Linear programming, Financial Management

Linear programming, one of the important techniques of operations research, has been applied to a wide range of business problems. This technique is useful in solving decision making problems which involve maximizing a linear objective function subject to a set of linear constraints.

Linear programming is helpful in solving a variety of problems in finance, budgeting and investments. The important applications of this technique are in the following areas:

  • Selection of a product mix which maximizes the profits of the firm subject to several production, material, marketing, personnel and financial constraints.

  • Determination of the capital budget which maximizes the net present value of the firm subject to several financial, managerial, environmental, and other constraints.

  • Choice of mixing short-term financing which minimizes the cost subject to certain funding constraints.

This note, expounding the basis of linear programming is divided into four sections including this introductory section. Section II presents the graphical method of solving the linear programming problem. Though this method can be applied only to those problems having only two basic variables, it is a very useful pedagogic device to understand certain concepts underlying the more advanced methods of linear programming. 

Posted Date: 9/13/2012 8:22:15 AM | Location : United States

Related Discussions:- Linear programming, Assignment Help, Ask Question on Linear programming, Get Answer, Expert's Help, Linear programming Discussions

Write discussion on Linear programming
Your posts are moderated
Related Questions
Imagine you have been allocated $100,000 which is to be invested in 8 companies listed on the Australian Stock Exchange (ASX). You are required to have a balanced portfolio betwee

Securitization is a financial innovation born out of the necessity the savings and loan associations of the United States of America face to save themselves from im


In convertible bonds, bondholders get a right to convert their bonds for a specific number of shares of the bond issuer. This privilege allows bondholders to take

Question 1 Swap is an agreement among two or more parties to exchange sets of cash flows over a period in future and What do you understand by swap? Describe its features, kind

I need this in the next 24 hours urgently. If you can accept this, you must be meeting the deadline with strictly no delays or full payment refund is needed

Q. Interest Rate Risk in financial management Interest rate risk is the variation in the single period rates of return caused by the fluctLlaoons in the market interest rate. M

Q. What is Evaluation of Credit Policy? Evaluation of Credit Policy: - A credit policy is prepared to maintain the investment in receivables at optimum level. Receivable Turnov

Trade credit is free credit.  Do you agree or disagree with this statement?  Explain. No the Trade credit is not free.  It comprises a cost.  Who bears that cost relies on the te

paid-up equty 100000 earning of the company 10000 praice - earning ratio(PIE) 20 no.of equty share