Quantitative Analysis for Management

Thirteenth Edition

Chapter 7
Linear Programming Models:
Graphical and Computer
Methods

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Learning Objectives (1 of 2)
After completing this chapter, students will be able to:

7.1 Identify the basic assumptions and properties of linear

programming (LP).
7.2 Formulate a linear programming problem algebraically.
7.3 Graphically solve any LP problem that has only two variables by
both the corner point and isoprofit line methods.
7.4 Use Excel spreadsheets to solve LP problems.
7.5 Understand the difference between minimization and maximization
objective functions.
7.6 Understand special issues in LP such as infeasibility,
unboundedness, redundancy, and alternative optimal solutions.
7.7 Understand the role of sensitivity analysis.

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Chapter Outline
7.1 Requirements of a Linear Programming Problem
7.2 Formulating LP Problems
7.3 Graphical Solution to an LP Problem
7.4 Solving Flair Furniture’s LP Problem using QM for
Windows, Excel 2016, and Excel QM
7.5 Solving Minimization Problems
7.6 Four Special Cases in LP
7.7 Sensitivity Analysis

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Introduction
• Many management decisions involve making the most
effective use of limited resources
• Linear programming (LP)
– Widely used mathematical modeling technique
– Planning and decision making relative to resource
allocation
• Broader field of mathematical programming
– Here programming refers to modeling and solving a
problem mathematically

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Requirements of a Linear Programming
Problem
• Four properties in common
– Seek to maximize or minimize some quantity (the
objective function)
– Restrictions or constraints are present
– Alternative courses of action are available
– Linear equations or inequalities

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LP Properties and Assumptions
TABLE 7.1 LP Properties and Assumptions

PROPERTIES OF LINEAR PROGRAMS

1. One objective function
2. One or more constraints
3. Alternative courses of action
4. Objective function and constraints are linear – proportionality
and divisibility
5. Certainty
6. Divisibility
7. Nonnegative variables

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Formulating LP Problems (1 of 2)
• Developing a mathematical model to represent the
managerial problem
• Steps in formulating a LP problem
1. Completely understand the managerial problem being
faced
2. Identify the objective and the constraints
3. Define the decision variables
4. Use the decision variables to write mathematical
expressions for the objective function and the
constraints

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Formulating LP Problems (2 of 2)
• Common LP application – product mix problem
• Two or more products are produced using limited
resources
• Maximize profit based on the profit contribution per unit of
each product
• Determine how many units of each product to produce

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Flair Furniture Company (1 of 6)
• Flair Furniture produces inexpensive tables and chairs
• Processes are similar, both require carpentry work and
painting and varnishing
– 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 (2 of 6)
• The company wants to determine the best combination of
tables and chairs to produce to reach the maximum profit

TABLE 7.2 Flair Furniture Company Data

HOURS REQUIRED TO PRODUCE 1

UNIT

TABLES CHAIRS AVAILABLE HOURS

DEPARTMENT (T) (C) THIS WEEK
Carpentry 4 3 240

Painting and varnishing 2 1 100

Profit per unit $70 $50 Blank

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Flair Furniture Company (3 of 6)
• The objective is
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 decision variables are
T = number of tables to be produced per week
C = number of chairs to be produced per week

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Flair Furniture Company (4 of 6)
• Create objective function in terms of T and C
Maximize profit = $70T + $50C
• Develop mathematical relationships for the two constraints
– For carpentry, total time used is
(4 hours per table)(Number of tables produced)
+ (3 hours per chair)(Number of chairs produced)
– First constraint is
Carpentry time used ≤ Carpentry time available
4T + 3C ≤ 240 (hours of carpentry time)

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Flair Furniture Company (5 of 6)
• Similarly
Painting and varnishing time used
≤ Painting and varnishing time available
2 T + 1C ≤ 100 (hours of painting and varnishing time)

This means that each table produced requires two

hours of painting and varnishing time
– Both of these constraints restrict production capacity
and affect total profit

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Flair Furniture Company (6 of 6)
• 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)

The complete problem stated mathematically

Maximize profit = $70T + $50C

subject to
4T + 3C ≤ 240 (carpentry constraint)
2T + 1C ≤ 100 (painting and varnishing constraint)
T, C ≥ 0 (nonnegativity constraint)

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Graphical Solution to an LP Problem
• Easiest way to solve a small LP problems is graphically
• Only works when there are just two decision variables
– Not possible to plot a solution for more than two
variables
• Provides valuable insight into how other approaches work
• Nonnegativity constraints mean that we are always
working in the first (or northeast) quadrant of a graph

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Graphical Representation of Constraints (1 of
11)

FIGURE 7.1 Quadrant Containing All Positive Values

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Graphical Representation of Constraints (2 of
11)

• The first step is to identify a set or region of feasible

solutions
• Plot each constraint equation on a graph
• Graph the equality portion of the constraint equations

4T + 3C = 240
• Solve for the axis intercepts and draw the line

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Graphical Representation of Constraints (3 of
11)

