EMSE 6850

Quantitative Models in Systems Engineering

Instructor:

Dr. John Fossaceca

 Getting Started
• Attendance

• Student Information Form

• Professor’s Background

• Course Logistics

• Topics & Models (Motivation)

• Syllabus Walkthrough

• Lecture 1(chapters 1 & 2)

 Information Form

• Please fill out the information form and turn it

in
 Information Form
• Full Name:

• Preferred first name for class (please provide any special pronunciation tips):

• Circle Any Prerequisite Courses taken (do not worry if not taken):
– EMSE 6020
– APSC 3115

• Where you are in the EMSE Master’s program

– How many courses completed:
– Member of cohort?

• Interest in this class (Circle All that Apply)

– Need it for my job
– It’s required for my masters degree
– I’ve always wanted to learn how to model problems mathematically to help make decisions
– Any Additional Comment/Concerns:
 About the Instructor
• 30 years of Industry Experience
• Telecommunications,
Aerospace/Communications, Cyber
Security, Consumer Products,
Large, Medium, Start-up
companies
• Main background is in
Engineering, Managing
Engineering Teams & Product
Design/Development
• Currently responsible for
Technology & Product
Management for my employer
• I have taught college level courses
Since 2003
• Bachelor’s Degree in Electrical
Engineering (Manhattan College)
• Master’s Degree in Electrical
Engineering (Syracuse University)
• Ph.D. in Systems Engineering
(George Washington University)
• Master’s Business Administration
(Virginia Polytechnic University)
• Current Research Areas:
 Adaptive Systems (Systems that modify
their behavior based in external stimuli)
 Machine Learning (applied to Cyber
Security)
 Course Logistics

• Course dates: Sep 8, 15, 22, 29; Oct 6, 13, 20, 27; Nov 3, 10

• Class Hours: 5:30pm to 8:30pm

•  Course location: NGA - 7500 GEOINT Drive Springfield, VA 22150 

•  Consultation: Available on request after class.

•  Textbook: Introduction to Management Science: A modeling and case studies

approach with spreadsheets by Hillier and Hillier; McGraw Hill; 5th edition.

• Software: The class will make extensive use of Excel, Excel Solver and Risk
Solver Platform for Education. We will also use the textbook CD. Activation and
installation instructions for Excel Solver and Risk Solver Platform for Education are
provided at the end of this Syllabus.
 Learning Objectives
• Learning Objectives: To be able to formulate decision problems into
models - algebraic and spreadsheet - and solve them using management
science techniques, from linear programming (integer and binary) to decision
analysis, forecasting and goal seeking/programming.

• Required background: The catalog lists APSC 3115 or EMSE 6020 as

prerequisite courses. It is helpful to have some modeling experience
(optimization and exposure to other management science techniques) as well
as a good working knowledge of Excel and its various functions. Appendix B
of the book provides tips on using Excel for modeling.

•  Grading and exams: The course grade will be calculated based on

satisfactory completion of the homework, midterm exam, and final exam. The
percentages of the final grade allotted to these are as follows:

• Homework 20%

• Midterm 40%

• Final exam 40%

 Homework

• Homework: There will be a total of 7 homework assignments. Please check

the due dates on page 3 of this syllabus. No late homework (hardcopy or
supporting email with Excel spreadsheet) will be accepted. Submit homework
at the beginning of the class in hardcopy, or email it prior to class if you’re
traveling or unable to come to class. Please label your homework with EMSE
6850, your last name and the HW number on top of each page. In addition,
always email the supporting Excel spreadsheets by the due date before 5:00
pm. Please always put EMSE 6850, your last name and the HW number in the
email subject line (e.g. EMSE 6850, Smith, HW1). These spreadsheets will be
used for reference when grading.

• Homework problems are designed to apply the methodologies and approaches

discussed in the class examples. You are allowed to consult with other students
in order to get a better understanding of a problem. However, the homework
you submit, including the supporting spreadsheets, must be your own work.

