ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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LINEAR PROGRAMMING Definition
LINEAR PROGRAMMING (LP), in accounting, is the mathematical approach to optimally allocating limited resources among competing activities. It is a technique used to maximize revenue, contribution margin, and profit function; or, to minimize a cost function, subject to constraints. Linear programming consists of two ingredients: (1) objective function and (2) constraints, both of which are linear. In formulating the LP problem, the first step is to define the decision variables that one is trying to solve. The next step is to formulate the objective function and constraints in terms of these decision variables.
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HAIRCUT is the amount of reduction in market value given to securities pledged as collateral, typically in a repurchase agreement or a reverse repurchase agreement. This reduction assures the lender of funds in this type of transaction that, even if the collateral's market value declines, there is time to call for additional collateral to bring the collateral value back up to an acceptable level.
JOB SPECIFICATION is the delineation of the knowledge, skills, and abilities along with the associated education, training, and experience required to successfully perform within a position. The stipulated criteria normally constitutes the minimum recruiting criteria or minimum qualifications for the position