• When Flair produces no tables, the carpentry constraint is:

4(0) + 3C = 240
3C = 240
C = 80
• Similarly for no chairs:
4T + 3(0) = 240
4T = 240
T = 60
– This line is shown on the following graph

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Graphical Representation of Constraints (4 of
11)

FIGURE 7.2 Graph of Carpentry

Constraint Equation 4T + 3C = 240

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Graphical Representation of Constraints (5 of
11)

FIGURE 7.3 Region that

Satisfies the Carpentry • Any point on or below the
Constraint constraint plot will not violate
the restriction
• Any point above the plot will
violate the restriction

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Graphical Representation of Constraints (6 of
11)

• The point (30, 20) lies below the line and satisfies the
constraint
4(30) + 3(20) = 180
• The point (70, 40) lies above the line and does not satisfy
the constraint
4(70) + 3(40) = 400

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Graphical Representation of Constraints (7 of
11)

FIGURE 7.4 Region that Satisfies the Painting and

Varnishing Constraint

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Graphical Representation of Constraints (8 of
11)

• To produce tables and chairs, both departments must be

used
• Find a solution that satisfies both constraints
simultaneously
• A new graph shows both constraint plots
• The feasible region is where all constraints are satisfied
– Any point inside this region is a feasible solution
– Any point outside the region is an infeasible solution

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Graphical Representation of Constraints (9 of
11)

FIGURE 7.5 Feasible Solution Region for the Flair Furniture

Company Problem

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Graphical Representation of Constraints (10
of 11)

• For the point (30, 20)

Carpentry 4T + 3C ≤ 240 hours available

constraint (4)(30) + (3)(20) = 180 hours used 
Painting 2T + 1C ≤ 100 hours available
constraint (2)(30) + (1)(20) = 80 hours used 

• For the point (70, 40)

Carpentry 4T + 3C ≤ 240 hours available
constraint (4)(70) + (3)(40) = 400 hours used 
Painting 2T + 1C ≤ 100 hours available
constraint (2)(70) + (1)(40) = 180 hours used 

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Graphical Representation of Constraints (11 of
11)

• For the point (50, 5)

Carpentry 4T + 3C ≤ 240 hours available

constraint (4)(50) + (3)(5) = 215 hours used 
Painting 2T + 1C ≤ 100 hours available
constraint (2)(50) + (1)(5) = 105 hours used 

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Isoprofit Line Solution Method (1 of 7)
• Find the optimal solution from the many possible solutions
• Speediest method is to use the isoprofit line
• Starting with a small possible profit value, graph the
objective function
• Move the objective function line in the direction of
increasing profit while maintaining the slope
• The last point it touches in the feasible region is the
optimal solution

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Isoprofit Line Solution Method (2 of 7)
• Choose a profit of $2,100
• The objective function is
$2,100 = 70T + 50C
• Solving for the axis intercepts, draw the graph
• Obviously not the best possible solution
• Further graphs can be created using larger profits
– The further we move from the origin, the larger the
profit
• The highest profit ($4,100) will be generated when the
isoprofit line passes through the point (30, 40)

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Isoprofit Line Solution Method (3 of 7)
FIGURE 7.6 Profit line of $2,100 Plotted for the Flair
Furniture Company

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Isoprofit Line Solution Method (4 of 7)
FIGURE 7.7 Four
Isoprofit Lines
Plotted for the Flair
Furniture Company

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Isoprofit Line Solution Method (5 of 7)
FIGURE 7.7 Four
Isoprofit Lines
Plotted for the Flair
Furniture Company

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Isoprofit Line Solution Method (6 of 7)
FIGURE 7.7 Four
Isoprofit Lines
Plotted for the Flair
Furniture Company

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Isoprofit Line Solution Method (7 of 7)
FIGURE 7.8 Optimal Solution to the Flair Furniture Problem

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Corner Point Solution Method (1 of 4)
• The corner point method for solving LP problems
• Look at the profit at every corner point of the feasible
region
• Mathematical theory is that an optimal solution must lie at
one of the corner points or extreme points

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Corner Point Solution Method (2 of 4)
FIGURE 7.9 Four Corner Points of the Feasible Region

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Corner Point Solution Method (3 of 4)
• Solve for the intersection of the two constraint lines
• Using the elimination method to solve simultaneous
equations method, select a variable to be eliminated
• Eliminate T by multiplying the second equation by −2 and
add it to the first equation
−2(2T + 1C = 100) = −4T −2C = −200
4T + 3C = 240 (carpentry)
−4T − 2C = −200 (painting)
C = 40

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Corner Point Solution Method (4 of 4)
• Substitute C = 40 into either equation to solve for T
4T + 3(40) = 240 Thus the
4T + 120 = 240 corner point is
4T = 120 (30, 40)
T =30
Highest profit – Optimal Solution
TABLE 7.3 Feasible Corner Points and Profits for Flair Furniture
NUMBER OF TABLES (T) NUMBER OF CHAIRS (C) PROFIT = $70T + $50C
0 0 $0
50 0 $3,500
0 80 $4,000
30 40 $4,100