 
 Class Attendance & Exams

• Attendance: Attendance is strongly encouraged. I will give short quizzes at

the beginning of lecture and reserve the right to award extra points for
attendance and quizzes.

•  Midterm: The midterm exam will be held in class on Tuesday, October

13. It will be closed book and closed notes.

• Final exam: The final exam will be held in class on Tuesday, November 10.
It will be closed book and closed notes.

• Instructor Attendance: Unless previously announced, we will have class on

the specified dates. If for some reason I am late (e.g. traffic), please call 240-
367-4129. I will also try to contact the course captain. If the class does not
hear from me, please wait at least 30 minutes for my arrival before leaving.
 Description of Course and Suggested Prerequisite Courses
(Off Campus Requirements may vary – the course will review required math)
• EMSE 6850 – THIS COURSE
Quantitative modeling techniques and their application to decision making in systems engineering. Linear, integer, and nonlinear
optimization models. Stochastic models: inventory control, queuing systems, and regression analysis. Elements of Monte Carlo and discrete
event system simulation. Applications to production scheduling, transportation problems, network design, budgeting, crew scheduling, etc.
Spreadsheet modeling is used extensively to solve formulated problems. Prerequisite: APSC 3115 or EMSE 6020.

• Prerequisite  APSC 3115. Engineering Analysis III

Analytical methods for the solution of problems in engineering, the physical sciences, and applied mathematics: applications of ordinary
differential equations, matrices and determinants, eigenvalues and eigenvectors, systems of ordinary linear differential equations, Bessel and
Legendre functions. Prerequisite or concurrent registration: MATH 2233.  We will be using Excel and built in tools to do the “heavy
lifting” here. We will look at how the equations are set up and let Excel do the work.

• Prerequisite  EMSE 6020 - Decision Making with Uncertainty

Problem formulation. Concepts and techniques used in analyzing complex decision problems. Modeling decision problems using decision
trees, probability models, multi-objective models and utility theory.    We will start from basic principles and learn how to use Excel and
built in tools to help us make better decisions.

• Prerequisite for APSC 3115  MATH 2233-Multivariable Calculus

Partial derivatives and multiple integrals. Vector-valued functions. Topics in vector calculus, including line and surface integrals and the
theorems of Gauss, Green, and Stokes. Prerequisite: Single Variable Calculus.  We may make mention of a Calculus concept
occasionally, however we will not be solving Calculus problems by hand in this course.

BOTTOM LINE: BRING YOUR ANALYTIC SKILLS – WE WILL WORK THROUGH THE MATH TOGETHER
 Course Overview – What it is about
• Management Science – Field of study where we develop models to help us
make decisions with the intention of optimizing performance under given
constraints

• The models we will study have extensive applications in business,

manufacturing, systems engineering, and operations

• Supply Chain Management, Analytics, Forecasting

• Approach – Linear Programming and Extensions of Linear Programming

 Why am I interested in this Course?
(And you should be too!)
• Models are very important. Often, you can’t actually use the real system or
build the system. You want to predict or forecast the impact:
– Missile Launch
– Spacecraft
– Predict Election Outcome
– Predict Impact of a Policy (Intended & Unintended Consequences)
– If I raise my prices will I lose business?
– How much should I charge for my product or service?
– How do I allocate my resources to optimize performance or profit?
– Optimize the Recognition of a face in a crowd
– Detect a Cyber Attack on my Computer Network
– How well will my autonomous robot perform on a new terrain
– Find the optimal route to deliver resource to various geographic areas
– What is likely to happen with the current crisis (you name it)?

