Optimization overview

Any business and not only business could be modeled as a flow of different resources in time: energy, goods, working hours, money, etc. Conversion of the numbers of some items into the others (e.g. number of sales and prices to revenue) is mathematically represented as an expression. A big business is a very complex expression, but it is a mathematical expression anyway. We use multivariate regression analysis to find the best way to change some parameters (called Controls) and not to change too much the other parameters (called Constraints) aiming to get the desired results of the expression (called Objectives). The more complex the expression is, the less are humans able to find optimal solutions of such math problem. AIMES optimization tool does it multiple times better than humans do.

Simple examples of optimization could look like:

• Optimization example 1:

  • Objective: Achieve maximal profit ($) over the next five years;
  • Constraint: Keep Debt/Equity <=0.2 for each month from 1 to 30;
  • Control: Monthly distribution of available investment in product development and sales departments.
    
    

• Optimization example 2:

  • Objectives: Maximize company value at the end of next three years & Make cumulative FCF >0 in the last 6 months;
  • Constraints: Keep Debt less than 200 000 $ & Keep developers number below 20;
  • Controls: Number of sales managers hired per month & investments in IT infrastructure.

More objectives, constraints and controls are involved the bigger is the advantage of AIMES optimization over manual scenario testing. AIMES optimization solves the task both: faster and with better results.