My learning experience during the week on linear programming was very insightful.
I had the learning of understanding the real and valid meaning of why different mathematical methods are used for decision making. Using the linear programming methods to allocation the available resources. It is a method used by managers to efficiently allocation of scare resources. The limited resources could be any of these- materials, time, money and machinery.
The linear programming method is useful where the resources at our disposal are very limited, and it is important to calculate how best to maximise those resources.
It is an important technique for the optimization of resources. From our understanding, linear means relationship between variables while as for programming, it is referred to as a planning process where the best course of action is selected from the various options.
The linear programming can be expressed mathematically or graphically.
The LP is a tool used for profit maximization with optimal production processes and cost minimization while meeting product specifications. It helps in optimizing the product mix when the product works in certain specification.
Other applications of linear programming tools or techniques are –
- Minimizing cost in transportation routes
- Minimizing cost of raw materials
- Utilizing the storage and distribution channels or centres.
- It is applicable in various field like Accounting, Banking and Finance, Agriculture, Marketing, Operations, Logistics, Engineering and Medicine.
The linear programming as explained is a relationship for linear relationship. It problems has these five characteristics:
- Objective Functions
- Constraints
- Non- negativity
- Linearity
- Finite
The linear programming has assumptions can be classified as follows:
- There is only one objective function
- Only one objective function is required to be optimized of either a profit maximization or cost minimization.
- The linear relationship between the objective function and the constraints.
- The number of constraints and restrictions expressible are in quantitative terms.
- Limited resources
- Available data to specify the problem
- The non-negativity constraints.
In solving the linear programming with the graphical method, it is a business problems involving only two variables.
While using the simplex linear programming method, it is for business methods with two or more variables. It can be used for solving more complex problems.
Our learning went on with using excel solver to determine three main reports. The excel solver will give the followings:
- The Answer Report
- The Sensitivity Report
- Limit Report
With the answer report, this will show binding and non-binding constraints.
Having to report on the sensitivity report, it is showing the range optimality and while the limit range will show the range of profit.
To have a broader view on the sensitivity report, it shows the shadow cost to which helps management of the business to carry out the sensitivity on the availability of scare resources.
It also gives n insight on how the optimal solution changes with the change in the coefficient of the model.
The sensitivity helps to check between two products.
