Ques: Discuss the importance of using linear programming

Subject:BusinessPrice: Bought3

Share With

Ques: Discuss the importance of using linear programming. Provide a business example as to how this type of analysis can be used.

Ans: Linear programing is a mathematical modeling technique used to determine the best or worst outcome when various constraints are involved. This helps quantitative decision making in planning. Linear programming is the arrangement of the requirements to determine the most efficient results. For example, there are many ways to travel across the country, walk, bike, drive a fast car, drive a dump truck, bus, train, plane, etc. they all have different costs, time constraints, and limitations. Linear programing puts these in an arrangement so you can clearly decide what is the most effective/efficient means of travel for an intended result.

I n business planning, this method helps quantify the best cost and how time and cost can be reduced to produce a result. This helps improve decision making.

Mathematical example:

Travel method           time    cost

Plane                    5 hrs           $300

Car                        72 hrs         $450 (20mpg x 3000 miles @$3 per gallon gas cost) = $450

X= pane

Y=car

Objective function: reduce cost

Constraints: time and cost

Its clear that the time in a car is greater than on a plane and the cost is more in gas than a plane ticket therefore the most efficient manner to travel across the country is by plane in this example.