Whenever you think of engineering, you think of creating new stuff, solving problems or researching new theories. You see programmers writing codes on computers, mechanical engineers building cars, civil engineers constructing buildings and bridges, etc. But with all these, what lies in the heart of every engineering is economics and optimization.
What is Optimization?
Optimization is finding the best solution to a problem from available or scarce resources. One of the classic examples, you have a grocery store and you want to sell newly launched chocolates. Now in order to sell it, you have to make people test it, and in order to test it, people should notice it, and in order to notice it, the chocolates should be kept in such a place where people can see it. Now, you also do not want to lose the business done by other products. So you have to keep them in such a place where people will buy this new chocolate as well as buy all the other stuff. Thus, you have to do optimization here. And do you see how economics is closely related to optimization?
The Relation of Economics and Optimization
Whenever there is a problem to solve, an engineer applies some parameters or variables to it. One of the variables is the economics. Because without money you cannot do anything. Now for any business, the goal is to make maximum profit by keeping the production costs minimum. And, here comes optimization in the picture. The answer of “How much to produce, to get maximum profit?”, is given by optimization. If you produce too low, you’ll suffer a loss. If you produce too much, you’ll get less profit. You have to find that sweet little spot which when achieved, you will get maximum profit.
Take a look at this image. At Pt. C, you have maximum profits. This is the sweet spot you have to hit. If you go above that a point may come where you will have no-profit, no-loss, even if you produce very high quantities. Below Pt. A, you have losses. This is where you are producing very few units. And hence optimization is very necessary.
Whenever you talk of optimization, economics has to be somewhere nearby. They are just like the two sides of the same coin. Take any real-life example of optimization and you will see economics play its role somewhere.
Take any field of engineering. You always have to optimize some or the thing, keeping its economics in mind. Being a chemical engineer, we need optimization, to determine the minimum area of the reactor for maximum conversion, to determine the path of pipes so that minimum loss may occur, you get the point. Similarly, take any field, and you’ll see optimization play its role. And so it forms the core of every engineering.
And optimization is not just used by engineers. They are used by just everyone, as shown in the above grocery store example. But, the purpose of this article is to make you aware that these two are hidden gems of problem-solving. In most of the undergraduate engineering academic courses, these subjects are not taught. And even if they are taught, they are not taught from the perspective of real-life problems. We were taught optimization for a complete semester. What it was, just some mathematical models, and nothing else. This is not a way to learn optimization. If you want to study optimization, study it using real-life examples only. And when you study optimization, do not forget economics!
Credits Rohit bavishkar