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What is an Optimal Solution?

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  • Written By: Mary McMahon
  • Edited By: Nancy Fann-Im
  • Last Modified Date: 20 November 2016
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    Conjecture Corporation
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An optimal solution is the best business approach to a problem, creating the most profit for the least expense. It may take some tinkering and planning to arrive upon the optimal solution, but any changes beyond that point would make it less effective. Businesses work to achieve optimal solutions for all their problems, from getting ready to launch new products to developing new approaches to inventory managements. Some companies rely on industry standards and practices to achieve their goals while others may develop their own.

The optimal solution provides a balance point between achieving a goal in the most effective way possible and cutting costs as much as possible. Sometimes there are steps a business could take to lower costs, but these would make a product less effective; for example, reducing the amount of pulp in toilet paper would make it cheaper, but would also lead consumers to reject it on the grounds that it no longer works as effectively. Likewise, changes to effectiveness may drive up costs and push the product outside the optimal solution zone.

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Sometimes this represents an alternative approach. At other times, it may be the most obvious best approach to a business problem. Businesses are more likely to find an optimal solution when they solicit feedback from personnel who may have insight into a situation thanks to differing perspectives. Companies can use a variety of means to get feedback, including providing anonymous drop boxes for recommendations, encouraging employees to talk to supervisors if they have ideas, and setting up working groups with representatives from different areas of the business to talk about business problems and potential solutions.

Sometimes there may be multiple optimal solutions to a problem. A business can weigh the options and decide on the one that will best suit its needs, considering the larger mission of the business and how various options might be perceived by members of the public. The business can also use statistical analysis to look at the long term outcomes of various solutions, to determine if there are hidden pitfalls to a given solution that might cause problems in the future.

Business requires flexibility, and a business may need to revise an optimal solution periodically to come to terms with changes in the market. Supply and production costs can increase, necessitating changes in business practices, and businesses may also need to consider issues like changing demands from customers. An environmentally unfriendly optimal solution, for instance, can become a problem when consumers start expecting more environmental responsibility, forcing the company to adjust.

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