Chapter Guide. This chapter concentrates on model formulation and computations in linear programming (LP). It starts with the modeling and graphical solution of a two-variable problem which, though highly simplified, provides a concrete understanding of the basic concepts of LP and lays the foundation for the development of the general simplex algorithm in Chapter 3. To illustrate the use of LP in the real world, applications are formulated and solved in the areas of urban planning, currency arbitrage, in-vestment, production planning and inventory control, gasoline blending, manpower planning, and scheduling. On the computational side, two distinct types of software are used in this chapter. (1) TORA, a totally menu-driven and self-documenting tutorial program, is designed to help you understand the basics of LP through interactive feed-back. (2) Spreadsheet-based Excel Solver and the AMPL modeling language are commercial packages designed for practical problems.