Objective Functions In Inventory Management

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so called decision variables usually denoted by x1, x2,….xn are conducted.
Objective functions : the objective function of each lp problem is expressed in terms of decision variables to optimize the criterian of optimality such as profit, cost, revenue, distance etc.
In its general form, it is represented as : Optimize (maximise or minimise) Z= c1x1 + c2x2 +…….+ cnxn
Where z is the measure of performance variables, which is a function of x1, x2,…..xn. quantities c1, c2,…… cn are parameters that represents the contribution of a unit of the respective variable x1, x2, …….. xn to the measure of performance z. the optimal value of the given is obtained by the graphical method or simplex method.
The constraints : there are always certain
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Inventory Management
A firm is faced with the problem of inventory management of raw materials and finished products. The objective function in inventory management is to minimise inven­tory cost and the constraints are space and demand for the product. LP technique is used to solve this problem.
4. Marketing Management:
LP technique enables the marketing manager in analysing the audience coverage of advertising based on the available media, given the advertising budget as the constraint. It also helps the sales executive of a firm in finding the shortest route for his tour. With its use, the marketing manager determines the optimal distribution schedule for transporting the product from different warehouses to various market locations in such a manner that the total transport cost is the minimum.
5. Financial Management:
The financial manager of a firm, mutual fund, insurance company, bank, etc. uses the LP technique for the selection of investment portfolio of shares, bonds, etc. so as to maximise return on investment.
6. Blending Problem:
LP technique is also applicable to blending problem when a final product is produced by mixing a variety of raw materials. The blending problems arise in animal feed, diet problems, petroleum products, chemical products, etc. In all such cases, with raw materials and other inputs as constraints, the objective function is to minimise the cost of final
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Discuss the procedure of solving a linear programming problem. Consider the following situation. Sky Ltd. has two products Cloud and Wind. To produce one unit of Cloud, 2 units of material X and 4 units of material Y are required. To produce one unit of Wind, 3 units of material X and 2 units of material Y are required. As the raw material X is in short supply so not more than 16 units of material X can be used. Atleast 16 units of material Y must be used in order to meet the committed sales of Cloud and Wind. Cost per unit of material X and material Y are Rs. 2.50 and Rs. 0.25 respectively. The selling price per unit of cloud and wind are Rs. 12 and Rs. 16 respectively. You are required to formulate mathematical model, and to solve it for maximum

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