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97 viewsChapter 2 Part 1 3 Linear Programming Model Formulation and Graphical Solution
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/ 63
LINEAR PROGRAMMING:
MODEL FORMULATION
Chapter 2 — Part One INTRODUCTION
Many major decisions faced by a manager focus on the best way to
achieve the objectives of the firm, subject to the restrictions placed on
the manager by the operating environment.
One of the most frequent objectives of business forms is to gain the
most profit possible or, in other words, to maximize profit (or minimize
cost).
When a manager attempts to solve a general type of problem by
seeking an objective that is subject to restrictions, the management
science technique called linear programming is frequently used. INTRODUCTION
* There are three steps in applying the linear programming technique:
First, the problem must be identified as being solvable by linear
programming.
Second, the unstructured problem must be formulated as a
mathematical model.
Third, the model must be solved by using established mathematical
techniques. INTRODUCTION
* The linear programming technique derives its name from the fact that
the functional relationships in the mathematical model are linear, and
the solution technique consists of predetermined mathematical
steps—that is, a program. MODEL FORMULATION
» A linear programming model consists of certain common components
and characteristics. The model components include decision variables,
an objective function, and model constraints, which consist of decision
variables and parameters.
|. Decision variables are mathematical symbols that represent levels
of activity by the firm.
2. The objective function is a linear mathematical relationship that
describes the objective of the firm in terms of the decision variables.
The objective function always consists of either maximizing or
minimizing some value. MODEL FORMULATION
The model constraints are also linear relationships of the decision
variables; they represent the restrictions placed on the firm by the
operating environment.
The actual numeric values in the objective function and the
constraints, such as 40 hours of available labor, are parameters. MODEL FORMULATION
(objective function)
maximize Z = $40x, + 50x,
subject to
(model constraints) a Ix, + 2x, $ 40
(40 & 120 are parameters) 4x, + 3x, $ 120
XX), 20
(decision variables) GEORGE B. DANTZIG A MAXIMIZATION MODEL EXAMPLE
* Beaver Creek Pottery Company produces clay bowls and mugs from
two resources—abor and clay. Given these two limited resources, the
company desires to know how many bowls and mugs to produce each
day to maximize profit. This is generally referred to as a product mix
problem type. The two products have the following resource
requirements for production and profit per item produced:
eee eee
Labor Clay Profit
Product (hrunit) (lb/unit) (S/unit)
Bowl 1 4 40
Mug 3 50 A MAXIMIZATION MODEL EXAMPLE
There are 40 hours of labor and 120 pounds of clay available each day for
production. We will formulate the problem as a linear programming model
by defining each component of the model separately and then combining
the components into a single model. The steps in this formulation process
are summarized as follows:
SUMMARY OF LP MODEL FORMULATION STEPS:
Step I: Define the decision variables
How many bowls and mugs to produce
Step 2: Define the objective function
Maximize profit
Step 3: Define the constraints
The resources (clay and labor) available STEP 1: DECISION VARIABLES
* The decision confronting management in this problem is how many
bowls and mugs to produce. The two decision variables represent the
number of bowls and mugs to be produced on a daily basis. The
quantities to be produced can be represented symbolically as
x, = number of bowls to produce
X2 = number of mugs to produce STEP 2: THE OBJECTIVE FUNCTION
The objective of the company is to maximize profit. Total profit, which will be
defined symbolically as Z, can be expressed mathematically as $40x, + $50x,.
By placing the term maximize in front of the profit function, we express the
objective of the firm—to maximize total profit:
maximize Z = $40x, + 50x,
where
Z = total profit per day
$40x, = profit from bowls
$50x, = profit from mugs STEP 3: MODEL CONSTRAINTS
+ In this problem, two resources are used for production—labor and
clay—both of which are limited.
a. For each bow! produced, | hour of labor is required, therefore 1x,
b. For each mug produced, 2 hours of labor is required, therefore 2x»
* The total labor used by the company is the sum of the individual
amounts of labor used for each product:
Ix, + 2x9 STEP 3: MODEL CONSTRAINTS
+ However, the amount of labor represented by Ix, + 2x, is limited to
40 hours per day; thus, the complete labor constraint is
Ix, + 2x) $ 40 hr.
