Chapter 2 & 3 LP

Chapter 2
Linear Programming
© 2008 Prentice Hall, Inc. B–1

Linear programming (LP)
1. Linear Programming (LP) is a mathematical
procedure for determining optimal allocation
of scarce resources
2. LP deals with a class of programming
problems where both the objective function
to be optimized is linear and all relations
among the variables corresponding to
resources are linear.
3. Any LP problem consists of an objective
function and a set of constraints. In most
cases, constraints come from the
environment in which you work to achieve
your objective
• Some of the major application areas to which
LP can be applied are:
– Work scheduling
– Production planning & Production process
– Capital budgeting
– Financial planning
– Blending (e.g. Oil refinery management)
– Farm planning
– Distribution
– Multi-period decision problems
• Inventory model
• Financial models
• Work scheduling

Facility Location Decisions
LP as a “What-If” Tool

The Facility Location
Problem
• LP-based techniques can be used to locate
– manufacturing facilities,
– distribution centres,
– warehouse/storage facilities etc.
taking into consideration factors such as
– facility/distribution capacities,
– customer demand,
– budget constraints,
– quality of service to customers etc.

Linear Programming Model
• Objective: the goal of an LP model is maximization or
minimization
• Decision variables: amounts of either inputs or outputs
• Feasible solution space: the set of all feasible
combinations of decision variables as defined by the constraints
• Constraints: limitations that restrict the available alternatives
• Parameters: numerical values

Linear Programming
Assumptions
• Linearity: the impact of decision variables is

linear in constraints and objective function
• Divisibility: non-integer values of decision
variables are acceptable
• Certainty: values of parameters are known and
constant
• Nonnegativity: negative values of decision
variables are unacceptable

2. Linear programming (LP)
Formulation of a LP Model
1. Identify the decision variables and express them

in algebraic symbols. (like X1, X2, etc..)
2. Identify all the constraints or limitations and

express as equations (scares resources like time,
labor, raw materials etc…)
3. Identify the Objective Function and express it as
a linear function (the decision maker want to
achieve it)
Requirements of an
LP Problem
1. LP problems seek to maximize or
minimize some quantity (usually
profit or cost) expressed as an
objective function
2. The presence of restrictions, or
constraints, limits the degree to
which we can pursue our objective

1. LP model formulation
 An LP is one of the bedrocks of OR
 It is a tool for solving optimization
problems
2. Any linear program consists of 4 parts:
 a set of decision variables,
 the objective function,
 and a set of constraints
 Sign Restrictions
© 2008 Prentice Hall, Inc. B – 10

General Mathematical Formulation of LPP
Optimize (Maximize or Minimize)

Z = c1 x1 + c2 x2+…+cn xn
Subject to:
a11 x1 + a12 x2 +…+ a1n xn (≤, =, ≥ ) b1
a21 x1 + a22 x2 +…+ a2n xn (≤, =, ≥ ) b2
. . . . . .
. . . . . .
am1 x1 + am2 x2 +…+ amn xn (≤, =, ≥ ) bm
and x1, x2, …xn ≥ 0

Examples

Example 1.
The Windsor Glass Company is planning to launch two new products.
Product 1 is an 8-foot glass door with aluminum framing and Product 2 a
4x6 foot double-hung wood-framed window
Aluminum frames are made in Plant 1, wood frames are made in Plant 2,
and Plant 3 produces the glass and assembles the products. Product 1
requires some of the production capacity in Plants 1 and 3, but none in
Plant 2. Product 2 needs only Plants 2 and 3. The marketing division
has concluded that the company could sell as much of either product as
could be processed by these plants. The management of the company
wants to determine what mixture of both products would be the most
profitable. The following table provides the information available.
Production time per batch, hours Production

