Goal programming

2
Goal Programming
and
Multiple Objective Optimization
Goal programming involves solving problems containing not one specific objective function, but rather a collection
of goals. In linear and integer programming methods the objective function is measured in one dimension only but
in goal programming, conflicting goals or goals with different priorities and weights can be combined with each
other and solved by using simplex algorithm and programs such as QM solver or Excel.
Goal programming yields only an efficient and satisfactory result rather than optimum, solution to the problem.

1. Goal Programming
An important technique that has been developed to supplement LP is called goal programming.
Typically, goals set by management can be achieved only at the expense of other goals.
A hierarchy of importance needs to be established so that higher-priority goals are satisfied before lower-priority
goals are addressed.
It is not always possible to satisfy every goal so goal programming attempts to reach a satisfactory level of
multiple objectives.
The main difference is in the objective function where goal programming tries to minimize the deviations
between goals and what we can actually achieve within the given constraints.

1.1 A Goal Programming Example (Harrison Electric Revisited)

The LP formulation for the Harrison Electric problem is

Maximize profit = $7X1 + $6X2

subject to 2X1 + 3X2 12 (wiring hours)
6X1 + 5X2 30 (assembly hours)
X1, X2 0
where
X1 = number of chandeliers produced
X2 = number of ceiling fans produced

Harrison is moving to a new location and feels that maximizing profit is not a realistic objective.
Management sets a profit level of $30 that would be satisfactory during this period.
The goal programming problem is to find the production mix that achieves this goal as closely as possible given the
production time constraints.

We need to define two deviational variables

d1 = underachievement of the profit target
+
d1 = overachievement of the profit target

We can now state the Harrison Electric problem as a single-goal programming model.

+
Minimize under or overachievement of profit target = d1 + d1

+
subject to $7X1 + $6X2 + d1 d1 = $30 (profit goal constraint)
2X1 + 3X2 12 (wiring hours)
6X1 + 5X2 30 (assembly hours)
+
X1, X2, d1 , d1 0
 Goal programming

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.

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
+ + +
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 d1 = 30 (profit constraint)
+
2X1 + 3X2 + d2 d2 = 12 (wiring hours)
+
6X1 + 5X2 + d3 d3 = 30 (assembly hours)
+
X2 + d4 d4 =7 (ceiling fan constraint)
All Xi, di variables 0

1.2 Ranking Goals with Priority Levels

In most goal programming problems, one goal will be more important than another, which will in turn be more
important than a third.
Goals can be ranked with respect to their importance in managements eyes.
Priorities (Pis) are assigned to each deviational variable with the ranking so that P1 is the most important goal, P2
the next most important, P3 the third, and so on.
The deviation from the high-priority goal must be minimized to the greatest extent possible before the next-
highest-priority goal is considered.

Harrison Electric has set the following priorities for their four goals;

GOAL PRIORITY
Reach a profit as much above $30 as possible P1
Fully use wiring department hours available P2
Avoid assembly department overtime P3
Produce at least seven ceiling fans P4

This effectively means that each goal is infinitely more important than the next lower goal.
With the ranking of goals considered, the new objective function is

Minimize total deviation = P1d1 + P2d2 + P3d3+ + P4d4

The constraints remain identical to the previous ones.

 Goal programming

1.3 Solving Goal Programming Problems Graphically

Recall the Harrison Electric goal programming model.
+
Minimize total deviation = P1d1 + P2d2 + P3d3 + P4d4
+
subject to 7X1 + 6X2 + d1 d1 = 30 (profit )
+
2X1 + 3X2 + d2 d2 = 12 (wiring)
+
6X1 + 5X2 + d3 d3 = 30 (assembly)
+
X2 + d4 d4 = 7 (ceiling fans)
All Xi, di variables 0 (non-negativity)
where
X1 = number of chandeliers produced, X2 = number of ceiling fans produced

Analysis of the first goal

To solve this we graph one constraint at a time starting with the constraint
with the highest-priority deviational variables.

In this case we start with the profit constraint as it has the variable d1 with
a priority of P1 .
Note that in graphing this constraint the deviational variables are ignored.

To minimize d1 the feasible area is the shaded region.

Analysis of first and second goals

The next graph is of the second priority goal of minimizing d2 .
The region below the constraint line 2X1 + 3X2 = 12 represents the
+
values for d2 while the region above the line stands for d2 .
To avoid underutilizing wiring department hours the area below the
line is eliminated.
This goal must be attained within the feasible region already defined
by satisfying the first goal.

Analysis of all four priority goals

The third goal is to avoid overtime in the assembly department.

