C723: Unit 6 Linear Programming and Inventory Models With complete verified solutions 2025

Linear Programming

A mathematical technique that can be used to identify the value of a variable for a given set of constraints.

Economic Order Quantity

Amount of inventory a business should order to minimize the total amount of inventory costs, including carrying, ordering, and shortage costs.

Inventory

Any goods held in stock of immediate or future use.

Feasible Region

Area of the graph that satisfies all constraints.

Coefficient

Multiplier of the variable, as in linear equations or inequalities.

Constraint

Restriction that limits the degree in which a company can purse its objective.

Ordering Costs

The cost of replenishing inventory, including receiving logistics.

Carrying Costs

The costs of storing inventory, insurance, and managing inventory risk due to damage or theft.

Shortage Costs

The costs resulting from not having an item on the shelf for sale.

Objective Function

The function that seeks to minimize or maximize some quantity.

Demand

The number of items needed, typically per year.