A solution (set of values for the decision variables) for which all of the constraints in the Solver model

are satisfied is called a feasible solution. In some problems, a feasible solution is already known; in
others, finding a feasible solution may be the hardest part of the problem.

An optimal solution is a feasible solution where the objective function reaches its maximum (or
minimum) value – for example, the most profit or the least cost. A globally optimal solution is one
where there are no other feasible solutions with better objective function values. A locally optimal
solution is one where there are no other feasible solutions “in the vicinity” with better objective function
values – you can picture this as a point at the top of a “peak” or at the bottom of a “valley” which may
be formed by the objective function and/or the constraints.

Solver is designed to find feasible and optimal solutions. In the best case, it will find the globally optimal
solution – but this is not always possible. In other cases, it will find a locally optimal solution, and in still
others, it will stop after a certain amount of time with the best solution it has found so far. But like
many users, you may decide that it’s most important to find a good solution – one that is better than the
solution, or set of choices, you are using now.

The kind of solution Solver can find depends on the nature of the mathematical relationships between
the variables and the objective function and constraints (and the solution algorithm used). As explained
below, if your model is smooth convex, you can expect to find a globally optimal solution; if it is smooth
but non-convex, you will usually be able to find a locally optimal solution; if it is non-smooth, you may
have to settle for a “good” solution that may or may not be optimal.

What is the difference between solution and optimal solution?

*A feasible solution satisfies all the problem's constraints. An optimal solution is a feasible solution that
results in the largest possible objective function value when maximizing (or smallest when minimizing).

Linear Programming (LP) Problem

 The maximization or minimization of some quantity is

the objective in all linear programming problems.

 All LP problems have constraints that limit the degree

to which the objective can be pursued.

 A feasible solution satisfies all the problem's

constraints.

 An optimal solution is a feasible solution that results in

the largest possible objective function value when

maximizing (or smallest when minimizing).

 A graphical solution method can be used to solve a

linear program with two variables.

Guidelines for Model Formulation

 Understand the problem thoroughly.

 Describe the objective.

 Describe each constraint.

 Define the decision variables.

 Write the objective in terms of the decision variables.

 Write the constraints in terms of the decision variables.

FIGURES

Summary of the Graphical Solution Procedure for

Maximization Problems

 Prepare a graph of the feasible solutions for each of

the constraints.

 Determine the feasible region that satisfies all the

constraints simultaneously..

 Draw an objective function line.

 Move parallel objective function lines toward larger

objective function values without entirely leaving the

feasible region.

 Any feasible solution on the objective function line

with the largest value is an optimal solution.

Reduced Cost  The reduced cost for a decision variable whose value is 0 in the optimal solution is the
amount the variable's objective function coefficient would have to improve (increase for maximization
problems, decrease for minimization problems) before this variable could assume a positive value.  The
reduced cost for a decision variable with a positive value is 0.

A feasible solution is one that satisfies all defined constraints and requirements. A solution is infeasible
when no combination of decision variable values can satisfy the entire set of requirements and
constraints. Notice that a solution (i.e., a single set of values for the decision variables) can be infeasible
by failing to satisfy the problem requirements or constraints, but this doesn’t imply that the problem or
model itself is infeasible.

However, constraints and requirements can be defined in such a way that the entire model is infeasible.
For example, suppose that in the Portfolio Allocation problem in Chapter 1, the investor insists on
finding an optimal investment portfolio with the following constraints:

Income fund (income fund is a mutual fund that focuses on providing investors with a consistent income
stream from a portfolio of investments. There are several types of income funds, each with a different
level of risk and return, depending in what they invest.) + Aggressive growth fund (Growth stock funds
hold stocks of companies that are expected to grow at a faster rate compared to the stock market.
Income funds seek to provide an investor with a source of income through dividends.)<= 10000

Income fund + Aggressive growth fund >= 12000

Clearly, no combination of investments exists that will make the sum of the income fund and aggressive
growth fund no more than $10,000 and at the same time greater than or equal to $12,000.

Or, for this same example, suppose the bounds for a decision variable were:

$15,000 <= Income fund <= $25,000

And a constraint was:

Income fund <= 5000

This also results in an infeasible problem.

You can make infeasible problems feasible by fixing the inconsistencies of the relationships modeled by
the constraints. OptQuest detects optimization models that are constraint-infeasible and reports them
to you.

If a model is constraint-feasible, OptQuest will always find a feasible solution and search for the optimal
solution (that is, the best solution that satisfies all constraints).

When an optimization model includes requirements, a solution that is constraint-feasible may be

infeasible with respect to one or more requirements.

After first satisfying constraint feasibility, OptQuest assumes that the user's next highest priority is to
find a solution that is requirement-feasible. Therefore, it concentrates on finding a requirement-feasible
solution and then on improving this solution, driven by the objective in the model.
Key Words:
1. Optimal- What is the mean by optimal? most desirable or satisfactory ;most desirable or
satisfactory : optimum the optimal use of class time the optimal dosage of medication for a
patient conditions for optimal development.
2. Breakthrough solution- Breakthrough Solution: A solution or strategy that satisfies over 50% of
the customers' desired outcomes better than an existing strategy or solution. Breakthrough
solutions often deliver up to 10 times more value than commonly implemented solutions and
enable an organization to leapfrog their competition. Breakthrough solutions also of ten provide
an organization with a unique and valued competitive position. A com petitive advantage will
often arise as a result of a breakthrough solution.
3. Internal constraints- Internal constraints include people, policy, and equipment issues, which
can actively reduce the efficiency of specific process flows.
4. External constraints- include resource scarcity, contracts (i.e., suppliers or employees), and
legalities.
5. Cost- Cost denotes the amount of money that a company spends on the creation or production
of goods or services.
6. Risk- Business risk is the exposure a company or organization has to factor(s) that will lower its
profits or lead it to fail.
7. Effort- Putting in that effort every day is more important than any natural talent you might have.
On top of that, the grit you exhibit as you work toward business success can lead to learning
new skills and building on that natural talent.