+
We want d3 to be as close to zero as possible.
Any point inside the feasible region bounded by the first three
constraints will meet the three most critical goals. The fourth

constraint seeks to minimize d4 .
To do this requires eliminating the area below the constraint line
X2 = 7 which is not possible given the previous, higher priority,
constraints.
 Goal programming

The optimal solution must satisfy the first three goals and come as close as possible to satisfying the fourth goal.
This would be point A on the graph with coordinates of X1 = 0 and X2 = 6.
Substituting into the constraints we find,
+
d1 = $0 d1 = $6
+
d2 = 0 hours d2 = 6 hours
+
d3 = 0 hours d3 = 0 hours
+
d4 = 1 ceiling fan d4 = 0 ceiling fans
A profit of $36 was achieved exceeding the goal.

1.4 Modified Simplex Method for Goal Programming

The modified simplex method can be used to solve problems with more than two real variables.

Recall the Harrison Electric model.

+
Minimize = P1d1 + P2d2 + P3d3 + P4d4
+
subject to 7X1 + 6X2 + d1 d1 = 30
+
2X1 + 3X2 + d2 d2 = 12
+
6X1 + 5X2 + d3 d3 = 30
+
X2 + d4 d4 = 7
All Xi, di variables 0

There are four features of the modified simplex tableau that differ from earlier simplex tableaus.

1. The variables in the problem are listed at the top, with the decision variables (X1 and X2) first, then the
negative deviational variables and, finally, the positive deviational variables. The priority level of each
variable is assigned on the very top row.
2. The negative deviational variables for each constraint provide the initial basic solution. This is analogous
to the use of slack variables in the earlier simplex tableaus. The priority level of each variable in the
current solution mix is entered in the Cj column.

3. There is a separate Zj and Cj Zj row for each of the Pi priorities because different units of measurement
are used for each goal. The bottom row of the tableau contains the highest ranked (P1) goal; the next row
has the P2 goal, and so forth. The rows are computed exactly as in the regular simplex method, but they
are done for each priority level.

4. In selecting the variable to enter the solution mix, we start with the highest-priority row, P1, and select
the most negative Cj Zj value in it. If there was no negative number for P1, we would move on to priority
P2s Cj Zj row and select the largest negative number there. A negative Cj Zj that has a positive number
 Goal programming

in the P row underneath it, however, is ignored. This means that deviations from a more important goal
(one in a lower row) would be increased if that variable were brought into the solution.

We move towards the optimal solution just as with the regular minimization simplex method.
We find the pivot row by dividing the quantity values by their corresponding pivot column (X 1) values and picking
the one with the smallest positive ratio.

In this case, d1 leaves the basis and is replaced by X1 .
We continue this process until an optimal solution is reached.

In the final solution the first three goals have been fully achieved with no negative entries in their Cj Zj rows
+
A negative value appears in the d3 column in the priority 4 row indicating this goal has not been fully attained
+ +
But the positive number in the d3 at the P3 priority level (shaded cell) tells us that if we try to force d3 into the
solution mix, it will be at the expense of the P3 goal which has already been satisfied.

The final solution is:

X1 = 0 chandeliers produced
X2 = 6 ceiling fans produced
+
d1 = $6 over the profit goal
+
d2 = 6 wiring hours over the minimum set

d4 = 1 fewer fan than desired
 Goal programming

1.4 Using EXCEL for Windows to Solve Harrisons Problem

We transfer the objective function and constraints into the Excel spreadsheet as follows.
+
Minimize = P1d1 + P2d2 + P3d3 + P4d4
+
subject to 7X1 + 6X2 + d1 d1 = 30
+
2X1 + 3X2 + d2 d2 = 12
+
6X1 + 5X2 + d3 d3 = 30
+
X2 + d4 d4 = 7
All Xi, di variables 0

=SUMPRODUCT(B4:C4;B7:C7)+D7-H7

The cell L7 is the sum of the products B4:C4 with B7:C7, plus D7 minus H7,
The cell L8 is the sum of the products B4:C4 with B8:C8 plus E8 minus I8,
The cell L9 is the sum of the products B4:C4 with B9:C9 plus F9 minus J9,
The cell L10 is the sum of the products B4:C4 with B10:C10 plus G10 minus K10.
+
Objective function is the minimization of d1 + d2 + d3 + d4 , which are D7+E8+J9+G10.
The column L is the summation of X1, X2 and deviations so L7:L10 values are equal to N7:N10.

We insert the constraints into Excel solver.

The results are as follows.

 Goal programming

The final solution is as found in the graphical method.

X1 = 0 chandeliers produced
X2 = 6 ceiling fans produced
+
d1 = $6 over the profit goal
+
d2 = 6 wiring hours over the minimum set

d4 = 1 fewer fan than desired

1.5 Goal Programming with Weighted Goals in Excel

The deviations measure different variables, such as cost, time, material etc. In order to combine the deviations in a
single objective function, the percentage of each deviation from target value must be calculated.

Minimizing the summation of the percentage deviations Min: ( +
+ )

Here ti is target value and di is the deviation.

If the decision maker has some priorities, the weight of each deviation can be included in the objective function.