Product time available
Plant 1 2 per week,
hours
1 1 0 4
2 0 2 12
3 3 2 18
© 2008 PrenticeProfit
Hall, Inc. per batch $3,000 $5,000 B – 13
Example2 .
The KADISCO company owns a small paint factory that produces
both interior and exterior house paints for wholesale distribution.
Two basic raw materials, A and B, are used to manufacture the
paints. The maximum availability of A is 6 tons a day; that of B is
8 tons a day. The daily requirements of the raw materials per ton
of interior and exterior paints are summarized in the following
table.
Tons of Raw Material per Ton of Paint
Exterior Interior Maximum Availability (tons)
Raw Material A 1 2 6
Raw Material B 2 1 8
• A market survey has established that the daily demand for the
interior paint cannot exceed that of exterior paint by more than 1
ton. The survey also showed that the maximum demand for the
interior paint is limited to 2 tons daily.
• The wholesale price per ton is $3000 for exterior paint and $2000
per interior paint. How much interior and exterior paint should the
company produce daily to maximize gross income?
Define:
XE = Tons of exterior paint to be produced
XI = Tons of interior paint to be produced
Maximize z = 3XE + 2XI

Subject to:
XE + 2XI  6 (1) (availability of raw material A)
2XE + XI  8 (2) (availability of raw material B)
-XE + XI  1 (3) (Restriction in production)
XI  2 (4) (Demand Restriction)
XE , XI  0
LP Applications
Production-Mix Example
Department
Product Wiring Drilling Assembly Inspection Unit Profit
XJ201 .5 3 2 .5 $ 9
XM897 1.5 1 4 1.0 $12
TR29 1.5 2 1 .5 $15
BR788 1.0 3 2 .5 $11
Capacity Minimum
Department (in hours) Product Production Level
Wiring 1,500 XJ201 150
Drilling 2,350 XM897 100
Assembly 2,600 TR29 300
Inspection 1,200 BR788 400
LP Applications
X1 = number of units of XJ201 produced
X2 = number of units of XM897 produced
X3 = number of units of TR29 produced
X4 = number of units of BR788 produced
Maximize profit = 9X1 + 12X2 + 15X3 + 11X4
subject to .5X1 + 1.5X2 + 1.5X3 + 1X4 ≤ 1,500 hours of wiring

3X1 + 1X2 + 2X3 + 3X4 ≤ 2,350 hours of drilling
2X1 + 4X2 + 1X3 + 2X4 ≤ 2,600 hours of assembly
.5X1 + 1X2 + .5X3 + .5X4 ≤ 1,200 hours of inspection
X1 ≥ 150 units of XJ201
X2 ≥ 100 units of XM897
X3 ≥ 300 units of TR29
© 2008 Prentice Hall, Inc. X4 ≥ 400 units of BR788 B – 17
Advertisement Example
• Dorian makes luxury cars and jeeps for high-income
men and women. It wishes to advertise with 1
minute spots in comedy shows and football games.
Each comedy spot costs $50K and is seen by 7M
high-income women and 2M high-income men.
Each football spot costs $100K and is seen by 2M
high-income women and 12M high-income men.
How can Dorian reach 28M high-income women
and 24M high-income men at the least cost.

Post Office
• A PO requires different numbers of

employees on different days of the
week. Union rules state each employee
must work 5 consecutive days and then
receive two days off. Find the minimum
number of employees needed.

The decision variables are xi (#
of employees starting on day i)

A Diet Problem
Suppose the only foods available in your local store are
potatoes and steak. The decision about how much of each
food to buy is to made entirely on dietary and economic
considerations. We have the nutritional and cost
information in the following table:
Per unit Per unit Minimum

of of steak requirements
potatoes
Units of carbohydrates 3 1 8
Units of vitamins
4 3 19
Units of proteins
1 3 7
Unit cost
$25 $50

A Diet Problem ctd.

