Hello and Happy Holidays...Can you get me started on this question? Thanks in advance! If two...

Hello and Happy Holidays...Can you get me started on this question? Thanks in advance!

If two large companies merge, why might you want to run a multi-objective optimization to trade off the total cost of company one versus the total cost to company two? That is, why might this be better than running with just the objective of minimizing the total cost of the combined supply chain?

Expert Solution

Multi-objective optimization is a technique wherein two objectives are analyzed at the same time to determine the trade off that is appropriate for both the companies. This is better than having one single objective for both the companies because a large facility building and leasing used for the purpose of warehousing would lead to a significant increase in the cost. Also, this would provide limitations to the companies in providing superior customer service to their customers. Thus, in order to choose between the options wherein each option denotes a trade-off between customer-service level and total cost, mathematical optimization in multi-objective optimization comes into place. With the help of multi-objective optimization, the supply chain network gets refined information for each of the objective which is not feasible in a single large objective of total cost of supply chain network for both the companies.

keosha answered 1 year ago

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