Optimization methods in Linear programming - Lab Report Example

SABIC, Saudi Basic Industries Corporation, is one among the mainstream manufactures of metals, plastics, chemicals, and fertilizers (SABIC, 2014). The manufacturing of metal and plastics indicates that the company is one among the busiest in the world as the consumption of metal and plastics is in the increase due to demand for building/construction materials, packaging, and insulation material (SABIC, para. 1-5). However, while the company also manufactures chemicals and fertilizers, it is expected that the management of all activities can be hectic.

Nevertheless, the company has a variety of technical solutions that provide automated management of resources. However, where automated machinery is required, it is expected that supervision regarding functionality of the system is minimal and at times seasonally fluctuating. Thus, one among the major problems that the company is currently facing include the management of resources to yield the best results. Regarding this problem, the company is not doing anything wrong to limit its capacity capabilities; on the contrary, the company appreciates the need to optimize the current system such that it can lead to minimized costs of production and holding inventory.

The overall performance of the company is determined by how well configured an automated systems in making optimal use of the allocated resources. In the production of the products identified above, SABIC is faced with two levels of problems that require linear programming to solve; such that the output of the company meets the fluctuating demand. Firstly, the company produces different types of products whose demand varies seasonally – the company in this case is unable to accurately predict how much demand it would be facing in the coming financial period.

Secondly, provided that demand fluctuates with reference to the type of products such as fertilizers which are