Linear Programming

Topics: Rate of return, Scientific method, Operations research Pages: 4 (1297 words) Published: April 12, 2008
The development of linear programming has been ranked among the most important scientific advances of the mid 20th century. Its impact since the 1950’s has been extraordinary. Today it is a standard tool used by some companies (around 56%) of even moderate size. Linear programming uses a mathematical model to describe the problem of concern. Linear programming involves the planning of activities to obtain an optimal result, i.e., a result that reaches the specified goal best (according to the mathematical model) among all feasible alternatives. Linear Programming as seen by various reports by many companies has saved them thousands to even millions of dollars. Since this is true why isn’t everyone using Linear Programming? Maybe the reason is because there has never been an in-depth experiment focusing on certain companies that do or do not use linear programming. My main argument is that linear programming is one of the most optimal ways of resource allocation and making the most money for any company today. I used (in conjunction with another field supporter – My Dad) the survey method to ask 28 companies that were in Delaware, New Jersey, and Pennsylvania whether they were linear programming users. In addition, I wanted to examine the effect of the use of linear programming across three different but key decision support areas of the participating companies to include (1) Planning (2) Forecasting and (3) Resource Allocation. The companies were selected randomly from the Dunn & Bradstreet Database of companies and also from the CNN and Yahoo Databases of company performances. All these data sources are available free of charge. The three key measures that I wanted to use to examine the impact of LP on company results were EPS, (Earnings per Share; explained later) the ROI%, (Rate on Investment or the Rate of Return; explained later) and Profit. I used these three measures as they are key measures that Wall Street Investors look at when they examine a...
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