Transport Economics & Optimization

Shebil
MBA 2nd year
 Q1. How Knapsack can help in transport industries?

plain the significance in linear program

 What is Knapsack?
knapsack problemisaproblemincombinatorialoptimization

Givenasetofitems,eachwithaweightandavalue,determinethenumberofeachitemtoincludeina

collectionsothatthetotalweightislessthanorequaltoagivenlimitandthetotalvalueisaslargeas

possible.

Theproblemoftenarisesinresourceallocationwheretherearefinancialconstraintsandisstudiedin

fieldssuchas,computerscience,complexitytheory,appliedmathematics.

Thename"knapsackproblem"datesbacktotheearlyworksofmathematicianTobias Dantzig(1884

1956)
The most common problem being solved is the0-1 knapsack problem
which restricts the numberxiof copies of each kind of item to zero or one.

Given a set ofnitems numbered from 1 up ton, each with a weightwiand a valuevi,
along with a maximum weight capacityW
How Knapsack can help in transport industries?
Packingacontainerwithobjectsofvaryingsizestomaximizeefficiency,a
"knapsack"problem.

Theobjectivecanbetominimizewastedspaceinthecontainer,tomaximizeor
minimizetotalloadweight,or,asinthiscase,tomaximizethevalueoftheload.

Todecidewhichitemstoloadonatruck.Eachitemmustbeshippedinitsentiretyor
notatall

What'sBest!tooptimizebytheconventionalmethod.

Eachitemhasanassociatedvalueandweight.

Theobjectiveofoptimizationistomaximizethetotalvalueoftheitemsloadedonto
thetruckwithoutexceedingthetruck'sweightcapacity.
 Truck 10t capacity

Optimum cargo combination:

Item 1: $5 (3t)
Item 2: $7 (4t)
Item 3: $8 (5t)
 Output function f(i,w)

Optimum output of a combination of items 1
to i with a cumulated weight of w or less.

Item 1: x1=$5 ; w1=3t

Item 2: x2=$7 ; w2=4t
Item 3: x3=$8 ; w3=5t
ignificance of Liner Programmin
1. Solve the business problems

With linear programming we can easily solve business problem. It is very benefited for
increase the profit or decrease the cost of business.

2. Easy work of manager under limitations and condition :-

Linear programming solve problem under different limitations and conditions , so It is easy for
manager to work under limitations and conditions . It helps manager to decide in different
limitations.

3. Use in solving staffing problems

With linear programming , can calculate the number of staff needed in hospitals ,mines ,
hotels and other type of business.

4. Helpful in profit planning

Today linear programming is using for good profit planning.

 5. Personnel Management:
tosolveproblemsrelatingtorecruitment,selection,training,anddeploymentofmanpowerto
differentdepartmentsofthefirm.
6. Inventory Management:
Theproblemofinventorymanagementofrawmaterialsandfinishedproducts.Thefunctionin
inventorymanagementistominimiseinventorycostandtheconstraintsarespaceanddemand
fortheproduct.
7. Marketing Management:
Themarketingmanagerdeterminestheoptimaldistributionschedulefortransportingtheproduct
fromdifferentwarehousestovariousmarketlocationsinsuchamannerthatthetotaltransport
costistheminimum.
 8. Financial Management:

Thefinancialmanagerofafirm,mutualfund,insurancecompany,bank,etc.usestheLPtechniquefortheselection

ofinvestmentportfolioofshares,bonds,etc.soastomaximisereturnoninvestment.

9. Blending Problem:

Theblendingproblemsariseinanimalfeed,dietproblems,petroleumproducts,chemicalproducts,etc.Inallsuch

cases,withrawmaterialsandotherinputsasconstraints,theobjectivefunctionistominimisethecostoffinal

product.

10.Production Management:

Itisusedtodeterminetheoptimalproduct-mixofthefirmtomaximizeitsrevenue.Itisalsousedforproduct

smoothingandassemblylinebalancing.
Thank you