Linear Programming

MODULE
PowerPoint presentation to accompany
Heizer and Render
Operations Management, Eleventh Edition
Principles of Operations Management, Ninth Edition

PowerPoint slides by Jeff Heyl

© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. MB - 1
 Outline
► Why Use Linear Programming?
► Requirements of a Linear
Programming Problem
► Formulating Linear Programming
Problems
► Graphical Solution to a Linear
Programming Problem

© 2014 Pearson Education, Inc. MB - 2

 Outline – Continued

▶Sensitivity Analysis
▶Solving Minimization Problems
▶Linear Programming Applications
▶The Simplex Method of LP

© 2014 Pearson Education, Inc. MB - 3

 Learning Objectives
When you complete this chapter you
should be able to:
1. Formulate linear programming models,
including an objective function and
constraints
2. Graphically solve an LP problem with
the iso-profit line method
3. Graphically solve an LP problem with
the corner-point method

© 2014 Pearson Education, Inc. MB - 4

 Learning Objectives
When you complete this chapter you
should be able to:

4. Interpret sensitivity analysis and

shadow prices
5. Construct and solve a minimization
problem
6. Formulate production-mix, diet, and
labor scheduling problems

© 2014 Pearson Education, Inc. MB - 5

 Why Use Linear Programming?
▶A mathematical technique to help plan
and make decisions relative to the
trade-offs necessary to allocate
resources
▶Will find the minimum or maximum
value of the objective
▶Guarantees the optimal solution to the
model formulated

© 2014 Pearson Education, Inc. MB - 6

 LP Applications
1. Scheduling school buses to minimize total
distance traveled
2. Allocating police patrol units to high crime
areas in order to minimize response time
to 911 calls
3. Scheduling tellers at banks so that needs
are met during each hour of the day while
minimizing the total cost of labor

© 2014 Pearson Education, Inc. MB - 7

 LP Applications
4. Selecting the product mix in a factory to
make best use of machine- and labor-
hours available while maximizing the
firm’s profit
5. Picking blends of raw materials in feed
mills to produce finished feed
combinations at minimum costs
6. Determining the distribution system that
will minimize total shipping cost

© 2014 Pearson Education, Inc. MB - 8

 LP Applications
7. Developing a production schedule that will
satisfy future demands for a firm’s product
and at the same time minimize total
production and inventory costs
8. Allocating space for a tenant
mix in a new shopping mall
so as to maximize
revenues to the
leasing company

© 2014 Pearson Education, Inc. MB - 9

 Requirements of an
LP Problem
1. LP problems seek to maximize or
minimize some quantity (usually
profit or cost) expressed as an
objective function
2. The presence of restrictions, or
constraints, limits the degree to
which we can pursue our objective

© 2014 Pearson Education, Inc. MB - 10

 Requirements of an
LP Problem
3. There must be alternative courses of
action to choose from
4. The objective and constraints in
linear programming problems must
be expressed in terms of linear
equations or inequalities

© 2014 Pearson Education, Inc. MB - 11

 Formulating LP Problems
▶Glickman Electronics Example
► Two products
1. Glickman x-pod, a portable music
player
2. Glickman BlueBerry, an internet-
connected color telephone
► Determine the mix of products that will
produce the maximum profit

© 2014 Pearson Education, Inc. MB - 12

 Formulating LP Problems
TABLE B.1 Glickman Electronics Company Problem Data
HOURS REQUIRED TO PRODUCE
ONE UNIT
AVAILABLE HOURS
DEPARTMENT X-PODS (X1) BLUEBERRYS (X2) THIS WEEK
Electronic 4 3 240
Assembly 2 1 100
Profit per unit $7 $5

Decision Variables:
X1 = number of x-pods to be produced
X2 = number of BlueBerrys to be produced

