4. The Optimization Approach

In this chapter, we continue the discussion in Chap. 3, and gradually build optimization approaches and linear programming models, without pre-required knowledge in operations research. In order to solve a linear programming, Microsoft Excel Solver software and Microsoft Visual Basic software are used and the required instructions are comprehensively illustrated, so that no previous knowledge about the software are needed. We also discuss a different view for the Petroleum example with two output factors. Two important theorems are provided to explain when a score should be called a ‘relative score’. In addition, two necessary types are added to Types 1–4 in Chap. 1, when the number of input factors and the number of output factors are more than 1. These two types provide a transparent view to rank and benchmark firms through the feasible area, as well as a direction for future arguments on these topics. At the end of this section, readers are prepared to calculate the performance evaluation of a set of homogenous firms and explain the related concepts visibly.