Running Head: IMPORTANCE OF STATING OBJECTIVE FUNCTION IN LINEAR OPTIMISATION PROBLEM
OBJECTIVE FUNCTION IN LINEAR OPTIMISATION PROBLEM
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Objective functions and constraints; which include inequalities and system equations constitute an optimization model. Optimization models are essential in solving financial problems, solving various engineering problems and for decision making. The objective function indicates how much each variable contributes to the value to be optimized in the question. The coefficients of the objective function indicate the contribution to the value of the objective function of one unit of the corresponding variable.
Linear optimization problems are useful in comprehending, formulating and initializing a linear problem, and especially a question related to finances. In this case, for example, when coming up with payroll for a given transportation company, it would be crucial for the financial analyst to consider correctly defining the variables. The variables defined in this occurrence would include the number of drivers being hired at the beginning of a given year, number of drivers at the end of the year, the initial number of drivers and difference of the number of drivers. In some cases, however, it would be important to correctly state the objective function and constraints in linear optimization problems because under some special conditions the actual role is more critical than the limitations.