Multivariate optimization of production systems

This paper reports that mathematically, optimization involves finding the extreme values of a function. Given a function of several variables, Z = ∫(rvec x1, rvec x2,rvec x3,→xn), an optimization scheme will find the combination of these variables that produces an extreme value in the function, whether it is a minimum or a maximum value. Many examples of optimization exist. For instance, if a function gives and investor's expected return on the basis of different investments, numerical optimization of the function will determine the mix of investments that will yield the maximum expected return. This is the basis of modern portfolio theory. If a function gives the difference between a set of data and a model of the data, numerical optimization of the function will produce the best fit of the model to the data. This is the basis for nonlinear parameter estimation. Similar examples can be given for network analysis, queuing theory, decision analysis, etc