Contents xiii
Chapter 4 Linear Programming Applications in
Marketing, Finance, and Operations
Management 153
4.1 Marketing Applications 154
Media Selection 155
Marketing Research 158
4.2 Financial Applications 161
Portfolio Selection 161
Financial Planning 164
4.3 Operations Management Applications 168
A Make-or-Buy Decision 168
Production Scheduling 172
Workforce Assignment 179
Blending Problems 183
Summary 188
Problems 189
Case Problem 1 Planning an Advertising Campaign 202
Case Problem 2 Phoenix Computer 203
Case Problem 3 Textile Mill Scheduling 204
Case Problem 4 Workforce Scheduling 205
Case Problem 5 Duke Energy Coal Allocation 207
Appendix 4.1 Excel Solution of Hewlitt Corporation Financial
Planning Problem 210
Chapter 5 Advanced Linear Programming
Applications 214
5.1 Data Envelopment Analysis 215
Evaluating the Performance of Hospitals 216
Overview of the DEA Approach 216
DEA Linear Programming Model 217
Summary of the DEA Approach 222
5.2 Revenue Management 223
5.3 Portfolio Models and Asset Allocation 229
A Portfolio of Mutual Funds 229
Conservative Portfolio 230
Moderate Risk Portfolio 232
5.4 Game Theory 236
Competing for Market Share 236
Identifying a Pure Strategy Solution 238
Identifying a Mixed Strategy Solution 239
Summary 247
Glossary 247
Problems 248