Linear Programming

Linear programming is the use of mathematical methods to find the optimal solution, whether it is small
or large in nature. This method uses a linear pattern to create a polygon and then determines the
maximum or minimum area of the shape. Manufacturing operations often use linear programming to
help reduce costs and increase profit or output.[7]

Interest in money - Temporary relationships

Considering the amount of capital to be lent for a certain period of time, with the understanding that it
will be returned to the investor, the period of financial relations examines the costs associated with this
type of action. Capital itself should be divided into two distinct categories, equity capital and loan
capital. Social capital is money already in the waste of the company, comes mainly from profit, so it is
not of great concern, since there are no owners who want it return and interest. Debt capital is actually
owned by its owners, and they seek to return its use with "profit", known as interest. The interest that
the business will pay will be zero, while the lenders will consider interest as profit, which can make the
situation difficult. To add to this, everyone will change the tax level of the participants. The interest in
the partnership period comes in when the capital required to complete the project must be secured or
secured. Borrowing raises questions about interest and value created by doing the job. When he takes
capital from the reserve, he refuses to use it in other projects that can produce more results. Interest is
defined in the simplest terms by multiplying the principal, the period and the interest rate. However, the
complexity of interest calculations increases as things like compound interest or annuities come into
play.

Engineers often use interest rate tables to determine the future or present value of capital. These tables
can also be used to determine the effect of annuities on loans, businesses or other situations. All that
needs to be done by a user of interest table is three things; period of analysis, the minimum attractive
rate of return (MARR) and the value of the capital itself. The table will provide the multiplier that will be
used in the cost of capital, which will be given to the user at the appropriate future or present value.

Examples of Present, Future, and Annuity Analysis

Using the interest tables mentioned above, an engineer or manager can quickly determine the value of
capital over a period of time. For example, a company wants to borrow $5,000.00 to finance a new
machine and will repay this amount in 5 years at 7%. Using the table, 5 years at 7% gives a factor of
1.403, which will be multiplied by $5,000.00. This will bring in $7,015.00. This is actually under the
assumption that the company will pay the sum at the end of five years, without making any
prepayment. A more effective example is that of some tools that will provide value for production work
in a certain period of time. For example, a machine brings the company $2,500.00 per year and has a
useful life of 8 years. MARR is determined at about 5%. The combined interest table creates different
values for different types of analysis in this context. If the company wants to know the Net Current
Value (NPB) of these benefits; then the factor is P/A of 8 years at 5%. It is 6.463. If the company wants to
know the future value of these benefits; then the reason is F/A of 8 years at 5%; is 9.549. The first gives
an NPB of $16,157.50, while the second gives a future value of $23,872.50. These situations are very
simplistic in nature and do not reflect the reality of many corporate situations. Therefore, the engineer
must begin to weigh the costs and benefits, and determine the value of the proposed machine,
extension, or installation.