Linear Programming: Model Formulation and Graphical Solution

Prepared by JOSEPH GEORGE KONNULLY

2-1

Topics

Linear Programming An overview Model Formulation

Characteristics of Linear Programming Problems

Assumptions of a Linear Programming Model Advantages and Limitations of a Linear Programming. A Maximization Model Example Graphical Solutions of Linear Programming Models

A Minimization Model Example

Irregular Types of Linear Programming Models
2-2

Linear Programming: An Overview

Objectives of business decisions frequently involve maximizing profit or minimizing costs. Linear programming uses linear algebraic relationships to represent a firms decisions, given a business objective, and resource constraints. Steps in application: 1. Identify problem as solvable by linear programming. 2. Formulate a mathematical model of the unstructured problem. 3. Solve the model. 4. Implementation
2-3

Model Components

Decision variables - mathematical symbols representing levels of activity of a firm. Objective function - a linear mathematical relationship describing an objective of the firm, in terms of decision variables - this function is to be maximized or minimized.

Constraints requirements or restrictions placed on the firm by the operating environment, stated in linear relationships of the decision variables.
Parameters - numerical coefficients and constants used in the objective function and constraints.

2-4

Summary of Model Formulation Steps

Step 1 : Clearly define the decision variables

Step 2 : Construct the objective function Step 3 : Formulate the constraints

2-5

Characteristics of Linear Programming Problems

A decision amongst alternative courses of action is required.

The decision is represented in the model by decision variables. The problem encompasses a goal, expressed as an objective function, that the decision maker wants to achieve. Restrictions (represented by constraints) exist that limit the extent of achievement of the objective. The objective and constraints must be definable by linear mathematical functional relationships.

2-6

Assumptions of Linear Programming Model

Proportionality - The rate of change (slope) of the objective function and constraint equations is constant. Additivity - Terms in the objective function and constraint equations must be additive. Divisibility -Decision variables can take on any fractional value and are therefore continuous as opposed to integer in nature. Certainty - Values of all the model parameters are assumed to be known with certainty (non-probabilistic).

2-7

Advantages of Linear Programming Model

It helps decision - makers to use their productive resource effectively.

The decision-making approach of the user becomes more objective and less subjective.
In a production process, bottle necks may occur. For example, in a factory some machines may be in great demand while others may lie idle for some time. A significant advantage of linear programming is highlighting of such bottle necks.

2-8

Limitations of Linear Programming Model

Linear programming is applicable only to problems where the constraints and objective function are linear i.e., where they can be expressed as equations which represent straight lines. In real life situations, when constraints or objective functions are not linear, this technique cannot be used. Factors such as uncertainty, and time are not taken into consideration. Parameters in the model are assumed to be constant but in real life situations they are not constants.
Linear programming deals with only single objective , whereas in real life situations may have multiple and conflicting objectives.

In solving a LPP there is no guarantee that we get an integer value. In some cases of no of men/machine a non-integer value is meaningless.
2-9

LP Model Formulation A Maximization Example (1 of 4)

Product mix problem - Beaver Creek Pottery Company How many bowls and mugs should be produced to maximize profits given labor and materials constraints? Product resource requirements and unit profit:
Resource Requirements

Product

Labor (Hr./Unit)

Clay (Lb./Unit)

Profit ($/Unit)

Bowl
Mug

1
2

4
3

40
50

2-10

LP Model Formulation A Maximization Example (2 of 4)

2-11

LP Model Formulation A Maximization Example (3 of 4)

Resource Availability: Decision Variables: Objective Function: 40 hrs of labor per day 120 lbs of clay x1 = number of bowls to produce per day x2 = number of mugs to produce per day Maximize Z = $40x1 + $50x2 Where Z = profit per day

Resource 1x1 + 2x2 40 hours of labor Constraints: 4x1 + 3x2 120 pounds of clay Non-Negativity Constraints: x1 0; x2 0

2-12

LP Model Formulation A Maximization Example (4 of 4)

Complete Linear Programming Model:
Maximize Z = $40x1 + $50x2

subject to:

1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

2-13

Feasible Solutions
A feasible solution does not violate any of the constraints: Example: x1 = 5 bowls x2 = 10 mugs Z = $40x1 + $50x2 = $700 1(5) + 2(10) = 25 < 40 hours 4(5) + 3(10) = 70 < 120 pounds

