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Heuristic Optimization

Chapter
Part of the Advances in Computational Management Science book series (AICM, volume 8)

2.5 Conclusion

In this chapter, some basic concepts of optimization in general and heuristic optimization methods in particular were introduced. The heuristics presented in this chapter differ significantly in various aspects: the varieties range from repeatedly modifying one candidate solution per iteration to whole populations of search agents each of them representing one candidate solution; from neighborhood search strategies to global search methods, etc. As diverse these methods are, as diverse are also their advantages and disadvantages: Simulated Annealing and Threshold Accepting are relatively easy to implement and are good general purpose methods, yet they tend to have problems when the search space is excessively large and has many local optima. Other methods such as Genetic Algorithms or Memetic Algorithms, on the other hand, are more complex and their implementation demands some experience with heuristic optimization, yet they can deal with more complicated and highly demanding optimization problems. Hence, there is not one best heuristic that would be superior to all other methods. It is rather a “different courses, different horses” situation where criteria such as the type of optimization problem, restrictions on computational time, experience with implementing different HO algorithms, the programming environment, the availability of toolboxes, and so on that influence the decision which heuristic to choose - or eventually lead to new or hybrid methods.

The following chapters of this contribution make use of heuristic optimization techniques for approaching problems, merely from the area portfolio management, that cannot be answered with traditional models. The diversity of the problems leads to the application of different methods as well as the introduction of a new hybrid approach. Though the main focus of these applications shall be on the financial implications that can be drawn from the results, there will also be some comparisons of these methods together with suggestions for enhancements.

Keywords

Simulated Annealing Local Optimum Monte Carlo Candidate Solution Travel Salesman Problem 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer 2005

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