* The “‘less than or equal to” (S) inequality is employed instead of an
equality (=) because the 40 hours of labor is a maximum limitation that
can be used, not an amount that must be used. STEP 3: MODEL CONSTRAINTS
* The constraint for clay is formulated the same way as the labor
constraint:
a. For each bowl produced, 4 pounds of clay is required, therefore 4x,
b. For each mug produced, 3 pounds of clay is required, therefore 3x2
© Given that the amount of clay available for production each day is 120
pounds, the material constraint can be formulated as
4x, + 3x, $ 120 Ib. STEP 3: MODEL CONSTRAINTS
» A final restriction is that the number of bowls and mugs must either be
zero or a positive value because it is impossible to produce negative
items. These restrictions are referred to as nonnegativity
constraints and are expressed mathematically as
x, 20,x, 20 COMPLETE LINEAR PROGRAMMING
MODEL
* The complete linear programming model for this problem can now be
summarized as follows:
maximize Z = $40x, + 50x,
subject to
Ix, + 2x) $ 40
4x, + 3x, S$ 120
Xp,X 20 COMPLETE LINEAR PROGRAMMING
MODEL
* The solution of this model will result in numeric values for x, and x,
that will maximize total profit, Z. As one possible solution, consider: x, =
5 bowls and x, = 10 mugs. First, we will substitute this hypothetical
solution into each of the constraints in order to make sure that the
solution does not require more resources than the constraints show
are available:
(5) + 2(10) < 40
25 < 40
And
(5) + 3(10) < 120
50 < 120 FEASIBLE SOLUTION
* Because neither of the constraints is violated by this hypothetical
solution, we say the solution is feasible (i.e., possible).
* Substituting these solution values in the objective function gives Z =
40(5) + 50(10) = $700. However, for the time being, we do not have
any way of knowing whether $700 is the maximum profit. INFEASIBLE SOLUTION
* Now consider a solution of x, = 10 bowls and x, = 20 mugs. This
solution results in a profit of
Z = $40(10) + 50(20)
Z = 400 + 1,000
= $1,400
+ Although this is certainly a better solution in terms of profit, it is
infeasible (ie, not possible) because it violates the resource
constraint for labor:
1(10) + 2(20) < 40
50 £40 OPTIMAL SOLUTION
* The solution to this problem must maximize profit without violating
the constraints. The solution that achieves this objective is x, = 24
bowls and x, = 8 mugs, with a corresponding profit of $1,360. The
determination of this solution is shown using the graphical solution
approach which will be explained in our next lesson. DIN ON
PROGRAMMING:
GRAPHICAL
SOLUTION
ae at * Following the formulation of mathematical model, the
Graph ical next stage in the application of linear programming to
Solutio ns of a decision-making problem is to find the solution of the
- model.
L tnear + Acommon solution is to solve algebraically the set of
7 mathematical relationships that form the model either
Programming zi
manually or using a computer program, thus
Models determining the values of the decision variables.
However, because the relationships are linear, some
models and solutions can be illustrated graphically. Graphical
Solutions of
Linear
Programming
Models
* The graphical method is realistically limited to models
with only two decision variables, which can be
represented on a graph of two dimensions. Models
with three decision variables can be graphed in three
dimensions, but the process is quite cumbersome, and
models of four or more decision variables cannot be
graphed at all.
* Although the graphical method is limited as a solution
approach, it is very useful at this point in our
presentation of linear programming in that it gives a
picture of how a solution is derived.
* Graphs can provide a clearer understanding of how the
mathematical solution approaches presented in
subsequent chapters work, and thus, a better
understanding of the solution. = * The product mix model will be used to demonstrate the
Gr ap hical graphical interpretation of a linear programming problem
. Recall that the problem describes Beaver Creek Pottery
Solution of a Cripein’s eae ptts deedde haw many Bowe and moe
to produce daily, given limited amounts of labor and clay.
Maxi m wat ton The complete linear programming model was formulated
Model *
maximize Z = $40x, + 50x,
subject to
x, + 2x, $40 hr. of labor
4X,+ 3% £120 Ib. of clay
XX, 20
where Graphical
Solution of a
Maximization
Model
Figure 2.2 is a set of coordinates
for the decision variables x, and x,,
on which the graph of our model
will be drawn. Note that only the
Positive quadrant is drawn (i.e.,
the quadrant where x, and x, will
FIGURE 2.2
Coordinates for
graphical analysis 1. Constraint
lines are
plotted as
equations.
The first step in drawing the graph of the model is to plot
the constraints on the graph. this is done by treating both
constraints as equations (or straight lines) and plotting
each line on the graph.