The problem is to find a diet (a choice of the numbers of
units of the two foods) that meets all minimum nutritional
requirements at minimal cost. Formulate the problem LP
Mini {w = $25X1 + $50X2}
3X1 + X2 ≥8
4X1 + 3X2 ≥ 19
X1 + 3X2 ≥7
X1 , X2 ≥0
Blending Problem
Bryant's Pizza, Inc. is a producer of frozen pizza products.
The company makes a net income of $1.00 for each
regular pizza and $1.50 for each deluxe pizza produced.
The firm currently has 150 pounds of dough mix and 50
pounds of topping mix. Each regular pizza uses 1 pound of
dough mix and 4 ounces (16 ounces= 1 pound) of topping
mix. Each deluxe pizza uses 1 pound of dough mix and 8
ounces of topping mix. Based on the past demand per
week, Bryant can sell at least 50 regular pizzas and at
least 25 deluxe pizzas. The problem is to determine the
number of regular and deluxe pizzas the company should
make to maximize net income. Formulate this problem as
an LP problem
A Blending Problem
Let X1 and X2 be the number of regular and deluxe pizza, then
the LP formulation is:
Maximize: { W = X1 + 1.5 X2 }
Subject to:
X1 + X2 ≤ 150
0.25 X1 + 0.5 X2 ≤ 50
X1 ≥ 50
X2 ≥ 25
X1 , X2 ≥ 0
Transportation problem
East Africa bottling has two distribution centers (DC’s). In DC A
5000units of products are stored. In DC B, the stock is
7000units. The two DCs deliver the products to 4 different
regions. Other data are given below in the table.
shop Distance from to Demand

A B
1 25 75 2500
2 40 15 1500
3 55 60 3000
4 90 30 5000

The transportation cost per unit is proportional to the
distance travel. East Africa bottling wants to minimize the
total transportation cost over all units to be transported.
Moreover the demand should be delivered and take into
account the capacity of the distribution center too
Solution: will be solved in class….

3. Solving Linear programming (LP)
Steps for Graphical Solution
A. Corner Point Method

1. Define the problem mathematically
2. Graph by constraints by treating each
inequality as equality
3. Locate the feasible region and the corner
points
4. Find out the value of objective function at
these points
5. Find out the optimal solution and the optimal
value of O.F. if it exists
B. Iso-Profit or Iso-Cost Line Method
1. Define the problem mathematically

2. Graph by constraints by treating each inequality as equality
3. Locate the feasible region and the corner points
4.Draw out a line having the slope of Objective Function

Equation (this is called Iso-Cost / Profit Line in Minimization
and Maximization problems respectively) somewhere in the
middle of the feasible region

B. Iso-Profit or Iso-Cost Line Method ctd..
5. Move this line away from origin (in case of Maximization)

or towards Origin (in case of Minimization) until it touches
the extreme point of the feasible region
6. If a single point is encountered, that reflects optimality and
its coordination the solution. If Iso-Profit/ Cost line
coincides with any constraint line at the extreme, then this
is the case of multiple optimum solutions

Formulating LP Problems
The product-mix problem at Shader Electronics
 Two products
1. Shader X-pod, a portable music
player
2. Shader BlueBerry, an internet-
connected color telephone
 Determine the mix of products that will
produce the maximum profit

Hours Required
to Produce 1 Unit
X-pods BlueBerrys Available Hours
Department (X1) (X2) This Week
Electronic 4 3 240
Assembly 2 1 100
Profit per unit $7 $5
Table B.1
Decision Variables:
X1 = number of X-pods to be produced
X2 = number of BlueBerrys to be produced
Objective Function:
Maximize Profit = $7X1 + $5X2
There are three types of constraints

