Date of Submission

Spring 2023

Academic Program

Economics

Project Advisor 1

Gautam Sethi

Abstract/Artist's Statement

The optimization of business procedures benefits all aspects of the product. Maximizing efficiency can lead to more profits for the business, cheaper products for the consumer, and less fuel consumption for the environment. Tracing the history of optimization, we can see that people have always strived for the most efficient way to allocate scarce resources. However, the field of optimization did not blossom until innovations in mathematics allowed us to solve a majority of real world problems. The discovery of linear and nonlinear programming in the 1940s allowed us to optimize problems that were unsolvable before. This paper introduces how linear programming works and then introduces how uncertainty can affect an agent's optimal decision. Expected value and expected utility theory yield different results when accounting for the risk preferences of an individual. In order to optimize a decision for an agent, utility and risk preference must be accounted for.

Open Access Agreement

Open Access

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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