optimization

(noun)

The design and operation of a system or process to make it as good as possible in some defined sense.

Related Terms

Examples of optimization in the following topics:

  • Optimization

    • This application is called design optimization.
    • Economics is closely linked to optimization of agents.
    • Modern optimization theory includes traditional optimization theory but also overlaps with game theory and the study of economic equilibria.
    • Asset prices are also modeled using optimization theory, though the underlying mathematics relies on optimizing stochastic processes rather than on static optimization.
    • The optimization of market portfolios is an example of multi-objective optimization in economics.

  • Optimization in Several Variables

    • To solve an optimization problem, formulate the function $f(x,y, \cdots )$ to be optimized and find all critical points first.
    • An optimization process that involves only a single variable is rather straightforward.
    • The same strategy applies for optimization with several variables.
    • In this atom, we will solve a simple example to see how optimization involving several variables can be achieved.
    • Therefore, the goal of the optimization is to minimize a function $S(x,y,z) = 2(xy + yz+zx)$.

  • Investment in Operations

    • Supply chain optimization applies processes and tools that ensure optimal operation of a manufacturing and distribution supply chain.
    • Ongoing investment in a company's operations is necessary in order for supply chain optimization to be achieved.
    • Supply chain optimization addresses the general supply chain problem of delivering products to customers at low cost and high profit.
    • Supply chain optimization may include additional refinements at various stages of the product lifecycle, and new, ongoing, and obsolete items are optimized in different ways.
    • Supply chain optimization applies processes and tools that ensure the optimal operation of a manufacturing and distribution supply chain.

  • Profit Optimization

    • Firms utilize strategies such as price and promotional reduction to minimize cost, maximize revenue, and thereby optimize profits.
    • Traditional profit optimization includes methods for reduction of pricing, promotional, and markdown losses.
    • Yield management can help firms optimize profits.
    • Since total demand normally exceeds what the particular firm can produce in that period, the models attempt to optimize the firm's outputs to maximize revenue.
    • Revenue optimization is a method of determining 'optimal' profits or expenditures, and can be related to quadratics, as the vertex of a parabola can illustrate the point where the ‘maximum' revenue can be attained.

  • Introduction to Deadweight Loss

    • Deadweight loss is the decrease in economic efficiency that occurs when a good or service is not priced at its pareto optimal level.
    • Deadweight loss is the decrease in economic efficiency that occurs when a good or service is not priced and produced at its pareto optimal level.
    • In a perfectly competitive market, products are priced at the pareto optimal point.
    • the point on the supply curve where the y-coordinate equals the non-pareto optimal price;
    • the point on the demand curve where the y-coordinate equals the non-pareto optimal price.

  • Introduction to Optimization and Markets

    • As a tool economics provides some insights that help identify optimal choices with respect to specific alternatives.
    • Most of Neoclassical economics presumes that the agent is trying to maximize or minimize (optimize) some objective with respect to a set of constraints.

  • Streamlining Distribution

    • In order to optimize the work of the logistics and distribution centers, one should define the criteria according to which the optimization shall be carried out:
    • This process may include the planning of production and/or optimization of supply chains in order to determine the possibility of meeting the demand.
    • Stock planning allows the optimal level and location of finished products that meet the demand and the level of service of the end users.
    • In principle, stock planning is used to calculate the optimal level of safety stocks at every location.
    • In order to minimize the transport costs and maximize the usage of the fleet, transport planning means the optimization of both the external and the internal goods flow.

  • Non-Rational Decision Making

    • The rational model of decision making holds that people have complete information and can objectively evaluate alternatives to select the optimal choice.
    • Maximizers try to make an optimal decision, whereas satisficers simply try to find a solution that is "good enough."
    • On the other hand, satisficers recognize that decision makers lack the ability and resources to arrive at an optimal solution.
    • Thus, a satisficer seeks a satisfactory solution rather than an optimal one.
    • German psychologist Gerd Gigerenzer goes beyond Simon in dismissing the importance of optimization in decision making.

  • Microbial Growth Cycle

    • Increases in cell size are tightly linked in unicellular organisms and under optimal conditions bacteria can grow and divide rapidly.
    • Under optimal conditions, bacteria can grow and divide extremely rapidly.
    • These optimal conditions are discussed below.

  • Optimal Quantity of a Public Good

    • To determine the optimal quantity of a public good, it is necessary to first determine the demand for it.
    • The optimal quantity of the public good occurs where MB (society's marginal benefit) equals MC (provider's marginal cost), or where the two curves intersect .
    • The optimal quantity of public good occurs where MB = MC.