 Upper limits where the amount used is ≤
the amount of a resource
 Lower limits where the amount used is ≥
the amount of the resource
 Equalities where the amount used is =
the amount of the resource
First Constraint:
Electronic Electronic
time used is ≤ time available
4X1 + 3X2 ≤ 240 (hours of electronic time)
Second Constraint:
Assembly Assembly
time used is ≤ time available
2X1 + 1X2 ≤ 100 (hours of assembly time)
Graphical Solution
 Can be used when there are two
decision variables
1. Plot the constraint equations at their
limits by converting each equation to
an equality
2. Identify the feasible solution space
3. Create an iso-profit line based on the
objective function
4. Move this line outwards until the
optimal point is identified
Graphical Solution
X2
100 –
–
Number of BlueBerrys
80 – Assembly (constraint B)
–
60 –
–
40 –
– Electronics (constraint A)
Feasible
20 –
region
–
| |– | | | | | | | | | X1
0 20 40 60 80 100
Number of X-pods
Graphical Solution
Iso-Profit
X
Line Solution Method
2
Choose a100
possible
– value for the
objective function
–
Number of Watch TVs
80 – Assembly (constraint B)
–
$210 = 7X1 + 5X2
60 –
Solve for the– axis intercepts of the function
and plot the
40 –line
– Electronics (constraint A)
20 – X2 = 42
Feasible X1 = 30
region
–
| |– | | | | | | | | | X1
Figure B.3 0 20 40 60 80 100
Number of X-pods
Graphical Solution
X2
100 –
–
80 –
–
60 –
$210 = $7X1 + $5X2
–
(0, 42)
40 –
–
20 – (30, 0)
–
| |– | | | | | | | | | X1
Figure B.4 0 20 40 60 80 100
Number of X-pods
Graphical Solution
X2
100 –
– $350 = $7X1 + $5X2
Number of BlueBeryys
80 –
–
$280 = $7X1 + $5X2
60 –
$210 = $7X1 + $5X2
–
40 –
–
$420 = $7X1 + $5X2
20 –
–
| |– | | | | | | | | | X1
Figure B.5 0 20 40 60 80 100
Number of X-pods
Graphical Solution
X2
100 –
– Maximum profit line
80 –
–
60 – Optimal solution point
–
(X1 = 30, X2 = 40)
40 –
–
$410 = $7X1 + $5X2
20 –
–
| |– | | | | | | | | | X1
Figure B.6 0 20 40 60 80 100
Number of X-pods
Corner-Point Method
X2
100 –
2 –
80 –
–
60 –
–
3
40 –
–
20 –
–
| |– | | | | | | | | | X1
Figure B.7 1
0 20 40 60 80 100
4
Number of X-pods
Corner-Point Method
 The optimal value will always be at a
corner point
 Find the objective function value at each
corner point and choose the one with the
highest profit
Point 1 : (X1 = 0, X2 = 0) Profit $7(0) + $5(0) = $0

Point 2 : (X1 = 0, X2 = 80) Profit $7(0) + $5(80) = $400
Point 4 : (X1 = 50, X2 = 0) Profit $7(50) + $5(0) = $350

Corner-Point Method
Solvepoint
corner for the intersection of two constraints
 Find the4Xobjective function

1 + 3X2 ≤ 240 value
(electronics at each
time)
corner point
2X1 + 1Xand choose
2 ≤ 100 the one
(assembly time)with the
highest profit
4X1 + 3X2 = 240 4X1 + 3(40) = 240
Point 1 : - 4X
(X11 =-0,2X
X22 ==0)-200 4X$7(0)
Profit 1 + +120
$5(0)==240
$0
Point 2 : (X1 =+0,1X
X22 ==80)40 X1 = = 30
Profit $7(0) + $5(80) $400
Point 4 : (X1 = 50, X2 = 0) Profit $7(50) + $5(0) = $350

Corner-Point Method
corner point
 Find the objective function value at each
corner point and choose the one with the
highest profit
Point 1 : (X1 = 0, X2 = 0) Profit $7(0) + $5(0) = $0

Point 2 : (X1 = 0, X2 = 80) Profit $7(0) + $5(80) = $400
Point 4 : (X1 = 50, X2 = 0) Profit $7(50) + $5(0) = $350
Point 3 : (X1 = 30, X2 = 40) Profit $7(30) + $5(40) = $410