(Line 1) x, +2x, < 4o hr. of labor
(Line 2) 4x,+ 3x, $120 Ib. of clay
Let’s consider the labor constraint line first
X, + 2X, = 40
Asimple procedure for plotting this line is to determine
two points that are on the line and then draw a straight
line through the points. One point can be found by letting
x, =o and solving x,:
(0) + 2x, = 40
%,=20
Thus, one points at the coordinates x, = 0 and x, = 20. 1. Constraint
lines are
plotted as
equations.
Asecond point can be found by letting x2 = o and
solving for xa:
x, + 2(0) = 40
X,=40
Now we have a second point, x1 = 40, x2=0
Thus, for the labor constraint, the first point is x, =o
and x, = 20, and second point, x, = 40, x, = 0. This is Line
1 Graphical
Solution of a FIGURE 2.3
Maximization Graph ofthe labor
Model
The line on the graph representing
this equation is drawn by
connecting these two points, as
shown in Figure 2.3.
— EEE E EE 1. Constraint
lines are
plotted as
equations.
We draw the line for the clay constraint (Line 2) the same
way as the one for the labor constraint—by finding two
points on the constraint line and connecting them with a
straight line. First, let x, = 0 and solve for x,
4(0) + 3x, =120
X,= 40
Performing this operation results in a point, x, = 0, x, = 40.
Next, we let x, = 0 and then solve for x,:
4X, +3(0) = 120
4X, = 120
30
This operation yields a second point, x, = 30, X= 0.
Thus, for the clay constraint, the first point is x, =o and x, =
40, and second point, x, = 30, x, = 0. This is Line 2. Graphical
Solution of @ cure zs
Maximization The concn
Model
Plotting these points on the graph
and connecting them with a line
gives the constraint line and area
Line 2
for clay, as shown in Figure 2.5.
oO!
10 20 30 40 50 60 x, ; 2. The Optimal
Solution
Point
The second step in the graphical
solution method is to locate the
points in the feasible solution area
that may result in the greatest
total profit.
Optimal solution
coordinates 3. The
Solution
Values
The third step in the graphical solution approach is to
solve for the values of x, and x, once the possible
optimal solution points have been found.
Point Ais x, = 0 and x, = 20
Point Cis x, = 30 and x, =0
But what are the coordinates of point B?
It is possible to determine the x, and x, coordinates of
point B directly from the graph, as shown in 2.11. The
graphical coordinates corresponding to point B in
Figure 2.12 are x, = 24 and x, = 8. However, unless an
absolutely accurate graph is drawn, it is frequently
difficult to determine the correct solution directly from
the graph. 3. Th * Amore exact approach is to determine the solution
- Cc values mathematically once the possible optimal
So lu tion solution points on the graph has been determined.
* The values of x, and x, coordinates of point B can be
Va l ues found by solving the two equations simultaneously:
* First, we convert both equations to functions of x,:
X, + 2X, = 40
X, = 40-2x,
and
4X, + 3X, =120
4X, = 120-3x,
X, = 30—(3X,/4) Th + Now, we let x, in the first equation equal x, in the second
3. The — csuvon
Solution 40-2x, = 30-(3%/4)
* and solve for x2:
Values eee
[40 - 2x, = 30-3x2/4] 4
160 ~8x, = 120 -3x,
8x, — 3x, = 160-120
5X. = 40
=8
or 3 Th * Substituting x, = 8 into either one of the original
. iB equations gives a value for x,:
Solution x= 40-202
X,= 40- 2(8)
Values a
%,=24
* Thus, the coordinates for point B are x, = 24 and x, =8
Substituting these values into the objective function
gives us the following profit for point B:
Z = $40X, + 50x,
Z = $40(24) + 50(8)
= $1,360 3 The * Point A (x, = 0, x, = 20) will give us a profit of:
Z = $40X, + 50x,
Solution Z = $40(0) + 50(20)
Values —
* Point C (x1 = 30, x, = 0) will give us a profit of:
Z = $40X, + 50x,
Z = $40(30) + 50(0)
= $1,200
* Thus, the optimal solution is point B (x1 = 24, x, = 8)
which will give us a maximum profit, Z, of $1,360 Solutions at All
Corner Points
Figure 2.12 shows the solution
values for all three points, A, B,
and C, and the amount of profit, Z,
at each point.
FIGURE 2.12
Solutions at all
corner points Slack
Variables
Aslack variable is a variable that is added to an
inequality constraint to transform it into an equality.
In our example, a slack variable would mean a portion
of unused resources, say, an unused labor or unused
clay.