© 2014 Pearson Education, Inc. MB - 13

 Formulating LP Problems
Objective Function:
Maximize Profit = $7X1 + $5X2

There are three types of constraints

► Upper limits where the amount used is ≤ the
amount of a resource
► Lower limits where the amount used is ≥ the
amount of the resource
► Equalities where the amount used is = the
amount of the resource
© 2014 Pearson Education, Inc. MB - 14
 Formulating LP Problems
First Constraint:
Electronic Electronic
time used is ≤ time available
4X1 + 3X2 ≤ 240 (hours of electronic time)

Second Constraint:
Assembly Assembly
time used is ≤ time available
2X1 + 1X2 ≤ 100 (hours of assembly time)
© 2014 Pearson Education, Inc. MB - 15
 Graphical Solution
▶Can be used when there are two decision
variables
1. Plot the constraint equations at their limits by
converting each equation to an equality
2. Identify the feasible solution space
3. Create an iso-profit line based on the
objective function
4. Move this line outwards until the optimal
point is identified

© 2014 Pearson Education, Inc. MB - 16

 Graphical Solution
X2

100 –
–
Number of BlueBerrys

80 – Assembly (Constraint B)
–
60 –
–
40 –
– Electronic (Constraint A)
Feasible
20 –
region
–
–
| | | | | | | | | | |
X1
0 20 40 60 80 100
Figure B.3 Number of x-pods
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 Graphical Solution
X2
Iso-Profit Line Solution Method
100 –
Choose a –possible value for the objective
function80 –
Number of BlueBerrys

Assembly (Constraint B)
–
60 – $210 = 7X1 + 5X2
–
Solve for
40 the
– axis intercepts of the function and
plot the line
– Electronic (Constraint A)
20 – Feasible
– X2 =
region 42 X1 = 30
|– | | | | | | | | | | X1
0 20 40 60 80 100
Figure B.3 Number of x-pods
© 2014 Pearson Education, Inc. MB - 18
 Graphical Solution
X2

100 –
–
Number of BlueBerrys

80 –
–
60 – $210 = $7X1 + $5X2
–
(0, 42)
40 –
–
20 – (30, 0)
–
–
| | | | | | | | | | |
X1
0 20 40 60 80 100
Figure B.4 Number of x-pods
© 2014 Pearson Education, Inc. MB - 19
 Graphical Solution
X2

100 –
– $350 = $7X1 + $5X2
Number of BlueBerrys

80 –
$280 = $7X1 + $5X2
–
60 – $210 = $7X1 + $5X2
–
40 –
– $420 = $7X1 + $5X2
20 –
–
|– | | | | | | | | | |
X1
0 20 40 60 80 100
Figure B.5 Number of x-pods
© 2014 Pearson Education, Inc. MB - 20
 Graphical Solution
X2

100 –
– Maximum profit line
Number of BlueBerrys

80 –
–
60 – Optimal solution point
– (X1 = 30, X2 = 40)
40 –
– $410 = $7X1 + $5X2
20 –
–
–
| | | | | | | | | | |
X1
0 20 40 60 80 100
Figure B.6 Number of x-pods
© 2014 Pearson Education, Inc. MB - 21
 Corner-Point Method
X2

100 –
2 –
Number of BlueBerrys

80 –
–
60 –
–
3
40 –
–
20 –
–
–
| | | | | | | | | | |
X1
1
0 20 40 60 80 100
4
Figure B.7 Number of x-pods
© 2014 Pearson Education, Inc. MB - 22
 Corner-Point Method
X2
► The optimal value will always be at a corner
point 100 –
2 –
► Find the
80 objective function value at each
Number of BlueBerrys

–
corner point
– and choose the one with the
highest60profit
–
–
3
40 –
Point 1 : (X1 –= 0, X2 = 0) Profit $7(0) + $5(0) = $0
Point 2 : 201 –= 0, X2 = 80)
(X Profit $7(0) + $5(80) = $400
–
Point 4 : (X1 |= 50, X| 2 =| 0) Profit $7(50) +| $5(0) = $350
1 –
| | | | | | |
X1
0 20 40 60 80 100
4
Figure B.7 Number of x-pods
© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. MB - 23
 Corner-Point Method
X2
► The optimal value will always be at a corner
Solve
point 100 for
– the intersection of two constraints
2 –
► Find the 4X + 3X2 ≤function
objective
1 240 (electronic
value time)
at each
Number of BlueBerrys