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Slack and Surplus (1 of 3)
• Slack is the amount of a resource that is not used
– For a less-than-or-equal constraint
Slack = (Amount of resource available)
− (Amount of resource used)
– Flair decides to produce 20 tables and 25 chairs

4(20) + 3(25) = 155 (carpentry time used)

240 = (carpentry time available)
240 − 155 = 85 (Slack time in carpentry)

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 At the optimal solution,
Slack and Surplus (2 of 3) slack is 0 as all 240
hours are used
• Slack is the amount of a resource that is not used
– For a less-than-or-equal constraint
Slack = (Amount of resource available)
− (Amount of resource used)
– Flair decides to produce 20 tables and 25 chairs

4(20) + 3(25) = 155 (carpentry time used)

240 = (carpentry time available)
240 − 155 = 85 (Slack time in carpentry)

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Slack and Surplus (3 of 3)
• Surplus is used with a greater-than-or-equal-to constraint
to indicate the amount by which the right-hand side of the
constraint is exceeded
Surplus = (Actual amount) − (Minimum amount)

– New constraint

T + C ≥ 42
– If T = 20 and C = 25, then

20 + 25 = 45
Surplus = 45 − 42 = 3
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Summaries of Graphical Solution Methods
TABLE 7.4 Summaries of Graphical Solution Methods
ISOPROFIT METHOD
1. Graph all constraints and find the feasible region.
2. Select a specific profit (or cost) line and graph it to find the slope.
3. Move the objective function line in the direction of increasing profit (or
decreasing cost) while maintaining the slope. The last point it touches in
the feasible region is the optimal solution.
4. Find the values of the decision variables at this last point and compute
the profit (or cost).
CORNER POINT METHOD
1. Graph all constraints and find the feasible region.
2. Find the corner points of the feasible reason.
3. Compute the profit (or cost) at each of the feasible corner points.
4. Select the corner point with the best value of the objective function found
in Step 3. This is the optimal solution.

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Four Special Cases in LP
• Four special cases and difficulties arise at times when
using the graphical approach
1. No feasible solution
2. Unboundedness
3. Redundancy
4. Alternate Optimal Solutions

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No Feasible Solution (1 of 2)
• No solution to the problem that satisfies all the constraint
equations
• No feasible solution region exists
• A common occurrence in the real world
• Generally one or more constraints are relaxed until a
solution is found
• Consider the following three constraints
X 1 + 2X 2  6
2X 1 + X 2  8
X1  7
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No Feasible Solution (2 of 2) X 1 + 2X 2  6
2X 1 + X 2  8
FIGURE 7.12 A X1  7
problem with no
feasible solution

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Unboundedness (1 of 2)
• Sometimes a linear program will not have a finite solution
• In a maximization problem
– One or more solution variables, and the profit, can be
made infinitely large without violating any constraints
• In a graphical solution, the feasible region will be open
ended
• Usually means the problem has been formulated
improperly

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Unboundedness (2 of 2)
FIGURE 7.13 A Feasible Maximize profit = $3X1 + $5X2 blank
Region That Is Unbounded subject to X1 blank ≥ 5
to the Right blank X2 ≤ 10
blank X1 + 2X2 ≥ 10
blank blank X1, X2 ≥ 0

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Redundancy (1 of 2)
• A redundant constraint is one that does not affect the
feasible solution region
• One or more constraints may be binding
• This is a very common occurrence in the real world
• Causes no particular problems, but eliminating redundant
constraints simplifies the model
Maximize profit = $1X1 + $2X2 blank

subject to X1 + X2 ≤ 20
blank 2X1 + X2 ≤ 30
blank X1 blank ≤ 25
blank blank X1, X2 ≥0
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Redundancy (2 of 2) Maximize profit = $1X1 + $2X2 blank
subject to X1 + X2 ≤ 20
FIGURE 7.14 Problem blank 2X1 + X2 ≤ 30
with a Redundant blank X1 ≤ 25
Constraint blank blank X1, X2 ≥ 0

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Alternate Optimal Solutions (1 of 2)
• Occasionally two or more optimal solutions may exist
• Graphically this occurs when the objective function’s
isoprofit or isocost line runs perfectly parallel to one of the
constraints
• Allows management great flexibility in deciding which
combination to select as the profit is the same at each
alternate solution
Maximize profit = $3X1 + $2X2 blank
subject to 6X1 + 4X2 ≤ 24
blank blank ≤ 3
X 1
blank blank X1, X2 ≥ 0
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Alternate Optimal Solutions (2 of 2)
FIGURE 7.15 Example of Maximize profit = $3X1 + $2X2 blank
Alternate Optimal subject to 6X1 + 4X2 ≤ 24
Solutions blank X1 blank ≤ 3
blank blank X1, X2 ≥ 0

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Copyright

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