem lies in the ability to

identify the decision variables, parameters, and constraints

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 Decision Variables
Decision variables are variables that are under the control of the decision
maker. They are sometimes referred to as Control or Policy variables.

• In the case problem the decisions are

decision 1: Number of Aquas to produce (this can be represented by 𝑥" )

decision 2: Number of Hydros to produce (this can be represented by 𝑥$ )

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Parameters
Coefficients (data) of the decision variables. They help in formulating
expressions for the objective function and constraints. They may also
define levels of limitation/constraint that must be satisfied in the
problem
Pay-off parameters Activity/technology Resource/RHS parameters
Objective function coefficients parameters

1 1 200
350 300 ; 9 6 ; 1566
12 16 2800

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Objective Function
• The performance measure—such as cost, revenue, profit, time, distance—
to be optimized in a model. It is defined by the decision variables and their
associated parameters or coefficients

• For the case problem, the objective can be stated as follows:

objective: To maximize total profit

In this case, Aqua earns a profit of $350 and Hydro earns a profit of $300.
Therefore an expression for the profit/objective function is as follows:
PROFIT = 350𝑥" + 300𝑥$

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Constraints

Constraints are conditions that must be satisfied in an optimization model. They

impose limitations on the decision problem.

There are three stated constraints in our sample problem:

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Constraint #1

Each product type needs one pump, but there are only 200 pumps available. The
manufacturer cannot produce more than 200 pumps.

constraint 1: 𝑥" + 𝑥$ ≤ 200 (pump constraints)

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Constraint #2

Only 1566hrs are available for production.

Total production hours required will be 9𝑥" + 6𝑥$ .

constraint 2: 9𝑥" + 6𝑥$ ≤ 1566 (production hour constraint)

PME 551 COPYRIGHT DR. EMMANUEL A. DONKOR

Constraint #3

The number of tubing is given by 12𝑥" + 16𝑥$ .

Only 2880 tubing is available.

constraint 3: 12𝑥" + 16𝑥$ ≤ 2880 (steel tubing constraint)

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Non-Negativity Constraint
Finally

It is not possible to produce negative products. So we specify lower bounds for the
decision variables.

𝑥" ≥ 0; 𝑥$ ≥ 0, (non-negativity constraint)

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SOME DEFINITIONS
• A solution that satisfies all the
constraints is said to be feasible
• The set of all feasible solutions form the
feasible region

• The feasible solution—from the feasible

region—that provides the best value
of the objective (performance
measure) is called the optimal solution

• In a minimization problem, If " x

Î{feasible region}, f(x0) < f(x), then x0 is
the optimal solution and f(x0) is the
optimal value

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COMPLETE FORMULATION OF THE CASE PROBLEM
Maximize: 350𝑥" + 300𝑥$

s.t 𝑥" + 𝑥$ ≤ 200 (pump constraints)

9𝑥" + 6𝑥$ ≤ 1566 (production hour constraint)

12𝑥" + 16𝑥$ ≤ 2880 (steel tubing constraint)

𝑥" ≥ 0; 𝑥$ ≥ 0, (non-negativity constraint)

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General Form of an Optimization Model: Notation

Suppose in a decision problem, there are

n decisions, indexed by j:1..n
m limiting conditions, indexed by i:1..m

Then, we can define

𝑥3 = the jth decision for all j:1..n
𝑐3 = profit or pay-off for each unit of jth activity undertaken
𝑎6,3 = the coefficient of the jth activity in the ith constraint , ∀ i:1..m
𝑏6 = amount of the ith “resource” ∀ i:1..m
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General Form of an Optimization Model: Formulation

Maxi(Mini)mize 𝑐" 𝑥" + 𝑐$ 𝑥$ + … + 𝑐: 𝑥:

s.t 𝑎"," 𝑥" + 𝑎",$ 𝑥$ + … 𝑎",3 𝑥3 + … + 𝑎",: 𝑥: ≤ 𝑏"

𝑎$," 𝑥" + 𝑎$,$ 𝑥$ + … 𝑎$,3 𝑥3 + … + 𝑎$,: 𝑥: = 𝑏$
.
.
.

𝑎<," 𝑥" + 𝑎<,$ 𝑥$ + … 𝑎<,3 𝑥3 + … + 𝑎<,: 𝑥: ≥ 𝑏<

𝑥3 ≥ 0, ∀ 𝑗 ∈ 1. . 𝑁

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Definition of a Linear Program
• The mathematical formulation above is known as a Linear Program
because the objective function and constraint equations are all linear
combinations of the decision variables.
• The 𝑐3 parameters are known as objective function coefficients
• The 𝑎6,3 parameters are known as Technology coefficients
• The 𝑏6 parameters are known as Right Hand Side parameters.

• Question: How would you solve the case problem?

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SOLUTION PROCEDURE

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PROBLEM SOLVINGPROCEDURE

• Step 1: Define The Problem (Identify the problem)

• Step 2: Collect Data (Analyze the System)
• Step 3: Formulate/Develop a (mathematical) Model (synthesize the System)
• Step 4: Develop a computer program for the model(program model)
• Step 5: Test (verify and validate) the Model
• Step 6: Use model to solve the problem (perform experiments)
• Step 7: Communicate model’s results and recommendations to mgt.
• Step 8: Implement the model (recommendations or DSS)

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Class Exercise
For the following problem, identify and state in words only…
(a) the decision variables;
(b) the objective; and
(c) (c) the constraints

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1. Homewood Masonry Problem
Homewood masonry is a small owner-operated firm that produces construction
materials for the residential and commercial construction industry in the region.
The company specializes in the manufacture of two widely used building materials:
(1) a universal concrete patching material called HYDIT and (2) a decorative brick
mortar called FILIT. Homewood can sell all of the HYDIT it produces for a profit of
$140 per ton, and all the FILIT it can produce for a profit of $160 per ton.
Unfortunately, some of the resources needed to manufacture these products are in
limited supply. The production of both HYDIT and FILIT require a red clay known as
Wabash Red Clay. Each ton of HYDIT produced requires 2m3 of this clay, and each
ton of FILIT produced requires 4m3. A maximum of 28m3 of the clay is available
each week for production. Secondly, the operator of the machine used in blending
the products can work only a maximum of 50hrs per week. The machine blends a
ton of either product at a time, and the blending process requires 5hrs to complete
for each. Lastly, each material must be stored in a separate vat, further limiting the
overall production volume of each product. The curing vats for HYDIT and for FILIT
have capacities of 8 and 6 tons, respectively.

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