Optimisation exercises for the business world
The increasing amount and complexity of data we now have
In order to stay
Generally, the most crucial task of a business manager is finding a way to increase revenue and keep costs as low as possible. In academia this is what optimisation methods specialists do; using advanced maths, programming, and algorithms they search for minimums and maximums. Translating that
To get closer to this topic we can look at several real-life problems which are often used as
One of the most popular exercises is the Travelling Salesman Problem. In this task a representative of a firm has to visit 50 cities, each only once, and go back to the office: you need to find the fastest or the cheapest route. The problem was first introduced as one common for salesmen and had a rather theoretical solution sketched on a map. Since the problem is complex, it started to serve as a model for the development of optimisation algorithms.
Another example is the Knapsack Problem. Here the goal is to pack as many of the most necessary (i.e. most valuable) things into your bag as possible while still keeping the bag under a total maximum weight. To adjust the problem to regular business challenges we can re-focus it as, for example, a situation in which a firm wants to release a new product while obtaining the maximum revenue with the lowest costs. Metaphorically the company wants to fill the bag with the most necessary things while keeping it as light as possible. Here we can treat the weight of the bag as the cost of the business processes which are required for the release of the new product. The maximum revenue would be the value of all of the necessary stuff you put
A third exercise is the Nurse Scheduling Problem: the problem of finding the optimum working schedule for nurses (or any profession really). In this example you need to maximise the happiness of nurses: they prefer to work (or not to work) at specific times, varying between day shifts, night shifts, weekends and national holidays. Additionally, the optimal schedule must meet the hospital’s requirements regarding how many nurses need to be on duty at specific times. A solution to this problem is often used to create
In a world full of complex information and complicated decisions, firms have started to co-operate closely with academic researchers. Those businesses which will be able to integrate that knowledge into their daily operations will always have more chances to prosper.
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Author: Elli Vitchynova