Chapter 14: Optimization Models: Marketing Assignment Paper

Optimization Models
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Optimization models
Optimization models are used in business to find optimal solution and improve the business process. The optimization process is used to analyze problems by either minimizing or maximizing choosing variables available within specific sets. Real decision problems can be solved using specific optimization models (Albright & Winston, 2014). There are different types of optimization model; linear programming models are one common example of a mathematical representation that enables personnel to recognize problems to be solved (Albright & Winston, 2014).
For instance, if a company assembles computer equipment and wants to start production of two different types of computer, the firm will need to factor in assembly time, issues of storage space and inspection. Resource needed for production might be limited, hence the manager is required to determine the quantity of each computer for production to maximize profit. Linear programming is a quantitative management tool that helps in offering solution involving restrictions and limitation known as a constrained optimization problem (Albright & Winston, 2014).
The Linear programming concept consists of the four basic features; these include decision-making variable, the objective function, the constraints, and data. The decision variable represents quantities that need to be determined as the objective function is how decision variables will affect the cost or value that needed to optimize it can either be minimized or maximized (Paul & MacDonald, 2015).
Constraints are how the decision variable will utilize resources based on its limited quantities as data analyze the relationship between the objective function and the existing constraints. Using linear model the objective function and the constraints are linear, therefore any decision made will be relative (Paul & MacDonald, 2015). In many real world situations, business problems can be solved using this mathematical model of linear programming. Linear programming is an optimization technique whereby the objective function and constraints are linear. Linear programming is used in various management activities to make d...