Linear programming
This is a mathematical technique to obtain a solution for a maximization (or
minimization) problem.
The goal is to maximize a function called the objective function, subject to
constraints.
Both the objective function and the constraints, are linear functions.
Examples:
1. A product-mix problem. Maximize profits, for instance, a profit function as
a function of the production level of, say, two products subject to time
constraints to manufacture both products.
2. Allocation of advertising budget. Maximize a function that represents the
number of "audience points" from three media (radio, TV, and newspapers),
subject to constraints representing, for instance, the total budget and the
cost of each media, minimum amounts spent on each media, and non-negativity
constraints.
References
Render, B. and R.M. Stair, Jr. (1997): Quantitative Analysis for Management.
Sixth Edition. Prentice Hall.
Turban, E. and J.R. Meredith (1985): Fundamentals of Management Science. Third
Edition Business Publications, Inc.