Solving Minimization
Problems
 Formulated and solved in much the
same way as maximization
problems
 In the graphical approach an iso-
cost line is used
 The objective is to move the iso-
cost line inwards until it reaches the
lowest cost corner point
Minimization Example
X1 = number of tons of black-and-white picture
chemical produced
X2 = number of tons of color picture chemical
produced
Minimize total cost = 2,500X1 + 3,000X2
X1 ≥ 30 tons of black-and-white chemical

X2 ≥ 20 tons of color chemical
X1 + X2 ≥ 60 tons total
X1, X2 ≥ $0 nonnegativity requirements
Minimization Example
Table B.9 X2
X + X2 = 60
60 – 1
50 –
Feasible
region
40 –
30 – b
20 –
a
X1 = 30
10 – X2 = 20
| | | | | | |
– X1
0 10 20 30 40 50 60
4. (LP) Simplex Method
• Realistic linear programming problems often have
several decision variables and many constraints.
• Such problems cannot be solved graphically;
instead an algorithm such as the simplex
procedures is used.
• Simplex method is thus the most effective analytical
method of solving linear programming problems.
• The simplex method is an ITERATIVE or “step by
step” method or repetitive algebraic approach that
moves automatically from one basic feasible
solution to another basic feasible solution improving
the situation each time until the optimal solution is
reached at.

Objective Function
Optimize (Max. or Min.) z = Σ cj xj for j = 1..n
Subject to: (Constraints)
Σ a ij xj (<=, =, >=) bi ; for j = 1 ..n, i = 1,2, …
m
(Non negativity restrictions)

xj >=0 ; j= 1, 2, …, n
4. Simplex methods
General Mathematical Formulation of LPP
Optimize (Maximize or Minimize)
Z = c1 x1 + c2 x2+…+cn xn
Subject to:
a11 x1 + a12 x2 +…+ a1n xn (<=, =, >= ) b1
a21 x1 + a22 x2 +…+ a2n xn (<=, =, >= ) b2
.
.
am1 x1 + am2 x2 +…+ amn xn (<=, =, >= ) bm
and x1, x2, …xn >=0

1. The standard form of LP problem
I. All the constraints should be expressed
as equations by slack or surplus and/or
artificial variables
II. The right hand side of each constraint should
be made non-negative; if it is not, this should
be done by multiplying both sides of the
resulting constraint by -1
• Example:
• 2X1+3X2-4X3+X3<-50, we multiply both
sides by negative
III. Three types of additional variables,
namely
a. Slack Variable (S)
b. Surplus variable (-S), and
c. Artificial variables (A)
Are added in the given LP problem to convert
it into standard form for two reasons:
– to convert an inequality into equation to have
a standard form of an LP model, and
– To get an initial feasible solution represented
by the columns of an identity matrix
The summery of the extra variables needed to add in
the given LP problem to convert it into standard
form is given below
Coefficient of extra variables Presence of variables in

Types of
Extra variables to be added in the objective function the initial solution mix
constraint
MaxZ MinZ
< Add only slack variable 0 0 Yes
> Subtract surplus variable and 0 0 No

Add artificial variable -M +M Yes
= Add artificial variable -M +M Yes

Some Definitions
• Solution: pertains to the values of decision variables
that satisfies constraints
• Feasible solution: Any solution that also satisfies the
non negativity restrictions
• Basic Solution: For a set of m simultaneous equations in
n unknowns (n>m), a solution obtained by setting n- m
of the variables equal to zero and solving the m
equation in m unknowns is called basic solution
• Basic Feasible solution: A feasible solution that is also
basic
• Optimum Feasible solution: Any basic feasible solution
which optimizes the objective function
• Degenerate Solution: when one or more basic variable
becomes equal to zero.
2. Test of optimality
i. If all Zj - Cj > 0, then the basic feasible solution is optimal
(Maximization case)
ii. If all Zj - Cj < 0, then the basic feasible solution is optimal
(Minimization case)
3. Variable to enter the basis
i. A variable that has the highest negative value in the Zj-Cj
row (Maximization case)
ii. A variable that has the most positive value in the Zj-Cj row
(Minimization case)
4. Variable to leave the basis
The row with the worst negative/largest positive and
minimum replacement ratio (or both maximization and
minimization cases respectively).

