MODUL PERKULIAHAN

Model Stokastik

Goal Programming (1/2)

Fakultas Program Studi Tatap Muka Kode MK Disusun Oleh

Fakultas Teknik Teknik Industri 05510004 Dr. Nova Indah Saragih, S.T., M.T.

04
Abstrak Kompetensi
Modul ini membahas latar belakang Mahasiswa mampu menerapkan
Goal Programming, tahap-tahap konsep Goal Programming.
pengembangan model Goal
Programming, beserta contoh
soalnya.
Introduction of Goal Programming

The LP models that have been presented are based on the optimization of a single objective
function. There are situations where multiple (conflicting) objectives may be more
appropriate. For example, politicians promise to reduce the national debt and,
simultaneously, offer income tax relief. In such situations, it is impossible to find a single
solution that optimizes these two conflicting goals. What goal programming does is seek a
compromise solution based on the relative importance of each objective.

We have assumed that the objectives of the organization conducting the linear programming
study can be encompassed within a single overriding objective, such as maximizing total
profit or minimizing total cost. However, this assumption is not always realistic. In fact,
studies have found that the management of U.S. corporations frequently focuses on a
variety of other objectives, e.g., to maintain stable profits, increase (or maintain) market
share, diversify products, maintain stable prices, improve worker morale, maintain family
control of the business, and increase company prestige. Goal programming provides a way
of striving toward several such objectives simultaneously.

The basic approach of goal programming is to establish a specific numeric goal for each of
the objectives, formulate an objective function for each objective, and then seek a solution
that minimizes the (weighted) sum of deviations of these objective functions from their
respective goals. There are three possible types of goals:
1. A lower, one-sided goal sets a lower limit that we do not want to fall under (but
exceeding the limit is fine).
2. An upper, one-sided goal sets an upper limit that we do not want to exceed (but
falling under the limit is fine).
3. A two-sided goal sets a specific target that we do not want to miss on either side.

Goal programming problems can be categorized according to the type of mathematical

programming model (linear programming, integer programming, nonlinear programming,
etc.) that it fits except for having multiple goals instead of a single objective. In this book, we
only consider linear goal programming—those goal programming problems that fit linear
programming otherwise (each objective function is linear, etc.) and so we will drop the
adjective linear from now on.

‘20 Model Stokastik

2 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id
Another categorization is according to how the goals compare in importance. In one case,
called nonpreemptive goal programming, all the goals are of roughly comparable
importance. In another case, called preemptive goal programming, there is a hierarchy of
priority levels for the goals, so that the goals of primary importance receive firstpriority
attention, those of secondary importance receive second-priority attention, and so forth (if
there are more than two priority levels).

A Goal Programming Formulation

Fairville is a small city with a population of about 20,000 residents. The city council is in the
process of developing an equitable city tax rate table. The annual taxation base for real
estate property is $550 million. The annual taxation bases for food and drugs and for general
sales are $35 million and $55 million, respectively. Annual local gasoline consumption is
estimated at 7.5 million gallons. The city council wants to develop the tax rates based on
four main goals.
1. Tax revenues must be at least $16 million to meet the city's financial commitments.
2. Food and drug taxes cannot exceed 10% of all taxes collected.
3. General sales taxes cannot exceed 20% of all taxes collected.
4. Gasoline tax cannot exceed 2 cents per gallon.

Let the variables xp , xf and xs represent the tax rates (expressed as proportions of taxation
bases) for property, food and drug, and general sales, and define the variable xg as the
gasoline tax in cents per gallon. The goals of the city council are then expressed as

These constraints are then simplified as

‘20 Model Stokastik

3 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id
Each of the inequalities of the model represents a goal that the city council aspires to satisfy.
Most likely, however, the best that can be done is a compromise solution among these
conflicting goals.

The manner in which goal programming finds a compromise solution is to convert each
inequality into a flexible goal in which the corresponding constraint may be violated, if
necessary. In terms of the Fairville model, the flexible goals are expressed as follows:

The nonnegative variables si+ and si-, i = 1,2,3,4, are called deviational variables because
they represent the deviations below and above the right-hand side of constraint i.

