Multi Goal Programming and its application in

excel

Submitted By : Abhishek Sharma, 14020241007

Gaurav Varshney, 14020241039
Prakhar Khandelwal 14020241104
Rucha Raste, 14020241105
Shruti Gupta, 14020241111

Scope of the presentation:

Introduction to Goal programming
Dealing with Goal programming
Goal Programming Model Formulation & Goal

Constraints Requirement
Goal programming using graphical analysis
Computer solution of Goal programming

Introduction to Goal programming

Goal programming (GP)
A variation of linear programming (LP) that allows

multiple objectives (goals)soft (goal) constraints or a

combination of soft and hard (nongoal) constraints to
achieve optimal solutions.
GP models are similar to LP models in that both are
formulated under the same requirements and
assumptions (e.g., linearity, nonnegativity, certainty).
Firms often have more than one goal, which are
sometimes contradictory and sometimes dependent.
Instead of optimizing single valued function, try to
meet pre-specified goals:
Eg: Goal 1: total cost < 1000 INR

Goal 2: total reliability > .95

Dealing with Goal Programming

There are various methods proposed to solve the

problems but we will look at some of them. Note: There

is no one right way to approach a problem involving
multiple objectives.
Determine hierarchy of goals so that higher-priority
goals are satisfied before low-priority goals are
addressed.
Not always possible to satisfy every goal so GP
attempts to reach a satisfactory level of objective
fulfillment.
GP uses, like LP, graphical methods to illustrate linear
programming concepts.
An integer programming model can be used where an
integer value is used in final solution. Proceed with the
same problem statement through GP will give priority

Harrison Electric Company Example of Integer

Programming
The Company produces two products popular with

home renovators, old-fashioned chandeliers and

ceiling fans
Both the chandeliers and fans require a two-step
production process involving wiring and assembly
It takes about 2 hours to wire each chandelier and
3 hours to wire a ceiling fan
Final assembly of the chandeliers and fans requires
6 and 5 hours respectively
The production capability is such that only 12
hours of wiring time and 30 hours of assembly
time are available

Harrison Electric Company Example of Integer

Programming
Each chandelier produced nets the firm $7 and

each fan $6
Harrisons production mix decision can be
formulated using LP as follows
Maximize profit = $7X1 + $6X2
subject to
2X1 + 3X2 12 (wiring hours)
6X1 + 5X2 30 (assembly hours)
X1, X2 0 (nonnegative)
where
X1 = number of chandeliers produced
X2 = number of ceiling fans produced

Multiple Goals
Now Harrisons management wants to achieve

several goals of equal in priority

Goal 1: to produce a profit of $30 if possible during
the production period
Goal 2: to fully utilize the available wiring
department hours
Goal 3: to avoid overtime in the assembly
department
Goal 4: to meet a contract requirement to produce
at least seven ceiling fans

Multiple Goals
The deviational variables are

d1 = underachievement of the profit target

d1+ = overachievement of the profit target
d2 = idle time in the wiring department (underutilization)
d2+ = overtime in the wiring department (overutilization)
d3 = idle time in the assembly department (underutilization)
d3+ = overtime in the assembly department (overutilization)
d4 = underachievement of the ceiling fan goal
d4+ = overachievement of the ceiling fan goal

Model formulation
Because management is unconcerned about d1+,

d2+, d3, and d4+ these may be omitted from the

objective function
The new objective function and constraints are
Minimize total deviation = d1 + d2 + d3+ + d4

subject to 7X1+ 6X2+ d1

2X1+ 3X2+ d2 d2+
6X1+ 5X2+ d3 d3+
X2+ d4 d4+

d1+ = 30 (profit constraint)

= 12 (wiring hours)
= 30 (assembly hours)
= 7 (ceiling fan constraint)

All Xi, di variables 0

Goal Programming with Penalty weights

ABC Ltd. produces three products A,B,C wants

primary consideration given to three factors:

long-run profit, stability in the workforce, and
the level of capital investment that would be
required now for new equipment. In particular,
management has established the goals of:
Achieving a long-run profit (net present value) of

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at least $125 million from these products.

Maintaining the current employment level of
4,000 employees.
Holding the capital investment to less than $55
million.

 However, management realizes that it probably will not be

possible to attain all these goals simultaneously, so it

decided to set penalty weights of:
5 for missing the profit goal (per $1 million under)
2 for going over the employment goal (per 100
employees).
4 for going under this same goal
3 for exceeding the capital investment goal (per
$1
Penalty/
Factor
A
B
C
Goal
Weight
million over).
LongRun
Profit 12
9
15
>=125($ mn)
5
Formulation

11

Emp Level

Capital
Investment

=40(hundreds of
employee)
<=55($ mn)

3(+), 4(-)
2

Solution:
After solving it excel solver we get:
A=8.33
B=0
C=1.66
Here, d+ for labour=8.33, for others it is 0,so the

first and third goals are fully satisfied, but the

employment level goal of 40 is exceeded by 8.33
(833 employees). The resulting penalty for
deviating from the goals is 16.66
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Example :Beaver Creek Pottery

Company
Maximize Z = $40x1 + 50x2

subject to:
1x1 + 2x2 40 hours of labor
4x1 + 3x2 120 pounds of clay
x1, x2 0
Where:
x1 = number of bowls produced
x2 = number of mugs produced

Formulation
& Goal Constraints Requirement
Adding objectives (goals) in order of importance (i.e. priorities),

the company:
Does not want to use fewer than 40 hours of labor per day.
Would like to achieve a satisfactory profit level of $1,600 per

day.
Prefers not to keep more than 120 pounds of clay on hand

each day.
Would like to minimize the amount of overtime.
All goal constraints are equalities that include deviational

variables d- and d+.

A positive deviational variable (d+) is the amount by which a goal

level is exceeded.
A negative deviation variable (d-) is the amount by which a goal

level is underachieved.

Goal Constraints & Objective Function

Goal Constraints:

X1 + 2x2 = 40 - d1- + d1+

40x1 + 50 x2 = 1,600 - d2- + d2+
4x1 + 3x2 = 120 - d3- + d3+
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0
Complete Goal Programming Model:

Minimize d1-, d2-, d3+, d1+

subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0

Graphical Solution
Goal programming solutions do not
always achieve all goals and they
are not optimal, they achieve the
best or most satisfactory solution
possible.
Minimize d1-, d2-, d3+, d1+
subject to:
x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + = 1,600
4x1 + 3x2 + d3 - - d3 + = 120
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0
x1 = 15 bowls
x2 = 20 mugs

Goal Programming
Computer Solution Using Excel

Goal Programming
Computer Solution Using Excel

Goal Programming
Computer Solution Using Excel

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