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This document introduces linear programming and its applications in various fields such as business, finance, medicine, and social science. It discusses the use of linear programming for scheduling, production planning, and routing, as well as more complex techniques like integer and non-linear programming. The document also highlights the importance of optimization and related mathematical modeling techniques in real-world scenarios, particularly in airline scheduling.

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12 views1 page

Full-pages-1

This document introduces linear programming and its applications in various fields such as business, finance, medicine, and social science. It discusses the use of linear programming for scheduling, production planning, and routing, as well as more complex techniques like integer and non-linear programming. The document also highlights the importance of optimization and related mathematical modeling techniques in real-world scenarios, particularly in airline scheduling.

Uploaded by

udong lami
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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4.

1: Introduction to Linear Programming Applications in Business, Finance,


Medicine, and Social Science
 Learning Objectives

In this section, you will learn about real world applications of linear programming and related methods.

The linear programs we solved in Chapter 3 contain only two variables, x and y , so that we could solve them graphically. In
practice, linear programs can contain thousands of variables and constraints. Later in this chapter we’ll learn to solve linear
programs with more than two variables using the simplex algorithm, which is a numerical solution method that uses matrices and
row operations. However, in order to make the problems practical for learning purposes, our problems will still have only several
variables. Now that we understand the main concepts behind linear programming, we can also consider how linear programming is
currently used in large scale real-world applications.
Linear programming is used in business and industry in production planning, transportation and routing, and various types of
scheduling. Airlines use linear programs to schedule their flights, taking into account both scheduling aircraft and scheduling staff.
Delivery services use linear programs to schedule and route shipments to minimize shipment time or minimize cost. Retailers use
linear programs to determine how to order products from manufacturers and organize deliveries with their stores. Manufacturing
companies use linear programming to plan and schedule production. Financial institutions use linear programming to determine the
mix of financial products they offer, or to schedule payments transferring funds between institutions. Health care institutions use
linear programming to ensure the proper supplies are available when needed. And as we’ll see below, linear programming has also
been used to organize and coordinate life saving health care procedures.
In some of the applications, the techniques used are related to linear programming but are more sophisticated than the methods we
study in this class. One such technique is called integer programming. In these situations, answers must be integers to make sense,
and can not be fractions. Problems where solutions must be integers are more difficult to solve than the linear programs we’ve
worked with. In fact, many of our problems have been very carefully constructed for learning purposes so that the answers just
happen to turn out to be integers, but in the real world unless we specify that as a restriction, there is no guarantee that a linear
program will produce integer solutions. There are also related techniques that are called non-linear programs, where the functions
defining the objective function and/or some or all of the constraints may be non-linear rather than straight lines.
Many large businesses that use linear programming and related methods have analysts on their staff who can perform the analyses
needed, including linear programming and other mathematical techniques. Consulting firms specializing in use of such techniques
also aid businesses who need to apply these methods to their planning and scheduling processes.
When used in business, many different terms may be used to describe the use of techniques such as linear programming as part of
mathematical business models. Optimization, operations research, business analytics, data science, industrial engineering hand
management science are among the terms used to describe mathematical modelling techniques that may include linear
programming and related met
In the rest of this section we’ll explore six real world applications, and investigate what they are trying to accomplish using
optimization, as well as what their constraints might represent.

Airline Scheduling
Airlines use techniques that include and are related to linear programming to schedule their aircrafts to flights on various routes,
and to schedule crews to the flights. In addition, airlines also use linear programming to determine ticket pricing for various types
of seats and levels of service or amenities, as well as the timing at which ticket prices change.
The process of scheduling aircraft and departure times on flight routes can be expressed as a model that minimizes cost, of which
the largest component is generally fuel costs.
Constraints involve considerations such as:
Each aircraft needs to complete a daily or weekly tour to return back to its point of origin.
Scheduling sufficient flights to meet demand on each route.
Scheduling the right type and size of aircraft on each route to be appropriate for the route and for the demand for number of
passengers.

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