Minimizing the weighted sum of the percentage deviations Min: ( + +
+ )

WORKED-OUT PROBLEM 1 Davis McKeown is the owner of a resort hotel and convention center in Myrtle Beach,
South Carolina. Although his business is protable, it is also highly seasonal; the summer months are the most
protable time of year. To increase prots during the rest of the year, Davis wants to expand his convention
business but, to do so, he needs to expand his conference facilities. Davis hired a marketing research rm to
determine the number and sizes of conference rooms that would be required by the conventions he wants to
attract. The results of this study indicated that Daviss facilities should include at least 5 small (400 square foot)
conference rooms, 10 medium (750 square foot) conference rooms, and 15 large (1,050 square foot) conference
rooms. Additionally, the marketing research rm indicated that if the expansion consisted of a total of 25,000
square feet, Davis would have the largest convention center among his competitorswhich would be desirable for
advertising purposes. While discussing his expansion plans with an architect, Davis learned that he can expect to
pay $18,000 for each small conference room in the expansion, $33,000 for each medium conference room, and
$45,150 for each large conference room. Davis wants to limit his expenditures on the convention center expansion
to approximately $1,000,000.
 Goal programming

Solution:
Goal 1: The expansion should include approximately 5 small conference rooms.
Goal 2: The expansion should include approximately 10 medium conference rooms.
Goal 3: The expansion should include approximately 15 large conference rooms.
Goal 4: The expansion should consist of approximately 25,000 square feet.
Goal 5: The expansion should cost approximately $1,000,000.

Notice that the word approximately appears in each goal. This word reinforces that these are soft goals rather
than hard constraints.

The goals are X1= 5, X2=10, X3=15 .

The goals for the room numbers with deviational variables are;
+
X1 + d1 d1 = 5 (small rooms )
+
X2 + d2 d2 = 10 (medium rooms)
+
X3 + d3 d3 = 15 (large rooms)

We can formulate the goal constraints for the remaining goals in the problem in a similar manner.
Because each small, medium, and large conference room requires 400, 750,and 1,050 square feet, respectively,
and the hotel owner wants the total square footage of the expansion to be 25,000, the constraint representing this
goal is
+
400X1+ 750X2 + 1,050 X3 + d4 d4 =25,000 (square footage)

Because each small, medium, and large conference room results in building costs of $18,000, $33,000, and
$45,150 , respectively, and the hotel owner wants to keep the cost of the expansion at approximately $1,000,000,
the constraint representing this goal is:

+
18,000X1 + 33,000X2 + 45,150 X3 + d5 d5 =1,000,000 (building cost)

Objective function is ;

Minimizing the summation of the deviations Min: + +

The deviations in this problem measure different units (number of rooms, area and cost), we have to modify the
objective function and measure the sum of the percentage deviations.

Minimizing the summation of the percentage deviations Min: ( +
+ )

Here d represents deviation and t represents the target value.

One solution to the previous criticisms is to allow the decision maker to assign weights to the deviational variables
in the objective function of a GP problem, to better reflect the importance and desirability of deviations from the
various goals. So, a more useful type of objective function for a GP problem is:

Minimizing the weighted sum of the percentage deviations Min: ( + +
+ )

Here +
and represent numeric constants that can be assigned to values to weight the various deviational
variables in the problem by the decision maker. Such as if all and +
s are equal to 1 then they have equal
importance. If one weight is 10, then it is much more important than the others and so on.

+ + +
Min:


+ +
+ + , + , + ,,

 Goal programming

To begin our analysis of this problem, we will assume that all weights are equal to 1.
We transfer the data into an Excel spreadsheet as follows.

Variable cells

The target cell is O7= SUMPRODUCT (B7:D7; B4:D4) +E7-J7 (copy through O7 to O11)
Objective cell is B13=E7/Q7+F8/Q8+G9/Q9+O10/Q10+M10/Q10+N11/Q11 (summation of percentage deviations)
Variable cells are B4:D4 and E7:N11

The model can be solved using the solver parameters. The solution obtained using these settings are given below.

X1=5 , X2=10 , X3=15, d4+=250, d5+=97250

So the result is 5 small rooms , 10 medium rooms, and 15 small rooms will be constructed.