The complete linear programming model can be
written in what is referred to as standard form with
slack variables as follows:
maximize Z = $40x, + 50x, + 0S, + 0S,
subject to
% 42,45, =
4X, + 3% +5, = 120
Nay Xap Sy) 5220 Slack * The solution values, including the slack at each solution
Variab les point, are summarized as follows:
Solution Summary with Slack
Point Solution Values z
A x, = O bowls, 20 mugs $1,000
$1,360
$1,200 Slack Variables
Figure 2.14 shows the graphical
solution of this example, with slack
variables included at each solution
point.
FIGURE 2.14
Solutions at points
A, B, and C with
slack
%
40
4x, + 3x, + 8)= 120
x=0
%=20
520
x =24 S * The steps for solving a graphical linear programming
um mary O model are summarized here:
the 1. Plot the model constraint as equations on the graph;
then, considering the inequalities of the constraints,
G rap hica l indicate the feasible solution area.
. 2. Solve simultaneous equations at each corner point to
Solution find the solution values at each point.
St 3. Substitute these values into the objective function to
eps find the set of values that results in the maximum Z
value. LINEAR PROGRAMMING:
GRAPHICAL SOLUTION
ee aed A MINIMIZATION MODEL EXAMPLE
SPM atelal cok 1e date tel eal Ream Meare ee Rohs loam a1
programming problems: maximization problems (like the Beaver Creek Pottery
ert TNA Cl (Lire MeN 1 ol kolo) (a
Se Mulia <1s ola ce) (ue Re Rea CNA Recta)
problem, except for a few minor differences. A MINIMIZATION MODEL EXAMPLE
+ The following sample problem will demonstrate the formulation of a
minimization model.
Neat Suu ke Maku aueeuc hate cence
There are two brands of fertilizer to choose from, Super-gro and Crop-quick. Each
brand yields a specific amount of nitrogen and phosphate per bag, as follows:
Chemical Contribution
Nitrogen Phosphate
Brand (Ib./bag) (Ib./bag)
Super-gro 4
Crop-quick 3 A MINIMIZATION MODEL EXAMPLE
Se Rete aioe teeta Le (tt ed ol ale Rea mained 1a tae YA tele Role
Folate} oC) cell) ace gee Ce Moe lle Meh Oke) eee eee ER ed
to know how many bags of each brand to purchase in order to minimize the total
ered late
+ The steps in the linear programming model formulation process are summarized
as follows:
Summary of LP Model Formulation Steps
Step 1: Define the decision variables
How many bags of Super-gro and Crop-quick to buy
Step 2: Define the objective function
Minimize cost
Step 3: Define the constraints
‘The field requirements for nitrogen and phosphate A MINIMIZATION MODEL EXAMPLE
Siam BY Sats elec}
SRA es eeac ete nun Cuca ac Ceca ach yee ced
each brand of fertilizer to purchase:
eet
x, = bags of Crop-quick A MINIMIZATION MODEL EXAMPLE
2. The Objective Function
MTR leuteRe) =) (reel MR Manes Raa Role ol AC -lgel Pla Roe Rela
Sta est aol meat MTs NUCL aera ele leaky mca ie Lec eT Mol) (tae)
eRe ec ace Reena eee
Pear ae
eed
Peete ead eee ec)
eee ed ger ete A MINIMIZATION MODEL EXAMPLE
3. Model Constraints
+ The requirements for nitrogen and phosphate represent the constraints of the
Tetele (IM =tLo shore Relat lael Pomel Lee Maan) mom lol ale Roam ali acere (Ta Lele]
Paley R oh Rite Reel aclm al lacele ane
2X, + 4x, 216 lb.
where
Pee eau ean Mica er tease eae
4x, = the nitrogen contribution (Ib.) per bag of Crop-quick A MINIMIZATION MODEL EXAMPLE
- Rather than a < (less than or equal to) inequality, as used in the Beaver Creek
Pottery Company model, this constraint requires a 2 (greater than or equal to)
Cate AMEN eR a Maceo anol uo RR MMT La)
requirement specifying that at least 16 pounds of nitrogen be deposited on the
farmer's field. If a minimum cost solution results in more than 16 pounds of
nitrogen on the field, that is acceptable; however, the amount cannot be less than
16 pounds.
