LINEAR PROGRAMMING

Introduction
Linear programming (LP) can be viewed as part of a great revolutionary development that has
given mankind the ability to state general goals and to lay out a path of detailed decisions to be
taken in order to “best” achieve these goals when faced with practical situations of great
complexity. LP is a technique of allocating resources where there are more than one constraint
involved. It is a method of solving equations and can be programmed for computer so that
difficult and multi-constraint problems will show how scarce resources in a firm can best be
utilized.
LP is concerned with maximization or minimization of a linear objective function in many
variables subject to linear equality and inequality constraints. LP is a powerful tool well suited
to solving problems of firms with product-mix.

Assumptions of LP
The basic assumptions underlying the operation of the techniques
a) Certainty: it is believed that all relevant information relating to a problem situation is
known, for example the resources availability.
b) Linearity: it is believed that there a proportional relationship between the resources
utilized and the contribution or the cost incurred.
c) Non-Negativity: there is no negative output that will be produced, that is, at worst zero
level of production.
d) Single Objective: there is an assumption of only one economic objective, that is,
maximization of profit or minimization of cost.

Uses of LP
1. The specific uses of LP technique are:
2. It can be used in determining the optimum product mix
3. It can be effective method of solving capital rationing problem
4. It can be used to plan the production activity effectively
5. It is an effective aid to financial modeling

Methods of LP
There are three method of solving LP problems:
1. Graphical solution method
2. Simplex method
3. Equation method
For the purpose of this class only the simplex method will be considered.

Formulating of LP Problem
1. Identify the decision variables: these are the variables (products) about which
production decision is to be made. This usually represents the output to be optimized
with respect to the constraint of resources. Thus, the products in the mix to be produced
in order to maximize profit or minimize costs given the constraints pose by the
resources.
2. State the objective function: this is the algebraic expression of the goal of the firm in
relation to its production decision. This will be either to maximize profit or minimize
of cost. If there are two products and the profit from Product-x is N5 and Product-y is
N3, the objective function will be stated as: Maximize Z= 5x +3y,
Where Z is the profit to be maximized or cost to be minimized as the case may be
 3. State the constraints: the constraints are the scarcity faced by the firm in terms of factors
of production, such as those limiting its productive capacity. These include raw
material, labour hours, machine hours. Let’s assume a case of constraints posed by
materials and direct labour hours for production of products x and y. If x requires 4 unit
of materials and y requires 5 units, while x requires 2 direct labour hours and y requires
3, and the available labour hours and material are 200 hours and 500 kg respectively:
then the constraint for the direct labour hours and the materials can be stated as follows:
4x + 5y ≤ 500 (i)
2x + 3y ≤ 200 (ii)
4. At this stage, it is important to state the non-negativity function assumption which is
basic in solving linear programming problem that indicates that there cannot be a
negative output.
5. The compute the optimum solution is last stage in finding solution to linear
programming problem after the problem has been properly identified and formulated.

Let us use the following question to illustrate how a linear programming problem is solved.

1. Farar Lamba Manufacturing Company produces two types of aluminium doors (bronze and
silver). Each of products passes through two production processes (Cutting and Assembling)
where machine hours are limited. The manager is concerned with achieving optimum results
for the Company due to the existing constraints.

Cutting hours Assembling hours

Bronze 2 4
Silver 3 3
Available hours 450 600

The expected income to be obtained from each unit of bronze and silver doors are N8 and N7
respectively. Based on this information you required to:
a) Formulate the problem as a LP problem
b) Solve the LP problem using the simplex method

2. Packing product mix company has the following resources constraints situation for
machine hours for next production run.
Profit to maximize = 12x + 8y
Subject to the following constraints:
4x + 6y ≤ 240
4x + 2y ≤ 120
Find the optimum solution through the simplex method

3. Kabuga Plc has three operation departments (weaving, processing and packaging) with a
capacity to produce three different products (Koka and Saro).
Weaving Processing Packaging
Hours available available in a week 120 80 160
Hours required by each product:
Koka (profit is N4) 6 4 2
Saro (profit is N8) 8 6 6
Required:
1. Formulate LP problem from the given information
2. Solve the problem using the simplex method to maximize profits