ALL OF THE ABOVE SITUATIONS INVOLVE THE USE OF MODELS

 High Level Outline of Topics
• Linear Programming Formulations, Mathematical Modeling for making decisions

• Solving Linear Programming Problems (An Introduction)

• Graphical Approach
• Algebraic Approach
• Simplex Algorithm

• Computer Approaches (Solver, RSPE) – Main Focus

• Transportation Problems

• Assignment Problems

• Decision Making

• Forecasting
Timeline Overview – 1st Half

Chapter 9
Timeline Overview – 2nd Half
 Appendix A – Tips for Using Microsoft Excel
• An Excel file is called a Workbook consisting of a number of worksheets.
Excel 2013
 Working with Solver
• Models must be confined to a single worksheet. That is, Solver DOES NOT
allow the model on a given sheet to have its components spread across
different sheets

• Separate Worksheets can contain separate Solver Models

• When Solver is Run, ONLY the model on the CURRENTLY displayed sheet is
Solved

• Important NOTE: You must “control-click” and “drag” the worksheet tab
rather than simply selecting the cells containing the model and using copy and
paste. This will ensure that ALL contents of the sheet (formulas, data, and
Solver information) are replicated.
 Working with RSPE Solver
• There is a second tool called RSPE Solver we will be using.

• Unlike Solver, RSPE Solver DOES allow the model on a given sheet to have
its components spread across different sheets

• The ENTIRE Workbook is treated as a single simulation model for RSPE.

When a simulation is run, all results are generated for all cells (uncertain
variables, statistic cells, results cells) regardless of what worksheet they appear
on.

• RSPE has a type of built in model called Decision Trees (We will see these in
Chapter 9)
 Working with Cells
• There is a second tool called RSPE Solver we will be using.

• Unlike Solver, RSPE Solver DOES allow the model on a given sheet to have
its components spread across different sheets

• The ENTIRE Workbook is treated as a single simulation model for RSPE.

When a simulation is run, all results are generated for all cells (uncertain
variables, statistic cells, results cells) regardless of what worksheet they appear
on.

• RSPE has a type of built in model called Decision Trees (We will see these in
Chapter 9)
 Table of Contents
Chapter 1 (Introduction)

• Structured & Scientific Approach to Modeling

• Break-Even Analysis
Modeling in a Nutshell

www.carnegielearning.com (2014) -
http://nola14.mrmeyer.com/tag/day-o
ne/
 Structured Approach

1. Define the Problem and Gather Data

2. Formulate a Model (Typically a Mathematical Model)

3. Develop a Computer-Based Procedure for Deriving Solutions to the Problem

from the Model

4. Test the Model and Refine it as Necessary

5. Apply the Model to Analyze the Problem (Provide Decisions,

Recommendations, Forecasts, Alternatives and Other Analyses)

6. Implement or Assist in Implementation of Recommendation (i.e. You may

have to live with whatever you recommend!)
 A Machine Learning Example

Learning From Data – AMLBooks.com March 27, 2012 Yaser S. Abu-Mostafa, Malik Magdon-Ismail, Hsuan-Tien Lin
 Model Selection

Using a Validation Set for Model Selection

Learning From Data – AMLBooks.com March 27, 2012 Yaser S. Abu-Mostafa, Malik Magdon-Ismail, Hsuan-Tien Lin
 Table of Contents
Chapter 1 (Introduction)

Special Products Break-Even Analysis (Section 1.2) 1.2 – 1.6

 Special Products Break-Even Analysis

• The Special Products Company produces expensive and unusual gifts.

• The latest new-product proposal is an iWatch with wireless internet.

• Data:
– If they go ahead with this product, a fixed cost of $10 million is incurred.
– The variable cost is $1000 per iWatch produced.
– Each iWatch sold would generate $2000 in revenue.
– A sales forecast will be obtained.

Question: Should they produce the iWatch, and if so, how many?