The area constraint will exceed by 250 square feet and the cost will exceed $97250.
 Goal programming

10

PROBLEMS
(Goal Programming formulations) statistics gathered by the university indicate that the
1. (8.1-1/Taha) (Tax Planning)Fairville is a small city average ACT scores for in-state, out-of-state, and
with a population of about 20,000 residents. The city international students are 27,26, and 23, respectively.
council is in the process of developing an equitable city The committee on admissions has established the
tax rate table. The annual taxation base for real estate following desirable goals for the new freshman class:
property is $550 million. The annual taxation bases for (a) The incoming class is at least 1200 freshmen.
food and drugs and for general sales are $35 million (b) The average ACT score for all incoming students is
and $55 million, respectively. Annual local gasoline at least 25.
consumption is estimated at 7.5 million gallons. The (c) International students constitute at least 10% of
city council wants to develop the tax rates based on the incoming class.
four main goals. (d) The female-male ratio is at least 3:4.
1.Tax revenues must be at least $16 million to meet (e) Out-of-state students constitute at least 20% of the
the city's financial commitments. incoming class.
2. Food and drug taxes cannot exceed 10% of all Formulate the problem as a goal programming model.
taxes collected.
3. General sales taxes cannot exceed 20% of all 4. (8.1A-4/Taha)Circle K farms consumes 3 tons of
taxes collected. special feed daily. The feed -a mixture of limestone,
4. Gasoline tax cannot exceed 2 cents per gallon. corn, and soybean meal-must satisfy the following
nutritional requirements:
Let the variables Xp , Xf and Xs represent the tax rates Calcium. At least 0.8% but not more than 1.2%.
(expressed as proportions of taxation bases) for Protein. At least 22%.
property, food and drug, and general sales, and the Fiber. At most 5%.
variable Xg as the gasoline tax in cents per gallon. The following table gives the nutritional content of the
Write the goals of the city council. feed ingredients.
Lb per Lb of ingredient
2. (8.1A-2/Taha) The NW Shopping Mall conducts Ingredient Calcium Protein Fiber
special events to attract potential patrons. Among the Limestone .380 .00 .00
events that seem to attract teenagers, the Corn .001 .09 .02
young/middle-aged group, and senior citizens,the two Soybean meal .002 .50 .08
most popular are band concerts and art shows. Their
costs per presentation are $1500 and $3000, Formulate the problem as a goal programming model.
respectively. The total (strict) annual budget allocated
to the two events is $15,000. The mall manager (Goal Programming Algorithms)
estimates the attendance as follows:
5. (8.2-1/Taha) TopAd, a new advertising agency with
Number attending per presentation
10 employees, has received a contract to promote a
Event Teenagers Young/middle age Seniors new product. The agency can advertise by radio and
Band concert 200 100 0 television. The following table gives the number of
Art show 0 400 250 people reached by each type of advertisement and the
cost and labor requirements.
Data/min advertisement
The manager has set minimum goals of 1000, 1200,
and 800 for the attendance of teenagers, the Radio Television
young/middle-aged group, and seniors, respectively. Exposure (in millions of persons) 4 8
Formulate the problem as a goal programming model. Cost (in thousands of dollars) 8 24
Assigned employees 1 2
3. (8.1A-3/Taha) Ozark University admission office is
processing freshman applications for the upcoming The contract prohibits TopAd from using more than 6
academic year. The applications fall into three minutes of radio advertisement. Additionally, radio
categories: in-state, out-of-state, and international. and television advertisements need to reach at least 45
The male-female ratios for in-state and out-of-state million people. TopAd has a budget goal of $100,000
applicants are 1:1 and 3:2,respectively. For for the project and it's management assumes that the
international students, the corresponding ratio is exposure goal is twice as important as the budget
8:1.The American College Test (ACT) score is an goal.How many minutes of radio and television
important factor in accepting new students. The advertisement should TopAd use?
 Goal programming

11

6. An electronics company produces two types of 8. The Midtown City Council is reviewing housing
television sets, color and black-and-white. The proposals for a new development area. There is some
production of a color set requires 10 hours of skilled dispute among various interest groups as to what goals
and 100 hours of unskilled labor. The production of a should be sought. The zoning committee has
black-and-white set requires 5 hours of skilled and 150 recommended three types of housing: one-family
hours of unskilled labor. The company has 100 hours houses, deluxe condominiums and apartments. The
of skilled labor and 1,500 hours of unskilled labor zoning committee has compiled the following data for
normally available per month for the production of each type of housing:
television sets. The maximum number black-and-white
and color sets that can be sold each month are 45 and One-
70, respectively. The profit margin from the sale of a Condominiums Apartments
family
color set is $20, whereas it is $15 from a black-and-
white set. The company has set the following goals: Acres per unit .25 .20 .125
1. Avoid the over utilization of skilled labor since it Families housed per
1 4 6
is hard to obtain in the labor market. unit
2. Minimize the under utilization of unskilled labor.
Tax base generated per
3. Meet the demand as much as possible. $50,000 $100,000 $150,000
unit
4. Limit over utilization of unskilled labor to 100
Taxes required for city
hours. $4,000 $8,000 $10,000
services
Formulate the above as a goal programming problem
and solve using Excel.
There are 50 acres available for zoning. The League for
7. A department store plans to schedule its annual Better Housing has conducted a campaign to gain
advertising. The total budget is set at $200,000. The housing for at least 500 families. The Taxpayers Union
store can purchase local radio spots at $100 per spot, has strongly lobbied for an added tax base of
local television spots at $500 per spot and local $5,000,000. The Gray Panthers have disrupted the city
newspaper advertising at $200 per ad. The payoff council meetings to demand that taxes for city services
from each advertising medium is a function of its be no more than $250,000. The city council hired a
audience size and audience characteristics. The public opinion survey company to assess the priorities
generally accepted objective criterion for advertising is of the citizens. The poll results are as follows:
audience points, reflected in the following table:

