The graphical method of linear programming (LP) discussed in Chapter 7 is useful for understanding how to formulate and solve small LP problems. The purpose of this chapter is to go one step further and show how a large number of real-life problems can be modeled using LP. We do this by presenting examples of models in the areas of marketing research, media selection, production mix, labor scheduling, production scheduling, ingredient mix, and financial portfolio selection. We will solve many of these LP problems using Excel’s Solver and QM for Windows.

Although some of these models are relatively small numerically, the principles developed here are definitely applicable to larger problems. Moreover, this practice in “paraphrasing” LP model formulations should help you to develop skill in applying the technique to other, less common applications.