Linear Programming

Operations Research
(OR):
Linear Programming
Prepared by
May G. Tamala
2-1
Operations Research
 A scientific approach to decision making,
which seeks to determine how to optimally
design and operate a system, usually under
conditions requiring the allocation of
scarce resources.
2-2
Major Phases of OR
I. Problem Description
II. Model Construction
III. Model Solution
IV. Analysis of the Results
V. Implementation
2-3
Linear Programming: An Overview
 Objectives of business decisions frequently involve maximizing
profit or minimizing costs.
 Linear programming uses linear algebraic relationships to
represent a firm’s 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. Testing the model and refine as needed
5. Implementation
2-4
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.
2-5
Summary of Model Formulation Steps
Step 1 : Clearly define the decision variables
Step 2 : Construct the objective function
Step 3 : Formulate the constraints
2-6
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.
2-7
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
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
Labor Clay Profit

Product
(Hr./Unit) (Lb./Unit) ($/Unit)
Bowl 1 4 40
Mug 2 3 50
2-9
2-10
Resource 40 hrs of labor per day

Availability: 120 lbs of clay
Decision x1 = number of bowls to produce per day
Variables: x2 = number of mugs to produce per day
Objective Maximize Z = $40x1 + $50x2
Function: Where Z = profit per day
Resource 1x1 + 2x2  40 hours of labor
Constraints: 4x1 + 3x2  120 pounds of clay
Non-Negativity x1  0; x2  0
Constraints:
2-11
Complete Linear Programming Model:
Maximize Z = $40x1 + $50x2
subject to: 1x1 + 2x2  40

4x2 + 3x2  120
x 1, x 2  0
2-12
Feasible Solutions
A feasible solution does not violate any of the constraints:
Example: x1 = 5 bowls
x2 = 10 mugs
Z = $40x1 + $50x2 = $700
Labor constraint check: 1(5) + 2(10) = 25 < 40 hours

Clay constraint check: 4(5) + 3(10) = 70 < 120 pounds
2-13
Infeasible Solutions
An infeasible solution violates at least one of the

constraints:
Example: x1 = 10 bowls
x2 = 20 mugs
Z = $40x1 + $50x2 = $1400
Labor constraint check: 1(10) + 2(20) = 50 > 40 hours
2-14
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.
2-15
Coordinate Axes
Graphical Solution of Maximization Model (1 of 12)
X2 is mugs

4x2 + 3x2  120
x1, x2  0
X1 is bowls
Figure 2.2 Coordinates for Graphical Analysis
2-16
Labor Constraint

4x2 + 3x2  120
x1, x2  0
Figure 2.3 Graph of Labor Constraint

2-17
Labor Constraint Area

4x2 + 3x2  120
x1, x2  0
Figure 2.4 Labor Constraint Area

2-18
Clay Constraint Area

4x2 + 3x2  120
x1, x2  0
Figure 2.5 Clay Constraint Area

2-19
Both Constraints

4x2 + 3x2  120
x1, x2  0
Figure 2.6 Graph of Both Model Constraints

2-20
Feasible Solution Area

4x2 + 3x2  120
x1, x2  0
Figure 2.7 Feasible Solution Area

2-21
Objective Function Solution = $800

4x2 + 3x2  120
x1, x2  0
Figure 2.8 Objection Function Line for Z = $800

2-22
Alternative Objective Function Solution Lines

4x2 + 3x2  120
x1, x2  0
Figure 2.9 Alternative Objective Function Lines

2-23
Optimal Solution

4x2 + 3x2  120
x1, x2  0
Figure 2.10 Identification of Optimal Solution Point

2-24
Optimal Solution Coordinates

4x2 + 3x2  120
x1, x2  0
Figure 2.11 Optimal Solution Coordinates

2-25
Extreme (Corner) Point Solutions

4x2 + 3x2  120
x1, x2  0
Figure 2.12 Solutions at All Corner Points

2-26
Optimal Solution for New Objective Function

4x2 + 3x2  120
x1, x2  0
Figure 2.13 Optimal Solution with Z = 70x1 + 20x2

2-27
The Diet Problem
2-28
The Diet Problem
2-29
Production Process Model
2-30
Production Process Model
2-31
Inventory Model
2-32
Inventory Model
2-33
Multiperiod Financial Model
2-34

Linear Programming

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Operations Research

Step 1 : Clearly define the decision variables

Step 2 : Construct the objective function

Step 3 : Formulate the constraints

 A decision amongst alternative courses of action is required.

 Product mix problem - Beaver Creek Pottery Company

Labor Clay Profit

Resource 40 hrs of labor per day

Complete Linear Programming Model:

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40

A feasible solution does not violate any of the constraints:

Labor constraint check: 1(5) + 2(10) = 25 < 40 hours

An infeasible solution violates at least one of the

Labor constraint check: 1(10) + 2(20) = 50 > 40 hours

 Graphical solution is limited to linear programming models

Maximize Z = $40x1 + $50x2

Maximize Z = $40x1 + $50x2

Figure 2.3 Graph of Labor Constraint

Maximize Z = $40x1 + $50x2

Figure 2.4 Labor Constraint Area

Maximize Z = $40x1 + $50x2

Figure 2.5 Clay Constraint Area

Maximize Z = $40x1 + $50x2

Figure 2.6 Graph of Both Model Constraints

Maximize Z = $40x1 + $50x2

Figure 2.7 Feasible Solution Area

Maximize Z = $40x1 + $50x2

Figure 2.8 Objection Function Line for Z = $800

Maximize Z = $40x1 + $50x2

Figure 2.9 Alternative Objective Function Lines

Maximize Z = $40x1 + $50x2

Figure 2.10 Identification of Optimal Solution Point

Maximize Z = $40x1 + $50x2

Figure 2.11 Optimal Solution Coordinates

Maximize Z = $40x1 + $50x2

Figure 2.12 Solutions at All Corner Points

Maximize Z = $70x1 + $20x2

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

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