Medium Points Priority 1 Priority 2 Priority 3

Radio 30 per spot Housing for 500 families 55% 35% 10%
Television 150 per spot
Tax base of $5,000,000 40 30 30
Newspaper 150 per ad
Taxes for services of
15 20 65
$250,000
The president of the firm has established the following
goals for the campaign:
1. The total budget should not exceed $200,000. Based on this survey the city council has established
2. Meet the contract with the local television the following goals:
station that requires that the firm spend at least
$30,000. 1. Provide housing for at least 500 families.
3. The corporate advertising policy prohibits annual 2. Establish at least $5,000,000 worth of new tax
newspaper ad expenditures in excess of $50,000. base.
4. Maximize the audience points for the advertising 3. Limit taxes for city services to $250,000.
campaign. 4. Reserve at least 5 acres for a neighborhood park
The president has established unit weights on the area.
goals of 10, 6, 3 and 1 for the goals 1 through 4, It is assumed that the first goal is met fully before the
respectively. Formulate the above as a goal second, the second met fully before the third and the
programming problem and solve using Excel. third met fully before the fourth. Formulate the above
as a goal programming problem and solve using Excel.

9. Acme Sawmill can produce plywood, chipboard and
pulp for sale, realizing profit margins of $10, $9 and $6
per ton, respectively. The mill can run any number of
operations at the same time, but the setup costs for
each of the operations differ. While the pulp
production only costs $2,000 ,to set up the plywood
production costs $50,000 and the chipboard
production costs $25,000. Plywood consists of 95%
wood and 5% resin glue. Chipboard consists of 91%
wood, 5% resin glue and 4% other additives. Pulp
consists of 86% wood and 14% other additives.
Demand limits the amount of plywood produced to
10,000 tons, while as much as 5,000 tons each may be
produced of chipboard and pulp. For the next month
of production there are 15,000 tons of wood and 500
tons each of resin glue and other additives available.
Finally, Acmes customers always place orders for
whole tons of plywood and chipboard. No partial tons
may be accepted.
The operations manager at Acme has set the following
goals for the upcoming month:
a. Achieve at least $70,000 profit.
b. Avoid having to special order more glue and
additives.
Although it is an inconvenience to have to reorder glue
and additives, the target profit is a more important
consideration. Accordingly, the operations manager
has placed subjective weights of 5 on profit deviations
and 1 on resource deviations. Formulate the above as
a goal programming problem and solve using Excel.
10. (10/Ragsdale)The CFO for the Shelton Corporation
has $1.2 million to allocate to the following budget
requests from 5 departments:
Dept 1 Dept 2 Dept 3 Dept 4 Dept 5
$450,000 $310,000 $275,000 $187,500 $135,000
Because the total budget requests exceed the available
$1.2 million, not all the requests can be satisfied.
Suppose that the CFO considers the requests for
departments 2 and 3 to be twice as important as those
from departments 4 and 5, and the request from
department 1 to be twice as important as those from
departments 2 and 3. Further suppose that the CFO
wants to make sure each department receives at least
70% of the requested amount.
a. Formulate a GP model for this problem.
b. Implement your model and solve it. What is the
optimal solution?
c. Suppose the CFO is willing to allocate more than $1.2
million to these budgets but regards exceeding the
$1.2 million figure as being twice as undesirable as not
Goal programming
12
meeting the budget request of department 1. What is
the optimal solution?
d. Suppose the CFO regards all deviations from the
original budget amounts (including the $1.2 million
available) to be equally undesirable. What solution
minimizes the maximum percentage deviation from the
budgeted amounts?
11. (14/Ragsdale) A new Italian restaurant called the
Olive Grove is opening in several locations in the
Memphis area. The marketing manager for these stores
has a budget of $150,000 to use in advertising and
promotions for the new stores. The manager can run
magazine ads at a cost of $2,000 each that result in
250,000 exposures each. TV ads result in approximately
1,200,000 exposures each, but cost $12,000 each. The
manager wants to run at least five TV ads and ten
magazine ads, while maximizing the number of
exposures generated by the advertising campaign. But
the manager also wants to spend no more than
$120,000 on magazine and TV advertising so that the
remaining $30,000 could be used for other promotional
purposes. However, the manager would spend more
than $120,000 on advertising if it resulted in a
substantial increase in advertising coverage.
a. Formulate a GP model for this problem assuming
that the marketing manager has the following goals:
Goal 1: Exposures should be maximized.
Goal 2: No more than $120,000 should be spent on
advertising.
(Note that you will have to determine an appropriate
target value for the first goal.)
Assume that the marketing manager wants to minimize
the maximum percentage deviation from either goal.
b. Implement your model in a spreadsheet and solve it.
12. (15/Ragsdale)The city of Abingdon is determining its
tax rate structure for the coming year. The city needs
to generate $6 million in tax revenue via taxes of
property, sales, prepared food, and utilities. The
following table summarizes how much tax revenue
would be generated from each segment of the
population by the 1% increase in each tax category.
(For instance, a 2% tax on prepared food would
generate $240,000 in tax revenue from upper income
residents.)
Revenues (in $1000s) per 1% Tax Rate
Income
Group Sales Property Food Utility
Low $200 $600 $50 $80
Middle $250 $ 800 $100 $100
Upper $400 $1200 $120 $120
 Goal programming

