Course: -PGDM Subject: - Strategic Cost Management

Semester: -5th Code: - FN-06

ASSIGNMENT

Q1.: - “Linear programming has no real-life application” Do you agree

with this statement?

Ans.

No, I don’t agree with the statement

We use linear programming at personal and professional fronts. We are using

linear programming we are driving from home to work and want to take the

shortest route. Or when we have a project delivery, we make strategies to make

your team work efficiently for on time delivery.

linear programming requires defining variables, finding constraints and finding

the objective function, or what needs to be maximized. In some cases, linear

programming is instead used for minimization, or the smallest possible

objective function value. Linear programming requires the creation of

inequalities and then graphing those to solve problems

Farmers apply linear programming techniques to their work. By determining

what crops, they should grow, the quantity of it and how to use it efficiently,

farmers can increase their revenue.

In nutrition, linear programming provides a powerful tool to aid in planning for

dietary needs. In order to provide healthy, low-cost food baskets for needy

families, nutritionists can use linear programming. Constraints may include

dietary guidelines, nutrient guidance, cultural acceptability or some combination

thereof

Engineers also use linear programming to help solve design and manufacturing

problems. For example, in air foil meshes, engineers seek aerodynamic shape

optimization. This allows for the reduction of the drag coefficient of the air foil

Q2.: - What are the feasible solution to the LPP? What may be the various

methods for solving the LPP? Define with its application.

Ans.

A feasible solution is a solution which satisfies all the constraints and also the

non-negativity conditions of the linear programming problem

A (LP) is feasible if there exists at least one feasible solution. Otherwise, it is

said to be infeasible.

Methods to solve LPP:

1. Solve Linear Program by Graphical Method

2. Solve Linear Program using R

3. Solve Linear Program using Open Solver

4. Simplex Method

5. Northwest Corner Method and Least Cost Method

Linear programming is a simple technique where we depict complex

relationships through linear functions and then find the optimum points. The

important word in previous sentence is depict. The real relationships might be

much more complex – but we can simplify them to linear relationships.

Linear programming can be used in various industries. Manufacturing and

service industry uses linear programming on a regular basis. In this section, we

are going to look at the various applications of Linear programming.

Manufacturing industries use linear programming for analysing their supply

chain operations. Their motive is to maximize efficiency with minimum

operation cost. As per the recommendations from the linear programming

model, the manufacturer can reconfigure their storage layout, adjust their

workforce and reduce the bottlenecks. Here is a small Warehouse case study of

Cequent a US base company, watch this video for a more clear understanding.

Linear programming is also used in organized retail for shelf space

optimization. Since the number of products in the market have increased in

leaps and bounds, it is important to understand what does the customer want.

Optimization is aggressively used in stores like Walmart, Hypercity, Reliance,

Big Bazaar, etc. The products in the store are placed strategically keeping in

mind the customer shopping pattern. The objective is to make it easy for a

customer to locate & select the right products. This is with subject to constraints

like limited shelf space, the variety of products, etc

Q3.: - What are the four major type of conditions where the LPP can be

designed for identifying the solution of the problem.

Ans.

Step 1: Identify the ‘n’ number of decision variables which govern the

behaviour of the objective function (which needs to be optimized).

Step 2: Identify the set of constraints on the decision variables and express them

in the form of linear equations /inequations. This will set up our region in the n-

dimensional space within which the objective function needs to be optimized.

Don’t forget to impose the condition of non-negativity on the decision variables

i.e. all of them must be positive since the problem might represent a physical

scenario, and such variables can’t be negative.

Step 3: Express the objective function in the form of a linear equation in the

decision variables.

Step 4: Optimize the objective function either graphically or mathematically.

Q-4 “Simplex method can be used for the analysis of future profit or cast

with considering the relevant conditions.” Explain.

Ans.

Yes, this is true.

The simplex method is a very useful method to solve linear programming

problems. It gives us a systematic way of examining the vertices of the feasible

region to determine the optimal value of the objective function. It is executed by

performing elementary row operations on a matrix that we call

the simplex tableau.

Simplex method helps managers to choose the most suitable mix of financing,

such that the overall cost of capital is kept to a minimum, and/or specific

constraints on types of borrowing are maintained.