Skip to Main Content
Linear Programming and Resource Allocation Modeling
book

Linear Programming and Resource Allocation Modeling

by Michael J. Panik
November 2018
Intermediate to advanced content levelIntermediate to advanced
448 pages
12h 24m
English
Wiley
Content preview from Linear Programming and Resource Allocation Modeling

1Introduction

This book deals with the application of linear programming to firm decision making. In particular, an important resource allocation problem that often arises in actual practice is when a set of inputs, some of which are limited in supply over a particular production period, is to be utilized to produce, using a given technology, a mix of products that will maximize total profit. While a model such as this can be constructed in a variety of ways and under different sets of assumptions, the discussion that follows shall be limited to the linear case, i.e. we will consider the short‐run static profit‐maximizing behavior of the multiproduct, multifactor competitive firm that employs a fixed‐coefficients technology under certainty (Dorfman 1951, 1953; Naylor 1966).

How may we interpret the assumptions underlying this profit maximization model?

  1. All‐around perfect competition – the prices of the firm’s product and variable inputs are given.
  2. The firm employs a static model – all prices, the technology, and the supplies of the fixed factors remain constant over the production period.
  3. The firm operates under conditions of certainty – the model is deterministic in that all prices and the technology behave in a completely systematic (nonrandom) fashion.
  4. All factors and products are perfectly divisible – fractional (noninteger) quantities of factors and products are admissible at an optimal feasible solution.
  5. The character of the firm’s production activities, which represent ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Model Building in Mathematical Programming, 5th Edition

Model Building in Mathematical Programming, 5th Edition

H. Paul Williams
Fundamentals of Deep Learning, 2nd Edition

Fundamentals of Deep Learning, 2nd Edition

Nithin Buduma, Nikhil Buduma, Joe Papa

Publisher Resources

ISBN: 9781119509448Purchase book