aera ie ieee aan ceuetson eerie Caan cet ae
eee) oe) ae
Steam aeRO Maar \ OLR ac na oC Role aL cele CTT ATS]
model constraints, < and =. A MINIMIZATION MODEL EXAMPLE
The third type is an exact equality, = . This type specifies that a constraint
eC ind eee ae eget ee eee kristy
Peale ase ca clm Rie RR clade Ya Tol alee Relea la ai Colt] (|
have been
eee eee yas
PTR mahal anole eee miele leis ec ae lee R al
SIUC ne OAC oe oii rec
ae aT) A MINIMIZATION MODEL EXAMPLE
+ The complete model formulation for this minimization problem is
RT eae Soe Se
subject to
Py ae eee etd Moma ecele( 1a)
4X, + 3X, 2 24 Ib. of phosphate
Sp) A MINIMIZATION MODEL EXAMPLE
Graphical Solution of a Minimization Model:
SAW re) Cosa Mer Lg ModE) eM cat Mee) oad aro) heel Leal al aah lamar
re urea rel Muto ( alr clan) RI) Merten
the graphical solution of a minimization model. A MINIMIZATION MODEL EXAMPLE
The first step is to graph the equations of en
the two model constraints, as shown in Pees Sar trier etree oe
Creeks
Pee ine cera
FIGURE 2.16
Constraint lines for
fertilizer model
246 8 012m x A MINIMIZATION MODEL EXAMPLE
+ After the feasible solution areahas TqIaR ET
been determined, the second step in [i@estuEl
the graphical solution approach is to FORNCIN TN
ete Te Raa Medan Lela
pet eee eee
; ede conse
Stee CR Uren ckstat or
Se ee een h es
objective function line. 2=6x, + 3x, A MINIMIZATION MODEL EXAMPLE
aes] Rule eMule eed Royle ee oan eel calle)
yield the highest profit.
Se reas ul se M etc cs uence Sinaia etc
DUC kao
eC ae dT Cae ae eee kel Cae eat)
Berd ens) S\CR et SER)
- Point C = $6(8) = $48
+ This means the farmer should not purchase any Super-gro but, instead, should
purchase eight bags of Crop-quick, at a total cost of $24 SURPLUS VARIABLES
Sige La Re Me cole Re aloe AN ge RoR el Le loae aol lad
Nell area lake ecm ec] Role car. tels (Colne Ld
minimize Z = $6x, + 3x,
subject to
2X, + 4x, 2.16 Ib. of nitrogen
eee ee a oe
< a2 0
Ne
ae ee eel h Cue ce
Saeed leet keey eee ae ce
Z = farmer's total cost ($) of purchasing fertilizer SURPLUS VARIABLES
Sette Ree 16) Tu eee eee) yooh hu eee eee al
Beaver Creek Pottery Company maximization example, the constraints are
eel aeteRcoR tele Maal Re LiL
Se race Tele tele ar) Reel Ra eee ec eee ec laa)
ERC) aCe ACL RT le Ceo ae ee toc trol ge
a surplus variable is subtracted and reflects the excess above a minimum resource
tee teat tate (00 eB ere TT Lol ee eRe a ole oat Le)
symbolically by s, and must be nonnegative. SURPLUS VARIABLES
eee unica ee eke ene
ark)
caer en
Mae gM Lilo) eM Tale Ral Mall cere anole la enon T Re Ur Lola
2(0) + 4(8)—s, =26
ee cae es)
s, = 16 lb. of nitrogen
SM amen eRe Ul belo la Meee LaM LM abet olga RR ea eo cee Ee Taal cod m alice (aL Tea dal
minimum requirement of 16 pounds that would be obtained by purchasing 8 bags
Cider emetie aciatliee SURPLUS VARIABLES
Sms APPA CMC Age seg Lae lao ue} Le eRe) ako Rcok- Aol TL lo la
subtracting a surplus variable, s,:
(eee Sere,
+ Asis the case with slack variables, surplus variables contribute nothing to the overall cost
of a model. For example, putting additional nitrogen or phosphate on the field will not
affect the farmer's cost, the only thing affecting Cost is the number of bags of fertilizer
Ue we Cet mute asec manel needle ical hus Sieetuelr sit
minimize Z = $6x, + 3x, + 05, + 05,
subject to
Pree Agere)
Ps) ie ae
eens) SURPLUS VARIABLES
Sate (Uc et NER Rel e-] ale FIGURE 2.19
tlhe acolo a clu) aa) Graph of the
surplus variables included ateach [Sm ecu
solution point. SUMMARY
SRR (ce) el Tle eR oY 1 te a1
programming models in order to demonstrate the modeling process. These
problems were similar in that they concerned achieving some objective subject to
a set of restrictions or requirements. Linear programming models exhibit certain
aaa Ras ela as
SU UN) o) Cae Raia telah coll Mul dul
