Question

1) Select two operational areas from the list below and discuss how might LP be applied in decision making. Provide an example for each business area you chose:

Marketing

Production

Staff/Employee

scheduling

Fuel blending

Transportation and/or logistics

Finance

Answer 1

Linear progamming in Production:

Linear programming is mathematical optimisation model which select the the required amount of product or services produces to meet the particular objectives such as maximisation of profit or minimisation of cost. it is mostly used in industries and military operation.

Decision making; The production manger need to effective utilisation of resources which are allocated to the strategic alternatives under various constraints . the contraints like scare resources, limited time and fulfill the objective of higher return.

Example: In the construction of building the resources such as man, machinery, equipment, cement, water, sand, spares and power etc are required . Now the manager wants to know the optimum blend of Concrete( mixture of water, cement and sand). the resources like water, power are limited available by which manger faces the problem so he allocate the strategic alternativs by using the Linear programing model which evaluates the mixture and optimal solution which satisfies at least cost.

linear programming in Transportation:

Transportation involves physical movement of goods from warehouses to wholeselers , from wholeselers to retailers and from retailers to customers. linear programming is used to work with production scheduling and inventory control. there are some constraints like origin or destination requirement where exact or minimum amount of product required at each origin at the same time required amount of product produced at each source.

The decision required by the operation manager of using linear programming is the required amount of quantity of the product shipped from each source to the each destination for the planning period.