Quantitative Analysis for Management

Thirteenth Edition

Chapter 7
Linear Programming Models:
Graphical and Computer
Methods

Copyright © 2018, 2015, 2012 Pearson Education, Inc. All Rights Reserved.
Learning Objectives (1 of 2)
After completing this chapter, students will be able to:

7.1 Identify the basic assumptions and properties of

linear programming (LP).
7.2 Formulate a linear programming problem algebraically.
7.3 Graphically solve any LP problem that has only two variables by
both the corner point and isoprofit line methods.
7.4 Use Excel spreadsheets to solve LP problems.
7.5 Understand the difference between minimization and maximization
objective functions.
7.6 Understand special issues in LP such as infeasibility,
unboundedness, redundancy, and alternative optimal solutions.
7.7 Understand the role of sensitivity analysis.
Chapter Outline
7.1 Requirements of a Linear Programming Problem
7.2 Formulating LP Problems
7.3 Graphical Solution to an LP Problem
7.4 Solving Flair Furniture’s LP Problem using QM for
Windows, Excel 2016, and Excel QM
7.5 Solving Minimization Problems
7.6 Four Special Cases in LP
7.7 Sensitivity Analysis
Introduction
• Many management decisions involve making the most
effective use of limited resources
• Linear programming (LP)
– Widely used mathematical modeling technique
– Planning and decision making relative to resource
allocation
• Broader field of mathematical programming
– Here programming refers to modeling and solving a
problem mathematically
Requirements of a Linear Programming
Problem
• Four properties in common
– Seek to maximize or minimize some quantity (the
objective function)
– Restrictions or constraints are present
– Alternative courses of action are available
– Linear equations or inequalities
LP Properties and
Assumptions
TABLE 7.1 LP Properties and Assumptions

PROPERTIES OF LINEAR PROGRAMS

1. One objective function
2. One or more constraints
3. Alternative courses of action
4. Objective function and constraints are linear – proportionality
and divisibility
5. Certainty
6. Divisibility
7. Nonnegative variables
Formulating LP Problems ( 1 of 2)

• Developing a mathematical model to represent the

managerial problem
• Steps in formulating a LP problem
1. Completely understand the managerial problem being
faced
2. Identify the objective and the constraints
3. Define the decision variables
4. Use the decision variables to write mathematical
expressions for the objective function and the
constraints
• Common LP application – product mix problem
• Two or more products are produced using limited
resources
• Maximize profit based on the profit contribution per unit
of each product
• Determine how many units of each product to produce
Flair Furniture Company ( 1 of 6)

• Flair Furniture produces inexpensive tables and chairs

• Processes are similar, both require carpentry work and
painting and varnishing
– Each table takes 4 hours of carpentry and 2 hours of
painting and varnishing
– Each chair requires 3 of carpentry and 1 hour of
painting and varnishing
– There are 240 hours of carpentry time available and
100 hours of painting and varnishing
– Each table yields a profit of $70 and each chair a profit
of $50
• The company wants to determine the best combination
of tables and chairs to produce to reach the maximum
profit

TABLE 7.2 Flair Furniture Company Data

HOURS REQUIRED TO PRODUCE 1

UNIT
TABLES CHAIRS AVAILABLE HOURS
DEPARTMENT (T) (C) THIS WEEK
Carpentry 4 3 240
Painting and varnishing 2 1 100

Profit per unit $70 $50

• The objective is
Maximize profit
• The constraints are
1. The hours of carpentry time used cannot exceed
240 hours per week
2. The hours of painting and varnishing time used
cannot exceed 100 hours per week
• The decision variables are
T = number of tables to be produced per week
C = number of chairs to be produced per week
• Create objective function in terms of T and C
Maximize profit = $70T + $50C
• Develop mathematical relationships for the two constraints
– For carpentry, total time used is
(4 hours per table)(Number of tables produced)
+ (3 hours per chair)(Number of chairs produced)
– First constraint is
Carpentry time used ≤ Carpentry time available
4T + 3C ≤ 240 (hours of carpentry time)
• Similarly

Painting and varnishing time used

≤ Painting and varnishing time available
2 T + 1C ≤ 100 (hours of painting and varnishing time)

This means that each table produced requires two

hours of painting and varnishing time
– Both of these constraints restrict production capacity
and affect total profit
• The values for T and C must be nonnegative
T ≥ 0 (number of tables produced is greater than or equal to 0)
C ≥ 0 (number of chairs produced is greater than or equal to 0)

