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    Limiting Factors

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    ERIC
    The document discusses linear programming techniques for managing limiting factors and determining optimal production plans. It provides objectives for identifying limiting factors, formulating linear programming problems, and determining optimal solutions graphically and algebraically. An example problem demonstrates the steps of defining variables, formulating constraints, the objective function, graphing the constraints and objective, and determining the optimal solution at the point where the objective function intersects the feasible region.

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    Limiting Factors

    Uploaded by

    ERIC
    2K views7 pages
    The document discusses linear programming techniques for managing limiting factors and determining optimal production plans. It provides objectives for identifying limiting factors, formulating linear programming problems, and determining optimal solutions graphically and algebraically. An example problem demonstrates the steps of defining variables, formulating constraints, the objective function, graphing the constraints and objective, and determining the optimal solution at the point where the objective function intersects the feasible region.

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    The document discusses linear programming techniques for managing limiting factors and determining optimal production plans. It provides objectives for identifying limiting factors, formulating linear programming problems, and determining optimal solutions graphically and algebraically. An example problem demonstrates the steps of defining variables, formulating constraints, the objective function, graphing the constraints and objective, and determining the optimal solution at the point where the objective function intersects the feasible region.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2K views7 pages

    Limiting Factors

    Uploaded by

    ERIC
    The document discusses linear programming techniques for managing limiting factors and determining optimal production plans. It provides objectives for identifying limiting factors, formulating linear programming problems, and determining optimal solutions graphically and algebraically. An example problem demonstrates the steps of defining variables, formulating constraints, the objective function, graphing the constraints and objective, and determining the optimal solution at the point where the objective function intersects the feasible region.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 7
    At a glance
    Powered by AI
    The key takeaways are about identifying and managing limiting factors using techniques like linear programming to maximize contribution within resource constraints.

    The steps involved in managing a single limiting factor are: 1) Identify the limiting factor, 2) Calculate contribution per unit for each product, 3) Calculate contribution per unit of limiting factor, 4) Rank products, 5) Make products in rank order until resources are used up.

    The stages involved in linear programming are: 1) Define the unknowns, 2) Frame the constraints equation, 3) State the objective functions, 4) Graph the constraints, 5) Graph objective function, 6) Establishing feasible values for the unknowns.

    Session Objectives

     Identify a single limiting factor


     Determine the optimal production plan where an
    Limiting Factors organisation is restricted by a single limiting factor
     Formulate a linear programming problem involving
    two variables
     Determine the optimal solution to a linear
    programming problem using a graphical approach
     Use simultaneous equations, where appropriate, in
    the solution of a linear programming problem

    Managing Single Limiting


    Managing Limiting Factors
    Factor
     A factor that restricts output.  Step 1: Identify the limiting factor
     Objective should be to concentrate on  Step 2: Calculate contribution per unit
    those products/services that yield the for each product
    largest contribution per limiting factor.  Step 3: Calculate contribution per unit of
     Limiting factor decisions involve limiting factor
    determination of the contribution earned Contribution per unit of limiting factor
    by each different product from each unit = Contribution per unit / Units of limiting factor
    of the limiting factor. required per unit
    Managing Single Limiting
    Example
    Factor ....Cont’d
     Step 4: Rank products
     Step 5: Make products in rank order until
    scarce resources are used up

    Solution

     Step 1: Identify the limiting factor  Step 3: Calculate contribution per unit of
     Machine hours limiting factor
     Step 2: Calculate contribution per unit Contribution per unit of limiting factor
    for each product = Contribution per unit / Units of limiting factor
     Given as X £12, Y £10, Z £6 required per unit
    Thus, X = £12 / 6 = £2, Y= £10 / 2 = £5, Z=£6 /
    1 = £6
     Step 4: Rank products ( make product
    with highest contribution per unit of
    limiting factor first)
     Ranking: Z, Y, X
     Step 5: Make products in rank order until
    scarce resources are used up
     First 2000 units of Z should be made, then
    2000 units of Y and finally with left machine
    hours X

    Managing Multiple Limiting Necessary Condition for Linear


    Factor Programming

     Linear programming is an operations  There must be a linear relationship


    research technique between the factors.
     It can be used to decide on the optimum
    use of scarce resources.
    Stages in Linear Programming Example

     Step 1: Define the unknowns


     Step 2: Frame the constraints equation
     Step 3: State the objective functions
     Step 4: Graph the constraints
     Step 5: Graph objective function
     Step 6: Establishing feasible values for the
    unknowns

    Step 2: Formulate the


    Solution: Step 1
    constraints

    Let:
     x = number of units of X produced and
    sold during the year
     y= number of units of Y produced and
    sold during the year
    Step 3: Formulate the
    Step 4: Graph the constraints
    objective functions

     Objective is Maximise Contribution. So  2.5x + 5y ≤ 10000


    objective is: 2.5x + 5y = 10000
     Maximise 15x + 25y  Put x = 0, then y = 2000
    Y= 2000
     If y= 0, x = 2.5x +0=10000, X= 4000
     Draw the two points (0, 2000) and (4000, 0) on
    a graph to represent the line for labour
    constraint

    Step 5: Graph objective


    Step 4: Graph the constraints
    function

     Take any reasonable value of maximum


    contribution
     15x + 25y = 37500
     If x = 0, y = 1500 and If y = 0, x= 2500
    Y units  To draw 15x + 25y =37,500 draw (0,
    1500) and (2500,0) as the two points.
     NOTE: Any contribution line can be
    drawn. The purpose is only to establish
    X units the slope
    Step 5: Graph objective Step 6: Determine the optimal
    function solution

     Method 1: Calculate the contribution


    earned at each point A, B and C.
     Point A =£15 * 0 + £25 * 2000=£50000
     Point B = £15 * 3000 +£25 *500 =£57,500
     Point C = £15 * 3000 = $45000
     Pont B gives maximum contribution

    Step 6: Determine the optimal


    Algebraic Solutions
    solution
     Method 2: Slide the objective function  Optimal solutions can be arrived at using
    line away from the origin to the furthest simultaneous equations instead of
    possible point graphs.
     The optimal solution is B where sales
    constraint intersects labour constraint
    Example: Solution

     John manufactures garden chairs and  Let x = number of garden chairs produced each
    armchairs. Each product passes through a week
    cutting process and an assembling process.  Y= number of armchairsproduced each week
    One garden chair makes a contribution of $50  Constraints are:
    and takes 6 hours cutting time and 4 hours
    assembly time. One armchair makes a  6x +3y =36
    contribution of $40 and takes 3 hours cutting  4x +8y =48 with x ≥0, y ≥0
    time and 8 hours assembly time There is a  Solving for x and y gives, x = 4 and y= 4
    maximum of 36 cutting hours available each  Thus maximum contribution = 4 x $50 + 4
    week and 48 assembly hours X$40= $360
     Find the output that maximises contribution.

    Limitations of Linear
    Programming

     Linear relationships must exist


     Only suitable when there is only one
    objective function
     It is assumed that variables are
    completely divisible
     Assumed that situation remains static in
    all respects

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