# Activity analysis

### From Glossary

An approach to micro-economics for which a system is composed of elementary
functions, called *activities*, which influenced the early
growth of linear programming. An insightful way to view
an activity in a standard form linear program is that negative
coefficients represent input requirements and positive coefficients
represent outputs:

In general, the reduced cost represents the net worth of the activity for the prices ,

This leads to an economic interpretation of not only linear programming but also of the simplex method: agents (activity owners) respond instantaneously to changes in prices, and the activity with the greatest net revenue wins a bid to become active (basic), thus changing the prices for the next time (iteration).

In this context, activities can be regarded as
*transformations*, from inputs to outputs. Three prevalent
transformations are: *form*, *place* and *time*.