The complete problem stated mathematically

Maximize profit = $70T + $50C

subject to
4T + 3C ≤240 (carpentry constraint)
2T + 1C ≤100 (painting and varnishing constraint)
T, C ≥ 0 (nonnegativity constraint)
Graphical Solution to an LP
Problem
• Easiest way to solve a small LP problems is graphically
• Only works when there are just two decision variables
– Not possible to plot a solution for more than two
variables
• Provides valuable insight into how other approaches work
• Nonnegativity constraints mean that we are always
working in the first (or northeast) quadrant of a graph
Graphical Representation of Constraints ( 1 of
11)

FIGURE 7.1 Quadrant Containing All Positive Values

• The first step is to identify a set or region of
feasible solutions
• Plot each constraint equation on a graph
• Graph the equality portion of the constraint equations

4T + 3C = 240
• Solve for the axis intercepts and draw the line
• When Flair produces no tables, the carpentry constraint
is: 4(0) + 3C = 240
3C = 240
C = 80
• Similarly for no chairs:
4T + 3(0) = 240
4T = 240
T = 60
– This line is shown on the following graph
FIGURE 7.2 Graph of Carpentry
Constraint Equation 4T + 3C = 240
FIGURE 7.3 Region that
Any point on or below the constraint plot will not violat
Satisfies the Carpentry
Any point above the plot will
Constraint violate the restriction
• The point (30, 20) lies below the line and satisfies
the constraint
4(30) + 3(20) = 180
• The point (70, 40) lies above the line and does not satisfy
the constraint
4(70) + 3(40) = 400
FIGURE 7.4 Region that Satisfies the Painting and
Varnishing Constraint
• To produce tables and chairs, both departments must
be used
• Find a solution that satisfies both constraints
simultaneously
• A new graph shows both constraint plots
• The feasible region is where all constraints are satisfied
– Any point inside this region is a feasible solution
– Any point outside the region is an infeasible solution
FIGURE 7.5 Feasible Solution Region for the Flair Furniture
Company Problem
Graphical Representation of Constraints ( 10

of 11)

• For the point (30, 20)

Carpentr
y 4T + 3C ≤ 240 hours available (4)

constrain (30) + (3)(20) = 180 hours used
t 2T + 1C ≤ 100 hours available 
Painting (2)(30) + (1)(20) = 80 hours used
constrain
t

• For the point (70, 40)

Carpentr t
y
constrain Painting
constraint
Graphical Representation of Constraints ( 11

of 11)
4T + 3C ≤
240 hours
available

(4)(70) +
(3)(40) =
400 hours
used
2T + 1C ≤ 
100 hours
available
(2)(70) +
(1)(40) =
180 hours
used
• For the point (50, 5)

Carpentr
y 4T + 3C ≤ 240 hours available (4)

constrain (50) + (3)(5) = 215 hours used
t 2T + 1C ≤ 100 hours available
Painting (2)(50) + (1)(5) = 105 hours used

constrain
t
Isoprofit Line Solution Method ( 1 of 7)

• Find the optimal solution from the many possible solutions

• Speediest method is to use the isoprofit line
• Starting with a small possible profit value, graph the
objective function
• Move the objective function line in the direction of
increasing profit while maintaining the slope
• The last point it touches in the feasible region is the
optimal solution
• Choose a profit of $2,100
• The objective function is
$2,100 = 70T + 50C
• Solving for the axis intercepts, draw the graph
• Obviously not the best possible solution
• Further graphs can be created using larger profits
– The further we move from the origin, the larger the
profit
• The highest profit ($4,100) will be generated when the
isoprofit line passes through the point (30, 40)
FIGURE 7.6 Profit line of $2,100 Plotted for the Flair
Furniture Company
FIGURE 7.7 Four
Isoprofit Lines
Plotted for the Flair
Furniture Company
FIGURE 7.7 Four
Isoprofit Lines
Plotted for the Flair
Furniture Company
FIGURE 7.7 Four
Isoprofit Lines
Plotted for the Flair
Furniture Company
FIGURE 7.8 Optimal Solution to the Flair Furniture Problem
Corner Point Solution Method ( 1 of 4)

