LINEAR PROGRAMMING

Profit maximization: Graphical Method

NATURE AND APPLICATIONS

 Linear Programming is a mathematical technique that permits the determination of the best or
optimum use of the available resources; namely, money, personnel, materials, facilities and time.
 This was developed by the Russian mathematician L.V.Kantrovich in 1939 and extended by the
American mathematician G. B. Dantzig in 1947.

Specific applications of linear programming:

 Determination of transportation routes.
 Determination of the product mix to maximize contribution margin.
 Selection of an investment mix.
 Determination of material mix to minimize cost.
 Assignment of jobs to machines.

Computational Methods of Linear Programming

A. Graphical method –This method can be used if the problem involves only two variables, a two-
dimension graph can be used to determine the optimal solution
Steps in in graphic method:
 Determine the objective function
 Determine basic relationships
 Compute the optimum solution, especially the constraints as follows:
a. Change inequalities to equalities
b. Graph the equalities
c. Identify the correct side for the original inequalities
d. Identify the feasible solution
e. Determine the contribution margin at all corners in the feasible solution