Labor constraint check: Clay constraint check:

2-14

Infeasible Solutions
An infeasible solution violates at least one of the constraints: Example: x1 = 10 bowls x2 = 20 mugs Z = $40x1 + $50x2 = $1400 1(10) + 2(20) = 50 > 40 hours

Labor constraint check:

2-15

Graphical Solution of LP Models

Graphical solution is limited to linear programming models containing only two decision variables (can be used with three variables but only with great difficulty). Graphical methods provide visualization of how a solution for a linear programming problem is obtained. Graphical methods can be classified under two categories: 1. Iso-Profit(Cost) Line Method 2. Extreme-point evaluation Method.

2-16

Coordinate Axes Graphical Solution of Maximization Model (1 of 12)

X2 is mugs

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

X1 is bowls

Figure 2.2 Coordinates for Graphical Analysis

2-17

Labor Constraint Graphical Solution of Maximization Model (2 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.3 Graph of Labor Constraint

2-18

Labor Constraint Area Graphical Solution of Maximization Model (3 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.4 Labor Constraint Area

2-19

Clay Constraint Area Graphical Solution of Maximization Model (4 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.5 Clay Constraint Area

2-20

Both Constraints Graphical Solution of Maximization Model (5 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.6 Graph of Both Model Constraints

2-21

Feasible Solution Area Graphical Solution of Maximization Model (6 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.7 Feasible Solution Area

2-22

Objective Function Solution = $800 Graphical Solution of Maximization Model (7 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.8 Objection Function Line for Z = $800

2-23

Alternative Objective Function Solution Lines Graphical Solution of Maximization Model (8 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.9 Alternative Objective Function Lines

2-24

Optimal Solution Graphical Solution of Maximization Model (9 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.10 Identification of Optimal Solution Point

2-25

Optimal Solution Coordinates Graphical Solution of Maximization Model (10 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.11 Optimal Solution Coordinates

2-26

Extreme (Corner) Point Solutions Graphical Solution of Maximization Model (11 of 12)

Maximize Z = $40x1 + $50x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.12 Solutions at All Corner Points

2-27

Optimal Solution for New Objective Function Graphical Solution of Maximization Model (12 of 12)

Maximize Z = $70x1 + $20x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0

Figure 2.13 Optimal Solution with Z = 70x1 + 20x2

2-28

Slack Variables
Standard form requires that all constraints be in the form of equations (equalities). A slack variable is added to a constraint (weak inequality) to convert it to an equation (=).

A slack variable typically represents an unused resource.

A slack variable contributes nothing to the objective function value.

2-29

Linear Programming Model: Standard Form

Max Z = 40x1 + 50x2 + s1 + s2 subject to:1x1 + 2x2 + s1 = 40 4x2 + 3x2 + s2 = 120 x1, x2, s1, s2 0 Where:
x1 = number of bowls x2 = number of mugs s1, s2 are slack variables

Figure 2.14 Solution Points A, B, and C with Slack

2-30

LP Model Formulation Minimization (1 of 8)

Two brands of fertilizer available - Super-gro, Crop-quick. Field requires at least 16 pounds of nitrogen and 24 pounds of phosphate. Super-gro costs $6 per bag, Crop-quick $3 per bag. Problem: How much of each brand to purchase to minimize total cost of fertilizer given following data ?
Chemical Contribution Brand Super-gro Crop-quick Nitrogen (lb/bag) 2 4 Phosphate (lb/bag) 4 3
2-31

LP Model Formulation Minimization (2 of 8)

Figure 2.15 Fertilizing farmers field

2-32

LP Model Formulation Minimization (3 of 8)

Decision Variables: x1 = bags of Super-gro x2 = bags of Crop-quick The Objective Function: Minimize Z = $6x1 + 3x2 Where: $6x1 = cost of bags of Super-Gro $3x2 = cost of bags of Crop-Quick Model Constraints: 2x1 + 4x2 16 lb (nitrogen constraint) 4x1 + 3x2 24 lb (phosphate constraint) x1, x2 0 (non-negativity constraint)
2-33

Constraint Graph Minimization (4 of 8)

Minimize Z = $6x1 + $3x2 subject to: 2x1 + 4x2 16 4x2 + 3x2 24 x1, x2 0

Figure 2.16 Graph of Both Model Constraints

2-34

Feasible Region Minimization (5 of 8)

Minimize Z = $6x1 + $3x2 subject to: 2x1 + 4x2 16 4x2 + 3x2 24 x1, x2 0

Figure 2.17 Feasible Solution Area

2-35

Optimal Solution Point Minimization (6 of 8)

Minimize Z = $6x1 + $3x2 subject to: 2x1 + 4x2 16 4x2 + 3x2 24 x1, x2 0

Figure 2.18 Optimum Solution Point

2-36

Surplus Variables Minimization (7 of 8)

A surplus variable is subtracted from a constraint to convert it to an equation (=).

