Introduction to LFP

Abstract

This is an introduction to the theory of linear-fractional programming. Here we define the common problem of LFP, give its main economic interpretation, formulate and prove the main lemmas and theorems of LFP and describe some important real-world applications where the use of LFP may prove to be quite useful.

Problems of LFP arise when there appears a necessity to optimize the efficiency of some activity: profit gained by company per unit of expenditure of labor, cost of production per unit of produced goods, nutritiousness of ration per unit of cost, etc. Nowadays because of a deficit of natural resources the use of specific criteria becomes more and more topical. So an application of LFP to solving real-world problems connected with optimizing efficiency could be as useful as in the case of LP.