Chapter: Applications of Linear Programming

Course: OR
Lecture 5

Dr. –Ing Taiba Zahid

Department of Operations and Supply Chain
NUST Business School (NBS)
National University of Sciences & Technology, Islamabad, Pakistan
Chapter Topics »Dr. Waqas Ahmed

 A Product Mix Example

 A Diet Example
 An Investment Example
 A Marketing Example
 A Transportation Example
 A Blend Example
 A Multiperiod Scheduling Example

© Dr. Waqas Ahmed 2

d »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 3

A Product Mix Example »Dr. Waqas Ahmed

Problem Definition (1 of 8)
Four-product T-shirt/sweatshirt manufacturing company.
■ Must complete production within 72 hours
■ Truck capacity = 1,200 standard sized boxes.
■ Standard size box holds12 T-shirts.
■ One-dozen sweatshirts box is three times size of standard
box.
■ $25,000 available for a production run.
■ 500 dozen blank T-shirts and sweatshirts in stock.
■ How many dozens (boxes) of each type of shirt to produce?

© Dr. Waqas Ahmed 4

A Product Mix Example (2 of 8) »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 5

A Product Mix Example Data (3 of 8) »Dr. Waqas Ahmed

Resource requirements for the product mix example.

Processing Cost Profit
Time (hr) ($) ($)
Per dozen per dozen per dozen
Sweatshirt - F 0.10 $36 $90
Sweatshirt – B/ F 0.25 48 125
T-shirt - F 0.08 25 45
T-shirt - B/ F 0.21 35 65

© Dr. Waqas Ahmed 6

A Product Mix Example »Dr. Waqas Ahmed

Model Construction (4 of 8)
Decision Variables:
x1 = sweatshirts, front printing
x2 = sweatshirts, back and front printing
x3 = T-shirts, front printing
x4 = T-shirts, back and front printing
Objective Function:
Maximize Z = $90x1 + $125x2 + $45x3 + $65x4
Model Constraints:
0.10x1 + 0.25x2+ 0.08x3 + 0.21x4  72 hr
3x1 + 3x2 + x3 + x4  1,200 boxes
$36x1 + $48x2 + $25x3 + $35x4  $25,000
x1 + x2  500 dozen sweatshirts
x3 + x4  500 dozen T-shirts
© Dr. Waqas Ahmed 7
A Product Mix Example »Dr. Waqas Ahmed

Computer Solution with

Click on Excel (5 of 8)
Objective “Data” tab
function to access
Solver

=D7*B14+E7*B15+F7*B
16+G7*B17
=J7-These cells
H7 have no
effect;
added for
“cosmetic”
Model
=F11*B16+G formulation
purposes.
11*B17 included on all
Excel files on
Exhibit 4.1
Companion
Web site © Dr. Waqas Ahmed 8
A Product Mix Example »Dr. Waqas Ahmed

Solution with Excel Solver Window (6 of 8)

Includes
all five
constrai
nts.

© Dr. Waqas Ahmed 9

A Product Mix Example »Dr. Waqas Ahmed

Solution with QM for Windows (7 of 8)

Model solution is:

x1=175.56 boxes of front-only sweatshirts
x2=57.78 boxes of front and back sweatshirts
x3 = 500 boxes of front-only t-shirts
Z=$45,522.22 profit
© Dr. Waqas Ahmed 10
A Product Mix Example »Dr. Waqas Ahmed

Solution with QM for Windows (8 of 8)

© Dr. Waqas Ahmed 11

 »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 12

A Diet Example »Dr. Waqas Ahmed

Data and Problem Definition (1 of 5)

Breakfast Food Fat Cholesterol Iron Calcium Protein Fiber Cost
Cal (g) (mg) (mg) (mg) (g) (g) ($)
1. Bran cereal (cup) 90 0 0 6 20 3 5 0.18
2. Dry cereal (cup) 110 2 0 4 48 4 2 0.22
3. Oatmeal (cup) 100 2 0 2 12 5 3 0.10
4. Oat bran (cup) 90 2 0 3 8 6 4 0.12
5. Egg 75 5 270 1 30 7 0 0.10
6. Bacon (slice) 35 3 8 0 0 2 0 0.09
7. Orange 65 0 0 1 52 1 1 0.40
8. Milk-2% (cup) 100 4 12 0 250 9 0 0.16
9. Orange juice (cup) 120 0 0 0 3 1 0 0.50
10. Wheat toast (slice) 65 1 0 1 26 3 3 0.07