• The corner point method for solving LP problems

• Look at the profit at every corner point of the feasible
region
• Mathematical theory is that an optimal solution must lie
at one of the corner points or extreme points
FIGURE 7.9 Four Corner Points of the Feasible Region
• Solve for the intersection of the two constraint lines
• Using the elimination method to solve simultaneous
equations method, select a variable to be eliminated
• Eliminate T by multiplying the second equation by −2 and
add it to the first equation
−2(2T + 1C = 100) = −4T −2C = −200
4T + 3C = 240 (carpentry)
−4T − 2C = −200 (painting)
C = 40
• Substitute C = 40 into either equation to solve for T
4T + 3(40) = 240 Thus the
4T + 120 = 240 corner point is
4T = 120 (30, 40)
T = 30
Highest profit – Optimal Solution
TABLE 7.3 Feasible Corner Points and Profits for Flair Furniture

NUMBER OF TABLES (T) NUMBER OF CHAIRS (C) PROFIT = $70T + $50C

0 0 $0
50 0 $3,500
0 80 $4,000
30 40 $4,100
Slack and Surplus (1 of 3)
• Slack is the amount of a resource that is not used
– For a less-than-or-equal constraint
Slack = (Amount of resource available)
− (Amount of resource used)
– Flair decides to produce 20 tables and 25 chairs

4(20) + 3(25) = 155 (carpentry time used)

240 = (carpentry time available)
240 − 155 = 85 (Slack time in carpentry)
 At the optimal solution,
Slack and Surplus (2 of 3) slack is 0 as all 240
hours are used
• Slack is the amount of a resource that is not used
– For a less-than-or-equal constraint
Slack = (Amount of resource available)
− (Amount of resource used)
– Flair decides to produce 20 tables and 25 chairs

4(20) + 3(25) = 155 (carpentry time used)

240 = (carpentry time available)
240 − 155 = 85 (Slack time in carpentry)
Slack and Surplus (3 of 3)
• Surplus is used with a greater-than-or-equal-to constraint
to indicate the amount by which the right-hand side of the
constraint is exceeded
Surplus = (Actual amount) − (Minimum amount)

– New constraint
T + C ≥ 42
– If T = 20 and C = 25, then
20 + 25 = 45
Surplus = 45 − 42 = 3
Summaries of Graphical Solution Methods
TABLE 7.4 Summaries of Graphical Solution Methods
ISOPROFIT METHOD
1. Graph all constraints and find the feasible region.
2. Select a specific profit (or cost) line and graph it to find the slope.
3. Move the objective function line in the direction of increasing profit (or
decreasing cost) while maintaining the slope. The last point it touches
in the feasible region is the optimal solution.
4. Find the values of the decision variables at this last point and
compute the profit (or cost).
CORNER POINT METHOD
1. Graph all constraints and find the feasible region.
2. Find the corner points of the feasible reason.
3. Compute the profit (or cost) at each of the feasible corner points.
4. Select the corner point with the best value of the objective function found
in Step 3. This is the optimal solution.
Solving Flair Furniture’s LP
Problem
• Most organizations have access to software to solve
big LP problems
• There are differences between software implementations,
the approach is basically the same
• With experience with computerized LP algorithms, it
is easy to adjust to minor changes
Using QM for Windows ( 1 of 4)

• Select the Linear Programming module

• Specify the number of constraints (non-negativity is
assumed)
• Specify the number of decision variables
• Specify whether the objective is to be maximized
or minimized
• For Flair Furniture there are two constraints, two decision
variables, and the objective is to maximize profit
PROGRAM 7.1A QM for Windows Linear Programming
Input Screen
PROGRAM 7.1B QM for Windows Data Input for Flair
Furniture Problem
PROGRAM 7.1C
QM for Windows
Output and Graph
for Flair Furniture
Problem
Solving Minimization Problems
• Many LP problems involve minimizing an objective such
as cost
• Minimization problems can be solved graphically
– Set up the feasible solution region
– Use either the corner point method or an isocost line
approach
– Find the values of the decision variables (e.g., X1 and
X2) that yield the minimum cost
Holiday Meal Turkey Ranch ( 1 of 10)

• The Holiday Meal Turkey Ranch is considering buying two

different brands of turkey feed and blending them to
provide a good, low-cost diet for its turkeys
TABLE 7.5 Holiday Meal Turkey Ranch data
COMPOSITION OF
EACH POUND OF
FEED (OZ.)
MINIMUM MONTHLY
INGREDIENT BRAND 1 FEED BRAND 2 FEED REQUIREMENT PER
TURKEY (OZ.)
A 5 10 90
B 4 3 48
C 0.5 0 1.5
Cost per pound 2 cents 3 cents
 Let
X1 = number of pounds of brand 1 feed purchased
X2 = number of pounds of brand 2 feed purchased