Steps in simplex methods:
• Step 1: Formulate LPP Model

• Step 2: Standardize the problem
• Step 3: Obtain the initial simplex tableau
• Step 4: check optimality (optimality test)
• Step 5: Choose the “incoming” or “entering”
variables
• Step 6: Choose the “leaving “or “outgoing” variable
• Step 6:
• Repeat step 4-6 till optimum basic feasible
solution is obtained
Example:
Solve the problem using the simplex
approach
Max. Z=300x1 +250x2
Subject to:
2x1 + x2 < 40 (Labor )

x1+3x2 < 45 (Machine)
x1 < 12 (Marketing)
x1, x2 >0
Big M-method
Minimize Z with inequalities of constraints in “ > “form
There are two methods to solve minimization LP problems:
• 1. Direct method/Big M-method/: Using artificial variables
• 2. Conversion method: Minimization by maximizing the
dual
Surplus Variable (-s):

– A variable inserted in a greater than or equal to constraint to create
equality. It represents the amount of resource usage above the
minimum required usage.
– Surplus variable is subtracted from a > constraint in the process of
converting the constraint to standard form.
• Neither the slack nor the surplus is negative value. They
must be positive or zero.
Big M-method
Example: let us consider 5x1+2x2 > 20
When x1= 4.5 and x2 2 ==>5(4.5)+2(2)-s = 20 ==> s=11
When x1= 2 and x2= 5 ==> s= 0
But when x1= 0 and x2= 0 (No production)==> s = -20 (This is mathematically
unaccepted).
Thus, in order to avoid the mathematical contradiction, we have to add
artificial variable (A)
Artificial variable (A): Artificial variable is a variable that has no meaning in a
physical sense but acts as a tool to create an initial feasible LP
solution.
Note:
Type of constraint To put into standard form

< --------------------------------------------- Add a slack variable
= ---------------------------------------------Add an artificial variable
> ---------------------- Subtract a surplus variable and add a slack variable
Big M-method
Following are the characteristics of Big-M
Method:
a. High penalty cost (or profit) is assumed as M
b. M is assigned to artificial variable A in the
objective function Z.
c. Big-M method can be applied to minimization
as well as maximization problems with the
following distinctions:
• Minimization problems: -Assign +M as coefficient of
artificial variable A in the objective function Z
• Maximization problems: -Here –M is assigned as coefficient
of artificial variable A in the objective function Z

Big M-method
d. Coefficient of S (slack/surplus) takes zero values in

the objective function Z
e. For minimization problem, the incoming variable
corresponds to the highest positive value of Zj- Cj.
f. Solution is optimal when all the values of Zj- Cj non
positive (For minimization case)
Example: 1. Minimize Z=25x1 +30x2
Subject to:
20x1+15x2 > 100
2x1+ 3x2 > 15
x1, x2 >0
Types of solutions in Simplex Methods:
•Alternative optimal solutions: when a non basic
variable (s) has/have a zero value in the rj coefficient,
there exists alternative optimal solutions
•unbounded optimal solutions: there exists an
improvement in the rj rows but there no ratio
test (ratio test fails)
•no feasible solution: in the simplex iteration,
the tableau reaches optimal but the artificial
variable remains in the basic solution
•Degenerate solutions: During ratio test when
two or more rows have the same ratio value,
there exits a degenerate solution. In this case
a basic variable will have a zero value
DUALITY and sensitivity
Every LPP has another LPP associated with it,

which is called its dual. The first way of starting a
linear problem is called the primal of the problem.
The second way of starting the same problem is
called the dual. The optimal solutions for the primal
and the dual are equivalent, but they are derived
through alternative procedures.

