Application of Linear Programming for Optimal Investments in Software Company

Abstract

We apply the simplex algorithm which is a branch of linear programming to efficiently determine the allocation of resources required to operate a company in the software development field. The main aim of applying this technique is to maximize the profit of a company under certain limitations. This can be done using the trial-and-error approach. However, this tedious process can be replaced by user-level tools such as Excel which are based on linear programming that will give more accurate results. Small software companies cannot afford to hire a high number of senior programmers to produce the required level of quality and to keep up with the demand for adding new features. On the other hand, lowering the quality of the product will reduce the number of customers and decrease profit. Another aspect is maximizing the utilization of hosting servers which are required for providing the services to customers since the cost of buying servers and maintaining them is extremely high. The simplex algorithm in linear programming will take the specified constraints into account to compute the optimal allocation of the available resources to maximize profit and limit the cost. This paper will present a model that uses the simplex algorithm with a set of constraints to determine how many projects of each type a company should take in one period of time.