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BSS_SIM_ – C2_S2, conf. V.E. Oltean
MOTIVATION
A service is an economic process which needs resources to be implemented and to achieve value co-creation
In general, for the provider, value is obtained if the service provision brings profit, or if it can be realized with
minimum costs
For the client, value is obtained if the service quality is such that satisfaction is achieved at a reasonable price
(~value in exchange)
Both perspectives need a quantification of the goals: (profit, costs, quality, price), which is desired to be
maximized or minimized, respectively, that is to be optimized
The mathematical expressions of the goals depends on parameters and involves decision variables, that have to
be computed
As the needed resources are not unlimited, the optimization of the goals is submitted to constraints
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
A High Level Description of a Generic Service Process Lifecycle
and associated scientific domains supporting the lifecycle’s stages
IT,
DATABASES,
1. A GENERIC MODEL OF A SERVICE PROCESS LIFECYCLE
STATISTICS
OPTIMAL
DECISIONS
on resource
allocation:
MATH.
PROGR.
WORKFLOW
DESIGN
(activities):
Business
Processes
(BPMN)
OPTIMAL
NEGOCIATION:
GAME THEORY
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
RESOURCE ALLOCATION in economic processes:
Note: optimal resource allocation is common both to production and service industry.
An introductory example: How does a supplier of medical devices decide on its production quantities?
A manufactures of medical devices used in medical services wants to produce products of two types:
PROD1, PROD2, with maximal income in a time interval T[tu] % denote tu – time units
The unknown quantities are: x1 units- for PROD1 and x2 units- for PROD2%denote pu-product units
The unit income contributions of each product type are, respectively, c1 1 [mu/pu1], c2 1 [mu/pu2]
%denote mu – money units
The manufacturing program requires, as resources, machines of two types, M1 and M2
According to the manufacturing program:
o The machines of type M1 are occupied in T[tu]: a11 1[tu/pu1], a12 2 [tu/pu2],
o The machines of type M2 are occupied in T[tu]: a21 1 [tu/pu1], a22 0 [tu/pu2],
PROD1 PROD2
Unit income contributions of the products c1 1 [mu/pu1] c2 1 [mu/pu2]
Resource M1: time required for prod.units a11 1[tu/pu1] a12 2 [tu/pu2]
Resource M2: time required for prod.units a21 1 [tu/pu1] a22 0 [tu/pu2]
In T[tu]: the machines of type M1 are available no more than 6 [tu] and those of type M2 are
available no more than 3 [tu]% these limits result from the structure of the manufacturing cell
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
PROBLEM: what are the optimal quantities x1 units- for PROD1 and x2 units- for PROD2 in order to:
x
Decision variables: x1, x2 R , x 1
x2
b
Limits of constraints in the time interval T[tu]: b1 6 [tu] for M1, b2 3 [tu] for M2, b 1
b2
REMARK: The objective always takes scalar values, because these values have to be compared (“ “or
“”).
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
This is a Mathematical Programming model:
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
STEP 2. Geometric solution. Analysis: The problem is feasible because the feasibility set is nonempty,
X , with X {x R 2 : x1 2 x2 6, x1 3} , so the problem has solutions ! Which solution is optimal?
x2
X f
x1 3
x1 2 x2 6 x 1
x f 1 c
f 1
x2
C (3,1.5)
0 x1
x f
f ( x) 0
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
The result is the same as the one obtained using the geometric approach:
the optimal decision variables are x1* 3 units of PROD1, x2* 1.5 units of PROD2 and
Remark: a different result is obtained if our products PROD1 and PROD2 are pieces and the decision
variables are imposed to be integer, x1, x2 Z
x1*int 2 , x2* int 2 and f ( xint
*
) 1 2 1 2 4 4.5 f ( x*) [mu],
so an integer solution drives to a an optimal income with a lower value than in the continuous case. This
will be detailed later, in the chapter dedicated to Integer Programming (IP).
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
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BSS_SIM_ – C2_S2, conf. V.E. Oltean
In next lesson: what is the decision model if the manufacturer wants to produce at minimum cost of
resources ? Answer: the DUAL problem of the PRIMAL LP problem.
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BSS_SIM_ – C2_S2, conf. V.E. Oltean