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Linear Programming Problem

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Linear Programming Problem

Uploaded by

jainshreya057
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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BUSINESS MATHS

AND STATISTICS
ASSIGNMENT

TOPIC: LPP AND ITS APPLICATION


BUSINESS
What is LPP?
Linear programming problem (LP, also called linear
optimization) is a method to achieve the best outcome
(such as maximum profit or lowest cost) in
a mathematical model whose requirements are
represented by linear relationships. Linear programming
is a special case of mathematical programming (also
known as mathematical optimization).
It is a mathematical model or technique for efficient and
effective utilization of limited recourses to achieve
organization objectives (Maximize profits or Minimize
cost).
When solving a problem using linear programming, the
program is put into a number of linear inequalities and
then an attempt is made to maximize (or minimize) the
inputs.
In this model, a linear objective function of the decision
variables are maximized/minimized subject to a set of
linear constraints with equations/inequations. This
technique has met outstanding success in the solution of
wide range problems like production planning and
scheduling, personal assignment, finance planning,
agricultural applications, competitive decision making
and so on.
APPLICATION OF LPP IN BUSINESS
1. MANUFACTURING PROBLEM
A Manufacturer Has A Work Under Different
Constraints, Like Limited Amt. Of Money,
Manpower, Time, Space, Etc. By Lpp He Can
maximise His Profits or Minimise His Costs of
Production.

2. AGRICULTURAL PROBLEM
A Farmer Has A Fixed Amount Of Plot. He Can
produce Different Types Of Crops Which yield
Different Amount Of Profits On Selling. Different
Crops Also need Different Amount of Labour And
different Amount Of Fertilizer. By Lp, The Farmer
Can Take Decision Regarding The Allocation Of
Land To Different Types Of Crops For Getting
Maximum Profit.

3. INVESTMENT PROBLEM
Suppose A Man Has A Fixed Amount Of Money
Which He Wants To Invest In Different Schemes
Which Give Different Rates Of Return. How Much
Amount Of Money Should He Invest In Different
Schemes To Maximise His Profit Can Be Obtained
By Lp Technique.

4. TRANSPORTATION PROBLEM
A Transportation Problem Is A Special Type Of Lpp In
Which Different Amount Of Commodity Are
Transported From A Given Number Of Warehouses
(Called Origins) To Different Centres (Called
Destinations) In Such A Way That The Total
Transportation Cost Is Minimum. The Capacity Of
Production At Each Origin, The Demand Of
Commodity At Each Destination And The Cost Of
Transportation Of One Unit Of Commodity From
Different Origins To Different Destinations Are Known.

5. DIET PROBLEM
Suppose A Diet Is To Be Prepared By Mixing Two
Types Of Foods F1 And F2. Each Type Of Food
Contains Two Types Of Vitamins A And B In Different
Amounts. The Cost Of One Unit Of F1 And F2 Are
Different. The Diet Should Contain Minimum Given
Amount Of Vitamin Of Each Type. The Amounts Of F1
And F2 Needed To Make The Diet So That The Total
Cost Of The Diet Is Minimum Can Be Obtained By Lp
Technique.

6. BLENDING PROBLEM
LP Technique Is Also Applicable To Blending Problem
When A Final Product Is Produced By Mixing A
Variety Of Raw Materials. The Blending Problems
Arise In Animal Feed, Diet Problems, Petroleum
Products, Chemical Products, Etc. In All Such Cases,
With Raw Materials And Other Inputs As Constraints,
The Objective Function Is To Minimise The Cost Of
Final Product.

7. INVENTORY PROBLEM
A Firm Is Faced With The Problem Of Inventory
Management Of Raw Materials And Finished Products.
The Objective Function In Inventory Management Is To
Minimise Inven­Tory Cost And The Constraints Are
Space And Demand For The Product.
CONCLUSION
Linear programming is now used extensively in
business, economics and engineering. An example
of an engineering application would be
maximising profit in a factory that manufactures a
number of different products from the same raw
material using the same resources. The constraints
would be decided by the amounts of raw materials
available. In the field of business and
management, linear programming is a method for
solving complex problems in the two main areas of
product mix (where the technique may be used
where it is difficult to decide just how much of
each variable to use in order to satisfy certain
criteria such as maximising profits or minimising
costs, subject to certain constraints) and
distribution of goods. As with all types of
mathematical modelling, the effective application
of Linear Programming requires good
understanding of the underlying modelling
assumptions, and a pertinent interpretation of the
analytical solutions obtained.

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