Multicriteria Decision Making
Goal Programming
Graphical Interpretation of Goal Programming Computer Solution of Goal Programming Problems with QM for Windows and Excel The Analytical Heirarchy Process
Multicriteria Decision Making
Overview
Study of problems with several criteria, multiple criteria, instead of a single objective when making a decision.
Two techniques discussed: goal programming, and the analytical heirarchy process.
Goal programming is a variation of linear programming considering more than one objective (goals) in the objective function.
The analytical heirarchy process develops a score for each decision alternative based on comparisons of each under different criteria reflecting the decision makers preferences.
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Goal Programming Discussion Model Formulation
Starting with single-objective Beaver Creek Pottery Company Example:
Maximize Z=$40x1 + 50x2 Subject to 1x1 + 2x2 40 hours of labor 4x2 + 3x2 120 pounds of clay x1, x2 0 Where x1 = number of bowls produced x2 = number of mugs produced
Adding objectives (goals) in order of importance, the company: 1. does not want to use fewer than 40 hours of labor per day; 2. would like to achieve a satisfactory profit level of $1,600 per day; 3. prefers not to keep more than 120 pounds of clay on hand each day; 4. would like to minimize the amount of overtime.
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Goal Programming Goal Constraint Requirements
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. At least one or both deviational variables in a goal constraint must equal zero. The objective function in a goal programming model seeks to minimize the deviation from goals in the order of the goal priorities.
Goal Programming Discussion Model Goal Constraints and Objective Function
- Labor goals constraint (1, less than 40 hours labor; 4, minimum overtime): minimize P1d1-, P4d1+ - Add profit goal constraint (2, achieve profit of $1,600):
minimize P1d1-, P2d2-, P4d1+
- Add material goal constraint (3, avoid keeping more than 120 pounds of clay on hand): minimize P1d1-, P2d2-, P3d3+, P4d1+ - Complete goal programming model:
minimize
subject to
P1d1-, P2d2-, P3d3+, P4d1+
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
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Goal Programming Alternative Forms of Discussion Model Goal Constraints
- Changing fourth-priority goal limits overtime to 10 hours instead of minimizing overtime: d1- + d4 - - d4+ = 10; minimize P1d1 -, P2d2 -, P3d3 +, P4d4 + - Addition of a fifth-priority goal- important to achieve the goal for mugs:
x1 + d5 - = 30 bowls; x2 + d6 - = 20 mugs; minimize P1d1 -, P2d2 -, P3d3 -, P4d4 -, 4P5d5 -, 5P5d6 - Complete model with new goals for both overtime and production: minimize P1d1 -, P2d2 -, P3d3 -, P4d4 -, 4P5d5 -, 5P5d6 subject to x1 + 2x2 + d1- - d1+ = 40 40x1 + 50 x2 + d2 - - d2 + = 1,600 4x1 + 3x2 + d3 - - d3 + = 120 d1 + + d4- - d4+ =10 x1 + d5 - = 30
x2 + d6- = 20
x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 +, d4-, d4 +, d5 -, d6-, 0
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Graphical Interpretation of Goal Programming (1 of 6)
minimize 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 P1d1-, P2d2-, P3d3+, P4d1+
Goal constraints 7
Graphical Interpretation of Goal Programming (2 of 6)
minimize subject to 1,600 4x1 + 3x2 + d3 - - d3 + = 120 x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0 P1d1-, P2d2-, P3d3+, P4d1+ x1 + 2x2 + d1- - d1+ = 40
40x1 + 50 x2 + d2 - - d2 + =
The first-priority goal: Minimize 8
Graphical Interpretation of Goal Programming (3 of 6)
minimize subject to P1d1-, P2d2-, P3d3+, P4d1+ x1 + 2x2 + d1- - d1+ = 40 4x1 + 3x2 + d3 - - d3 + = 120 x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0
40x1 + 50 x2 + d2 - - d2 + = 1,600
The second-priority goal: Minimize 9
Graphical Interpretation of Goal Programming (4 of 6)
minimize subject to P1d1-, P2d2-, P3d3+, P4d1+ x1 + 2x2 + d1- - d1+ = 40 4x1 + 3x2 + d3 - - d3 + = 120 x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0
40x1 + 50 x2 + d2 - - d2 + = 1,600
The third-priority goal: Minimize 10
Graphical Interpretation of Goal Programming (5 of 6)
minimize subject to P1d1-, P2d2-, P3d3+, P4d1+ x1 + 2x2 + d1- - d1+ = 40 4x1 + 3x2 + d3 - - d3 + = 120 x1, x2, d1 -, d1 +, d2 -, d2 +, d3 -, d3 + 0
40x1 + 50 x2 + d2 - - d2 + = 1,600
The fourth-priority goal: (minimize ) and the solution 11
Graphical Interpretation of Goal Programming (6 of 6) - Goal programming solutions do not always achieve all goals and they are not
optimal, they achieve the best or most satisfactory solution possible.
P1d1-, P2d2-, P3d3+, P4d1+ 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
minimize
x1 = 15 bowls x2 = 20 mugs
d1- = 15 hours
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