Business Case Studies & Business Publications

Optimization Modeling Exercises

Carraway, Robert L...

Case

Optimization Modeling Exercises

Carraway, Robert L.

QA-0606 | Published January 3, 2003 | 3 pages Case

Collection: Darden School of Business

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The problem set contains three problems designed to help students practice their ability to build math programming models. Problem # 1 is a portfolio problem where the student is asked to find a portfolio that minimizes risk (variance) subject to a required rate of return; as such, it is nonlinear. Problem # 2 is aggregate production scheduling; hence, linear. Problem # 3 involves determining how to source a fixed quantity from a menu of vendors with differing fixed- ordering charges and per-unit prices; it is a mixed integer model. All are sufficiently small that they can be easily optimized with standard math programming software (such as Excel's standard Solver).