Make sure you understand the Spreadsheet

1-2
 Expressing the Problem Mathematically

• Decision variable:
– Q = Number of iWatches to produce

• Costs:
– Fixed Cost = $10 million (if Q > 0)
– Variable Cost = $1000 Q
– Total Cost =
• 0, if Q = 0
• $10 million + $1000 Q, if Q > 0

• Profit:
– Profit = Total revenue – Total cost
• Profit = 0, if Q = 0
• Profit = $2000Q – ($10 million + $1000Q) = –$10 million + $1000Q, if Q > 0

1-3
 Special Products Co. Spreadsheet
A B C D E F
1 Special Products Co. Break-Even Analysis
2
3 Data Results
Range Name Cell
4 Unit Revenue $2,000 Total Revenue $40,000,000
FixedCost C5
5 Fixed Cost $10,000,000 Total Fixed Cost $10,000,000
MarginalCost C6
6 Marginal Cost $1,000 Total Variable Cost $20,000,000
ProductionQuantity C9
7 Sales Forecast 30,000 Profit (Loss) $10,000,000
8
Profit F7
9 Production Quantity 20,000 SalesForecast C7
TotalFixedCost F5
TotalRevenue F4
TotalVariableCost F6
UnitRevenue C4

1-4
The Effect of Varying Production Quantities
Graphical Analysis of the Problem

1-5
 Algebraic Analysis
•Profit
  = -$10 million + $1000* = 0 @ break even point

Solving for :

Therefore:

Note that there are some implied constraints here:

Given the sales forecast , we can assume:

 Formulating the Mathematical Model
•Maximize
  Profit =

Subject to:
 
The Algebraic Expression for the Profit is called the Objective Function

Solution for the Mathematical Model

=
 

Therefore, the company should introduce the product and produce

the number of units that can sold only if the production and sales
exceeds the break-even point
 Special Products Co. Spreadsheet
A B C D E F
1 Special Products Co. Break-Even Analysis
2
3 Data Results
4 Unit Revenue $2,000 Total Revenue $60,000,000 Range Name Cell
5 Fixed Cost $10,000,000 Total Fixed Cost $10,000,000 BreakEvenPoint F9
6 Marginal Cost $1,000 Total Variable Cost $30,000,000 FixedCost C5
7 Sales Forecast 30,000 Profit (Loss) $20,000,000 MarginalCost C6
8 ProductionQuantity C9
9 Production Quantity 30,000 Break-Even Point 10,000 Profit F7
SalesForecast C7
TotalFixedCost F5
TotalRevenue F4
TotalVariableCost F6
UnitRevenue C4

Decision Point: Since we know the equation for break-even why not build it into the spreadsheet? That is, in Cell C9
Try: C9 = IF(SalesForecast>BreakEvenPoint, SalesForecast,0)

1-6
 The “Real World” versus “Models”

• In the real world when making decisions we must not over constrain our assumptions

• Do not blindly believe the math

• For the prior question, what if management did not believe the sales forecast based on
experience? They don’t want to get locked into building too many iWatches and end
up with excess inventory. A more conservative approach might be to lower the
production quantity to reduce the risk of excess inventory. This also creates the risk
of a shortage of product later on

• As with an application of a Model to Decision Making, a Mathematical model can

provide useful guidance BUT Management needs to make the final decision after
considering factors that may or may not be included in the model
 An Example of Models Gone Awry – Gaussian Copula
Recipe for Disaster: The Formula That Killed Wall Street (Wired Magazine 2009)
In the mid-'80s, Wall Street turned to the quants—brainy financial engineers—to invent new ways to boost profits. Their methods for
minting money worked brilliantly... until one of them devastated the global economy.

In 2007 it was hardly unthinkable that a math wizard like David X. Li might someday earn a Nobel Prize. After all, financial economists—
even Wall Street quants—have received the Nobel in economics before, and Li's work on measuring risk has had more impact, more
quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors
survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all.

Moral of the Story: Users of Models Beware & Be Careful!

 Chapter 2 – Linear Programming: Basic Concepts

• Attempt to optimize a linear objective function subject to some constraints

• Linear programming helps us to formulate and solve problems that originate in

practical situations that model several activities

• Refers to a specific class of mathematical problems, in which a linear function

is maximized (or minimized) subject to given linear constraints.