The deviational variables si+ and si- are by definition dependent, and hence cannot be basic
variables simultaneously. This means that in any simplex iteration, at most one of the two
deviational variables can assume a positive value. If the original ith inequality is of the type ≤
and its si- > 0, then the ith goal is satisfied; otherwise, if si+ > 0, goal i is not satisfied. In
essence, the definition of si+ and si- allows meeting or violating the ith goal at will. This is the
type of flexibility that characterizes goal programming when it seeks a compromise solution.
Naturally, a good compromise solution aims at minimizing, as much as possible, the amount
by which each goal is violated.

‘20 Model Stokastik

4 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id
In the model, given that the first three constraints are of the type ≥ and the fourth constraint
is of the type ≤, the deviational variables s1-, s2-, s3- and s4+ (shown in the model in bold)
represent the amounts by which the respective goals are violated. Thus, the compromise
solution tries to satisfy the following four objectives as much as possible:

These functions are minimized subject to the constraint equations of the model.

Prototype Example for Nonpreemptive Goal Programming

The DEWRIGHT 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 product’s
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 Table 1,
along with the goals and penalty weights.

Table 1. Data for the Dewright Co. nonpreemptive goal programming problem

‘20 Model Stokastik

5 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id
Formulation. The Dewright Company problem includes all three possible types of goals: a
lower, one-sided goal (long-run profit); a two-sided goal (employment level); and an upper,
one-sided goal (capital investment). Letting the decision variables x1, x2, x3 be the
production rates of products 1, 2, and 3, respectively, we see that these goals can be stated
as

More precisely, given the penalty weights in the rightmost column of Table 1, let Z be the
number of penalty points incurred by missing these goals. The overall objective then is to
choose the values of x1, x2, and x3 so as to

where no penalty points are incurred for being over the long-run profit goal or for being under
the capital investment goal. To express this overall objective mathematically, we introduce
some auxiliary variables (extra variables that are helpful for formulating the model) y1, y2,
and y3, defined as follows:

Since each yi can be either positive or negative, we replace each one by the difference of
two nonnegative variables:

‘20 Model Stokastik

6 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id
For any BF solution, these new auxiliary variables have the interpretation

so that yj+ represents the positive part of the variable yj and yj- its negative part (as
suggested by the superscripts).

Given these new auxiliary variables, the overall objective can be expressed mathematically
as

which now is a legitimate objective function for a linear programming model. (Because there
is no penalty for exceeding the profit goal of 125 or being under the investment goal of 55,
neither y1+ nor y3- should appear in this objective function representing the total penalty for
deviations from the goals.)

To complete the conversion of this goal programming problem to a linear programming

model, we must incorporate the above definitions of the yj+ and yj- directly into the model. (It
is not enough to simply record the definitions, as we just did, because the simplex method
considers only the objective function and constraints that constitute the model.) For example,
since y1+ - y1- = y1, the above expression for y1 gives

After we move the variables (y1+ - y1-) to the left-hand side and the constant (125) to the
right-hand side,

becomes a legitimate equality constraint for a linear programming model. Furthermore, this
constraint forces the auxiliary variables (y1+ - y1-) to satisfy their definition in terms of the
decision variables (x1, x2, x3).

Proceeding in the same way for y2+ - y2- and y3+ - y3-, we obtain the following linear
programming formulation of this goal programming problem:

‘20 Model Stokastik

7 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id
As usual, you can see how Excel, LINGO/LINDO, and MPL/CPLEX are used to set up and
solve this example.

Daftar Pustaka

1. Hillier, F. S. and Lieberman, G. J. (2002): Introduction to Operations Research, Seventh

Edition, McGraw-Hill Science.
2. Taha, H. A. (2007): Operations Research: An Introduction, Eighth Edition, Pearson
Prentice Hall.

‘20 Model Stokastik

8 Dr. Nova Indah Saragih, S.T., M.T.
Biro Akademik dan Pembelajaran
http://www.widyatama.ac.id