Linear programming can be defined as a way of determining the best possible outcome subject to some constraints; it is very helpful in solving a variety of problem related to business, finance, budgeting etc…. Here is the list of some of the applications of linear programming –
1. It helps in selecting a product mix which maximizes the profit which is subject to various constraints like production, material management, manpower and financial constraints.
2. It also helps in the choice of short term financing as compared to long term financing subject to cost related to raising long or short term funds.
3. It also helps in determination of capital budget so that company can attain highest net present value from investing in project which again is subject to constraints like availability of capital, management attitude, creditor’s reaction and government approach towards the project.
Apart from above linear programming has many applications in the day to day operations of the company and therefore a very useful concept for company to adopt.