Optimization - Linear programming
8 important questions on Optimization - Linear programming
What are 4 typical optimization problems ?
- Maximize profits
- Minimize costs
- obtain most effects
- obtain certain effect, below EC legal limit
What are the 3 components of linear model ?
- An objective function; max/min
- a set of constraints
- A set of decision variables
What is linear programming?
- Optimization (max/min) of certain objective
- Given certain constraints (often including budget)
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What is redundant constraint?
Why sensitivity analysis for optimal solutions ?
- Parameter values used were only best estimates
- Dynamic environment may cause changes
- "What-if" analysis may provide economical and operational information
What is ceteris paribus?
What is slack variable?
What is so called "shadow price"?
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