Linear Programming

After completing this chapter, students will be able to:

1. Understand the basic assumptions and properties of linear

programming (LP)
2. Graphically solve any LP problem that has only two variables
by both the corner point and isoprofit line methods
3. Understand special issues in LP such as infeasibility,
unboundedness, redundancy, and alternative optimal
solutions
4. Understand the role of sensitivity analysis

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 Formulating LP Problems
• One of the most common LP applications is the product
mix problem
• Two or more products are produced using limited
resources such as personnel, machines, and raw
materials
• The profit that the firm seeks to maximize is based on
the profit contribution per unit of each product
• The company would like to determine how many units
of each product it should produce so as to maximize
overall profit given its limited resources

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 Flair Furniture Company
 The Flair Furniture Company produces inexpensive tables
and chairs
 Processes are similar in that both require a certain amount
of hours of carpentry work and in the painting and
varnishing department
 Each table takes 4 hours of carpentry and 2 hours of
painting and varnishing
 Each chair requires 3 of carpentry and 1 hour of painting
and varnishing
 There are 240 hours of carpentry time available and 100
hours of painting and varnishing
 Each table yields a profit of $70 and each chair a profit of
$50
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 Flair Furniture Company
 The company wants to determine the best combination of tables and chairs to
produce to reach the maximum profit

HOURS REQUIRED TO
PRODUCE 1 UNIT
(T) (C) AVAILABLE HOURS
DEPARTMENT TABLES CHAIRS THIS WEEK
Carpentry 4 3 240

Painting and varnishing 2 1 100

Profit per unit $70 $50

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 Flair Furniture Company
The decision variables representing the actual decisions we
will make are
T = number of tables to be produced per week
C = number of chairs to be produced per week
 The objective is to
Maximize profit
 The constraints are
1. The hours of carpentry time used cannot exceed 240
hours per week
2. The hours of painting and varnishing time used
cannot exceed 100 hours per week
The values for T and C must be nonnegative
T ≥ 0 (number of tables produced is greater than or equal to 0)
C ≥ 0 (number of chairs produced is greater than or equal to 0)

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 Flair Furniture Company

Decision Variable
T = number of tables to be produced per week
C = number of chairs to be produced per week

Maximize profit = $70T + $50C

subject to

4T + 3C ≤240 (carpentry constraint)----------- -(1)

2T + 1C ≤100 (painting and varnishing constraint)—(2)

T, C ≥ 0 (non negativity constraint)

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 Software Solution (LINDO)

Max 70T +50C

Subject to
4T + 3C ≤ 240 (carpentry constraint)-----------(1) Row 2
2T + 1C ≤ 100 (painting and constraint)—……(2) Row 3

LP OPTIMUM FOUND AT STEP 2

OBJECTIVE FUNCTION VALUE

1) 4100.000 Optimal Value (OV = 4100)

VARIABLE VALUE REDUCED COST

T 30.000000 0.000000
C 40.000000 0.000000 Optimal Solution (T= 30 and C = 40)

For active there is dual

ROW SLACK OR SURPLUS DUAL PRICES
(One unit increase in
2) 0.000000 15.000000 RHS of 1st constraint
3) 0.000000 5.000000 increases the profit by
15 Rs

• Both are active constraints (0 Slack/surplus means active and non zero means inactive)

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RANGES IN WHICH THE BASIS IS UNCHANGED:

OBJ COEFFICIENT RANGES

VARIABLE CURRENT ALLOWABLE ALLOWABLE
COEF INCREASE DECREASE
T 70.000000 30.000000 3.333333
C 50.000000 2.500000 15.000000

RIGHTHAND SIDE RANGES

ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
2 240.000000 60.000000 40.000000
3 100.000000 20.000000 20.000000

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 Active and Inactive Constraints
• Active and Inactive Constraints
If, at optimality (i.e. when evaluated at the optimal solution),
the left hand side of a constraint equals the right hand side,
that constraint is said to be active, or binding. Thus, an
equality constraint is always active. An inequality constraint
may or may not be active.
Geometrically, an active constraint is one that passes through
the optimal solution.
If a constraint is not active, it is said to be inactive.
Geometrically, an inactive constraint is one that does not pass
through the optimal solution.

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 Slack (RHS –LHS for ≤ type for inactive constraints)
• For a constraint of the ≤ type, the difference between the
right hand side and the left hand side (the amount
unused) is called slack. Hence slack relates to a ≤
constraint; it is the amount of a constraint that is unused
by a solution.
For example, if one constraint in a problem is that ≤ 100
hours and the solution requires the use of 90 hours of
labor, then we can say that the labor constraint has a slack
of 10 hours. Thus, slack is the amount by which the left-
hand side of a ≤ constraint is less than the right-hand side
of the constraint.
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Surplus (LHS –RHS for ≥ type for inactive constraints)
• For a constraint of ≥ type, the difference between the
left hand and the right hand side (the excess) is called
surplus. Hence surplus relates to a ≥ constraint; it is the
amount by which a constraint is exceeded by a solution.
For example, if a constraint requires that the number of
units of product A that are made be ≥ 10, and a solution
results in 12 units being produced, we can say that there
is a surplus of 2 units. Thus, surplus is the amount by
which the left hand side of ≥ constraint exceeds the right
hand side.

