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Category:Computer hardwarePerhaps you’ve heard of the term “linear programming.” That is the process of taking an optimization problem and solving it through linear equations, which are based on the concept of adding (or subtracting) the same amount of one variable to the value of another variable until you reach a solution that is in the optimal range.
This is an excellent model in the world of business. I have known plenty of hard-nosed businessmen who literally look at the P&L statement and consider how to balance it out by adding or subtracting the same amount of money from every budget item.
Linear programming is a great way to come up with an optimization problem for your business—but should you ever use it in your problem-solving process?
There’s a good reason that this type of thinking has been embraced in business.
You will never solve an optimization problem with a single variable. However, it is the best way to begin a long and arduous process that involves too many variables to solve with a linear approach. If you’re looking to find a way to improve some aspect of your business, there’s almost always an optimization problem you can solve by adding or subtracting just one variable.
Let’s look at a few examples.
Multiple Goals
Linear programming is the best way to solve something like the problem of improving your profit, your team’s productivity, or your customer satisfaction. Each of these goals might have multiple factors involved in their creation.
Here’s an example of one way to handle an optimization problem with multiple goals.
Profit ($)
Team Productivity (W-Hours per T-Day)
Customer Satisfaction Rating
Let’s say your ultimate goal is to increase profit. That means you have three variables involved in that goal:
Price
Days Delivered
$ Per Sale
Would you ever solve that problem with a single variable?
Let’s say you believe your profit would increase by a net of $2,000 per year if you could decrease your days delivered by 30 hours.
That is a linear equation. However, the equation you use to describe your business is:
Take the ln of both sides:
At first glance, this might look like it is a perfect solution for your problem. The http://www.skyhave.com/upload/files/2022/06/6IcwsD7iwvT4sBPsjdNv_07_9e707c0c90ffd431515693c2fdee67ba_file.pdf
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