It is a mathematical technique for choosing the best alternative from a set of feasible alternatives in situation where the objective function as well as the constraints can be expressed as linear mathematical functions.
Requirements
1) All problems seek to maximize or minimize some quantity (the objective function).
2) Restrictions or constraints that limit the degree to which we can pursue our objective are present.
3) There must be alternative courses of action from which to choose.
4) The objective and constraints in problems must be expressed in terms of linear equations or inequalities.
Three Components of Linear Programming
1) The Objective Function
2) Constraints
3) Non-negativity Constraint
Applications of LPP
Production management
Company can produce several products with each requiring the use of certain resources. It is formulated, determining the number of units to be produced, with an objective- maximization of profits or minimization of cost with constraints in the form of resources.
Financial management
Portfolio selection dealing with choosing of investment option with an objective to maximise the total expected return or minimizing risk.
Marketing Management
Determining the advertising media mix so as to maximize effective exposure, subject to limitation of budget and specified exposure rates.
