Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 222)
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Simulation models differ quite fundamentally to the type of optimization model discussed in the previous Chapters. An optimization model can be represented by
$$ Max (Or Min) f(x)$$
that is, some function of x is optimized subject to a set of constraints on x; if the objective function and the constraint set are linear equations in x, and x ≥ 0, we then have a socalled linear programming model, many applications of which we have already discussed. In contrast, a simulation model can be represented simply by
$$ subject to g(x)=0 $$
$$h(x) = 0.$$
KeywordsCash Flow Petroleum Product Income Statement Distribution Company Economic Dispatch
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© Springer-Verlag Berlin Heidelberg 1984