Wrapping Up
If you stuck with me on those last couple of models, then bravo. Those suckers weren't toy problems. In fact, this may be the hardest chapter in this book. It's all downhill from here!
Here's a little recap of what you just learned:
- Simple linear programming
- The minimax formulation
- Adding integer variables and constraints
- Modeling if-then logic using a “Big M” constraint
- Modeling the product of decision variables in a linear way
- The normal distribution, central limit theorem, cumulative distribution functions, and the Monte Carlo method
- Using the Monte Carlo method to model risk within a linear program
Your head is probably spinning with all sorts of applications of this stuff to your business right now. Or you've just downed a stiff drink and never want to deal with linear programming again. I hope it's the former, because the truth is, you can get arbitrarily creative and complex with linear programming. In many business contexts...