APK

Unit II: Determination of Optimizing Models

1. Linear Function Model
A. Equivalent Equations
B. Substitution
C. Elimination
Unit III: Linear
Programming Models
Joycelyn P. Ituriaga, MBA
Topic Learning Objectives
At the end of the unit, the student can:
1.explain the basic concept and terminologies in linear
programming as applied to managerial problems, which
includes cost minimization and maximization;
2.identify problems and develop solution strategies;
3.explain the control techniques in production and in
determining least cost or maximum profit of the firm; and
4.compute the optimum quantity that will yield to maximum
level of profit based on specific levels and capacities.
Topic Outline
Unit III. Linear Programming Models
1.Graphical Method
a.Decision Variables
b.Objective Function
c.Constraints
d.Vertices
e.Decisions
Linear Programming: Graphical
Method
• Linear Programming is a mathematical technique for
finding the bet uses of an organization’s resources.

• Graphical Solution Method is a two-dimensional

geometric analysis of Linear Programming Problems.
Restrictions
• Limited in a two-dimensional set of axes meaning if
there are more than two variables, we cannot graph the
constraints on two-dimensional set of axes.
Solving Linear Programming Problems
Graphically
A linear programming problem in two unknowns X and Y
is one in which we are to determine the maximum and
minimum value of a linear expression.
P = a1X + b1Y (for maximization)
C = a1X + b1Y (for minimization)
Called the objective function, subject to a number of
linear constraints of the form
a2X + b2Y ≤ c or
a2X + b2Y ≥ c or
a2X + b2Y = c
Solving Linear Programming Problems
Graphically
Objective function is an expression, which shows the
relationship between the variables in the problem and
the firm’s goal.
Two types of constraints:
1. Structural constraint is a limit on the availability of
resources; it is also referred as explicit constraint.
2. Non-negativity constraint is the constraint that
restricts all the variables to zero and positive solution;
it is also referred as implicit constraint.
Solving Linear Programming Problems
Graphically
Let’s take the linear programming model below.
Maximize P = 1,200X + 1,600Y Objective Function
Subject to3X + 2Y ≤ 18
2X + 4Y ≤ 20 Structural Constraints
X≤5
X ≥ 0, Y ≥ 0 Non-negativity
Constraints
Solving Linear Programming Problems
Graphically
Optimal value the highest (for maximization problem) or lowest
value (for minimization problem) of the objective function.
Optimal solution is a combination of decision variable amount
that yield the best possible value of the objective function and
satisfies all the constraints.
Feasible region is the et of combination of values for the
decision variable that satisfy the non-negativity conditions and
all the constraint simultaneously that is the allowable decision.
Extreme point is the corner of the feasible region; it is the
location of the maximum and minimum point of the feasible
region.
Solving Linear Programming Problems
Graphically
The Extreme Point Theorem
the linear objective function will have its optimal
solution at the extreme points (corner points) of the
feasible region whenever the feasible region is bounded.
If the feasible region is unbounded, there is no optimal
solution. In cases wherein there is an optimal solution
even though the feasible region in unbounded, it lies at
the extreme (or corner) of the feasible region.
Fundamental Theorem of Linear
Programming Problem
There are two things we need to consider in solving linear
programming problem such as
• If a Linear Programming (LP) problem has optimal
solution, there is always at least one extreme point
(corner point) solution of the feasible region.
• A Linear programming (LP) problem with bounded,
nonempty feasible regions always contain optimal
solutions.
Steps in Linear Programming
Graphical Method
1. Graph the linear inequalities an determine the feasible
region.
2. Determine the coordinates of the extreme points
(corner points).
3. Substitute the coordinates of the extreme points to
the objective function an identify the highest (for
maximization problem) or lowest (for minimization
problem) result.
4. The highest or lowest result obtained in step 3 serves
as the optimal solution to the LP problem.
The Graphical Solution of
Maximization Problems
Example
• A company produces two types of products, A and B. The product A and B
passes through three work before they are in their final state.
Machine # hours needed by # of hours needed by Cost in ₱ per
s product A product B hour
1 2 1 10
2 1 4.5 12
• The3 company can afford
4 200 hours for machine 3 1 and 540 hours for14
machine 2 and 480 hours for machine 3.
• What are the quantities produced of types A and B that maximize the
profit of the company if the price of type A is 138. and the price of type B
is 136.
Solution
Step 1: Represent the unknown in the problem.
Let X : # of units produced of type A
Y : # of units produced of type B
Solution
Step 2: Tabulate the data about the facts (if
necessary).
# hours # of hours Total
Machine Cost in ₱
needed needed hour
s per hour
by product A by product B s
1 2 1 200 10
2 1 4.5 540 12
3 4 3 480 14
Solution
Step 3: Formulate the objective function and constraints by restating
the information in mathematical form (LP model).
The objective function is:
Cost A : (2 x 10) + (12 x 1) + (4 x 14) = 88
Cost B : (1 x 10) + (12 x 4.5) + (3 x 14) = 106
Maximize P : (138 – 88)X + (136 – 106)Y = 50X + 30Y
Maximize P = 50X + 30Y
The constraints are:
2X + Y 200
X + 4.5Y 540

