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Linear programming can be used to find optional solutions under constraints.
In production:
• Product mix under capacity constraints to minimise costs/maximise profits along with marginal costing.
• Inventory management to minimize holding cost, warehousing / transporting from factories to warehouses etc.
• Inventory management to minimize holding cost, warehousing / transporting from factories to warehouses etc.
Sensitivity Analysis:
By providing a range of feasible solutions to decide on discounts on selling price, decisions to make or buy.
Blending: Optional blending of raw materials under supply constraints.
Finance: Portfolio management, interest/receivables management.
Advertisement mix: In advertising campaign – analogous to production management and production mix.
Assignment of personnel to jobs and resource allocation problems.
Blending: Optional blending of raw materials under supply constraints.
Finance: Portfolio management, interest/receivables management.
Advertisement mix: In advertising campaign – analogous to production management and production mix.
Assignment of personnel to jobs and resource allocation problems.
However, the validity will depend on the manager’s ability to establish a proper linear relationship among variables considered.
