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Objective Function:: Optimal Region

The document describes using linear programming to solve a two-person zero-sum game between two players. Each player develops a linear programming model to optimize their strategy - Player 1 aims to maximize reward by choosing chip probabilities, while Player 2 aims to minimize loss by choosing chip amounts. By having each player optimize their own strategy, the equilibrium solution or "stasis condition" can be identified mathematically where neither player can benefit from changing their strategy. Linear programming provides an exact framework for analyzing the game and determining the best strategies for each player.

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15 views

Objective Function:: Optimal Region

The document describes using linear programming to solve a two-person zero-sum game between two players. Each player develops a linear programming model to optimize their strategy - Player 1 aims to maximize reward by choosing chip probabilities, while Player 2 aims to minimize loss by choosing chip amounts. By having each player optimize their own strategy, the equilibrium solution or "stasis condition" can be identified mathematically where neither player can benefit from changing their strategy. Linear programming provides an exact framework for analyzing the game and determining the best strategies for each player.

Uploaded by

wocim20084
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. a.

A linear programming model is used in real world case scenarios when we want
to maximize the profit or minimize the loss subject to requirements and
constraints which are represented by linear relationships. In the case study, the
food factory would like to minimize the total cost of producing the beverages while
satisfying all constraints and requirements. The constraints and requirements such
as composition of lime, orange and mango in the beverage, the amount of
beverage required by the customer per week and the total cost of producing the
beverage can be represented by linear relationships. The food factory would like to
minimize the total cost of producing the beverage by making efficient use of the
available resources. Hence, a linear programming model would be a good fit for
this study

b. Constraints:
x : number of litres of product A required to mix
y : number of litres of product B required to mix
Objective function:
Minimize the total cost of producing the beverage
Total cost of producing beverage = cost of product A + cost of product B
Min z =4 x +1 2 y
Constraints:
 x + y >= 1.4
 6x + 4y >= 5
 4x + 8y >= 5
 2x + 7y <= 6
 x >= 0, y >= 0
c.

Optimal Region

d. The term "allowable variation" or "allowable reduction" describes the allowable


variation in product A's production cost without sacrificing the optimal outcome. This
implies that the amount of product A can be changed while still producing better results,
provided that certain restrictions are met.

There are economic ramifications to the limitation on the amount of product A,


which could be brought about by the availability of resources or consumer demand.
The objective function value is impacted economically by loosening or tightening
limitations, as demonstrated by the shadow price, which also shows how changes in the
constraint effect this value.

At $5.60, producing 1.4 units of A and 0 units of B is currently the best course of
action.

2 (a)

 xC1: Cotton in Spring product

 xW1: Wool in Spring product

 xS1: Silk in Spring product

 xC2: Cotton in Autumn product

 xW2: Wool in Autumn product

 xS2: Silk in Autumn product

 xC3: Cotton in Winter product

 xW3: Wool in Winter product

 xS3: Silk in Winter product

Maximize Z = (60 - 5 – 30)xc1 + ( 60 - 5 – 45)xw1 +(60 - 5 – 5)xs1 + (55 - 3 - 30)xc2 + (55 - 3 – 45)xw2 +
( 55 - 3 – 50)xs2 + (60 - 5 – 30)xc3 + ( 60 - 5 – 45)xw3 + ( 60 - 5 - 50)xs3

Spring:

 xC1≥0.55(xC1+xW1+xS1)

 xW1≥0.30(xC1+xW1+xS1

 xC1+xW1+xS1≤3300

Autumn:

 xC2≥0.45(xC2+xW2xS2)

 xW2≥0.40(xC2+xW2+xS2

 xC2+xW2+xS2≤3600

Winter:
 xC3≥0.30(xC3+xW3xS3)

 xW3≥0.50(xC3+xW3+xS3

 xC3+xW3+xS3≤4000

(b)

Optimal profit is: 125250

The optimal values are:

2310,990,0,2160,1440,0,0,0,0

3
a)

Payoff matrix
We look at every possible combination of decisions that the two players could make in order to create
the reward matrix. There are 27 possible outcomes (three times three) given each player's three chips
and three selections. But since no cell reflects both the largest value in its column and the minimum
value in its row at the same time, the matrix is devoid of a saddle point.
Red white Blue
Red 0 25 5
White 25 0 10
blue -5 -10 0

b)
Player 1:
p1, p2 and p3 be the probabilities of A, B and C .
Objective:
Maximize: P = 0.3p1 + 0.6p2 + 0.1 p3
constraints: p1+p2+p3=1.
Non-negativity constraints: p1 ≥ 0, p2 ≥ 0 and p3 ≥

Player 2:
Levels of Chip A, Chip B, and Chip C as q1, q2, and q3.
Objective:
Minimize: Q = -0.2 q1 – 0.5 q2 + 0.8q3
constraints: q1 + q2 + q3 = 1.
Non-negativity constraints: q1 ⩾ 0, q2 ⩾ 0, q3 ⩾ 0.

Each player in this competitive environment seeks to determine the best course of action while
considering the moves made by their rival. Their goal is to determine which option is best and still
advantageous in the event that the opponent changes their strategy. We use linear programming
models to build a mathematically exact framework for optimising these choices.
c)

D) To solve the game and arrive at a solution for the two-person zero-sum game, both players
optimise their decision-making processes using linear programming models. The'stasis' condition—
which denotes a player's incapacity to alter their strategy without losing to the opposing player—is
identified mathematically.

By maximising Player 1's expected reward according to the probability of each kind of chip, the
model provides guidance on the best course of action for digging.

The strategy used by Player 2 reduces projected loss by identifying the optimal chip options and
crucial safeguards against losses.

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