Linear Programming and Decision Making

Linear Programming and Decision Making

Linear Programming is a widely used and powerful optimization technique which enables planners and decision makers to allocate scarce resources in an optimal way. Once formulated and executed, LP output provides an optimal objective function value given the resource constraints and optimal utilization of resources, e.g. optimal use of scarce resources to meet a production plan, optimal capital allocation across a portfolio to meet a financial plan, or optimal routing to minimize transportation costs.
1. Despite the concrete and seemingly deterministic output of an optimal LP solution, many assumptions may go into the LP formulation.

2. Discuss in detail the specific LP output that addresses assumptions about LP inputs.
3. address over-confidence in decision making. which methods and techniques can be used to minimize over-confidence to the LP information you discussed in Part 1 above.