Models Based on Linear Programming

Abstract

In econometric modelling, we commonly use linear programming based on the existence of an objective function that must be optimised in certain conditions, of which the non-negativity condition is essential. Any econometric model of this category is based on linear programming and consists of a set of linear relations, of which some reflect the objective pursued and the others the economic restrictions and technological restrictions in which the phenomenon reflected by that econometric model is performed. Solving such models based on linear programming uses the Simplex algorithm which has the property of both convergence and duality. The problem of duality is solved in such models by the dual Simplex logarithm. For managers, the use of these models essentially involves the achievement of some re-optimised programs and with parameters that should be consistent with the actual situation the econometric model expresses. Managerial efficiency of organizational entities involved in the adoption of decisions by managers. For this managers in their work reoptimization algorithms and parameterization of the solution obtained by a linear programming model.