Introduction to

Optimization Models
OR Mini-course
July 31, 2009

Archis Ghate
Assistant Professor
Industrial and Systems Engineering
The University of Washington, Seattle
 What are “Optimization Models”?
• One possible definition - mathematical models
designed to help institutions and individuals decide
how to
‣ allocate scarce resources
‣ to activities
‣ to make the most of their circumstances.

• More generally, mathematical models designed to

help us make “better” decisions.

• Several other possible definitions.

What kind of decisions?
• Any kind really... but here are some examples
‣ How many cars to produce? What radiation intensity to use in cancer
treatment? How many outpatients to schedule every day? Whether to
start a new project? Whether to buy a stock? Which retirement plan to
choose? How many medical service centers to open? Where, what and
how much supplies to stock in storage? How many nurses to employ?
Which doctors to have on call? How to schedule flights? How to route
traffic? How to respond to a natural disaster?

• These are difficult decisions that involve an

inordinate number of factors.
‣ Optimization models attempt to capture some key components
to build a reasonable replica of the real situation.
‣ Provide a systematic, quantitative way to evaluate and select
decisions.
 FAQs about this talk
• Who is this talk for?
‣ People who have never seen an optimization model
and have minimal or no mathematics background but
‣ May benefit from using optimization models in their
profession.

• What if you are none of the above?

‣ Take a nap.

• How is this talk going to proceed?

‣ We are going to build a few simple toy models and
solve some of them with EXCEL.
Nuts and bolts of optimization
models

decision activity levels or

variables choices

resource
constraints limitations or
other restrictions

objective performance
function(s) metric(s)
 Example 1: a diet problem
• To decide the quantities of different food
items to consume every day to meet the
daily requirement (DR) of several nutrients
at minimum cost.
• What type of data do we need?
‣ food items under consideration.
‣ nutrition information.
‣ cost of food items.
Diet problem : toy example

Wheat Rye DR

Carbs/unit 5 7 20

Proteins/unit 4 2 15

Vitamins/unit 2 1 3

Cost/unit 0.6 0.35

 Diet example continued

• What decision variables do we need?

‣ Units of wheat consumed every day XW
‣ Units of rye consumed every day XR

• What constraints do we need?

• What is our objective function?
 minimize 0.6XW + 0.35XR

subject to

5XW + 7XR ≥ 20
4XW + 2XR ≥ 15
2XW + XR ≥ 3
XW ≥ 0
XR ≥ 0

Solution : XW =3.611 XR = 0.278

Cost : 2.2639
 Example 2 : Transportation problem

• Adapted from Hillier and Lieberman (2005).

• A non-profit organization manages three warehouses and

four healthcare centers. The organization has estimated
the requirements for a specific vaccine at each healthcare
center in number of boxes of vials. The organization
knows the number of boxes of vials available at each
warehouse. They want to decide how many boxes of vials
to ship from the warehouses to the healthcare centers
so as to meet the demand for the vaccine at minimum
total shipping cost.

• Decision variables Xij the number of boxes shipped from

warehouse i to healthcare center j.
 HC1 HC2 HC3 HC4 AVAILABILITY

W1 464 513 654 867 75

W2 352 416 690 791 125

W3 995 682 388 685 100

REQUIREMENT 80 65 70 85 300
 Solution
HC1 80
80
75 W1 20
HC2 65
45
125 W2
55
70 HC3 70
100 W3
30
HC4 85

Cost : 152535
 Example 3 : Cancer treatment with
radiation therapy

• Taken from Hillier and Lieberman (2005).

• One possible way to treat cancer is radiation therapy.

‣ An external beam treatment machine called a linear
accelerator is used to pass radiation through the
patient’s body.
‣ Damages both cancerous and healthy cells.
‣ Typically multiple beams of different strengths are used
from different sides and different angles.

