This book is meant to be used as a textbook by students of BBA, B.Com., CA, WA, for understanding the basic concepts of ?Linear Programming? and applying the results directly to real-life business problems. A large number of business-oriented solved as well as practice problems have been included to create a bank of problems for the students to solve and acquire practice in doing so.
Decision-making in today'ssocial and business environment has become a complex task. High costs of technology, materials, labour, competitive pressures and other economic, social as well as political factors greatly increase the difficulties in managerial decision-making. Knowledge and technology are changing rapidly and new problems with little or no precedents continually arise. Well-structured problems are routinely optimised at the operational level of organisations and increased attention is not focused on broader tactical and strategic issues. To effectively address these problems and provide leadership in the advancing global age, decision-makers cannot afford to make decisions by simply applying their personal experiences, guesswork or intuition, because the consequences of wrong decisions are serious and costly.
While solving a real-life problem, the decision-maker must examine a problem from both quantitative as well as qualitative perspective, so that data so obtained should be analysed in both perspectives to suggest a solution of the problem. For example, consider a problem of an investor seeking advice for investments in three alternatives: stock market, real estate and bank deposit. To solve the issue, certain quantitative factors have to be examined and these include financial ratios from the balance sheets of several companies whose stocks are under consideration, real estate companies? cash flows and rates of return for investment in property and how much the investment will be worth in future when deposited at a bank at a given interest rate for a certain number of years. Also to be considered are factors such as the weather, state and central policies, new technology, the political situation, etc.
It was in 1947 that George B. Dantzing, while working with the US Air Force, developed the Linear Programming Model, primarily for solving military logistics problems. But now it is being used extensively in all functional areas of management, airlines, agriculture, military operations, oil refining, energy planning, pollution control, transportation planning and scheduling, research and development activities.
In other words, Linear Programming provides a quantitative basis of assisting a decision-maker in the selection of the most effective and desirable courses of action from a number of available courses of action, to achieve an optimal solution to a problem under study.
Linear Programming is a mathematical modelling technique used for the allocation of ?scarce? or ?limited? resources, such as labour, material, machine, time, warehouse space, capital, energy, etc. to several competing activities, such as products, services, jobs, new equipment, projects etc. on the basis of a given criterion of optimality.
This book meant for students and professors help in understanding problem-solving methods based on a careful discussion of model formulation, solution procedures and analyses.
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