Course: -PGDM Subject: - Strategic Cost Management
Semester: -5th Code: - FN-06
ASSIGNMENT
Q1.: - “Linear programming has no real-life application” Do you agree
with this statement?
Ans.
No, I don’t agree with the statement
We use linear programming at personal and professional fronts. We are using
linear programming we are driving from home to work and want to take the
shortest route. Or when we have a project delivery, we make strategies to make
your team work efficiently for on time delivery.
linear programming requires defining variables, finding constraints and finding
the objective function, or what needs to be maximized. In some cases, linear
programming is instead used for minimization, or the smallest possible
objective function value. Linear programming requires the creation of
inequalities and then graphing those to solve problems
Farmers apply linear programming techniques to their work. By determining
what crops, they should grow, the quantity of it and how to use it efficiently,
farmers can increase their revenue.
In nutrition, linear programming provides a powerful tool to aid in planning for
dietary needs. In order to provide healthy, low-cost food baskets for needy
families, nutritionists can use linear programming. Constraints may include
dietary guidelines, nutrient guidance, cultural acceptability or some combination
thereof
Engineers also use linear programming to help solve design and manufacturing
problems. For example, in air foil meshes, engineers seek aerodynamic shape
optimization. This allows for the reduction of the drag coefficient of the air foil
Q2.: - What are the feasible solution to the LPP? What may be the various
methods for solving the LPP? Define with its application.
Ans.
A feasible solution is a solution which satisfies all the constraints and also the
non-negativity conditions of the linear programming problem
A (LP) is feasible if there exists at least one feasible solution. Otherwise, it is
said to be infeasible.
Methods to solve LPP:
1. Solve Linear Program by Graphical Method
2. Solve Linear Program using R
3. Solve Linear Program using Open Solver
4. Simplex Method
5. Northwest Corner Method and Least Cost Method
Linear programming is a simple technique where we depict complex
relationships through linear functions and then find the optimum points. The
important word in previous sentence is depict. The real relationships might be
much more complex – but we can simplify them to linear relationships.
Linear programming can be used in various industries. Manufacturing and
service industry uses linear programming on a regular basis. In this section, we
are going to look at the various applications of Linear programming.
Manufacturing industries use linear programming for analysing their supply
chain operations. Their motive is to maximize efficiency with minimum
operation cost. As per the recommendations from the linear programming
model, the manufacturer can reconfigure their storage layout, adjust their
workforce and reduce the bottlenecks. Here is a small Warehouse case study of
Cequent a US base company, watch this video for a more clear understanding.
Linear programming is also used in organized retail for shelf space
optimization. Since the number of products in the market have increased in
leaps and bounds, it is important to understand what does the customer want.
Optimization is aggressively used in stores like Walmart, Hypercity, Reliance,
Big Bazaar, etc. The products in the store are placed strategically keeping in
mind the customer shopping pattern. The objective is to make it easy for a
customer to locate & select the right products. This is with subject to constraints
like limited shelf space, the variety of products, etc
Q3.: - What are the four major type of conditions where the LPP can be
designed for identifying the solution of the problem.
Ans.
Step 1: Identify the ‘n’ number of decision variables which govern the
behaviour of the objective function (which needs to be optimized).
Step 2: Identify the set of constraints on the decision variables and express them
in the form of linear equations /inequations. This will set up our region in the n-
dimensional space within which the objective function needs to be optimized.
Don’t forget to impose the condition of non-negativity on the decision variables
i.e. all of them must be positive since the problem might represent a physical
scenario, and such variables can’t be negative.
Step 3: Express the objective function in the form of a linear equation in the
decision variables.
Step 4: Optimize the objective function either graphically or mathematically.
Q-4 “Simplex method can be used for the analysis of future profit or cast
with considering the relevant conditions.” Explain.
Ans.
Yes, this is true.
The simplex method is a very useful method to solve linear programming
problems. It gives us a systematic way of examining the vertices of the feasible
region to determine the optimal value of the objective function. It is executed by
performing elementary row operations on a matrix that we call
the simplex tableau.
Simplex method helps managers to choose the most suitable mix of financing,
such that the overall cost of capital is kept to a minimum, and/or specific
constraints on types of borrowing are maintained.
