Linear programming as an aid to financial decision making

Scope and Method of Study: This report consists of a description of linear programming and its uses in financial management. The theme exemplified throughout the report is that linear programming is indeed a viable approach to problem solving in finance. Three possible applications are presented with an analysis of each. One application concerns costing of funds, a second concerns capital budgeting; and the third, budgeting and financial planning. In addition the dual aspects of linear programming and their relevance to financial problems are analyzed in a separate chapter.Findings and Conclusions: The conclusion reached in this report is that linear programming used as a tool in financial decision making is an improvement over past methods. The main attribute of value to the financial manager is that all alternatives of a given situation can be considered within the framework of this single model, linear programming. Also of measurable advantage is the adaptability and flexibility of the technique. Other areas of research along this line include investigation into possible applications of dynamic, integer, and non-linear programming