Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

MAS 452
Systems Analysis Methodology and Applications
Lecture 2: Linear Programming
Prof. Christos Zacharias
czacharias@miami.edu
Department of Management Science
School of Business Administration, University of Miami
Coral Gables, Jan 20 2015

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

1/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

Todays agenda

(single-period) Investment Problem

(single-period) Production Planning & Transportation Problem

(multi-period) Cash-Flow Problem - case 3.3

(multi-period) Inventory Control

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

2/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

Investment Problem

Objective
1
2

Maximize expected returns (linear)

Minimize variance (quadratic)

Constraints
Available capital
Portfolio Diversification

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

3/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

The Transportation Problem

Transportation Problem

What is the optimal way to produce and transfer a commodity in a supply chain network
subject to demand and capacity
constraints?

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

4/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

Multi-Period Cash-Flow Problem

Past decisions have a ripple effect on future outcomes

Cash-Flow equation


 
 

Net
Cash
Cash
=

Cash Flow
Inflow
Outflow

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

5/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

Multi-Period Inventory Control

Past decisions have a ripple effect on future outcomes

Balance the trade-offs between production costs and inventory
costs.
Inventory Dynamics
 

Satisfied
Units
=
Demand
Sold

 
 
 

Satisfied
Opening
Produced
Closing

=
+

Demand
Inventory
Inventory
Inventory


Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

6/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

Useful Excel Functions/Formulas

The F4 key (command + t for Mac)

Press
Press
Press
Press

once: $B$4 - Do not adjust when copy-paste

twice: B$4 - Adjust only column when copy-paste
three times: $B4 - Adjust only row when copy-paste
four times: B4

The =IF function

=IF(logical condition, value if true, value if false)
example:
= IF(A4>4,B1+B2,B1-B2)
returns B1+B2 if A4>4, and B1-B2 otherwise.

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

7/8

Investment Problem

Transportation Problem

Multi-Period Cash-Flow Problem

Multi-Period Inventory Control

Homework

four textbook problems: 17, 21, 22, 34.

available on blackboard
team-up!
one submission per team
due on Tuesday Jan 27

Prof. Christos Zacharias

Systems Analysis Methodology and Applications (MAS 452)

Miami

8/8