80 –
2X
– 1 +and
corner point ≤ 100 (assembly
1X2 choose the onetime)
with the
highest60profit
–
4X1–+ 3X2 = 240 4X1 + 3(40) = 240
3
– 4X
40 1–– 2X2 = –200 4X1 + 120 = 240
Point 1 : (X1 –= 0, X2 = 0) Profit $7(0) + $5(0) = $0
+ 1X2 = 40 X1 = 30
Point 2 : 201 –= 0, X2 = 80)
(X Profit $7(0) + $5(80) = $400
–
Point 4 : (X1 |= 50, X| 2 =| 0) Profit $7(50) +| $5(0) = $350
1 –
| | | | | | |
X1
0 20 40 60 80 100
4
Figure B.7 Number of x-pods
© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. MB - 24
 Corner-Point Method
X2
► The optimal value will always be at a corner
point 100 –
2 –
► Find the
80 objective function value at each
Number of BlueBerrys

–
corner point
– and choose the one with the
highest60profit
–
–
3
40 –
Point 1 : (X1 –= 0, X2 = 0) Profit $7(0) + $5(0) = $0
Point 2 : 201 –= 0, X2 = 80)
(X Profit $7(0) + $5(80) = $400
–
Point 4 : (X1 |= 50, X| 2 =| 0) | | Profit $7(50) +| $5(0) = $350
1 –
| | | | |
X1
Point 3 : (X10= 30, 20
X2 = 40) 40
4 60 80
Profit $7(30)100
+ $5(40) = $410
Figure B.7 Number of x-pods
© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. MB - 25
 Sensitivity Analysis
▶How sensitive the results are to
parameter changes
▶Change in the value of coefficients
▶Change in a right-hand-side value of a
constraint
▶Trial-and-error approach
▶Analytic postoptimality method

© 2014 Pearson Education, Inc. MB - 26

 Sensitivity Report

© 2014 Pearson Education, Inc. Program B.1 MB - 27

 Changes in Resources
▶The right-hand-side values of constraint
equations may change as resource
availability changes
▶The shadow price of a constraint is the
change in the value of the objective
function resulting from a one-unit change
in the right-hand-side value of the
constraint

© 2014 Pearson Education, Inc. MB - 28

 Changes in Resources
▶Shadow prices are often explained as
answering the question “How much would
you pay for one additional unit of a
resource?”
▶Shadow prices are only valid over a
particular range of changes in right-hand-
side values
▶Sensitivity reports provide the upper and
lower limits of this range
© 2014 Pearson Education, Inc. MB - 29
 Sensitivity Analysis
X2
–
Changed assembly constraint from 2X1
100 –
+ 1X2 = 100
–
to 2X1 + 1X2 = 110
80 – 2
–
Corner point 3 is still optimal, but
60 –
values at this point are now X1 = 45, X2
– = 20, with a profit = $415
40 –
–
20 –
Electronic constraint is
3 unchanged
–
1 –
| | | | | | | | | | |

0 20 40 4 60 80 100 X1 Figure B.8 (a)

© 2014 Pearson Education, Inc. MB - 30
 Sensitivity Analysis
X2
–
100 – Changed assembly constraint from 2X1
–
+ 1X2 = 100
to 2X1 + 1X2 = 90
80 –
2 –
Corner point 3 is still optimal, but
60 –
values at this point are now X1 = 15, X2
– 3 = 60, with a profit = $405
40 –
–
20 –
Electronic constraint is
unchanged
–
1 –
| | | | | | | | | | |

0 20 40 4 60 80 100 X1 Figure B.8 (b)

© 2014 Pearson Education, Inc. MB - 31
 Changes in the
Objective Function
▶A change in the coefficients in the
objective function may cause a different
corner point to become the optimal
solution
▶The sensitivity report shows how much
objective function coefficients may
change without changing the optimal
solution point