Breakfast to include at least 420 calories, 5 milligrams of iron,

400 milligrams of calcium, 20 grams of protein, 12 grams of fiber,
and must have no more than 20 grams of fat and 30 milligrams of
cholesterol.
© Dr. Waqas Ahmed 13
A Diet Example »Dr. Waqas Ahmed

Model Construction – Decision Variables (2 of 5)

x1 = cups of bran cereal
x2 = cups of dry cereal
x3 = cups of oatmeal
x4 = cups of oat bran
x5 = eggs
x6 = slices of bacon
x7 = oranges
x8 = cups of milk
x9 = cups of orange juice
x10 = slices of wheat toast
© Dr. Waqas Ahmed 14
 A Diet Example »Dr. Waqas Ahmed

Model Summary (3 of 5)
Minimize Z = 0.18x1 + 0.22x2 + 0.10x3 + 0.12x4 + 0.10x5 + 0.09x6 + 0.40x7 + 0.16x8 + 0.50x9 +
0.07x10
subject to:
90x1 + 110x2 + 100x3 + 90x4 + 75x5 + 35x6 + 65x7 + 100x8 + 120x9 + 65x10  420 calories
2x2 + 2x3 + 2x4 + 5x5 + 3x6 + 4x8 + x10  20 g fat
270x5 + 8x6 + 12x8  30 mg cholesterol
6x1 + 4x2 + 2x3 + 3x4+ x5 + x7 + x10  5 mg iron
20x1 + 48x2 + 12x3 + 8x4+ 30x5 + 52x7 + 250x8 + 3x9 + 26x10  400 mg of calcium
3x1 + 4x2 + 5x3 + 6x4 + 7x5 + 2x6 + x7 + 9x8+ x9 + 3x10  20 g protein
5x1 + 2x2 + 3x3 + 4x4+ x7 + 3x10  12
xi  0, for all j

© Dr. Waqas Ahmed 15

 A Diet Example »Dr. Waqas Ahmed

Computer Solution with Excel (4 of 5)

=SUMPRODUCT(C5:C14,
F5:F14)
or
=C5*F5+C6*F6+C7*F7+C8
*F8+C9*F9+C10*F10+C11
*F11+C12*F12+C13*F13+
C14*F14
Constraint
value, 420,
=SUMPRODUCT(C5:C14,E5:E
typed in cell
14) F17
Decision or
variable, =C5*E5+C6*E6+C7*E7+C8*E8
C5:C14 +C9*E9+C10*E10+C11*E11+C
12*E12+C13*E13+C14*E14
© Dr. Waqas Ahmed 16
A Diet Example »Dr. Waqas Ahmed

Solution with Excel Solver Window (5 of 5)

Decision
variables;
“servings”
in column Constraint for “calories”
C in column F;
SUMPRODUCT
(C5:C14,F5:F14)<420

© Dr. Waqas Ahmed 17

 »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 18

An Investment Example »Dr. Waqas Ahmed

Model Summary (1 of 5)
An investor has $70,000 to divide among several instruments.
Municipal bonds have an 8.5% return, CD’s a 5% return, t-bills a
6.5% return, and growth stock 13%.

The following guidelines have been established:

1.No more than 20% in municipal bonds
2.Investment in CDs should not exceed the other three
alternatives
3.At least 30% invested in treasury bills and CDs
4.More should be invested in CDs and treasury bills than in
municipal bonds and growth stocks by a ratio of 1.2 to 1
5.All $70,000 should be invested.

© Dr. Waqas Ahmed 19

 »Dr. Waqas Ahmed

Standard form requires that fractional relationship between variables be

© Dr. Waqas Ahmed
eliminated 20
An Investment Example »Dr. Waqas Ahmed

Model Summary (2 of 5)
Maximize Z = $0.085x1 + 0.05x2 + 0.065 x3+ 0.130x4
subject to:
x1  $14,000
x2 - x1 - x3- x4  0
x2 + x3  $21,000
-1.2x1 + x2 + x3 - 1.2 x4  0
x1 + x2 + x3 + x4 = $70,000
x1, x2, x3, x4  0
where
x1 = amount ($) invested in municipal bonds
x2 = amount ($) invested in certificates of deposit
x3 = amount ($) invested in treasury bills
x4 = amount ($) invested in growth stock fund
© Dr. Waqas Ahmed 21
An Investment Example »Dr. Waqas Ahmed

Computer Solution with Excel (3 of 5)

Objective
function, Z,
for total
return First
guidelin
e,
=D6*B1
3

Total investment
requirement,
=D10*B13+E10*B14+F10*
B15+G10*B16

© Dr. Waqas Ahmed 22

An Investment Example »Dr. Waqas Ahmed

Solution with Excel Solver Window (3 of 4)