13

City commissioners have specified that the tax rate for objective function values. What solution do you
each revenue category must be between 1% and 3% obtain?
and that the tax rate on prepared food cannot exceed d. Suppose management considers maximizing the
half the sales tax rate. Ideally, the commissioners have amount of steam produced five times as important as
a goal of making up the $6 million tax budget with $1.5 achieving the best possible values for the other
million from low income residents, $2.1 million from objectives. What solution does this suggest?
middle income residents, and $2.4 million from high
income residents. If that is not possible, the
commissioners would like a solution that minimizes the 14. (11.22/Render)
maximum percentage deviation from these tax
revenue goals for each income group.
a. Create a spreadsheet model for this problem.
b. What is the optimal solution?

13. (17/Ragsdale) Virginia Tech operates its own power

generating plant. The electricity generated by this plant
supplies power to the university and to local businesses
and residences in the Blacksburg area. The plant burns
three types of coal, which produces steam that drives
the turbines that generate the electricity. The
Environmental Protection Agency (EPA) requires that
for each ton of coal burned, the emissions from the
coal furnace smokestacks contain no more than 2,500
parts per million (ppm) of sulfur and no more than 2.8
kilograms (kg) of coal dust. However, the managers of
the plant are concerned about the environment and
want to keep these emissions to a minimum. The
following table summarizes the amounts of sulfur, coal
dust, and steam that result from burning a ton of each
type of coal.

Coal Sulfur Coal Pounds of

(in Dust (in Steam
ppm) kg) Produced 15. (11.24/Render)
1 1,100 1.7 24,000
2 3,500 3.2 36,000
3 1,300 2.4 28,000

The three types of coal can be mixed and burned in any

combination. The resulting emission of sulfur or coal
dust and the pounds of steam produced by any mixture
are given as the weighted average of the values shown
in the table for each type of coal.
The manager of this facility wants to select a blend of
coal to burn while considering the following objectives:

Objective 1: Maximize the pounds of steam produced.

Objective 2: Minimize sulfur emissions.
Objective 3: Minimize coal dust emissions.
a. Formulate an MOLP model for this problem and
implement your model in a spreadsheet.
b. Determine the best possible value for each objective
in the problem.
c. Determine the solution that minimizes the
maximum percentage deviation from the optimal
 Goal programming

14

16. (11.28/Render) 18. (11.30/Render)

17. (11.29/Render)

19. (7.5-2./Hillier ) Management of the Albert

Franko Co. has established goals for the market share it
wants each of the companys two new products to
capture in their respective markets. Specifically,
management wants Product 1 to capture at least 15
percent of its market and Product 2 to capture at least
10 percent of its market. Three advertising campaigns
are being planned to try to achieve these market
shares. One is targeted directly on the first product.
The second targets the second product. The third is
intended to enhance the general reputation of the
company and its products. Letting x1, x2, and x3 be the
amount of money allocated (in millions of dollars) to
these respective campaigns, the resulting market share
(expressed as a percentage) for the two products are
estimated to be

Market share for Product 1 = 0.5x1 + 0.2x3,

a) Formulate this as a goal programming
problem,
b) Solve the problem using computer software.
Market share for Product 2 = 0.3x2 + 0.2x3.
A total of $55 million is available for the three
advertising campaigns, but management wants at least
$10 million devoted to the third campaign. If both
market share goals cannot be achieved, management
considers each 1 percent decrease in the market share
from the goal to be equally serious for the two
products. In this light, management wants to know how
to most effectively allocate the available money to the
three campaigns.
(a) Formulate a goal programming model for this
problem.
(b) Reformulate this model as a linear programming
model.
C (c) Use the simplex method to solve this model.
 Goal programming

