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Linear Programming

The document discusses operations research and linear programming, describing linear programming as a technique that uses linear relationships to represent business decisions given objectives and constraints, with the goal of maximizing profit or minimizing costs. It provides an example of formulating a linear programming model to determine the optimal product mix for a pottery company given constraints on labor and materials. The model is solved graphically by finding the point where the objective function intersects the feasible region defined by the constraints.

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Graciously Elle
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© © All Rights Reserved
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Download as PPT, PDF, TXT or read online on Scribd
183 views

Linear Programming

The document discusses operations research and linear programming, describing linear programming as a technique that uses linear relationships to represent business decisions given objectives and constraints, with the goal of maximizing profit or minimizing costs. It provides an example of formulating a linear programming model to determine the optimal product mix for a pottery company given constraints on labor and materials. The model is solved graphically by finding the point where the objective function intersects the feasible region defined by the constraints.

Uploaded by

Graciously Elle
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 34

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
LP Model Formulation
A Maximization Example (2 of 4)

2-10
LP Model Formulation
A Maximization Example (3 of 4)

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
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
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

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
2-16
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


2-17
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


2-18
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


2-19
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


2-20
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


2-21
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


2-22
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


2-23
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


2-24
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


2-25
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


2-26
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


2-27
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

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