Guideline
constraints

© Dr. Waqas Ahmed 23

An Investment Example »Dr. Waqas Ahmed

Sensitivity Report (4 of 4)

Shadow price
for the amount
available to
invest
Exhibit 4.9
© Dr. Waqas Ahmed 24
 »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 25

A Marketing Example »Dr. Waqas Ahmed

Data and Problem Definition (1 of 7)

Exposure
(people/ad or Cost
commercial)
Television Commercial 20,000 $15,000

Radio Commercial 2,000 6,000

Newspaper Ad 9,000 4,000

 Budget limit $100,000

 Television time for four commercials
 Radio time for 10 commercials
 Newspaper space for 7 ads
 Resources for no more than 15 commercials and/or ads
© Dr. Waqas Ahmed 26
A Marketing Example »Dr. Waqas Ahmed

Model Summary (2 of 7)

Maximize Z = 20,000x1 + 12,000x2 + 9,000x3

subject to:
15,000x1 + 6,000x 2+ 4,000x3  100,000
x1  4
x2  10
x3  7
x1 + x2 + x3  15
x1, x2, x3  0
where
x1 = number of television commercials
x2 = number of radio commercials
x3 = number of newspaper ads
© Dr. Waqas Ahmed 27
A Marketing Example »Dr. Waqas Ahmed

Solution with Excel (3 of 7)

Objective
function

=F6*D6+F7*D7+F8*D8
or
=SUMPRODUCT(D6:D8,
F6:F8)
© Dr. Waqas Ahmed 28
A Marketing Example »Dr. Waqas Ahmed

Solution with Excel Solver Window (4 of 7)

Includes
all five
constrain
ts

© Dr. Waqas Ahmed 29

A Marketing Example »Dr. Waqas Ahmed

Integer Solution with Excel (5 of 7)

Decision
variables

Click on
“int” for
integer.

© Dr. Waqas Ahmed 30

A Marketing Example »Dr. Waqas Ahmed

Integer Solution with Excel (6 of 7)

Integer
restriction

© Dr. Waqas Ahmed 31

A Marketing Example »Dr. Waqas Ahmed

Integer Solution with Excel (7 of 7)

Better solution—17,000
Integer solution more total exposures—
than rounded-down
solution
© Dr. Waqas Ahmed 32
 »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 33

A Transportation Example »Dr. Waqas Ahmed

Problem Definition and Data (1 of 3)

Warehouse supply of Retail store demand
Television Sets: for television sets:
1 - Cincinnati 300 A - New York 150
2 - Atlanta 200 B - Dallas 250
3 - Pittsburgh 200 C - Detroit 200
Total 700 Total 600
Unit Shipping Costs:

To Store
From Warehouse
A B C
1 $16 $18 $11
2 14 12 13
3 13 15 17
© Dr. Waqas Ahmed 34
A Transportation Example »Dr. Waqas Ahmed

Model Summary (2 of 4)

Minimize Z = $16x1A + 18x1B + 11x1C + 14x2A + 12x2B + 13x2C +

13x3A + 15x3B + 17x3C
subject to:
x1A + x1B+ x1C  300
x2A+ x2B + x2C  200
A double-subscripted
x3A+ x3B + x3C  200 variable is simply another
form of variable name
x1A + x2A + x3A = 150
x1B + x2B + x3B = 250
x1C + x2C + x3C = 200 © Dr. Waqas Ahmed 35
A Transportation Example »Dr. Waqas Ahmed

Solution with Excel (3 of 4)

=C5+D5+E5
=C5+C6+C7

© Dr. Waqas Ahmed 36

A Transportation Example »Dr. Waqas Ahmed

Solution with Solver Window (4 of 4)

Decision variables

Demand
constraints
Supply constraints

© Dr. Waqas Ahmed 37

 »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 38

A Blend Example »Dr. Waqas Ahmed

Problem Statement and Variables (1 of 7)

Determine the optimal mix of the three components in each

grade of motor oil that will maximize profit. Company wants to
produce at least 3,000 barrels of each grade of motor oil.

Decision variables: The quantity of each of the three

components used in each grade of gasoline (9 decision
variables); xij = barrels of component i used in motor oil grade
j per day, where i = 1, 2, 3 and j = s (super), p (premium), and
e (extra).