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 Sensitivity Analysis
• Optimal solutions to LP problems thus far have been found
under what are called deterministic assumptions
• This means that we assume complete certainty in the data
and relationships of a problem
• But in the real world, conditions are dynamic and changing
• We can analyze how sensitive a deterministic solution is to
changes in the assumptions of the model
• This is called sensitivity analysis, postoptimality analysis,
parametric programming, or optimality analysis

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 Sensitivity Analysis
Change In Impact On OS Impact On OV

R H S of active constraint Yes Yes

(By dual price amount)
R H S of Inactive Constraint No No
(Dual price is zero)
Coefficient of Objective No Yes
Function (By putting the value of OS)
(Applicable within the
given range)

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 High Note Sound Company
• The High Note Sound Company manufactures quality CD
players and stereo receivers
• Products require a certain amount of skilled artisanship
which is in limited supply
• The firm has formulated the following product mix LP model

Maximize profit = $50X1 + $120X2

Subject to 2X1 + 4X2 ≤ 80
(hours of electrician’s
time available)
3X1 + 1X2 ≤ 60
(hours of audio
technician’s time
available)
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 Software Output
max 50X1 + 120X2
Subject to
2X1 + 4X2 <= 80
3X1 + 1X2 <= 60

LP OPTIMUM FOUND AT STEP 1

OBJECTIVE FUNCTION VALUE

1) 2400.000

VARIABLE VALUE REDUCED COST

X1 0.000000 10.000000
X2 20.000000 0.000000

Optimal Solution (X1 = 0 and X2 = 20)

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 Software Output
Row Slack/Surplus Dual Price
2 0.00 30.00
3 40.00 0.00

RANGES IN WHICH THE BASIS IS UNCHANGED:

OBJ COEFFICIENT RANGES
VARIABLE CURRENT ALLOWABLE ALLOWABLE
COEF INCREASE DECREASE
X1 50.000000 10.000000 INFINITY
X2 120.000000 INFINITY 20.000000

RIGHTHAND SIDE RANGES

ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
2 80.000000 160.000000 80.000000
3 60.000000 INFINITY 40.000000

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 Changes in Resources or Right-Hand-Side
Values

• The right-hand-side values of the constraints often

represent resources available to the firm
• If additional resources were available, a higher
total profit could be realized
• Sensitivity analysis about resources will help
answer questions about how much should be paid
for additional resources and how much more of a
resource would be useful

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 Changes in Resources or Right-Hand-Side
Values

• If the right-hand side of a constraint is changed, the

feasible region will change (unless the constraint is
redundant)
• Often the optimal solution will change
• The amount of change in the objective function value that
results from a unit change in one of the resources available
is called the dual price or dual value
• The dual price for a constraint is the improvement in the
objective function value that results from a one-unit
increase in the right-hand side of the constraint

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 Changes in Resources or Right-Hand-Side
Values

• However, the amount of possible increase in the right-hand

side of a resource is limited
• If the number of hours increased beyond the upper bound,
then the objective function would no longer increase by
the dual price
• There would simply be excess (slack) hours of a resource or
the objective function may change by an amount different
from the dual price
• The dual price is relevant only within limits

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 Practice Question
E = total number of units of E2ZP’s produced next month
F = total number of units of F5ZM’s produced next month

MAX 5000E+4000F

SUBJECT TO

MINPROD) E + F  5 Row 2 (Minimum Production)

MKTPOSN) E - 3F  0 Row 3 (Market Position)

CAPA) 10E + 15F  150 Row 4 (Capacity in Department A)

CAPB) 20E + 10F 160 Row 5 (Capacity in Department B)

TESTHRS) 30E + 10F  135 Row 6 (Testing Hours )

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 Output
OBJECTIVE FUNCTION VALUE

1) 50500.00

VARIABLE VALUE REDUCED COST

E 4.5000 0.0000
F 7.0000 0.0000
 
ROW SLACK OR SURPLUS DUAL PRICES
2 6.5000 0.0000
3 16.5000 0.0000
4 0.0000 150.0000
5 0.0000 175.0000
6 70.0000 0.0000

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 RANGES IN WHICH THE BASIS IS UNCHANGED:

OBJ COEFFICIENT RANGES

VARIABLE CURRENT ALLOWABLE ALLOWABLE

COEF INCREASE DECREASE
E 5000.00 3000.00 2333.33
F 4000.00 3500.00 1500.00

RIGHTHAND SIDE RANGES

ROW CURRENT ALLOWABLE ALLOWABLE
RHS INCREASE DECREASE
2 5.00 6.50 INFINITY
3 0.00 INFINITY 16.50
4 150.00 90.00 47.14
5 160.00 73.33 40.00
6 135.00 70.00 INFINITY

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 Questions
a) Interpret the optimal solution, also explain the implication of all
slack and surplus variables.
b) What is the most that CAT would be willing to pay for an
additional hour of labor for testing?
c) What is the most that CAT would be willing to pay for an
additional hour in department B?
d) If only 130 hours were available in department A, what would be
CAT‘s profits?
e) CAT enters into a new agreement with the union whereby the
total number of hours available for testing next month is 150
hours. How would this affect the profits that can be made by CAT?
f) If the profit of E2ZP falls to $4000 per unit, would it have any
impact on the profits? If so, what?

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 Thank You

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