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Solving Linear Programming Using Excel Solver

This document provides step-by-step instructions for using Excel Solver to solve linear programming problems. It explains how to 1) load the Solver add-in, 2) formulate the linear programming model from the given data, 3) enter the appropriate formulas to represent the objective function and constraints, 4) conduct trial-and-error testing of potential solutions, and 5) use Solver to find the optimal solution that maximizes or minimizes the objective function subject to the constraints. The example problem is to maximize total profit from producing two fax machine models given limited resources, and the optimal solution found using Solver is to produce 2500 of one model for a maximum profit of $100,000.

Uploaded by

Muhd Shaddetny
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452 views

Solving Linear Programming Using Excel Solver

This document provides step-by-step instructions for using Excel Solver to solve linear programming problems. It explains how to 1) load the Solver add-in, 2) formulate the linear programming model from the given data, 3) enter the appropriate formulas to represent the objective function and constraints, 4) conduct trial-and-error testing of potential solutions, and 5) use Solver to find the optimal solution that maximizes or minimizes the objective function subject to the constraints. The example problem is to maximize total profit from producing two fax machine models given limited resources, and the optimal solution found using Solver is to produce 2500 of one model for a maximum profit of $100,000.

Uploaded by

Muhd Shaddetny
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Solving Linear Programming (LP) using Excel Solver.

First Step: Load the Solver Add-in

- To load the solver add-in, execute the following steps.

1. On the File tab, click Options.


2. Under Add-ins, select Solver Add-in and click on the Go button.
3. Check Solver Add-in and click OK.

4. You can find the Solver on the Data tab, in the Analyze group.
Second step: Formulate the Model from the Data found in the Question.

1. In formatting and solving LP, we need to identify the:


- Decision Variable (level of activity in the company)
- Objective Function (to maximize/minimize the profit/loss)
- Constraints (limitation)
- Parameters (numerical coefficient and constant)
Third step: Put in the Formula into the Model

1. For Decision Variable, you just need to put the basic ADD/SUM formula of
=C15+D15 to get the answer for resources used.
2. For unit cost and unit profit however, you need to use SUMPRODUCT formula.
- Example 1, to get resources used for unit cost, you need to put
=SUMPRODUCT(C16:D16,C15:D15)
- Example 2, to get total profit for unit profit, you need to put
=SUMPRODUCT(C19:D19,C15:D15)
3. Bonus tips: Using the SUMPRODUCT formula of SUMPRODUCT (:,:) is easier
than using normal formula.
- Example of normal formula for total profit, =C19*C15+D19*D15.
Fourth step: Trial and Error

With this formulation, it becomes easy to analyze any trial solution.

1. For this step, we can put it random numbers, limited to the constraint. (Number that
we put in must not be higher than the constraint.)
2. It is advice to play around at this part (trial and error) before going to the next step.
(The main part.)
3. You can see from the picture that we put 500 for Model A and 1000 for Model B,
getting us a total profit of 55000, total decision variable of 1500 and total unit cost
of 200,000.
4. This solution is not yet completed because one of the resources used is not been
optimized. It is not necessary to use trial and error. We shall describe next how the
Excel Solver can be used to quickly find the optimal solution.
Fifth step: Solve the Model

To find the optimal solution, execute the following steps.

1. On the Data tab, in the Analyze group, click Solver.

2. Enter the solver parameters. The result should be consistent with the picture below.
- Put Total Profit at cell E19 or $E$19 in Set Objective section.
- Put Variable Decision at cell C15 and cell D15 or $C$15:$D$15 in By Changing
Variable Cells section.
3. Click Add to enter the following constraint.
- Subject to the Constraints for VB, F15 < = H15 or $F$15 < = $H$15.
- Subject to the Constraints for UC, F16 < = H16 or $F$16 < = $H$15.

4. Check 'Make Unconstrained Variables Non-Negative' and select 'Simplex LP'.


5. Finally, click Solve
6. Choose OK and we get the result.

7. The optimal solution:


Conclusion: It is optimal to produce 0 fax machine Model A and 2500 fax machine
Model B. This solution gives the maximum profit of 100,000. This solution uses
all the resources available according to the constraint in demand of fax machine
and have excess of unit cost, 225,000. Check: 600,000-375,000=225,000.

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