• Linear programming was developed as a discipline in the 1940's, motivated

initially by the need to solve complex planning problems in wartime
operations. Its development accelerated rapidly in the postwar period as many
industries found valuable uses for linear programming.

• Linear: Refers to the form of the mathematical expressions in the problem

• Programming: Refers to “Planning”

Some information from: https://cs.nyu.edu/overton/g22_lp/encyc/article_web.html

 Table of Contents
Chapter 2 (Linear Programming: Basic Concepts)

The Wyndor Glass Company Product Mix Problem (Section 2.1) 2.2
Formulating the Wyndor Problem on a Spreadsheet (Section 2.2) 2.3–2.8
The Algebraic Model for Wyndor (Section 2.3) 2.9
The Graphical Method Applied to the Wyndor Problem (Section 2.4) 2.10–2.20
Using the Excel Solver with the Wyndor Problem (Section 2.5) 2.21–2.25
Risk Solver Platform for Education (Section 2.6) 2.26–2.33
A Minimization Example—The Profit & Gambit Co. (Section 2.7) 2.34–2.39
 Wyndor Glass Co. Product Mix Problem

• Wyndor has developed the following new products:

– An 8-foot glass door with aluminum framing.
– A 4-foot by 6-foot double-hung, wood-framed window.

• The company has three plants

– Plant 1 produces aluminum frames and hardware.
– Plant 2 produces wood frames.
– Plant 3 produces glass and assembles the windows and doors.

Questions:
1. Should they go ahead with launching these two new products?
2. If so, what should be the product mix?

2-39
 Structured Approach - Review
1. Define the Problem and Gather Data:
Assumptions: We will ignore the possibility that max profit may be attained by producing none of one product and as much as possible of
the second product. Needed:

A. Available production capacity for each of the plants

B. Required production capacity for each product
C. Profitability of each product

2. Formulate a Model (Typically a Mathematical Model)

Product Mix
A. What are the decisions to be made?
B. What are the constraints on these decisions?
C. What is the overall performance measure for these decisions? You really don’t know what you are doing until
you answer these questions
3. Develop a Computer-Based Procedure for Deriving Solutions to the Problem based on
the Model

 Linear Programming

4. Test the Model and Refine it as Necessary

5. Apply the Model (Decisions, Recommendations, Forecasts, Alternatives etc.)

6. Implement or Assist in Implementation of Recommendation

 Developing a Spreadsheet Model
• Step #1: Data Cells
– Enter all of the data for the problem on the spreadsheet.
– Make consistent use of rows and columns.
– It is a good idea to color code these “data cells” (e.g., light blue).

A B C D E F G
1 Wyndor Glass Co. Product-Mix Problem
2
3 Doors Windows
4 Unit Profit $300 $500
5 Hours
6 Hours Used Per Unit Produced Available
7 Plant 1 1 0 4
8 Plant 2 0 2 12
9 Plant 3 3 2 18

2-41
 Developing a Spreadsheet Model
• Step #2: Changing Cells
– Add a cell in the spreadsheet for every decision that needs to be made.
– If you don’t have any particular initial values, just enter 0 in each.
– It is a good idea to color code these “changing cells” (e.g., yellow with border).

A B C D E F G
1 Wyndor Glass Co. Product-Mix Problem
2
3 Doors Windows
4 Unit Profit $300 $500
5 Hours
6 Hours Used Per Unit Produced Available
7 Plant 1 1 0 4
8 Plant 2 0 2 12
9 Plant 3 3 2 18
10
11 Doors Windows
12 Units Produced 0 0

2-42
 Developing a Spreadsheet Model
• Step #3: Objective Cell
– Develop an equation that defines the objective of the model.
– Typically this equation involves the data cells and the changing cells in order to
determine a quantity of interest (e.g., total profit or total cost).
– It is a good idea to color code this cell (e.g., orange with heavy border).

