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Goal Programming Example

Goal Programming Example. 2. The System Constraint. Two principal product lines: Portable circular sawPrecision table saw. Average contribution to profits and overhead:$900 for each circular saw$600 for each table saw. Management would like contribution to profits and overhead to be at least $

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Goal Programming Example

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    1. Goal Programming Example Henry C. Co California Polytechnic & State University

    2. Goal Programming Example 2 The System Constraint Two principal product lines: Portable circular saw Precision table saw. Average contribution to profits and overhead: $900 for each circular saw $600 for each table saw. Management would like contribution to profits and overhead to be at least $2,000,000 per month.

    3. Goal Programming Example 3 Goal #1 Past experience indicates that sales of circular saw are three times that of precision table. As much as possible, marketing would like to maintain a 3:1 ratio in the product mix. Note: If X1= no. of circular saw and X2= no. of precision table saw, then X1= 3X2 or X1-3X2=0.

    4. Goal Programming Example 4 Goal #2 (Fabrication) Two crucial operations: fabrication and assembly. Fabrication Each circular saw requires 2 hours Each table saw requires 1 hour Hours available is 4,000 hours/month.

    5. Goal Programming Example 5 Goal #3 (Assembly) Assembly Each circular saw requires 1 hour Each table saw requires 2 hours Hours available is 5,000 hours/month Though idle time and overtime are acceptable, management would like the assembly hours to be as close to 5,000 hours as possible.

    6. Excel Solution Introduce ui (underachievement) for “=” inequality Introduce -vi (overachievement) for “=” inequality. Introduce di- (underachievement) and -di+ (overachievement) for equality. There are three goals. Goals 1 and 3 are “equal to” goals. Thus we need to insert 5 goal variables.

    7. Goal Programming Example 7 Goal #1 To maintain a 3:1 ratio in product mix. Let X1= no. of circular saw and X2= no. of precision table saw, then X1= 3X2 or X1-3X2=0. Since this is an “equal to” constraints, we may need two ‘goal’ variables, i.e., di- (underachievement) and -di+ (overachievement) for equality. Thus X1-3X2 + di- -di+ =0.

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