Submitted by: Submitted by aravinduppala
Views: 256
Words: 669
Pages: 3
Category: Business and Industry
Date Submitted: 03/30/2013 08:55 PM
Brief History of LP:-
* LP was developed to solve military logistics problems during World War II
* In 1947, George Dantzig developed a solution procedure for solving linear programming problems (Simplex Method)
* This method turned out to be so efficient for solving large problems quickly
* The simultaneous development of the computer technology established LP as an important tool in various fields
* Simplex Method is still the most important solution method for LP problems
* In recent years, a more efficient method for extremely large problems has been developed (Karmarkar’s Algorithm)
LP Problems:-
* A large number of real problems can be formulated and solved using LP. A partial list includes:
* Scheduling of personnel
* Production planning and inventory control
* Assignment problems
* Several varieties of blending problems including ice cream, steel making, crude oil processing
* Distribution and logistics problems
Typical Applications of LP:-
Aggregate Planning
Develop a production schedule which
* satisfies specified sales demands in future periods
* satisfies limitations on production capacity
* minimizes total production/inventory costs
Scheduling Problem
Produce a workforce schedule which
* satisfies minimum staffing requirements
* utilizes reasonable shifts for the workers
* is least costly
Product Mix (“Blending”) Problem
Develop the product mix which
* satisfies restrictions/requirements for customers
* does not exceed capacity and resource constraints
* results in highest profit
Logistics
Determine a distribution system which
* meets customer demand
* minimizes transportation costs
Marketing
Determine the media mix which
* meets a fixed budget
* maximizes advertising effectiveness
* Financial Planning
Establish an investment portfolio which
* meets the total investment...