X, Y 0
Note: P will denote that the LP model is maximization problem and C for
minimization problem.
 • Step 4: Plot the constraints of the LP problem
on a graph, with deign A (X) shown on the
horizontal axis and design B (Y) shown in the

Solution vertical axis, using the intercept rule.

• Step 5: after identifying the feasible region of
the linear programming problem, we need to
trace the extreme points of the graph and solve
for the unknown coordinates.

2X +Y X +4.5Y
200 540

X 0 100 0 540 0 120

Y 200 0 120 0 160 0
Solution
Step 6: Solve the intersection of the lines, which satisfies the feasible solution
simultaneously, using any of the four mathematical techniques.
First equation: 2X + Y 200 → (1) 2X + Y = 200 → 2X + Y = 200
Second equation: X + 4.5Y 540 → (2) X + 4.5Y = 540 → (-)2X + 9Y = 1080
0X - 8Y = -880
-8Y = -880
Y = 110
Substitute to first eq.
2X + 110 = 200 Replace Y by 110
2X = 200 – 110 Collect like terms
2X = 90 Combine like terms
X = 45 Divide by 2
The intersection of first eq. and second eq. is (45, 110)
Solution
Step 6: Now determine the intersection of the first equation and third
equation.
First equation: 2X + Y 200 → (4) 2X + Y = 200 → 8X + 4Y = 800
Second equation: → (2) 4X + 3Y = 480 → (-)8X + 6Y = 960
0X - 2Y = -160
-2Y = -160
Y = 80
Substitute to first eq.
2X + 80 = 200 Replace Y by 80
2X = 200 – 80 Collect like terms
2X = 120 Combine like terms
X = 60 Divide by 2
The intersection of first eq. and second eq. is (60, 80)
Solution
Step 7: Substitute the coordinates at the extreme
points on the feasible region to the objective
function.
Objective Function: P = 50X + 30Y
Extreme
Values of the objective function
points
50(0) + 30(0) = 0 + 0 = 0
(0,0) 50(60) + 30(80) = 3000 + 2400 =
(60, 80) 5400
(36, 112) 50(36) + 30(112) = 1800 + 3360 =
(0, 120) 5160
(100, 0) 50(0) + 30(120) = 0 + 3600 = 3600
Solution
Step 8: Formulate the decision. Since the coordinate (60, 80) will give
the highest value of ₱5,400. The decision is to produce 60 items of
product A and 80 items of product B in order to maximize the profit.
Decision:
X = 60 items of product A
Y = 80 items of product B
P = ₱5,400

To check substitute the values of X and Y in all the constraints.

