Question

discuss why implementing optimization models can be challenging.

operations research

Answer 1

Solution -

Optimization models are mathematical techniques that assist in solving business problems through quantification of all involved variables and constraints. The relationship between all the variables is identified to be able to draw out the simulation functions.

Following are the challenges in implementing any optimization models -

• Identification of all constraints and variables is a complex task and requires a major effort in terms of skill and time. Even after identification it is not a surety that all variables have been identified.
• The relationship between all variables need to be correctly identified. This is another herculean task and at times with multiple relations in existence this activity of pinning down each relationship and it's quantification is challenging.
• Collection of data for building simulation is also a challenge as it brings with it the research challenges and require a very balanced and Iterative approach.
• Trust Factor - All optimization models have certain grey areas attached to it and hence at times even a fool-proof optimization model finds few takers in the management as there are many questions that cannot be unanswered with an optimization model.
• Model Understanding - All those affected do not understand the intricacies and limitations of the optimization model and hence the implementation has to be heavily supervised. There are unprecedented situations created by stakeholders that can lead to a failure of the model. Such instances are wrong data feed and wrong interpretations.