2-43
 Developing a Spreadsheet Model
• Step #4: Constraints
– For any resource that is restricted, calculate the amount of that resource used in a
cell on the spreadsheet (an output cell).
– Define the constraint in three consecutive cells. For example, if Quantity A <=
Quantity B, put these three items (Quantity A, <=, Quantity B) in consecutive cells.

A B C D E F G
1 Wyndor Glass Co. Product-Mix Problem
2
3 Doors Windows
4 Unit Profit $300 $500
5 Hours Hours
6 Hours Used Per Unit Produced Used Available
7 Plant 1 1 0 0 <= 4
8 Plant 2 0 2 0 <= 12
9 Plant 3 3 2 0 <= 18
10
11 Doors Windows Total Profit
12 Units Produced 0 0 $0

2-44
 Formulas for the Spreadsheet Model
A B C D E F G
1 Wyndor Glass Co. Product-Mix Problem
2
3 Doors Windows
4 Unit Profit $300 $500
5 Hours Hours
6 Hours Used Per Unit Produced Used Available
7 Plant 1 1 0 0 <= 4
8 Plant 2 0 2 0 <= 12
9 Plant 3 3 2 0 <= 18
10
11 Doors Windows Total Profit
12 Units Produced 0 0 $0

Range Name Cells

E
HoursAvailable G7:G9 5 Hours
HoursUsed E7:E9 6 Used
HoursUsedPerUnitProduced C7:D9 7 =SUMPRODUCT(C7:D7,UnitsProduced)
TotalProfit G12 8 =SUMPRODUCT(C8:D8,UnitsProduced)
UnitProfit C4:D4 9 =SUMPRODUCT(C9:D9,UnitsProduced)
UnitsProduced C12:D12
G
11 Total Profit
12 =SUMPRODUCT(UnitProfit,UnitsProduced)

2-45
 A Trial Solution

The spreadsheet for the Wyndor problem with a trial solution (4 doors and 3
windows) entered into the changing cells.
Notice:
• G12 is the Objective Cell (Profit)
• Hours Used MUST meet CONSTRAINTS for Hours Available

2-46
 Even Better! – Or Maybe Not?

The spreadsheet for the Wyndor problem with a trial solution (5 doors and 4
windows) entered into the changing cells.
Notice:
• Hours Used is > Hours Available for Plant 1 & Plant 3
• Therefore the above does NOT represent a FEASIBLE Solution

2-47
 Characteristics of of Linear Programming Models

1. Proportionality - Contribution of each activity to the objective function and a constraint

is proportional to the level of that activity. Therefore each term of an output cell must
be proportional to a particular changing cell. (e.g. SUMPRODUCT Function always
applicable)

2. Additivity - Individual contribution of different activities can be summed up to obtain

an objective function and constraints (Sometimes called “Linearity”)

3. Certainty/Deterministic: Each parameter in the formulation is known for sure.

4. Divisibility: Decision variables can take integer as well as fractional values.

5. Constraints:
 Non-Negative
 Linear Equations or Linear Inequality Equations

Source – Adapted from: https://www.utdallas.edu/~metin/Or6302/Notes/formulation.pdf

Algebraic Formulation of Model for Wyndor Glass Co.

Let D = the number of doors to produce

W = the number of windows to produce

P = Profit

Maximize P = $300D + $500W

subject to
D ≤4
2W ≤ 12
3D + 2W ≤ 18
and
D ≥ 0, W ≥ 0.

Note that Production Rates cannot be negative.

