There are two types of linear programming:
1. Linear Programming- involves no more than 2 variables, linear programming problems can be structured to minimize costs as well as maximize profits. Due to the increasing complexity of business organizations, the role of the management executive as a decision maker is becoming more and more difficult. Linear programming is a useful technique to solve such problems.
The necessary condition is that the data must be expressed in quantitative terms in the form of linear equations and inequalities. The general nature of the business problems in which linear programming can be effectively used are multifaceted. They include purchasing, transportation, job assignments, production scheduling and mixing. Linear programming provides a method of maximizing or minimizing a first degree function subject to certain environmental restrictions or constraints which are usually in the form of equations and inequalities.
2. Simplex method- is an algorithm for solving linear programming with any number of variables. Most real-world linear programming problems have more than two variables and thus are too complex for graphical solution. A procedure called the simplex method may be used to find the optimal solution to such problems. The simplex method is actually an algorithm (or a set of instructions) with which we examine corner points in a methodical fashion until we arrive at the best solution—highest profit or lowest cost. Computer programs (such as Excel OM and POM for Windows) and Excel spreadsheets are available to solve linear programming problems via the simplex method.
(Operations Management, 10th Edition. Pearson Learning Solutions p. 704).
A few examples of problems in which LP has been successfully applied in operations management are:
1. Scheduling school buses to minimize the total distance traveled when carrying students
2. Allocating police patrol units to high crime areas