Lords Business School

Quantitative techniques for Management

BBA V Semester
Topic : Linear Programming

Meaning of Linear programming

Linear programming is a mathematical technique for determining the maximum utilisation of

available resources in a manufacturing or business concern.
It is used to find the optimal solution of the linear function. This method uses simple
assumptions for optimizing the given function. Linear Programming has a huge real-world
application and it is used to solve various types of problems.
Linear programming is used in various industries such as shipping industries, manufacturing
industries, transportation industries, telecommunications and others.
Term “linear programming” consists of two words linear and programming, the word linear is
used in the sense of straight line and a direct or proportional relationship of the interrelated
two or more variables is known as Linearity.The word programming refers to a mathematical
method used for planning a way of systematic manner with a view to achieve some desired
optimum results,i.e minimisation of cost or maximisation of profit.
Linear programming or Linear optimization is a technique that helps us to find the optimum
solution for a given problem, an optimum solution is a solution that is the best possible
outcome of a given particular problem.
In simple terms, it is the method to find out how to do something in the best possible way.
With limited resources, you need to do the optimum utilization of resources and achieve the
best possible result in a particular objective such as least cost, highest margin, or least time.
The situation that requires a search for the best values of the variables subject to certain
constraints is where we use linear programming problems. These situations cannot be
handled by the usual calculus and numerical techniques.
The technique of Linear programming was developed in 1947 by George B. Dantzing
,Marshall wood and their associates who were employed in Air force of America. By using
the technique of Linear programming they presented the best solution for military planning
problems.
In 1956, Prof L.V Kantorovich presented ‘Linear programming ’ in mathematical model to be
used by manufacturing and business concerns to select the best alternative course of
action.
Prof. L.V Kantorovich is said to be ‘inventor’ of Linear programming.

Linear Programming Definition

Acc . To Prof. George B. Dantzing ,’’ Linear programming is a technique which is applicable
to those programming problems in which the desired objectives as well as the restrictions
on the resources give rise to linear functions.’’

Components of Linear Programming

The basic components of a linear programming (LP) problem are:
Decision Variables: Variables you want to determine to achieve the optimal solution.
Objective Function: Mathematical equation that represents the goal you want to achieve
Constraints: Limitations or restrictions that your decision variables must follow.
Non-Negativity Restrictions: In some real-world scenarios, decision variables cannot be
negative

Characteristics of Linear Programming

 1. There should be a well defined objective of linear programming.The main objective
of a manufacturer is either to maximize the profits or to maximize the profits or to
minimize the costs.

2. To solve the problems of linear programming different courses of action should be

available so that the best course of action could be determined.

3. The resources should be available in a limited quantity because linear programming

is not required if the resources are available in unlimited larger quantities.

4. The problem of Linear programming should be represented in the form of

mathematical equations.Problems cannot be solved if it is not presented
mathematically.

5. The best possible solution is obtained in Linear programming. To solve the problem
of linear programming graphical method is used where each inequality constraint
exhibit a certain area with the help of which best solution is obtained.

6. The dividend, cost or price per unit and quantity of production per unit should be
ascertain.

7. The divisibility of resources and number of production is essential in linear

programming.

8. The sum of the quantity of resources engaged in the various activities of linear
programming should be equal to the capacity of other activities.

Linear Programming Examples

We can understand the situations in which Linear programming is applied with the help of
the example discussed below,
Suppose a delivery man has to deliver 8 packets in a day to the different locations of a city.
He has to pick all the packets from A and has to deliver them to points P, Q, R, S, T, U, V,
and W. The distance between them is indicated using the lines as shown in the image
below. The shortest path followed by the delivery man is calculated using the concept of
Linear Programming.
Linear Programming Problems
Linear Programming Problems (LPP) involve optimizing a linear function to find the optimal
value solution for the function. The optimal value can be either the maximum value or the
minimum value.
In LPP, the linear functions are called objective functions. An objective function can have
multiple variables, which are subjected to conditions and have to satisfy the linear
constraints.

