BASIC CONCEPTS OF GOAL PROGRAMMING

1.

GOALS HAVE PREEMPTIVE PRIORITIES.

2.

MINIMIZE DEVIATIONS FROM GOALS.

3.

ATTACH WEIGHTS TO DIFFERENT

ACTIVITIES AT THE SAME GOAL LEVEL.

NTC PRODUCES TWO TYPES OF MATERIALS, A STRONG

UPHOLSTERY MATERIAL AND A REGULAR DRESS
MATERIAL. THE UPHOLSTERY IS PRODUCED ACCORDING
TO DIRECT ORDERS FROM FURNITURE MANUFACTURERS.
THE DRESS MATERIAL ON THE OTHER HAND, IS
DISTRIBUTED TO RETAIL FABRIC STORES. AVERAGE
PRODUCTION RATES FOR THE TWO MATERIALS ARE
IDENTICAL; 1000 METRES/HR. BY RUNNING TWO SHIFTS,
NET OPERATIONAL CAPACITY OF THE PLANT IS 80
HOURS/WK. THE MARKETING DEPARTMENT REPORTS
THAT THE MAXIMUM ESTIMATED SALES FOR THE
FOLLOWING WEEK IS 70,000 M. OF UPHOLSTERY AND
45,000 M. OF DRESS MATERIAL. ACCORDING TO THE
ACCOUNTING DEPARTMENT, THE APPROXIMATE PROFIT
FROM A METRE OF UPHOLSTERY MATERIAL IS RS.2.50 AND
FROM A METRE OF DRESS MATERIAL IS RS.1.50.
THE M.D. OF THE COMPANY BELIVES THAT A GOOD
EMPLOYER- EMPLOYEE RELATIONSHIP IS IMPORTANT IN
BUSINESS. HENCE HE DECIDES THAT A STABLE
EMPLOYMENT LEVEL IS A PRIMARY GOAL FOR THE
FIRM. THEREFORE, WHENEVER THERE IS EXCESS
DEMAND OVER NORMAL PRODUCTION, HE SIMPLY
EXPANDS PRODUCTION CAPACITY BY PROVIDING
OVERTIME. HOWEVER HE FEELS THAT OVERTIME OF
MORE THAN 10 HOURS/WK. SHOULD BE AVOIDED
BECAUSE OF ACCELERATING COSTS.

CONTD.P/2.

FIRST GOAL: AVOID UNDER UTILISATION OF

PRODUCTION CAPACITY,
I.E. MAINTAIN STABLE EMPLOYMENT AT NORMAL
CAPACITY
SECOND GOAL: LIMIT OT OPERATION TO 10 HOURS.
THIRD GOAL :ACHIEVE SALES GOALS OF 70,000 M. OF
UPHOLSTERY AND 45,000 M. OF DRESS MATERIAL.
FOURTH GOAL: MINIMISE OT OPERATION AS MUCH AS
POSSIBLE.
FORMULATE AND SOLVE THIS PROBLEM AS A GOAL
PROGRAMMING PROBLEM.

BHARAT TELEVISION COMPANY PRODUCES CTV SETS.

IT HAS TWO PRODUCTION LINES. PRODUCTION RATE
OF LINE-1 IS 2 SETS/HR. AND IT IS 1.1/2 SETS/ HR. IN
LINE-2. THE REGULAR PRODUCTION CAPACITY IS 40
HR./WK. FOR BOTH LINES. EXPECTED PROFIT FROM AN
AVERAGE CTV SET IS RS.1000/- . THE TOP
MANAGEMENT OF THE FIRM HAS THE FOLLOWING
GOALS FOR THE WEEK (IN ORDINAL RANKING):

GOAL -1:
GOAL 2 :
GOAL 3 :
GOAL 4 :

PRODUCTION GOAL 180 SETS.

LIMIT OT OF LINE-1 TO 10 HOURS.
AVOID UNDERUTILISATION OF
REGULAR WORKING HOURS FOR
BOTH LINES.
LIMIT THE SUM OF OT FOR BOTH
LINES. (ASSIGN WTS. ACCORDING TO
RELATIVE COST OF OT HOUR. ASSUME
COST OF OPREATIONS IS IDENTICAL
FOR BOTH PRODUCTION LINES)

FORMULATE THE PROBLEM AS A GLP MODEL. IF

THE TOP MANAGEMENT DESIRES TO PUT A PROFIT
GOAL OF RS.1,90,000 FOR THE WEEK AS THE TOP
PRIORITY GOAL ABOVE THE STATED FOUR GOALS,
HOW WOULD THE MODEL CHANGE.

APPLICATION AREAS OF GOAL PROGRAMMING

GOAL PROGRAMMING HAS BEEN WIDELY APPLIED TO
VARIOUS DECISION PROBLEMS IN BUSINESS FIRMS,
GOVERNMENT AGENCIES, AND NON PROFIT INSTITUTIONS.
SOME OF THE BEST KNOWN APPLICATIONS OF GOAL
PROGRAMMING INCLUDE THE FOLLOWING PROBLEM
AREAS:

ACADEMIC PLANNING AND

ADMINISTRATION
ACCOUNTING ANALYSIS
ADVERTISING MEDIA
SCHEDULING
BLOOD COLLECTION AND
DISTRIBUTION
CAPITAL BUDGETING
COMPUTER RESOURCE
PLANNING AND
ALLOCATION
DECISION-SUPPORT
SYSTEM DESIGN
ECONOMIC POLICY
ANALYSIS
EDUCATIONAL SYSTEM
PLANNING
ENVIRONMENTAL
PROTECTION
PORTFOLIO
DETERMINATION
PRODUCTION SCHEDULING
PROJECT SCHEDULING
QUALITY CONTROL

FACILITIES LOCATION AND

LAYOUT PLANNING
FINANCIAL PLANING
HEALTH-CARE DELIVERY
SYESTEM DESIGN
INVENTORY MANAGEMENT
LOCATION AND
ALLOCATION DECISIONS
MANPOWER PLANNING
MARKETING LOGISTICS
MILITARY STRATEGIES
AND PLANNING
NETWORK SCHEDULING
ORGANIZATIONAL
ANALYSIS
PERSONNEL
ADMINISTRATION
POLICY ANALYSIS
RESEARCH AND
DEVELOPMENT
TRANSPORTATION
LOGISTICS
URBAN PLANNING
WATER RESOURCES
PLANNING