© Dr. Waqas Ahmed 39

A Blend Example »Dr. Waqas Ahmed

Problem Definition and Data (2 of 7)

Maximum Barrels
Component Cost/barrel
Available/day
1 4,500 $12
2 2,700 10
3 3,500 14

Grade Component Specifications Selling Price ($/bbl)

At least 50% of 1
Super $23
Not more than 30% of 2
At least 40% of 1
Premium
Not more than 25% of 3 20
At least 60% of 1
Extra 18
At least 10% of 2

© Dr. Waqas Ahmed 40

A Blend Example »Dr. Waqas Ahmed

Problem Statement and Variables (3 of 7)

Blend specification constraint for super, which
must contain 50% of component 1.

x1s Convert to standard form, a

0.50 linear function on the left
x1s  x2 s  x3 s
side and numeric value on
the right.
Multiply both sides by the
denominator and collect terms
x1s 0.50( x1s  x2 s  x3 s )
0.5 x1s  0.5 x2 s  0.5 x3 s 0
© Dr. Waqas Ahmed 41
A Blend Example »Dr. Waqas Ahmed

Model Summary (4 of 7)
Maximize Z = 11x1s + 13x2s + 9x3s + 8x1p + 10x2p + 6x3p + 6x1e
+ 8x2e + 4x3e
subject to:
x1s + x1p + x1e  4,500 bbl.
x2s + x2p + x2e  2,700 bbl.
x3s + x3p + x3e  3,500 bbl.
0.50x1s - 0.50x2s - 0.50x3s  0
0.70x2s - 0.30x1s - 0.30x3s  0
0.60x1p - 0.40x2p - 0.40x3p  0
0.75x3p - 0.25x1p - 0.25x2p  0
0.40x1e- 0.60x2e- - 0.60x3e  0
0.90x2e - 0.10x1e - 0.10x3e  0
x1s + x2s + x3s  3,000 bbl.
x1p+ x2p + x3p  3,000 bbl.
x1e+ x2e + x3e  3,000 bbl. all xij  0

© Dr. Waqas Ahmed 42

A Blend Example »Dr. Waqas Ahmed

Solution with Excel (5 of 7)

=B7+B10
+B13

Decision =B7+B8 =0.5*B7-

variables - +B9 0.5*B8-0.5*B9
B7:B15
© Dr. Waqas Ahmed 43
A Blend Example »Dr. Waqas Ahmed

Solution with Solver Window (6 of 7)

© Dr. Waqas Ahmed 44

A Blend Example »Dr. Waqas Ahmed

Sensitivity Report (7 of 7)

The
The upper limit for the
shadow
sensitivity range for
price for
component 1 is
component © Dr. Waqas Ahmed 45
 »Dr. Waqas Ahmed

© Dr. Waqas Ahmed 46

A Multiperiod Scheduling Example »Dr. Waqas Ahmed

Problem Definition and Data (1 of 5)

Production Capacity: 160 computers per week
50 more computers with overtime
Assembly Costs: $190 per computer regular time;
$260 per computer overtime
Inventory Holding Cost: $10/computer per week
Order schedule:
Week Computer Orders
1 105
2 170
3 230
4 180
5 150
6 250
© Dr. Waqas Ahmed 47
A Multi-Period Scheduling Example »Dr. Waqas Ahmed

Decision Variables (2 of 5)

Decision Variables:
rj = regular production of computers in week j
(j = 1, 2, …, 6)
oj = overtime production of computers in week j
(j = 1, 2, …, 6)
ij = extra computers carried over as inventory in week j
(j = 1, 2, …, 5)

© Dr. Waqas Ahmed 48

A Multi-Period Scheduling Example »Dr. Waqas Ahmed

Model Summary (3 of 5)
Model summary:
Minimize Z = $190(r1 + r2 + r3 + r4 + r5 + r6) + $260(o1+o2
+o3 +o4+o5+o6) + 10(i1 + i2 + i3 + i4 + i5)
subject to:
rj  160 computers in week j (j = 1, 2, 3, 4, 5, 6)
oj  50 computers in week j (j = 1, 2, 3, 4, 5, 6)
r1 + o1 - i1 = 105 week 1
r2 + o2 + i1 - i2 = 170 week 2
r3 + o3 + i2 - i3 = 230 week 3
r4 + o4 + i3 - i4 = 180 week 4
r5 + o5 + i4 - i5 = 150 week 5
r6 + o6 + i5 = 250 week 6
rj, oj, ij  0 © Dr. Waqas Ahmed 49
A Multi-Period Scheduling Example »Dr. Waqas Ahmed

Solution with Excel (4 of 5)

G7-H7

B7+D7+I6; regular
Decision variables Decision variables production + overtime
for regular for overtime production +
production – B6:B11 production – inventory from
D6:D11 previous week
© Dr. Waqas Ahmed 50
 »Dr. Waqas Ahmed

Thank you! Any Questions

© Dr. Waqas Ahmed 51