Goal programming is an extension of linear programming. Suggests that, although linear programming is used widely in decision‐making processes, it has a major limitation which restricts the users of the technique to narrowing their problems to a single objective function. Goal programming was developed to handle problems with multiple objectives. Proposes that used properly, this technique can be excellent in strategic planning. Shows how the improper structure of a goal programming model induces misleading results.
The advantages of Goal Programming (GP) over linear programming
(LP) are discussed in the context of the healthcare industry. Decision
makers must give considerable attention to the formulation of a GP
model. However, long‐ and short‐term solutions must not be confused.
Solutions also require implementations, which may be impractical or
difficult. The full utilisation of facilities is recommended in an
attempt to reduce unit costs and increase output.
Organization theorists tell us that all of the constituents of organizations have individual goals which they expect to be satisfied by organizational activity.They also tell us that the supporting environment has goals for the organization which must be satisfied if the organization is going to continue to receive environmental support in the form of scarce resources and utilization of its output. Also, taken all together, organizational goals, member goals, and environmental goals may be conflicting. In an attempt to control at least a portion of the melange, Goal Programming (GP) has been designed to attempt to deal with organizational goals. The assumption is that organizational decision makers can at least rank order their preferences of goal attain mentand, where goals may sometimes conflict, those conflicting goals may not be in direct opposition to each other and may vary in strength. This paper addresses the crucial problem which any bank faces in managing its portfolio. Further, the paper shows how GP can be an efficient tool in measuring the level of achievement of predetermined goals in commercial banks according to prioritized policies and regulations.
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