Linear programming is a model that consists of linear relationships  Extreme points are corner points on the boundary

representing a firm’s decision(s), given an objective and resource of the feasible solution area.
constraints  Constraint equations are solved simultaneously at
the optimal extreme point to determine the variable
 One of the most frequent objectives of business firms is solution values.
to gain the most profit possible or, in other words, to  The slope is computed as the “rise” over the “run.”
maximize profit.  Sensitivity analysis is used to analyze changes in
 management science technique called linear model parameters.
programming is frequently used.  Multiple optimal solutions can occur when the
 First, the problem must be identified as being solvable by objective function is parallel to a constraint line
linear programming.
 Second, the unstructured problem must be formulated as Slack Variable
a mathematical model.
 Third, the model must be solved by using established  A slack variable is added to a … constraint to
mathematical techniques. convert it to an equation (=).
 The linear programming technique derives its name from  A slack variable represents unused resources.
the fact that the functional relationships in the An infeasible problem has no feasible solution area; every possible
mathematical model are linear, and the solution solution point violates one or more constraints.
technique consists of predetermined mathematical steps
—that is, a program In an unbounded problem the objective function can increase
indefinitely without reaching a maximum value.
Model components :
Characteristics of Linear Programming Problems
 decision variables
 an objective function  restrictions exist, making unlimited achievement of
 model constraint the objective function impossible.
 requires a choice between alternative courses of
which consist of decision variables and parameters. action
Decision variables Properties of Linear Programming Models
 are mathematical symbols that represent levels of activity  Proportionality means the slope of a constraint or
by the firm. objective function line is constant.
 symbols representing unknown variable  The terms in the objective function or constraints
The objective function are additive.
 The values of decision variables are continuous or
 is a linear mathematical relationship that describes the divisible.
objective of the firm in terms of the decision variables.  All model parameters are assumed to be known
 The objective function always consists of either with certainty.
maximizing or minimizing some value  To summarize, a linear programming model has the
following general properties: linear ity,
The model constraints proportionality, additivity, divisibility, and certainty.
 are also linear relationships of the decision variables; As various linear programming solution methods are
they represent the restrictions placed on the firm presented throughout this book, these properties
 limited resources or restrictive guidelines. will become more obvious, and their impact on
problem solution will be discussed in greater detail
Parameters are numerical values that are included in the objective
functions and constraints.
Nonnegativity constraints restrict the decision variables to zero or
positive values.
A feasible solution does not violate any of the constraints.
 The optimal solution is the best feasible solution
An infeasible problem violates at least one of the constraints.
Graphical Solutions of Linear Programming Models
 Graphical solutions are limited to linear programming
problems with only two decision variables.
 A common solution approach is to solve algebraically the
set of mathematical relationships
 graphical method is realistically limited to models with
only two decision variables,
 The graphical method provides a picture of how a
solution is obtained for a linear programming problem