2-49
 Common Terminology

1. Decision Variables – D and W (Inputs)

2. Objective Function – 300D + 500W (Profit)
3. Nonnegativy Constraints - D ≥ 0, W ≥ 0
4. Functional Contraints:
D≤4
2W ≤ 12
3D + 2W ≤ 18
5. Solution – Result (Outputs) for any choice of decision
variables
6. Feasible Solution – Result that satisfies all constraints
7. Optimal Solution – “Best” feasible solution (e.g. maximize
P)

2-50
 Graphing the Product Mix

Production rate (units per week) for windows

A product mix of
7 D = 4 and W = 6

6 (4, 6)

4 A product mix of
D = 2 and W = 3
3 (2, 3)

1
Origin

-2 -1 0 1 2 3 4 5 6 7 8 D
Production rate (units per week) for doors
-1

-2
Linear programming problems having only two decision variables, like the Wyndor problem, can be solved by using a graphical method.

2-51
Graph Showing Constraints: D ≥ 0 and W ≥ 0

6
Production rate for windows

0 2 4 6 8 D
Production rate for doors

2-52
Nonnegative Solutions Permitted by D ≤ 4

D=4

6
Production rate for windows

0 2 4 6 8 D
Production rate for doors

2-53
Nonnegative Solutions Permitted by 2W ≤ 12
Production rate for windows
W

2 W = 12
6

0 2 4 6 8 D
Production rate for doors

2-54
Boundary Line for Constraint 3D + 2W ≤ 18
Production rate for windows
W
10

(0, 9)

8
1
(1, 7 _)
2

6 (2, 6)

3 D + 2 W = 18
1
(3, 4 _)
2
4

(4, 3)

2
1
(5, 1 _)
2

(6, 0)
0 2 4 6 8 D
Production rate for doors

2-55
Changing Right-Hand Side Creates Parallel Constraint
Boundary Lines
Production rate for windows
W
12

10

3D + 2W = 24

3D + 2W = 18
4

2 3D + 2W = 12

0 2 4 6 8 10 D
Production rate for doors

2-56
Nonnegative Solutions Permitted by
3D + 2W ≤ 18
Production rate for windows
W
10

3D + 2W = 18
4

0 2 4 6 8 D
Production rate for doors

2-57
 Graph of Feasible Region
Production rate for windows
W
10

3 D + 2 W = 18
8

D=4

6 2 W =12

Feasible

region
2

0 2 4 6 8 D
Production rate for doors

2-58
 Objective Function (P = 1,500)

W
Production rate

for windows
8

Feasible
4
region
P = 1500 = 300D + 500W

0 2 4 6 8 D
Production rate for doors

2-59
 Finding the Optimal Solution
Production rate W
for windows
8

P = 3600 = 300D + 500W

Optimal solution

P = 3000 = 300D + 500W 6 (2, 6)

Feasible
4
region
P = 1500 = 300D + 500W

0 2 4 6 8 10 D
Production rate for doors

2-60
 Summary of the Graphical Method

• Draw the constraint boundary line for each constraint. Use the origin (or any
point not on the line) to determine which side of the line is permitted by the
constraint.

• Find the feasible region by determining where all constraints are satisfied
simultaneously.

• Determine the slope of one objective function line. All other objective
function lines will have the same slope.

• Move a straight edge with this slope through the feasible region in the
direction of improving values of the objective function. Stop at the last instant
that the straight edge still passes through a point in the feasible region. This
line given by the straight edge is the optimal objective function line.

• A feasible point on the optimal objective function line is an optimal solution.

2-61
 Using Excel’s Solver to Solve Linear Programming
Problems
• Graphical Method gives good insight and geometric intuition for LP but is
limited to problems with two decision variables.

• Solver is tool that comes with Excel that solves LP problems.

• You may need to install it. See text page 38.

2-62
 Identifying the Objective Cell and Changing Cells
• Choose the “Solver” from the Data tab.
• Select the cell you wish to optimize in the “Set Objective” window.
• Choose “Max” or “Min” depending on whether you want to maximize or minimize the
objective cell.
• Enter all the changing cells in the “By Changing Variable Cells” window.