Minimize cost (in cents) = 2X1 + 3X2

subject to:
5X1 + 10X2 ≥ 90 ounces (ingredient A constraint)
4X1 + 3X2 ≥ 48 ounces (ingredient B constraint)
0.5X1 ≥ 1.5 ounces (ingredient C constraint)
X1 ≥ 0 (nonnegativity constraint)
X2 ≥ 0 (nonnegativity constraint)
FIGURE 7.10
Feasible Region
for the Holiday
Meal Turkey
Ranch Problem
• Solve for the values of the three corner points
– Point a is the intersection of ingredient constraints C
and B
4X1 + 3X2 = 48
X1 = 3
– Substituting 3 in the first equation, we find X2 = 12
– Solving for point b we find X1 = 8.4 and X2 = 4.8
– Solving for point c we find X1 = 18 and X2 = 0
• Substituting these values back into the objective function
we find
Cost = 2X1 + 3X2
Cost at point a = 2(3) + 3(12) = 42
Cost at point b = 2(8.4) + 3(4.8) = 31.2
Cost at point c = 2(18) + 3(0) = 36

– The lowest cost solution is to purchase 8.4 pounds of

brand 1 feed and 4.8 pounds of brand 2 feed for a total
cost of 31.2 cents per turkey
• Solving using an isocost line
• Move the isocost line toward the lower left
• The last point touched in the feasible region will be the
optimal solution
FIGURE 7.11
Graphical Solution
to the Holiday Meal
Turkey Ranch
Problem Using the
Isocost Line
PROGRAM 7.4 Solution to the Holiday Meal Turkey Ranch
Problem in QM for Windows
PROGRAM 7.5A Excel 2016 Solution for Holiday Meal
Turkey Ranch Problem
Holiday Meal Turkey Ranch (10 of 10)
PROGRAM 7.5B Excel 2016 Formulas for Holiday Meal
Turkey Ranch Problem
Four Special Cases in LP
• Four special cases and difficulties arise at times
when using the graphical approach
1. No feasible solution
2. Unboundedness
3. Redundancy
4. Alternate Optimal Solutions
No Feasible Solution (1 of 2)
• No solution to the problem that satisfies all the constraint
equations
• No feasible solution region exists
• A common occurrence in the real world
• Generally one or more constraints are relaxed until a
solution is found
• Consider the following three constraints
X1 + 2X2  6
2X1 + X  8
2

X1  7
 X1 + 2X26
No Feasible Solution (2 of 2) 2X1 + X28
X17
FIGURE 7.12 A
problem with no
feasible solution
Unboundedness ( 1 of 2)

• Sometimes a linear program will not have a finite solution

• In a maximization problem
– One or more solution variables, and the profit, can be
made infinitely large without violating any constraints
• In a graphical solution, the feasible region will be open
ended
• Usually means the problem has been formulated
improperly
FIGURE 7.13 A Feasible Maximize profit = $3X1 + $5X2
Region That Is subject to X1 ≥5
Unbounded to the Right X2 ≤ 10
X1 + 2X2 ≥ 10
X1, X2 ≥0
Redundancy (1 of 2)
• A redundant constraint is one that does not affect
the feasible solution region
• One or more constraints may be binding
• This is a very common occurrence in the real world
• Causes no particular problems, but eliminating redundant
constraints simplifies the model
Maximize profit = $1X1 + $2X2
subject to X1 + X2 ≤ 20
2X1 + X2 ≤ 30
X1 ≤ 25
X1, X2 ≥0
Redundancy (2 of 2) Maximize profit = $1X1 + $2X2
subject to X1 + X2 ≤ 20
FIGURE 7.14 Problem 2X1 + X2 ≤ 30
with a Redundant X1 ≤ 25
Constraint X1, X2 ≥0
Alternate Optimal Solutions ( 1 of 2)