15

20. (7.5-5./Hillier) Montega is a developing 21. (7.5-Example/Hillier) The DEWRIGHT

country which has 15,000,000 acres of publicly
controlled agricultural land in active use. Its
government currently is planning a way to divide this
land among three basic crops (labeled 1, 2, and 3) next
year. A certain percentage of each of these crops is
exported to obtain badly needed foreign capital
(dollars), and the rest of each of these crops is used to
feed the populace. Raising these crops also provides
employment for a significant proportion of the
population. Therefore, the main factors to be
considered in allocating the land to these crops are
(1) the amount of foreign capital generated,
(2) the number of citizens fed, and
(3) the number of citizens employed in raising these
crops.
The following table shows how much each 1,000 acres
of each crop contributes toward these factors, and the
last column gives the goal established by the
government for each of these factors.
Contribution per 1,000 Acres
Crop:
Factor 1 2 3 Goal
Foreign
$3,000 $5,000 $4,000 $70,000,000
capital
Citizens fed 150 75 100 1,750,000
Citizens
employed
10 15 12 = 200,000
In evaluating the relative seriousness of not achieving
these goals, the government has concluded that the
following deviations from the goals should be
considered equally undesirable: (1) each $100 under
the foreign-capital goal, (2) each person under the
citizens-fed goal, and (3) each deviation of one (in
either direction) from the citizens-employed goal.
(a) Formulate a goal programming model for this
problem and solve in Excel,
(b) Now suppose that the government concludes that
the importance of the various goals differs greatly so
that a preemptive goal programming approach should
be used. In particular, the first-priority goal is citizens
fed 1,750,000, the second priority goal is foreign
capital $70,000,000, and the third priority goal is
citizens employed = 200,000. Use the goal
programming technique to formulate one complete
linear programming model for this problem.
COMPANY is considering three new products to
replace current models that are being discontinued, so
their OR department has been assigned the task of
determining which mix of these products should be
produced. Management 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
(1) achieving a long-run profit (net present value) of at
least $125 million from these products,
(2) maintaining the current employment level of 4,000
employees, and
(3) 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 has discussed priorities with the OR department. This
discussion has led to setting 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, and 3 for exceeding
the capital investment goal (per $1 million over).Each
new products contribution to profit, employment
level, and capital investment level is proportional to
the rate of production. These contributions per unit
rate of production are shown in the following table,
along with the goals and penalty weights.
Unit
Contribution
Product Goal Penalty
Factor 1 2 3 weight
Long-run
12 9 15 125 (million$) 5
profit
Employment
5 3 4 = 40 (100 employees)
2(+),
level 4(-)
Capital
investment
5 7 8 55 (million$) 3
Formulate a goal programming model for this problem
by using weights and percentage deviations and solve
in Excel.
 Goal programming

16

Answers 6. Note that since the demand goal stated "meet the
demand as much as possible" production deviation either
1. (8.1-1/Taha) above or below demand is considered undesirable for both
types of televisions. Also note that all apparent "hard"
550xp + 35xf + 55xs + .075xg 16 (Tax revenue)
constraints are superseded by goal constraints.
35xf .1(550xp + 35xf + 55x3 + .075xg ) (Food/drug tax)
55xs .2(550xp + 35xf + 55xs + .075xg ) (General tax)
xg 2 (Gasoline tax) Let: C = # of color televisions produced
B = # of black and white televisions produced
These constraints are then simplified as +
ds = deviation above skilled labor utilization target
550xp + 35xf + 55xs + .075xg 16
ds- = deviation below skilled labor utilization target
55xp - 31.5xf + 5.5xs + .0075xg 0 +
110xp + 7xf - 44xs + .015xg 0 du = deviation above unskilled labor utilization target
-
xg2 du = deviation below unskilled labor utilization target
xp ,xf ,xs ,xg 0 +
dc = deviation above color television demand target
-
dc = deviation below color television demand target
We convert each inequality into a flexible goal. +
db = deviation above black and white television demand
- +
550xp + 35xf + 55xs + .075xg + d1 - d1 = 16 target
- +
55xp - 31.5xf + 5.5xs + .0075xg + d2 - d2 = 0 -
- +
110xp + 7xf - 44xs + .015xg + d3 -d3 = 0 db = deviation below black and white television demand
- +
xg + d4 -d4 = 2 target
- + +
di ,di 0, i = 1,2,3,4. do = deviation above unskilled labor overutilization target
-
do = deviation below unskilled labor overutilization target
the compromise solution tries to satisfy the
following four objectives as much as possible + -
Minimize Z = ds + du + dc + dc + db + db + do
+ - + - +