Note:
• The dual contains economic information useful to

management, and it may also be easier to solve, in terms of less
computation, than the primal problem.
• Corresponding to every LPP, there is another LPP.
• The given problem is called the primal.
• The related problem to the given problem is known as the dual.
• The dual of a dual is the primal
• If the primal has optimal solution ,the dual will have optimal
solution
• If the primal has no optimal solution, the dual will not have
optimal solution.
• Whether we follow the dual or primal system, the optimal
solution will remain equal.

Primal Dual
Objective is minimization Objective is maximization and vice versa
> type constraints < type constraints
No of columns No of rows
No of rows No of columns
No of decision variables No of constraints
No of constraints No of decision variables
Coefficient of Object function RHS value
RHS value Coefficient of Object function

6.5 – Finding the Dual of an LP
Define the variables for a max problem to

be z, x1, x2, …,xn and the variables for a
min problem to be w, y1, y2, …, yn.
Finding the dual to a max problem in
which all the variables are required to be
nonnegative and all the constraints are ≤
constraints (called normal max problem)
is shown on the next slide.

6.5 – Finding the Dual of an LP
max z = c1x1+ c2x2 +…+ cnxn
s.t. a11x1 + a12x2 + … + a1nxn ≤ b1
Normal max problem a21x1 + a22x2 + … + a2nxn ≤ b2
It’s dual … … … …
am1x1 + am2x2 + … + amnxn ≤ bm
xj ≥ 0 (j = 1, 2, …,n)
mim w = b1y1+ b2y2 +…+ bmym
s.t. a11y1 + a21y2 + … + am1ym ≥ c1
Normal min problem a12y1 + a22y2 + … + am2ym ≥ c2
It’s dual … … … …
a1ny1 + a2ny2 + …+ amnym ≥ cn
yi ≥ 0 (i = 1, 2, …,m)

4 – Economic Interpretation of the Dual Problem
Example: A Dakota work shop want to produce desk,

table, and chair with the available resource of: Timber,
Finishing hours and carpenter hours as revised in the table
below. The selling price and available resources are also
revised in the table. Formulate the this problem as Primal
and Dual Problem?
Resource Desk Table Chair Availability

Timmber 8 board ft 6 board ft 1 board ft 48 boards ft
Finishing 4 hours 2 hours 1.5 hours 20 hours
Carpentry 2 hours 1.5 hours 0.5 hours 8 hours
Selling Price $60 $30 $20

• Interpreting the Dual of a the Dakota (Max) Problem
The primal is: max z = 60x1 + 30x2 + 20x3
s.t. 8x1 + 6x2 + x3 ≤ 48 (Timber constraint)
4x1 + 2x2 + 1.5x3 ≤ 20 (Finishing constraint)
2x1 + 1.5x2 + 0.5x3 ≤ 8 (Carpentry constraint)
x 1 , x 2 , x3 ≥ 0
The dual is: min w = 48y1 + 20y2 + 8y3

s.t. 8y1 + 4y2 + 2y3 ≥ 60 (Desk constraint)
6y1 + 2y2 + 1.5y3 ≥ 30 (Table constraint)
y1 + 1.5y2 + 0.5y3 ≥ 20 (Chair constraint)
y1, y2, y3 ≥ 0

6.5 – Economic Interpretation of
the Dual Problem
The first dual constraint is associated with desks, the second with
tables, and the third with chairs. Decision variable y1 is associated with
Timber, y2 with finishing hours, and y3 with carpentry hours.
Suppose an entrepreneur wants to purchase all of Dakota’s resources.
The entrepreneur must determine the price he or she is willing to pay
for a unit of each of Dakota’s resources.
To determine these prices we define:

y1 = price paid for 1 boards ft of lumber
y2 = price paid for 1 finishing hour
y3 = price paid for 1 carpentry hour
The resource prices y1, y2, and y3 should be determined by solving the
Dakota dual.