• Decide what beam strengths to use to achieve sufficient

tumor damage but limit damage to healthy regions.
 Radiation therapy data
Fraction of energy absorbed by
area

Restriction on total
Area Beam 1 Beam 2 average dose

Healthy anatomy 0.4 0.5 Minimize

Critical tissue 0.3 0.1 at most 2.7
Tumor region 0.5 0.5 equal to 6
Center of tumor 0.6 0.4 at least 6

Decision variables x1 and x2 represent the strengths

for beam 1 and beam 2 respectively
 minimize 0.4x1 + 0.5x2
dose to healthy anatomy

subject to

0.3x1 + 0.1x2 ≤ 2.7 dose to critical tissue

0.5x1 + 0.5x2 = 6 dose to tumor

0.6x1 + 0.4x2 ≥ 6 dose to tumor center

x1 ≥ 0
x2 ≥ 0

Optimal solution : x1 =7.5 x2 = 4.5

Dose to healthy anatomy : 5.25
 Example 4: Air pollution problem
• Adapted from Hillier and Lieberman (2005)

• A steel plant has been ordered to reduce its

emission of 3 air pollutants - particulates, sulfur
oxides, and hydrocarbons

• The plant uses 2 furnaces

• The plant is considering 3 methods for achieving

pollution reductions - taller smokestacks, filters,
better fuels

• The 3 methods are expensive, so the plant

managers want to decide what combination of the
3 to employ to minimize costs and yet achieve the
required emission reductions
 Required emission Emission reduction (million pounds per year) if the method
Pollutant reduction (million
is employed at the highest possible level
pounds per year)
Taller
Filters Better Fuels
Smokestacks
Particulates 60
Pollutant F1 F2 F1 F2 F1 F2
Sulfur oxides 150
Particulates 12 9 25 20 17 13
Hydrocarbons 125
Sulfur oxides 35 42 18 31 56 49

Hydrocarbons 37 53 28 24 29 20

Annual cost of employing a method at the highest possible level

(million dollars)
Method F1 F2
Taller smokestacks 8 10
Filters 7 6
Better fuels 11 9
Decision variables - fraction of the highest possible level of a method
employed

Method F1 F2
Taller smokestacks x1 x2
Filters x3 x4
Better fuels x5 x6
 minimize 8x1 + 10x2 + 7x3 + 6x4 + 11x5 + 9x6
total cost
subject to

12x1 + 9x2 + 25x3 + 20x4 + 17x5 + 13x6 ≥ 60

35x1 + 42x2 + 18x3 + 31x4 + 56x5 + 49x6 ≥ 150
37x1 + 53x2 + 28x3 + 24x4 + 29x5 + 20x6 ≥ 125

xj ≤ 1, for j=1,2,3,4,5,6 emission

reduction

xj ≥ 0, for j=1,2,3,4,5,6 requirements

Optimal solution : (x1 , x2 , x3 , x4 , x5 , x6)=(1,0.623,0.343,1,0.048,1)

Cost : 32.16 million dollars
Example 5: Production
problem
• A company makes three types of laptops:
type 1, type 2, and type 3.
• Three types of machines are used to make
these laptops. The machines have limited
machine time available for production.
Machine Available Time
Machine 1 500
Machine 2 350
Machine 3 150
• Making one laptop requires the following
machine times:
Machine Type 1 Type 2 Type 3
Machine 1 9 3 5
Machine 2 5 4 0
Machine 3 3 0 2

• The production costs of making one laptop

are as follows:
Laptop Prod. cost
Type 1 250
Type 2 100
Type 3 150
• The company does not want to make more
than 20 type 3 laptops.
• The price that the company needs to set to
sell x laptops of type 1 is 350+100x-1/3.
• The price that the company needs to set to
sell y laptops of type 2 is 150+400y-1/4.
• The price that the company needs to set to
sell z laptops of type 3 is 200+50z-1/2.
• Given this information, how many laptops
of each type should the company make if
they want to maximize their profit? (ignore
the fact that “number of laptops” has to be
an integer).
• Class exercise: develop a mathematical
model.
maximize (350+100x-1/3-250)x + (150+400y-1/4-100)y
+ (200+50z-1/2-150)z

subject to
9x + 3y + 5z ≤ 500
5x + 4y + ≤ 350
3x + + 2z ≤ 150
z ≤ 20
x≥ 0
y≥ 0
z≥ 0
Answer (approximate) : Type 1= 26, Type 2 = 54, Type 3= 20
Profit (approximate) : 6390
 Example 6: Chess queens problem
• How many queens can you place on an 8*8
chessboard so that no queen threatens another?

• Where would you place these queens?

taken from wikipedia

• Class exercise: develop an optimization model.

 A five step approach to optimization
models
• Define/describe the problem and gather data

• Formulate a mathematical model to represent the

real problem

• Develop a computer based procedure for deriving

solutions to the model

• Test/refine the model, perform sensitivity analyses

• Implement
 References

• Hillier, F., and Lieberman, G., Introduction to

operations research, McGraw Hill, 8th
edition, 2005.