• Occasionally two or more optimal solutions may exist

• Graphically this occurs when the objective function’s
isoprofit or isocost line runs perfectly parallel to one of the
constraints
• Allows management great flexibility in deciding which
combination to select as the profit is the same at
each alternate solution
Maximize profit = $3X1 + $2X2
subject to 6X1 + 4X2 ≤ 24
X1 ≤3
X1, X2 ≥ 0
FIGURE 7.15 Example of
Maximize profit = $3X1 + $2X2
Alternate Optimal
subject to 6X1 + 4X2 ≤ 24
Solutions
X1 ≤3
X1, X2 ≥ 0
Sensitivity Analysis ( 1 of 2)

• Optimal solutions to LP problems thus far have been

found under deterministic assumptions
– We assume complete certainty in the data and
relationships of a problem
• Real world conditions are dynamic
• Analyze how sensitive a deterministic solution is to
changes in the assumptions of the model
• This is called sensitivity analysis, postoptimality analysis,
parametric programming, or optimality analysis
• Involves a series of what-if? questions concerning
constraints, variable coefficients, and the objective
function
• Trial-and-error method
– Values are changed and the entire model is resolved
• Preferred way is to use an analytic postoptimality analysis
– After a problem has been solved, we determine a
range of changes in problem parameters that will not
affect the optimal solution or change the variables in
the solution
 High Note Sound Company ( 1 of 3)

• The company manufactures quality speakers and stereo

receivers
• Products require a certain amount of skilled artisanship
which is in limited supply
• Product mix LP model
Maximize profit = $50X1 + $120X2
subject to 2X1 + 4X2 ≤ 80 (hours of electricians’
time available)
3X1 + 1X2 ≤ 60 (hours of audio
technicians’ time
available)
X1, X2 ≥ 0
FIGURE 7.16 High Note Sound Company Graphical Solution
• Electrician hours used are
2X1 + 4X2 = 2(0) + 4(20) = 80
– All hours are utilized so slack = 0
– Additional units of a binding constraint will generally
increase profits
• Technician hours used are
3X1 + 1X2 = 3(0) + 1(20) = 20
– Available hours = 60 so slack = 60 − 20 = 40
– Additional units of a nonbinding constraint will only
increase slack
Changes in the Objective Function
Coefficient ( of 2)
1

• Contribution rates in the objective functions fluctuate

– The feasible solution region remains exactly the same
– The slope of the isoprofit or isocost line changes
• Modest increases or decreases in objective function
coefficients may not change the current optimal
corner point
• Know how much an objective function coefficient can
change before the optimal solution would be at a different
corner point
FIGURE 7.17 Changes
in the Receiver
Contribution
Coefficients
QM for Windows ( 1 of 2)

PROGRAM 7.6A Input to QM for Windows High Note Sound

Company Data
PROGRAM 7.6B High Note Sound Company Sensitivity
Analysis Output
Changes in the Technological Coefficients ( 1

of 2)

• Changes in the technological coefficients often reflect

changes in the state of technology
• If the amount of resources needed to produce a
product changes, coefficients in the constraint
equations will change
• Objective function does not change
• May produce significant change in the shape of the
feasible region
• May cause a change in the optimal solution
FIGURE 7.18 Change in the Technological Coefficients for
the High Note Sound Company
Changes in Resources or Right-Hand-Side
Values ( of 3)
1

• Right-hand-side values of the constraints often represent

resources available to the firm
• Additional resources may lead to higher total profit
• Sensitivity analysis about resources helps
answer questions about
– How much should be paid for additional resources
– How much more of a resource would be useful
• Changing the RHS will change the feasible region, unless
the constraint is redundant
• Often changes the optimal solution
• The dual price or dual value
– The amount of change in the objective function value
that results from a unit change in one of the resources
– The dual price for a constraint is the improvement in
the objective function value that results from a one-unit
increase in the right-hand side of the constraint
• The amount of possible increase in the RHS is limited
• If the RHS is increased beyond the upper bound, then
the objective function would no longer increase by the
dual price
• There would be excess (slack) resources or the objective
function may change by an amount different from the
dual price
• The dual price is relevant only within limits
Changes in the Electricians’ Time
Resource
FIGURE 7.19 Changes in the Electricians’ Time Resource
for the High Note Sound Company
FIGURE 7.19 Changes in the Electricians’ Time Resource
for the High Note Sound Company
FIGURE 7.19 Changes in the Electricians’ Time Resource
for the High Note Sound Company
QM for Windows
PROGRAM 7.6B High Note Sound Company Sensitivity
Analysis Output
Copyright