System of Linear Equations - two or more linear equations with the same variables.

The solution of a system of linear equations is the point of intersection of the lines representing the equations.

Methods to determine the solution of system of linear equations

1. Algebraically
a. elimination
b. Substitution.
2. graphically

SYSTEMS OF INEQUALITIES
- arise in problems that have constraint statements that contain phrases such as “more than”, “less than”, “a
minimum of” and “a maximum of”. A solution of a system of linear inequalities in x and y is a point ( x,y ) that satisfies
each inequality in the system.

Graphing a System of Linear Inequalities

1. Sketch the line that corresponds to each inequality.
2. Lightly shade the half-plane that is the graph of each linear inequality.
3. The graph of the system is the intersection of the half-planes

Management Science

● Is the application of a scientific approach to solving management problems in order to help managers make
better decisions.
● A recognized and established discipline in business

Management Science Process

Observation> Problem Definition> Model Construction> Solution > Implementation

Observation - identification of a problem that exists in the system (organization). The system must be continuously
and closely observed so that problems can be identified as soon as they occur or are anticipated.

Management Scientist - a person skilled in the techniques of management science and trained to identify problems,
who has been hired specifically to solve problems using management science techniques

Problem Definition - Once the problem’s existence is determined, the problem must be clearly and concisely
defined.

Limits of the problem - the degree to which it pervades other units of the organization must be included in the
problem definition.

Model Construction - in the form of a graph or chart - consists of a set of mathematical relationships - made up of
numbers and symbols

A management science technique usually applies to a specific model type.

Model Solution - The actual use of the model once it has been developed or the solution to the problem the model
was developed to solve.

Model Implementation - the person responsible for putting the model or solution to use is not the same person who
developed the model and, thus, the user may not fully understand how the model works or exactly what it is
supposed to do.

Linear Programming models help managers determine solutions (i.e., make decisions) for problems that will
achieve some objective in which there are restrictions, such as limited resources or a recipe or perhaps production
guideline.
Goal programming, which is a form of linear programming that addresses problems with more than one objective or
goal.

These techniques are distinguished from mathematical programming techniques in that the results are probabilistic.
Mathematical programming techniques assume that all parameters in the models are known with certainty.

Deterministic is a technique that assumes certainty in its solution.

Decision Analysis shows how to select among several different decision alternatives, given uncertain (i.e.,
probabilistic) future conditions.

Queuing analysis presents probabilistic techniques for analyzing waiting lines that might occur.

Networks consist of models that are represented as diagrams rather than as strictly mathematical relationships.

AHP is a mathematical technique for helping the decision maker choose between several alternative decisions,
given more than one objective; however, it is not a form of linear programming, as is goal programming, on
multicriteria decision making.

The structure of the mathematical models for nonlinear programming problems is similar to the linear programming
problems; however, the mathematical equations and functions in nonlinear programming can be nonlinear instead of
linear, thus requiring the use of calculus to solve them.

Simulation is probably the single most unique topic. It has the capability to solve probabilistic and deterministic
problems and is often the technique of last resort when no other management science technique will work.

Forecasting and inventory management are topics traditionally considered to be part of the field of operations
management. However, because they are both important business functions that also rely heavily on quantitative
models for their analysis, they are typically considered important topics in the study of management science as well.

LINEAR PROGRAMMING
● is a mathematical technique used to determine the optimal allocation of resources in business
● the military and other areas of human endeavor
● conceived in 1947 by George B. Dantzig - head of the Air Force Statistical Control’s Combat Analysis
Branch at the Pentagon
● training, supplying, and deploying combat units as “programs.”

TWO VARIABLE LINEAR PROGRAMMING MAY CONSIST OF:

➢ An objective function that expresses the quantity to be maximized or minimized.
➢ A system of constraint linear inequalities whose solution set represents the set of feasible solutions

1. Decision Variables are mathematical symbols that represent levels of activity by the firm.

Example: An electrical manufacturing firm desires to produce x radios, y toasters, and z clocks. x, y, z - symbols
representing unknown variable quantities of each item. Model Formulation Components

2. Objective Function - a linear mathematical relationship that describes the objective of the firm in terms of the
decision variables. - always consists of either maximizing or minimizing some value

Ex; maximize the profit or minimize the cost of producing radios Model Formulation Components

3. Model Constraints - linear relationships of the decision variables. - they represent the restrictions placed on the
firm by the operating environment.

Example: Only 40 hours of labor may be available to produce radios during production. Model Formulation
Components
Parameters - the actual numeric values in the objective function and the constraints, such as the 40 hours of
available labor, are parameters

Linear Programming (LP) Problem

▪ A feasible solution satisfies all the problem's constraints.

▪ An optimal solution is a feasible solution that results in the largest possible objective function value when
maximizing (or smallest when minimizing).

▪ A graphical solution method can be used to solve a linear program with two variables.

▪ Linear constraints are linear functions that are restricted to "less than or equal to", "equal to", or "greater than or
equal to" a constant

▪ Problem formulation or modeling is the process of translating a verbal statement of a problem into a mathematical
statement