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Linear Programming Approach

The document provides further examples of applying linear programming to optimization problems involving production decisions for paint, pottery, and beverages. It defines the decision variables, constraints, and objectives for each example and discusses using graphical analysis to solve the linear programming models. It concludes with practice exercises formulating and solving additional linear programming problems

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Incia
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33 views

Linear Programming Approach

The document provides further examples of applying linear programming to optimization problems involving production decisions for paint, pottery, and beverages. It defines the decision variables, constraints, and objectives for each example and discusses using graphical analysis to solve the linear programming models. It concludes with practice exercises formulating and solving additional linear programming problems

Uploaded by

Incia
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Lecture 2

Chapter 2

Linear Programming Approach


2.1 Linear Programming LP: An Introduction [Part 1]

Many major decisions faced by a manager of a


business focus on the best way to achieve the
objectives of the firm, subject to the restrictions
placed on the manager by the operating
environment. These restrictions can take the form
of limited resources, such as time, labor, energy,
material, or money; or they can be in the form of
restrictive guidelines, such as a recipe for making
cereal or engineering specifications.
2.1 Linear Programming LP: An Introduction [Part 2]

One of the most frequent objectives of business


firms is to gain the maximum profit or, in other
words, to maximize profit. The objective of
individual organizational units within a firm (such
as a production or packaging department) is often
to minimize cost. When a manager attempts to
solve a general type of problem by seeking an
objective that is subject to restrictions, the
management science technique called Linear
Programming is frequently used.
2.1 Linear Programming LP: An Introduction [Part 3]

Objectives of a business frequently are to maximize profit


or minimize cost.

Linear programming is a model that consists of linear relationships


representing a firm's decision(s), given an objective and resource
constraints.

There are three steps in applying the linear programming


technique. First, the problem must be identified as being solvable
by linear programming. Second, the unstructured problem must be
formulated as a mathematical model. Third, the model must be
solved by using established mathematical techniques or
approaches.
2.2 Mathematical Model Formulation of a Problem
[Part 1]

The model components include decision variables, an


objective function, and model constraints, which consists
of decision variables and parameters.

Decision variables are mathematical symbols that


represent levels of activity.

Example (2.1): Reddy Mikks industry produces interior


and exterior paints from two raw materials M1 and M2
and whose details are as under:
2.2 Mathematical Model Formulation of a Problem [Part 2]
Availability Tons of raw material per ton Maximum daily
(tons) of Exterior & Interior paints Availability
Raw 6 4 24
material M1
Raw 1 2 6
material M2
Profit per 5 4
ton ($1000)
2.2 Mathematical Model Formulation of a Problem [Part 3]

- Daily demand for interior paint cannot exceed that of


exterior paint by more than 1 ton.
- Maximum daily demand of interior paint is 2 tons.
-Reddy Mikks wants to determine the optimum product
mix of interior and exterior paints that maximizes the
total daily profit.
Note: We start solution on white board
1.2 What is Operations Research (OR): Many
Definitions [Part 1]
• Operations Research or Management Science is the application
of a scientific approach to solving different problems in order to
help decision maker or managers make better decisions.

• OR is the application of modern methods of mathematical


science to complex problems involving management of large
systems of human, machines, materials and money in industry,
business, government and defense. The distinct approach is to
develop a Scientific model of the system incorporating
measurement of factors such as chance and risks to predict and
compare the outcomes of alternative decisions, strategies or
controls.
2.3 Graphical solution of linear Programming model

Note: We can calculate the corner points of feasible solution space


or area or region ABCDEFA i.e. B(4,0), C(3,1.5), D(2,2), E(1,2) &
F(0,1) by solving constraint equations simultaneously. For example,
we obtained co-ordinates of C i.e. C(3,1.5) by solving constraint
equations (1) & (2) and so on.

We will check that point C, gives the optimum (Best) solution i.e.
max. Z value i.e., we put x1 = 3 & x2 = 1.5 in equation (*), we get Z =
21 i.e. Z = 21 X 1000 => Z = $21,000.

In other words, Reddy Mikks obtain a maximum daily profit of


$21,000 daily, if they manufactures 3 tons of Exterior paint (x1) and
1.5 tons of Interior paint (x2) daily.
Example (2.2): Beaver Creek Pottery Company is a small
crafts operation run by a Native American tribal council.
The company employs skilled artisans to produce clay
bowls and mugs with authentic Native American designs
and colors. The two primary resources used by the
company are special pottery clay and skilled labor. Given
these limited resources, the company desires to know how
many bowls and mugs to produce each day in order to
maximize profit.

The details are given below:


Table (2.2)

Resource Requirements
Product LABOR CLAY PROFIT
(hr./unit) (lb./unit) ($/unit)

Bowl 1 4 40
Mug 2 3 50

There are 40 hours of labor and 120 pounds of clay


available each day for production.
Example (2.3): ABC organization manufactures 3 types of
beverage bottles(Coca Cola, Fanta and 7up) at it’s two
plants situated in Karachi and Lahore as shown below in
table (2.3):
Table (2.3)
Number of bottles produced per
day by plant at
Product Karachi Lahore

Coca-Cola 15,000 15,000


Fanta 30,000 10,000
7up 20,000 50,000
Cost per day (Rs.) 60,000 40,000
Market survey indicates that for the next quarter
there will be a demand of atleast 200,000 bottles of
Coca-cola , 400,000 bottles of Fanta and 440,000
bottles of 7up.

For how many days each plant be run for the next
quarter so as to minimize the production cost,
while still meeting the market demand?
Practice Exercise 1:

Q#1: A company produces two products that are processed on two assembly
lines. Assembly line 1 has 100 available hours, and assembly line 2 has 42
available hours. Each product requires 10 hours of processing time on line 1,
while on line 2 product 1 requires 7 hours and product 2 requires 3 hours. The
profit for product 1 is $6 per unit, and the profit for product 2 is $4 per unit.

a. Formulate a linear programming model for this problem.


b. Solve this model by using graphical analysis
Q#2: The Kalo Fertilizer Company makes a fertilizer using two chemicals that provide
nitrogen, phosphate, and potassium. A pound of ingredient 1 contributes 10 ounces
of nitrogen and 6 ounces of phosphate, while a pound of ingredient 2 contributes 2
ounces of nitrogen, 6 ounces of phosphate, and 1 ounce of potassium. Ingredient 1
costs $3 per pound, and ingredient 2 costs $5 per pound. The company wants to
know how many pounds of each chemical ingredient to put into a bag of fertilizer to
meet the minimum requirements of 20 ounces of nitrogen, 36 ounces of phosphate,
and 2 ounces of potassium while minimizing cost.
a. Formulate a linear programming model for this problem?
b. Solve this model by using graphical analysis?

Q#3 & Q#9 of Text Book (Introduction to Management Science, 9 th Edition By


Taylor)

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