Types of Linear Programming Problems

There are many different linear programming problems(LPP) but we will deal with three
major linear programming problems in this article.
Manufacturing Problems
Manufacturing problems are a problem that deals with the number of units that should be
produced or sold to maximize profits when each product requires fixed manpower, machine
hours, and raw materials.
Diet Problems
It is used to calculate the number of different kinds of constituents to be included in the diet
to get the minimum cost, subject to the availability of food and their prices.
Transportation Problems
It is used to determine the transportation schedule to find the cheapest way of transporting a
product from plants /factories situated at different locations to different markets.
Linear Programming Formula
A linear programming problem consists of,
Decision variables
Objective function
Constraints
Non-Negative restrictions
Decision variables are the variables x, and y, which decide the output of the linear
programming problem and represent the final solution.
The objective function, generally represented by Z, is the linear function that needs to be
optimized according to the given condition to get the final solution.
The restrictions imposed on decision variables that limit their values are called constraints.
Now, the general formula of a linear programming problem is,
Objective Function: Z = ax + by
Constraints: cx + dy e, px + qy r
Non-Negative restrictions: x 0, y 0
In the above condition x, and y are the decision variables.
Steps to Solve Linear Programming Problems
Before solving the linear programming problems first we have to formulate the problems
according to the standard parameters. The steps for solving linear programming problems
are,
Step 1: Mark the decision variables in the problem.
Step 2: Build the objective function of the problem and check if the function needs to be
minimized or maximized.
Step 3: Write down all the constraints of the linear problems.
Step 4: Ensure non-negative restrictions of the decision variables.
Step 5: Now solve the linear programming problem using any method generally we use
either the simplex or graphical method.
Linear Programming Methods
We use various methods for solving linear programming problems. The two most common
methods used are,
Simplex Method
Graphical Method

Linear Programming Simplex Method

One of the most common methods to solve the linear programming problem is the simplex
method. In this method, we repeat a specific condition ‘n’ a number of times until an optimum
solution is achieved.
The steps required to solve linear programming problems using the simplex method are,
Step 1: Formulate the linear programming problems based on the given constraints.
Step 2: Convert all the given inequalities to equations or equalities of the linear programming
problems by adding the slack variable to each inequality where ever required.
Step 3: Construct the initial simplex table. By representing each constraint equation in a row
and writing the objective function at the bottom row. The table so obtained is called the
Simplex table.
Step 4: Identify the greatest negative entry in the bottom row the column of the element with
the highest negative entry is called the pivot column
Step 5: Divide the entries of the right-most column with the entries of the respective pivot
column, excluding the entries of the bottommost row. Now the row containing the least entry
is called the pivot row. The pivot element is obtained by the intersection of the pivot row and
the pivot column.
Step 6: Using matrix operation and with the help of the pivot element make all the entries in
the pivot column to be zero.
Step 7: Check for the non-negative entries in the bottommost row if there are no negative
entries in the bottom row, end the process else start the process again from step 4.
Step 8: The final simplex table so obtained gives the solution to our problem.
Linear Programming Graphical Method
Graphical Method is another method than the Simplex method which is used to solve linear
programming problems. As the name suggests this method uses graphs to solve the given
linear programming problems. This is the best method to solve linear programming problems
and requires less effort than the simplex method.
While using this method we plot all the inequalities that are subjected to constraints in the
given linear programming problems. As soon as all the inequalities of the given LPP are
plotted in the XY graph the common region of all the inequalities gives the optimum solution.
All the corner points of the feasible region are calculated and the value of the objective
function at all those points is calculated then comparing these values we get the optimum
solution of the LPP.
Example: Find the maximal and minimal value of z = 6x + 9y when the constraint conditions
are,
2x + 3y 12
x and y 0
x+y 5
Solution:
Step 1: First convert the inequations into normal equations. Hence the equations will be
2x+3y = 0, x = 0, y = 0 and x + y = 5.
Step 2: Find the points at which 2x + 3y and x + y = 5 cut the x-axis and y-axis. To find the
point of intersection of the x-axis put y = 0 in the respective equation and find the point.
Similarly for y-axis intersection points put x = 0 in the respective equation.
Step 3: Draw the two lines cutting the x-axis and y-axis. We find that the two axes cut each
other at (3,2).
Step 4: For x 0 and y 0, we find that both inequations are followed. Hence the region will
include an area region enclosed by two axes and both lines including the origin. The plotted
region is shown below in the figure.
Step 5: Find Z for each point and maxima and minima.

Coordinat Z = 6x +
es 9y

(0,5) Z = 45

(0,4) Z = 36

(5,0) Z = 30

(6,0) Z = 36

(3,2) Z = 36
Hence, we find that Z = 6x + 9y is maximum at (0,5) and minimum at (5,0).
Linear Programming Applications

Linear Programming Applications

Linear Programming has applications in various fields. It is used to find the minimum cost of
a process when all the constraints of the problems are given. It is used to optimize the
transportation cost of the vehicle, etc. Various applications of Linear Programming are

Engineering Industries

Engineering Industries use linear programming to solve design and manufacturing problems
and to get the maximum output from a given condition.

Manufacturing Industries

Manufacturing Industries use linear programming to maximize the profit of the companies
and to reduce the manufacturing cost.

