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# Linear Programming Used to Attain Optimum Solutions

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1.1) An Operations Manager would like to understand how linear programming (LP) can be used to attain optimum solutions when allocating scarce organizational resources. He/She has the following questions:

a) What is LP? How is an LP problem defined
b) Define objective function, constraint, and decision variable
c) Our firm makes two products: Y and Z. Suppose that each unity of Y costs \$10 and sells for \$40. Each unit of Z costs \$5 and sells for \$25. If the firm's goal were to maximize profit, what is the appropriate objective function?
d) An LP problem must be "solved." One solution method is the corner point solution. How is this method applied? What gets solved in an LP problem? Are other solution methodologies available.

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The solution discusses linear programming used to attain optimum solutions.

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Linear programming (LP) can be defined as a mathematical technique for determining the optimal allocation of resources and obtaining a particular objective that may be profit maximization or cost minimization, when there are alternative uses of resources like money, manpower, material or machine.
In linear programming technique the total effectiveness of the problem can be expressed as a linear function of individual allocations and the limitations on resources give rise to linear equalities or inequalities of the ...

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• MBA, Indian Institute of Finance
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