- - - +
Min: d1 + d2 + d3 + d4 - +
s.t. 10C + 5B + ds - ds =100 (Skilled use goal)
- +
100C + 150B + du - du =1,500 (Unskilled use goal)
2. (8.1A-2/Taha) - +
.. C + dc - dc =70 (Color demand goal)
- +
B + db - db =45 (B&W demand goal)
+ - +
3. (8.1A-3/Taha) du + do - do =100 (Unskilled overuse goal)
Let x1 = No. of in-state freshmen, where:
x2 = No. of out-of-state freshmen, + - + - + - + - + -
C, B, ds , ds , du , du , dc , dc , db , db , do , do > 0 and
-x3 = No.of international freshmen. C, B are integer
-
Gi : Minimize di , i = 1,2, ... ,5, subject to
- +
x1 + x2 + x3 + d1 - d1 = 1200, 7. Note that an arbitrarily high number has been chosen for
- + the RHS of the final goal constraint to "maximize the
2x1+ x2- 2x3 + d2 - d2 = 0,
- + audience points." Also note that all apparent "hard"
- .1x1 - .1x2 + .9x3 + d3 - d3 = 0,
- + constraints are superseded by goal constraints.
.125 x1- .05 x2 - .556 x3 + d4 - d4 = 0,
- +
-.2x1+ .8x2- .2x3 + d5 - d5 = 0
All variables are nonnegative Let: R = # of local radio spots purchased

4. (8.1A-4/Taha) T = # of local television spots purchased

. N = # of newspaper ads purchased
+
db = deviation above budget target
-
db = deviation below budget target
+
dc = deviation above television contract target
5. (8.2-1/Taha)
- - - + + -
Minimize z = d1 + d2 + d3 + d4 + d5 dc = deviation below television contract target
+
xp = .0201, xf = .0457, xs = .0582, xg = 2 cents, d5 = 1.45
+
Gasoline tax is $1.45 million short of goal. dp = deviation above newspaper policy target
-
dp = deviation below newspaper policy target
+
da = deviation above audience points target
 Goal programming

17

- 0 if otherwise
da = deviation below audience points target
+
+ - + - dp = deviation above profit target
Minimize Z = 10 db + 6 dc + 3 dp + da -
+ - dp = deviation below profit target
s.t. 100R + 500T + 200N - db + db =200,000 (Budget goal) +
+ - dg = deviation above glue requirement target
500T - dc + dc = 30,000 (TV contract goal) -
+ - dg = deviation below glue requirement target
200N - dp + dp = 50,000 (Newspaper goal) +
+ - da = deviation above additive requirement target
30R + 150T + 150N - da + da =1,000,000 (Audience goal) -
da = deviation below additive requirement target
where: - + +
+ - + - + - + -
R, T, N, db , db , dc , dc , dp , dp , da , da > 0 and Minimize Z = 5 dp + dg + da
R, T, N are integer s.t. .95 X1 + .91X2 + .86X3 < 15,000 (Wood available)
X1 - 10,000 X4 <0 (Ply demand)
8. Note that a heuristic is employed in assigning objective X2 - 5,000 X5 <0 (Chip demand)
coefficients in order to prioritize goal compliance. The
X3 - 5,000 X6 <0 (Pulp demand)
variable representing the deviation with the lowest priority is
assigned a weight of "1" and the weights are increased by a 10 X1 + 9 X2 + 6 X3 - 50,000 X4 -
+ - = 70,000 (Profit goal)
factor of 10 for each successively more important goal. The 25,000 X5 - 2,000 X6 - dp + dp
resulting solution, however, does not allow compliance with +
.05 X1 + .05 X2 - dg + dg
-
= 500 (Glue goal)
goal 3 before that for goal 4. There is no feasible solution that + -
allows compliance with goal 3 if goals 1 and 2 are both .04 X2 + .14 X3 - da + da = 500 (Additives goal)
+ - + - + -
satisfied. Also note that only the total acres available for X1, X2, X3, X4, X5, X6, dp , dp , dg , dg , da , da > 0,
building remains as a "hard" constraint. where: X1, X2 are integer, and
X4, X5, X6 are binary
Let: S = # of single-family homes built
C = # of deluxe condominiums built
A = # of apartments built 10.
D = # of acres of land not used for building
+
df = deviation above families housed target
-
df = deviation below families housed target
+
dt = deviation above tax base target
-
dt = deviation below tax base target
+
ds = deviation above city services tax target
-
ds = deviation below city services tax target
+
dp = deviation above park set-aside target
-
dp = deviation below park set-aside target
- - + -
Minimize Z = 1,000 df + 100 dt + 10 ds + dp
s.t. .25 S + .2 C + .125 A + D=50(Acres available)
+ -
S + 4 C + 6 A - df + df =500(Families goal)
5 S + 10 C + 15 A - dt+ + dt-=500(Tax base goal)
+ -
4 S + 8 C + 10 A - ds + ds =250(City service tax goal)
+ -
D - dp + dp =5(Park goal)
where:
+ - + - + - + -
S, C, A, D, df , df , dt , dt , ds , ds , dp , dp > 0 and
S, C, A are integer

9.
Let: X1 = # of tons of plywood produced
X2 = # of tons of chipboard produced
X3 = # of tons of pulp produced
1 if plywood is produced
X4 = {
0 if otherwise
1 if chipboard is produced
X5 = {
0 if otherwise
X6 = { 1 if pulp is produced