A surplus variable represents an excess above a constraint requirement level. A surplus variable contributes nothing to the calculated value of the objective function.

Subtracting surplus variables in the farmer problem constraints: 2x1 + 4x2 - s1 = 16 (nitrogen) 4x1 + 3x2 - s2 = 24 (phosphate)
2-37

Graphical Solutions Minimization (8 of 8)

Minimize Z = $6x1 + $3x2 + 0s1 + 0s2 subject to: 2x1 + 4x2 s1 = 16 4x2 + 3x2 s2 = 24 x1, x2, s1, s2 0

Figure 2.19 Graph of Fertilizer Example

2-38

Irregular Types of Linear Programming Problems

For some linear programming models, the general rules do not apply.

Special types of problems include those with:

Multiple optimal solutions Infeasible solutions Unbounded solutions

2-39

Multiple Optimal Solutions Beaver Creek Pottery

The objective function is parallel to a constraint line. Maximize Z=$40x1 + 30x2 subject to: 1x1 + 2x2 40 4x2 + 3x2 120 x1, x2 0 Where: x1 = number of bowls x2 = number of mugs

Figure 2.20 Example with Multiple Optimal Solutions

2-40

An Infeasible Problem

Every possible solution violates at least one constraint: Maximize Z = 5x1 + 3x2 subject to: 4x1 + 2x2 8 x1 4 x2 6 x1, x2 0

Figure 2.21 Graph of an Infeasible Problem

2-41

An Unbounded Problem

Value of the objective function increases indefinitely: Maximize Z = 4x1 + 2x2 subject to: x1 4 x2 2 x1, x2 0

Figure 2.22 Graph of an Unbounded Problem

2-42

Problem Statement Example Problem No. 1 (1 of 3)

Hot dog mixture in 1000-pound batches.

Two ingredients, chicken ($3/lb) and beef ($5/lb).

Recipe requirements: at least 500 pounds of chicken at least 200 pounds of beef

Ratio of chicken to beef must be at least 2 to 1.

Determine optimal mixture of ingredients that will minimize costs.

2-43

Solution Example Problem No. 1 (2 of 3)

Step 1: Identify decision variables. x1 = lb of chicken in mixture x2 = lb of beef in mixture Step 2:

Formulate the objective function.

Minimize Z = $3x1 + $5x2 where Z = cost per 1,000-lb batch $3x1 = cost of chicken $5x2 = cost of beef
2-44

Solution Example Problem No. 1 (3 of 3)

Step 3:

Establish Model Constraints x1 + x2 = 1,000 lb x1 500 lb of chicken x2 200 lb of beef x1/x2 2/1 or x1 - 2x2 0 x1, x2 0
The Model: Minimize Z = $3x1 + 5x2 subject to: x1 + x2 = 1,000 lb x1 50 x2 200 x1 - 2x2 0 x1,x2 0
2-45

Example Problem No. 2 (1 of 3)

Solve the following model graphically: Maximize Z = 4x1 + 5x2 subject to: x1 + 2x2 10 6x1 + 6x2 36 x1 4 x1, x2 0 Step 1: Plot the constraints as equations

Figure 2.23 Constraint Equations

2-46

Example Problem No. 2 (2 of 3)

Maximize Z = 4x1 + 5x2 subject to: x1 + 2x2 10 6x1 + 6x2 36 x1 4 x1, x2 0 Step 2: Determine the feasible solution space

Figure 2.24 Feasible Solution Space and Extreme Points

2-47

Example Problem No. 2 (3 of 3)

Maximize Z = 4x1 + 5x2 subject to: x1 + 2x2 10 6x1 + 6x2 36 x1 4 x1, x2 0
Step 3 and 4: Determine the solution points and optimal solution

Figure 2.25 Optimal Solution Point

2-48