Energy Industries

Energy companies use linear programming to optimize their production output.

Transportation Industries
Linear programming is also used in transportation industries to find the path to minimize the
cost of transportation.
Importance of Linear Programming
Linear Programming has huge importance in various industries it maximizes the output value
while minimizing the input values according to various constraints.
Linear Programming Problems
Problem 1: A company manufactures and sells two types of products and the cost of
production of each unit a and b is rupees 200 and 150 respectively each unit of product
yields a profit of 20 rupees and each unit of product b yields a profit of 15 rupees on selling.
The company estimates the monthly demand of A and B to be at a maximum of the
harvested unit in all the production budget for the month is set at rupees 50000. How many
units should the company manufacture to earn maximum profit from its monthly sales from a
and b?
Solution:
Let x = number of units of type A
y = Number of units of type B
Maximize Z = 40x + 50y
Subject to the constraints
3x + y 9
x + 2y 8
and x, y 0
Consider the equation,
3x + y = 9
x=3
y=0
and x + 2y = 8
x=8
y=0
Now, we can determine the maximum value of Z by evaluating the value of Z at the four
points (vertices) is shown below

Vertice
s Z = 40x + 50y

Z = 40 × 0 + 50 × 0 = Rs.
(0, 0) 0

Z = 40 × 3 + 50 × 0 = Rs.
(3, 0) 120

Z = 40 × 0 + 50 × 4 =
(0, 4) Rs. 200
Vertice
s Z = 40x + 50y

Z = 40 × 2 + 50 × 3 = Rs.
(2, 3) 230

Maximum profit, Z = Rs. 230

Number of units of type A is 2 and the number of units of type B is 3.
Problem 2: Maximize Z = 3x + 4y.
Subject to constraints , x + y 450, 2x + y 600 and x, y 0.
Solution:
We have from the given
Constraints (1)
X + Y = 450
Putting x = 0, 0 + y = 450 y = 450
Putting y = 0, x + 0 = 450 x = 450
From, Constraints (2)
2x + y = 600
Putting x = 0, 0 + y = 600 y = 600
Putting y = 0, 2x + 0 = 600 x = 300
Now, we have the points co-ordinate Z = 3x + 4y

Vertices Z = 3x + 4y

(0, 0) Z=3×0+4×0=0

(300, 0) Z = 3 × 300+ 4 × 0 = 900

(150, Z = 3 × 150 + 4 × 300 =

300) 1650

Z = 3 × 0 + 4 × 450 =
(0, 450) 1800

Therefore, the optimal solution maximum Z = 1800 at co-ordinate x = 0 and y = 450. The
graph is given below.
Up-to-Date Applications of Linear Programming
Linear programming, a powerful mathematical technique, is used to solve optimization
problems in various industries. Here are some modern applications:
Supply Chain Optimization: Linear programming helps companies minimize costs and
maximize efficiency in their supply chains. It’s used for determining the most cost-
effective transportation routes, warehouse operations, and inventory management
strategies.
Energy Management: In the energy sector, linear programming is utilized to optimize the
mix of energy production methods. This includes balancing traditional energy sources
with renewable ones to reduce costs and environmental impact while meeting demand.
Telecommunications Network Design: Linear programming aids in designing efficient
telecommunications networks. It helps in allocating bandwidth, designing network
layouts, and optimizing the flow of data to ensure high-speed communication at lower
costs.
Financial Planning: Businesses and financial analysts use linear programming for portfolio
optimization, risk management, and capital budgeting. It helps in making investment
decisions that maximize returns while minimizing risk.
Healthcare Logistics: In healthcare, linear programming is applied to optimize the
allocation of resources, such as hospital beds, medical staff, and equipment. It’s crucial
for improving patient care, reducing wait times, and managing costs effectively.
Manufacturing Process Optimization: Linear programming is used to determine the optimal
production levels for multiple products within a manufacturing facility, considering
constraints like labor, materials, and machine availability.
Agricultural Planning: Farmers and agricultural planners use linear programming to decide
on crop selection, land use, and resource allocation to maximize yields and profits while
conserving resources.
 Airline Crew Scheduling: Airlines employ linear programming to schedule crews efficiently,
ensuring that flights are staffed in compliance with regulations and minimizing
operational costs.
These applications demonstrate the versatility and power of linear programming in solving
complex optimization problems across various sectors, showcasing its relevance in today’s
data-driven world.
Linear Programming in Operations Research
Core Tool: Linear programming is a foundational tool in operations research for optimizing
resources.
Decision Making: Helps in making the best decisions regarding resource allocation,
maximizing profits, or minimizing costs.
Wide Applications: Used in various fields such as logistics, manufacturing, finance, and
healthcare for solving complex problems.
Modeling Real-World Problems: Transforms real-world problems into mathematical
models to find the most efficient solutions.
Simplex Method
Optimization Algorithm: The Simplex Method is a powerful algorithm used in linear
programming to find the optimal solution to linear inequalities.
Step-by-Step Approach: It iteratively moves towards the best solution by navigating the
edges of the feasible region defined by constraints.
Efficiency: Known for its efficiency in solving large-scale linear programming problems.
Versatility: Applicable in various domains like diet planning, network flows, production
scheduling, and more, showcasing its versatility.