4– Economic Interpretation of the Dual
Problem
The total price that should be paid for these resources is 48
y1 + 20y2 + 8y3. Since the cost of purchasing the resources
is to minimized:
min w = 48y1 + 20y2 + 8y3
is the objective function for the Dakota dual.
In setting resource prices, the prices must be high enough
to induce Dakota to sell. For example, the entrepreneur
must offer Dakota at least $60 for a combination of
resources that includes 8 board feet of timber, 4 finishing
hours, and 2 carpentry hours because Dakota could, if it
wished, use the resources to produce a desk that could be
sold for $60. Since the entrepreneur is offering 8y 1 + 4y2 +
2y3 for the resources used to produce a desk, he or she
must chose y1, y2, and y3 to satisfy: 8y1 + 4y2 + 2y3 ≥ 60
Similar reasoning shows that at least $30 must be paid for
the resources used to produce a table. Thus y1, y2, and y3
must satisfy: 6y1 + 2y2 + 1.5y3 ≥ 30
Likewise, at least $20 must be paid for the combination of
resources used to produce one chair. Thus y1, y2, and y3
must satisfy: y1 + 1.5y2 + 0.5y3 ≥ 20
The solution to the Dakota dual yields prices for timber,
finishing hours, and carpentry hours.
In summary, when the primal is a normal max problem, the dual

variables are related to the value of resources available to the decision
maker. For this reason, dual variables are often referred to as resource
shadow prices.

Duality and sensitivity
Duality Advantage
1. The dual form provides an alternative form
2. The dual reduces the computational difficulties
associated with some formulation
3. The dual provides an important economic interpretation
concerning the value of scars resources used.

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Chapter 2

© 2008 Prentice Hall, Inc. B–1

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• Linearity: the impact of decision variables is

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1. Identify the decision variables and express them

2. Identify all the constraints or limitations and

© 2008 Prentice Hall, Inc. B–9

© 2008 Prentice Hall, Inc. B – 10

General Mathematical Formulation of LPP

Optimize (Maximize or Minimize)

and x1, x2, …xn ≥ 0

© 2008 Prentice Hall, Inc. B – 12

Production time per batch, hours Production

Maximize z = 3XE + 2XI

subject to .5X1 + 1.5X2 + 1.5X3 + 1X4 ≤ 1,500 hours of wiring

© 2008 Prentice Hall, Inc. B – 18

• A PO requires different numbers of

© 2008 Prentice Hall, Inc. B – 20

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Per unit Per unit Minimum

© 2008 Prentice Hall, Inc. B – 22

Mini {w = $25X1 + $50X2}

shop Distance from to Demand

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Steps for Graphical Solution

A. Corner Point Method

B. Iso-Profit or Iso-Cost Line Method

1. Define the problem mathematically

4.Draw out a line having the slope of Objective Function

© 2008 Prentice Hall, Inc. B – 29

Steps for Graphical Solution

B. Iso-Profit or Iso-Cost Line Method ctd..

5. Move this line away from origin (in case of Maximization)

© 2008 Prentice Hall, Inc. B – 30

© 2008 Prentice Hall, Inc. B – 31

There are three types of constraints

4X1 + 3X2 ≤ 240 (hours of electronic time)

Point 1 : (X1 = 0, X2 = 0) Profit $7(0) + $5(0) = $0

© 2008 Prentice Hall, Inc. B – 42

 Find the4Xobjective function

© 2008 Prentice Hall, Inc. B – 43

Point 1 : (X1 = 0, X2 = 0) Profit $7(0) + $5(0) = $0

© 2008 Prentice Hall, Inc. B – 44

X1 ≥ 30 tons of black-and-white chemical

© 2008 Prentice Hall, Inc. B – 49

(Non negativity restrictions)

and x1, x2, …xn >=0

Coefficient of extra variables Presence of variables in

> Subtract surplus variable and 0 0 No

© 2008 Prentice Hall, Inc. B – 54

© 2008 Prentice Hall, Inc. B – 56

• Step 1: Formulate LPP Model

2x1 + x2 < 40 (Labor )

Surplus Variable (-s):