© 2014 Pearson Education, Inc. MB - 32

 Solving Minimization Problems
▶Formulated and solved in much the
same way as maximization problems
▶In the graphical approach an iso-cost
line is used
▶The objective is to move the iso-cost
line inwards until it reaches the lowest
cost corner point

© 2014 Pearson Education, Inc. MB - 33

 Minimization Example
X1 = number of tons of black-and-white picture
chemical produced
X2 = number of tons of color picture chemical
produced

Minimize total cost = 2,500X1 + 3,000X2

Subject to:
X1 ≥ 30 tons of black-and-white chemical
X2 ≥ 20 tons of color chemical
X1 + X2 ≥ 60 tons total
X1, X2 ≥ $0 nonnegativity requirements

© 2014 Pearson Education, Inc. MB - 34

 Minimization Example
Figure B.9 X2
60 – X1 + X2 = 60

50 –
Feasible
40 – region

30 –
b

20 –
a
10 – X1 = 30
X2 = 20

–
| | | | | | |
X1
0 10 20 30 40 50 60
© 2014 Pearson Education, Inc. MB - 35
 Minimization Example

Total cost at a = 2,500X1 + 3,000X2

= 2,500(40) + 3,000(20)
= $160,000

Total cost at b = 2,500X1 + 3,000X2

= 2,500(30) + 3,000(30)
= $165,000

Lowest total cost is at point a

© 2014 Pearson Education, Inc. MB - 36

 LP Applications
Production-Mix Example
DEPARTMENT
UNIT
PRODUCT WIRING DRILLING ASSEMBLY INSPECTION PROFIT
XJ201 .5 3 2 .5 $ 9
XM897 1.5 1 4 1.0 $12
TR29 1.5 2 1 .5 $15
BR788 1.0 3 2 .5 $11

DEPARTMENT CAPACITY (HRS) PRODUCT MIN PRODUCTION LEVEL

Wiring 1,500 XJ201 150
Drilling 2,350 XM897 100
Assembly 2,600 TR29 200
Inspection 1,200 BR788 400

© 2014 Pearson Education, Inc. MB - 37

 LP Applications
X1 = number of units of XJ201 produced
X2 = number of units of XM897 produced
X3 = number of units of TR29 produced
X4 = number of units of BR788 produced

Maximize profit = 9X1 + 12X2 + 15X3 + 11X4

subject to .5X1 + 1.5X2 + 1.5X3 + 1X4 ≤ 1,500 hours of wiring
3X1 + 1X2 + 2X3 + 3X4 ≤ 2,350 hours of drilling
2X1 + 4X2 + 1X3 + 2X4 ≤ 2,600 hours of assembly
.5X1 + 1X2 + .5X3 + .5X4 ≤ 1,200 hours of inspection
X1 ≥ 150 units of XJ201
X2 ≥ 100 units of XM897
X3 ≥ 200 units of TR29
X4 ≥ 400 units of BR788
X1, X2, X3, X4 ≥0
© 2014 Pearson Education, Inc. MB - 38
 LP Applications
Diet Problem Example

FEED
INGREDIENT STOCK X STOCK Y STOCK Z
A 3 oz 2 oz 4 oz
B 2 oz 3 oz 1 oz
C 1 oz 0 oz 2 oz
D 6 oz 8 oz 4 oz

© 2014 Pearson Education, Inc. MB - 39

 LP Applications
X1 = number of pounds of stock X purchased per cow each month
X2 = number of pounds of stock Y purchased per cow each month
X3 = number of pounds of stock Z purchased per cow each month

Minimize cost = .02X1 + .04X2 + .025X3

Ingredient A requirement: 3X1 + 2X2 + 4X3 ≥ 64

Ingredient B requirement: 2X1 + 3X2 + 1X3 ≥ 80
Ingredient C requirement: 1X1 + 0X2 + 2X3 ≥ 16
Ingredient D requirement: 6X1 + 8X2 + 4X3 ≥ 128
Stock Z limitation: X3 ≤5
X1, X2, X3 ≥0