2X + Y 200 → 2(60) + 80 200 → 200 200
X + 4.5Y 540 → 60 + 4.5(80) 540 → 420 540
→ 4(60) + 3(80) 480 → 480 480
The Graphical Solution of Minimization
Problems
Example
• A company produces two types of chocolates (light
chocolates and dark chocolates).
• For light chocolate, we need 5g of sugar, 4g of cacao and
0.5g of butter.
• For dark chocolate, we need 10g of sugar, and 3g of
cacao.
• The company must use at least 90g of sugar, 48g of cacao
and 1.5g of butter. If the cost of one unit of light chocolates
is 2 and the cost of one unit of dark chocolate is 3. Find the
combination of products that gives the minimal cost.
Solution
Step 1: Represent the unknown in the problem.
Let X : # of units produced of light
chocolates
Y : # of units produced of dark
chocolates
Solution
Step 2: Tabulate the data about the facts (if
necessary).
Light Dark Total
Ingredien
chocolates chocolates (in
ts
(in grams) (in grams) grams
Sugar 5 10 90
Cacao 4 3 48
Butter 0.5 0 1.5
SP/unit ₱ 2 3
Solution
Step 3: Formulate the objective function and constraints
by restating the information in mathematical form (LP
model).
The objective function is:
Minimum C = 2X + 3Y
The constraints are:
5X + 10Y ≥ 90
4X + 3Y ≥ 48

X, Y 0
Note: P will denote that the LP model is maximization problem and
C for minimization problem.
 • Step 4: Plot the constraints of the LP problem on
a graph, with light chocolates (X) shown on the
horizontal axis and dark chocolates (Y) shown in

Solution the vertical axis, using the intercept rule.

• Step 5: after identifying the feasible region of
the linear programming problem, we need to
trace the extreme points of the graph and solve
for the unknown coordinates.

5X + 4X +
10Y ≥ 3Y ≥
90 48
X 0 18 0 12 3 0
Y 9 0 16 0 0 0
Solution
Step 6: Now determine the intersection of the first equation and second equation.
First equation: 5X + 10Y ≥ 90 → (4) 5X + 10Y = 90 → 20X + 40Y = 360
Second equation: → (5) 4X + 3Y = 48 → (-)20X + 15Y = 240
25Y = 120
25Y = 120
Y = 4.8
Substitute to first eq.
5X + 10(4.8) = 90 Replace Y by 4.8
5X + 48 = 90 Simplify
5X = 90 - 48 Collect like terms
5X = 42 Combine like terms
X = 8.4 Divide by 5
The intersection of first eq. and second eq. is (8.4, 4.8)
Solution
Step 6: Solve the intersection of the lines, which satisfies
the feasible solution simultaneously, using any of the four
mathematical techniques.
Notice that the third equation already have X = 3, we will directly
substitute the value of X to the second equation
Substitute to first eq.
Replace X by 3
12 + 3Y = 48 Simplify
3Y = 48 – 12 Collect like terms
3Y = 36 Combine like terms
Y = 12 Divide by 10
The intersection of first eq. and second eq. is (3, 12)
Solution
Step 7: Substitute the coordinates at the extreme
points on the feasible region to the objective
function.
Objective Function: C = 2X + 3Y
Extreme
Values of the objective function
points
(0,0) 2(0) + 3(0) = 0 + 0 = 0
(8.4, 4.8) 2(8.4) + 3(4.8) = 16.8 + 14.4 = 31.2
(3, 12) 2(3) + 3(12) = 6 + 36 = 42
(18, 0) 2(18) + 3(0) = 36 + 0 = 36
Solution
Step 8: Formulate the decision. Since the coordinate (8.4, 4.8)
will give the lowest value of ₱31.20. The decision is to produce 8
units of light chocolates and 5 units of dark chocolates in order to
have the minimal cost.
Decision:
X = 8.4 units of light chocolates
Y = 4.8 units of dark chocolates
C = ₱30.30

To check substitute the values of X and Y in all the constraints.

5X + 10Y ≥ 90 → 5(8.4) + 10(4.8) ≥ 90 → 90 ≥ 90
4X + 3Y ≥ 48 → 4(8.4) + 3(4.8) ≥ 34.5 → 48 ≥ 48
→ 0.5(8.4) ≥ 1.5 → 4.2 ≥ 1.5
End of Presentation
Thank you.