2-63
 Adding Constraints
• To begin entering constraints, click the “Add” button to the right of the
constraints window.
• Fill in the entries in the resulting Add Constraint dialogue box.

2-64
The Completed Solver Dialogue Box

2-65
The Solver Results Dialogue Box

2-66
The Optimal Solution

2-67
 Using Risk Solver Platform for Educaton (RSPE) to
Solve Linear Programming Problems
• RSPE is a Premium Version of Solver the provides greatly enhanced
functionality

• Refer to instructions in Syllabus.

• See text page 42.

2-68
My Version of RSPE on Excel 2013
Risk Solver Platform for Education (RSPE) – Textbook
Solution

2-70
My Version After Optimization
Specifying the Objective Cell with RSPE

2-72
Specifying the Changing Cells with RSPE

2-73
Adding Constraints with RSPE

2-74
Adding Constraints with RSPE

2-75
Making Changes with the Model Pane in RSPE

2-76
Specifying Options with RSPE

Standard
Assumption

2-77
The Optimal Solution with RSPE

2-78
 The Profit & Gambit Co.

• Management has decided to undertake a major advertising campaign that will

focus on the following three key products:
– A spray prewash stain remover.
– A liquid laundry detergent.
– A powder laundry detergent.

• The campaign will use both television and print media

• The general goal is to increase sales of these products.

• Management has set the following goals for the campaign:

– Sales of the stain remover should increase by at least 3%.
– Sales of the liquid detergent should increase by at least 18%.
– Sales of the powder detergent should increase by at least 4%.

Question: how much should the company advertise in each medium to

meet the sales goals at a minimum total cost?

2-79
 By the Numbers

Increase in Sales per

Unit of Advertising

Product Television Print Media Minimum

Required
Increase
Stain Remover 0% 1% 3%
Liquid Detergent 3 2 18
Powder -1 4 4
Detergent
Unit Cost $1 million $2 million  
It is worth noting that a simplifying assumption is being made here that each additional unit of advertising in a particular outlet will
yield the same increase in sales regardless of how much advertising already is being done. This is a poor assumption when
saturation is taken into account but may be acceptable for the small levels of advertising assumed for this problem.
2-80
 Algebraic Model for Profit & Gambit

Let TV = the number of units of advertising on television

PM = the number of units of advertising in the print media

Minimize Cost = TV + 2PM (in millions of dollars)

subject to
Stain remover increased sales: PM ≥ 3
Liquid detergent increased sales: 3TV + 2PM ≥ 18
Powder detergent increased sales: –TV + 4PM ≥ 4
and
TV ≥ 0, PM ≥ 0.

2-81
 Applying the Graphical Method
Amount of print media advertising
PM

Feasible
10
region

PM = 3
2
-TV + 4 PM = 4
3 TV + 2 PM = 18

-4 -2 0 2 4 6 8 10 TV
Amount of TV advertising

2-82
 The Optimal Solution

PM

10
Feasible
Cost = 15 = TV + 2 PM region

Cost = 10 = TV + 2 PM

4
(4,3)
optimal
solution
0 5 10 15 TV
Amount of TV advertising

2-83
Profit & Gambit Co. Spreadsheet Model

2-84
Model Showing Formulas
 My Approach Using Solver
Minimize

Decision
Variables Sales must
Achieve at least
Minimum Desired
Increase
It Works!!!
Solved with RSPE
 Now You Try It
Homework #1 Due September 15, 2015 by 5:00 p.m. BEFORE THE CLASS!

• Textbook Chapter 1:
 Problems 1.5, 1.7
Textbook Chapter 2:
 Problems 2.5, 2.15, 2.16

• Submit all Excel files by Email to jfossaceca@gwu.edu

• Please always put EMSE 6850, your last name and the HW number in the email subject
line (e.g. EMSE 6850, Smith, HW1). These spreadsheets will be used for reference when
grading.
• Please label your homework with EMSE 6850, your last name and the HW number on top
of each page for any hard copies