Jeyhun Abbasov

Central Bank of Azerbaijan, Senior Economist,

Institute of Control Systems of ANAS, Doctorate,

Azerbaijan State University of Economics, International Graduate and Doctorate Center, Lecturer,

Baku Engineering University, World Economy Department, Lecturer,

Baku, Azerbaijan

ceyhunabbasoglu@gmail.com

A new simple algorithm for solution of optimization problems

Abstract. This paper is devoted to developing a new sample algorithm after the solution of optimization problems subject to a budget constraint in firms’ production. In the calculation of the optimal composition of different items, there is one fundamental problem. In general, firm’s behaviors are under a budget constraint and they always try to optimally allocate their resources among production factors. It is possible that there are some production factors like quality of labor force which influence firm’s production after some period. In this case, when we want to solve optimization problems for these firms, we can encounter that the objective function (Revenue function, Production function or some other) of the optimization problem depends on the lags of the mentioned production factors. Therefore, the realization of the allocation of firm’s resources among the production factors doesn't seem plausible (because some of them are on the lags). In this context, we have tried to prepare a simple algorithm for optimal allocation of firm’s resources in the same period, using an optimal share which has been found for different lags of variables.

Received: November, 2017

1st Revision: February, 2018

Accepted: April, 2018

DOI: 10.14254/2071-8330.2018/11-2/7

JEL Classification: C5, C6, E6

Keywords: Optimization problem, production function, optimal allocation, lag effect in optimization