Cheapest solution is to purchase 40 pounds of stock X

at a cost of $0.80 per cow
© 2014 Pearson Education, Inc. MB - 40
 LP Applications
Labor Scheduling Example
NUMBER OF NUMBER OF
TIME PERIOD TELLERS REQUIRED TIME PERIOD TELLERS REQUIRED
9 a.m.–10 a.m. 10 1 p.m.–2 p.m. 18
10 a.m.–11 a.m. 12 2 p.m.–3 p.m. 17
11 a.m.–Noon 14 3 p.m.–4 p.m. 15
Noon–1 p.m. 16 4 p.m.–5 p.m. 10

F = Full-time tellers
P1 = Part-time tellers starting at 9 AM (leaving at 1 PM)
P2 = Part-time tellers starting at 10 AM (leaving at 2 PM)
P3 = Part-time tellers starting at 11 AM (leaving at 3 PM)
P4 = Part-time tellers starting at noon (leaving at 4 PM)
P5 = Part-time tellers starting at 1 PM (leaving at 5 PM)
© 2014 Pearson Education, Inc. MB - 41
 LP Applications
Minimize total daily
= $75F + $24(P1 + P2 + P3 + P4 + P5)
manpower cost
F + P1 ≥ 10 (9 AM - 10 AM needs)
F + P1 + P2 ≥ 12 (10 AM - 11 AM needs)
1/2 F + P1 + P2 + P3 ≥ 14 (11 AM - 11 AM needs)
1/2 F + P1 + P2 + P3 + P4 ≥ 16 (noon - 1 PM needs)
F + P2 + P3 + P4 + P5 ≥ 18 (1 PM - 2 PM needs)
F + P3 + P4 + P5 ≥ 17 (2 PM - 3 PM needs)
F + P4 + P5 ≥ 15 (3 PM - 7 PM needs)
F + P5 ≥ 10 (4 PM - 5 PM needs)
F ≤ 12

4(P1 + P2 + P3 + P4 + P5) ≤ .50(10 + 12 + 14 + 16 + 18 + 17 + 15 + 10)

© 2014 Pearson Education, Inc. MB - 42

 LP Applications
Minimize total daily
= $75F + $24(P1 + P2 + P3 + P4 + P5)
manpower cost
F + P1 ≥ 10 (9 AM - 10 AM needs)
F + P1 + P2 ≥ 12 (10 AM - 11 AM needs)
1/2 F + P1 + P2 + P3 ≥ 14 (11 AM - 11 AM needs)
1/2 F + P1 + P2 + P3 + P4 ≥ 16 (noon - 1 PM needs)
F + P2 + P3 + P4 + P5 ≥ 18 (1 PM - 2 PM needs)
F + P3 + P4 + P5 ≥ 17 (2 PM - 3 PM needs)
F + P4 + P5 ≥ 15 (3 PM - 7 PM needs)
F + P5 ≥ 10 (4 PM - 5 PM needs)
F ≤ 12

4(P1 + P2 + P3 + P4 + P5) ≤ .50(112)

F, P1, P2, P3, P4, P5 ≥ 0

© 2014 Pearson Education, Inc. MB - 43

 LP Applications
There are two alternate optimal solutions to this
problem but both will cost $1,086 per day
First Second
Solution Solution
F = 10 F = 10
P1 = 0 P1 = 6
P2 = 7 P2 = 1
P3 = 2 P3 = 2
P4 = 2 P4 = 2
P5 = 3 P5 = 3

© 2014 Pearson Education, Inc. MB - 44

 The Simplex Method
▶Real world problems are too complex to
be solved using the graphical method
▶The simplex method is an algorithm for
solving more complex problems
▶Developed by George Dantzig in the late
1940s
▶Most computer-based LP packages use
the simplex method

© 2014 Pearson Education, Inc. MB - 45

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.

© 2014 Pearson Education, Inc. MB - 46