Simplex method
The simplex method is an algorithm used to calculate the optimal solution to an LP problem.
It is a systematically performed iterative procedure to identify the optimal solution from the
set of feasible solutions. You might remember that in the graphical solution, the unique
optimal solution to the LP problem occurred at a corner point or vertex of the feasible region.

The simplex algorithm also starts at one corner point of the feasible region and at each
iteration moves to an adjacent vertex in sequence, until the corner point corresponding to the
optimal solution is reached.

Introduction LP Simplex Method

In the previous article, you studied how to solve linear programming problems
graphically. You also studied some special cases in the previous chapter.
The graphical approach is not applicable to problems with more than two variables are
involved. The simplex method is more suitable for solving LP problems in three or more
variables, or problems involving many constraints. The simplex method is a mathematical
solution technique where the model is formulated as a tableau on which a series of repetitive
mathematical steps are performed to reach the optimal solution.

The simplex method was developed in 1947 by George B. Dantzig. He put forward the
simplex method for obtaining an optimal solution to a linear programming problem, i.e., for
obtaining a non-negative solution of a system of m linear equations in n variables which
maximises a given linear functional of the vector of variables.

It is one of the most universally applied mathematical techniques, the popularity of the
simplex method comes from the fact that it can indicate at each phase if the solution is
optimal and if the solution can be improved and what that improved solution would be.

All LP problems can be solved using the simplex method. It is much more adaptable to
computers than the graphical method, therefore, it is more suited for complex problems
despite being mathematically more complex. Using the simplex method, a decision maker
can also identify degeneracy, unbounded solutions, alternate solutions, and infeasible
solutions along with redundant constraints.
Important Terms of Linear Programming for Simplex Method
Pivot column: In a row-echelon matrix, the first non-zero entry of each row is called a
pivot, and the columns where pivots occur are called pivot columns or key columns. This
is the column with the most negative index number, and it shows the entering variable in
the basis.
Pivot row: It is the row which contains the smallest non-negative ratio is called the pivot
row or key row. This row has the smallest quotient obtained after dividing the values of
quantity column by key column for each row. It shows the exiting variable from the basis.
Pivot element/ number: The pivot element of a matrix is selected first by an algorithm to
do certain computations. The pivot element is at the intersection of the pivot column with
pivot row.
Simplex tableau: The simplex tableau organises the model into a form that simplifies the
application of the mathematical steps. An LP problem in standard form can be
represented as a tableau of the form given below:
Basis: It is the set of variables not constrained to equal zero in the current basic solution.
Basic variables are those variables which make up the basis.
Non-basic variables: These are all variables other than basic variables.
Iteration: This refers to the steps performed to progress from one feasible solution to
another in simplex method.
Cj Row: The coefficients of the variables in the objective function occur in this row.
Zj Row: The Zj row element shows the increase or decrease in objective function value
when one unit of that variable is brought into the solution.
Zj – Cj Row: It is also called the index row; the elements of this row depict net contribution/
loss per unit when one unit of that vari- able is brought into the solution.

Steps for Solving Linear Programming using Simplex Method

To apply the simplex method to solve an LP problem, the problem first needs to be put into
the standard form. For this, the inequalities in constraints must be replaced by equalities
by adding slack variables.
Now, organise a simplex tableau using slack variables.
Select a pivot column i.e., the column that has the smallest number in the last row.
Divide each element in the right most columns with the corresponding element in the pivot
column. The row with the smallest non-negative quotient is the pivot row.
Locate the pivot element/number at the intersection of the pivot row and pivot column.
Calculate new values for the pivot row by dividing every number in the pivot row by the
pivot element.
Calculate new values for each remaining row using the formula:

(New row number) = (no in old row) – (no in old row above or below pivot number) x
(corresponding no in the new row)
The goal is to have no negative indicators in the first row. The simplex method is iterative,
i.e., we repeat steps 5, 6 and 7 until all numbers on the first row are positive.