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Linear Programming

# Linear Programming

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09/27/2012

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Technological development - necessitated organizations for Technological development - necessitated organizations foroptimally utilizing resources.optimally utilizing resources.
Use knowledge and exp for decision making together withUse knowledge and exp for decision making together withquantitative approaches to business.quantitative approaches to business.
OPERATIONS RESEARCH”-technique of using quantitativeOPERATIONS RESEARCH”-technique of using quantitativeapproach to solve business problems.approach to solve business problems.
Helps a manager in effective decision making byHelps a manager in effective decision making byeffectively utilizing the available resources.effectively utilizing the available resources.
Complex problems- easily solved by managersComplex problems- easily solved by managersknowledge+ quantitative techniques.knowledge+ quantitative techniques.

RACING TOWARDS LINEARRACING TOWARDS LINEARPROGRAMMINGPROGRAMMING
Method formulated by a Russian mathematicianMethod formulated by a Russian mathematician‘L.V. KANTROVICH’ and later developed by George‘L.V. KANTROVICH’ and later developed by GeorgeB. Dantzig in 1947.B. Dantzig in 1947.
The word “LINEAR” means that the relationships The word “LINEAR” means that the relationshipshandled are those represented by straight lines . .handled are those represented by straight lines . .
The word “PROGRAMMING” means taking decisions The word “PROGRAMMING” means taking decisionssystematically.systematically.
Thus linear programming is a decision making Thus linear programming is a decision makingtechnique under the given constraints on thetechnique under the given constraints on theassumption that the relationships among theassumption that the relationships among thevariables representing different phenomena happenvariables representing different phenomena happen

CONCEPT OF LINEARCONCEPT OF LINEARPROGRAMMINGPROGRAMMING
The mathematical method of trying to achieve something The mathematical method of trying to achieve somethingwhile taking into account a number of constraints. Typicalwhile taking into account a number of constraints. TypicalEXAMPLES include:EXAMPLES include:- maximizing consumer satisfaction or utility subject to a- maximizing consumer satisfaction or utility subject to a. ……..budget constraint;. ……..budget constraint;- maximizing profits subject to cost constraints;- maximizing profits subject to cost constraints;- minimizing a firm’s wage bill taking into account a given- minimizing a firm’s wage bill taking into account a givencapital-……..labour ratio; orcapital-……..labour ratio; or- maximizing revenues for a sales maximizing firm subject- maximizing revenues for a sales maximizing firm subjectto the own price elasticity of demand.to the own price elasticity of demand.
Put more formally,Put more formally,
linear programminglinear programming
problems are reallyproblems are reallyabout finding optimal solutions to problems which areabout finding optimal solutions to problems which areexpressed in terms of an entity which needs to be optimizedexpressed in terms of an entity which needs to be optimized(also known as ‘the objective function’) given certain(also known as ‘the objective function’) given certainconstraints.constraints.
Both the objective function and all of the constraints areBoth the objective function and all of the constraints areexpressed as linear equations eg. y = 4x+7 etcexpressed as linear equations eg. y = 4x+7 etc