Danese Anne Dela Cruz

BA 1-12

What is linear programming?

Linear programming, mathematical modeling technique in which a linear
function is maximized or minimized when subjected to various constraints. This
technique has been useful for guiding quantitative decisions in business
planning, in industrial engineering, and—to a lesser extent—in
the social and physical sciences.
Linear programming (LP) refers to a family of mathematical optimization
techniques that have proved effective in solving resource allocation problems,
particularly those found in industrial production systems. Linear programming
methods are algebraic techniques based on a series of equations or inequalities
that limit a problem and are used to optimize a mathematical expression called
an objective function.

What is inventory?
Inventory is the accounting of items, component parts and raw materials a
company uses in production or sells. As a business leader, you practice inventory
management to ensure that you have enough stock on-hand and to identify
when there is a shortage.
 The verb “inventory” refers to the act of counting or listing items. As an
accounting term, inventory refers to all stock in the various production stages
and is a current asset. By keeping stock, both retailers and manufacturers can
continue to sell or build items. Inventory is a major asset for most companies.
However, while inventory is an asset on the balance sheet, too much inventory
can become a practical liability.
What is regression analysis?
Regression analysis is a set of statistical methods used for the estimation of
relationships between a dependent variable and one or more independent
variables. It can be utilized to assess the strength of the relationship between
variables and for modeling the future relationship between them.

What is Simple linear regression and correlation?

Regression Analysis – Simple linear regression
Simple linear regression is a model that assesses the relationship between a
dependent variable and an independent variable. The simple linear model is
expressed using the following equation:
Y = a + bX + ϵ

Where:
Y – Dependent variable
X – Independent (explanatory) variable
a – Intercept
b – Slope
ϵ – Residual (error)

Multiple linear Regression

Regression Analysis – Multiple linear regression
Multiple linear regression analysis is essentially like the simple linear model, with
the exception that multiple independent variables are used in the model. The
mathematical representation of multiple linear regression is:
Y = a + bX1 + cX2 + dX3 + ϵ
Where:
Y – Dependent variable
X1, X2, X3 – Independent (explanatory) variables
a – Intercept
b, c, d – Slopes
ϵ – Residual (error)

Multiple linear regression follows the same conditions as the simple linear
model. However, since there are several independent variables in multiple linear
analysis, there is another mandatory condition for the model:
Non-collinearity: Independent variables should show a minimum of correlation
with each other. If the independent variables are highly correlated with each
other, it will be difficult to assess the true relationships between the dependent
and independent variables.

Importance of inventory and Kinds of inventory

The Importance of Inventory Control
Inventory control helps companies buy the right amount of inventory at the
right time. Also called stock control, the process helps optimize inventory levels,
reduces storage costs and prevents stockouts.
Kinds of Inventory
Raw Materials:
Raw materials are the materials a company uses to create and finish
products. When the product is completed, the raw materials are typically
unrecognizable from their original form, such as oil used to create shampoo.
Work in Progress (WIP):
WIP inventory refers to items in production and includes raw materials or
components, labor, overhead and even packing materials.
Finished Goods:
Finished goods are items that are ready to sell.
Maintenance, Repair and Operations (MRO) Goods:
MRO is inventory—often in the form of supplies—that supports making a
product or the maintenance of a business.
What Is Forecasting?
Forecasting is a technique that uses historical data as inputs to make
informed estimates that are predictive in determining the direction of future
trends. Businesses utilize forecasting to determine how to allocate
their budgets or plan for anticipated expenses for an upcoming period of time.
This is typically based on the projected demand for the goods and services
offered.

REFERENCES:
https://www.britannica.com/topic/operations-research/Resource-
allocation#ref22391
https://www.britannica.com/science/linear-programming-mathematics
https://www.netsuite.com/portal/resource/articles/inventory-
management/inventory.shtml
https://corporatefinanceinstitute.com/resources/knowledge/finance/regression-
analysis/#:~:text=Regression%20analysis%20is%20a%20set,a%20dependent%20va
riable%20(the%20outcome
https://www.netsuite.com/portal/resource/articles/inventory-
management/inventory.shtml
https://www.investopedia.com/terms/f/forecasting.asp