Minimum Cost Flow: A minimum cost flow problem is a optimization and decision problem to find the

cheapest possible of sending a certain amount of flow through a flow network. A typical application of
this problem involves finding the best delivery route from a factory to a warehouse where the road
network has some capacity and cost associated.

The min. cost flow problem is described below

1) The network is a directed and connected network

2) Atleast one of the nodes is supply node
3) Atleast one of the other nodes is a demand node
4) All the remaining nodes are transhipment nodes
5) Flow through an arc is allowed only in the direction indicated by the arrowhead, where the
maximum amount of flow is given by the capacity of that arc.
6) The network has enough arcs with sufficient capacity to enable all the flow generated at the
supply nodes to reach all the demand nodes
7) The objective is to minimize the total cost of sending the available supply through the network to
satisfy the given demand.

Formulation of the model

Consider a directed and connected network where the n nodes include atleast one supply node
and atleast one demand node. the decision variables are
xij = flow through arc i → j and the given information includes

cij = cost per unit flow through arc i → j

dij = arc capacity for arc i → j

bi = net flow generated at node i

The value of bi , depends on the nature of node i , where

bi > 0 if node i is a supply node

bi < 0 if node i is a demand node

bi = 0 if node i is a transhipment node

The objective is to minimize the total cost of sending the available supply through the network to
satisfy the given demand

𝑀𝑖𝑛 𝑍 = ∑𝑛𝑖=1 ∑𝑛𝑗=1 𝑐𝑖𝑗 𝑥𝑖𝑗

Subject to
∑𝑛𝑗=1 𝑥𝑖𝑗 − ∑𝑛𝑗=1 𝑥𝑗𝑖 = 𝑏𝑖

And 0 ≤ xij ≤ dij , for each arc i → j

The first summation in the node constraints represents the total flow out of node i, and the second
summation represents the total flow into node i, so the difference is the flow generated at this
node.
Feasible solution property: A necessary condition for a minimum cost flow problem to have any
feasible solution is that
∑𝑛𝑖=1 𝑏𝑖 = 0

𝑖. 𝑒 the total flow being generated at the supply nodes equals to the total flow being absorbed at
the demand.

Diet problem: The goal of the diet problem is to select a set of foods that will satisfy a set of daily
nutritional requirement at minimum cost. The problem is formulated as a linear program where
the objective is to minimize cost and the constraints are to satisfy the specified nutritional
requirements.

Formally, the cost minimization version of the problem can be defined as follows:

Define 𝑥𝑗 as the quantity of the jth food in the diet, let 𝑎𝑖𝑗 denote the amount of nutrients of type
i in one unit of food j, define 𝑐𝑗 as the cost for one serving of food j, and denote by 𝑏̅𝑖 ( 𝑏𝑖 )the
largest (smallest) acceptable quantity of nutrients of type i in the diet. The problem can then be
formulated as

𝑀𝑖𝑛 𝑍 = ∑𝑗 𝑐𝑗 𝑥𝑗

s.t 𝑏𝑖 ≤ ∑𝑗 𝑎𝑖𝑗 𝑥𝑗 ≤ 𝑏̅𝑖 ∀𝑖

𝑥𝑖𝑗 ≥ 0 ∀𝑗

Example: Vitamins A and B are found in foods F1 and F2. One unit of food F1 contains three units
of vitamin A and four units of vitamin B. one unit of food F2 contains six units of vitamin A and
three units of vitamin B. One unit of food F1 and F2 cost Rs4 and 5, resp. The min. daily requirement
(for a person) of vitamins A and B is 80 and 100 units, resp. Assuming that anything in excess of
the daily min. requirement of A and B is not harmful. Formulate this problem as an LP model to
find out the optimum mixture of food F1 and F2 at the minimum cost which meets the daily
minimum requirement of vitamins A and B.

Let 𝑥1 , 𝑥2= number of vitamin units purchased of food F1 and F2 resp.

𝑀𝑖𝑛. 𝑍 = 4𝑥1 + 5𝑥2

Subject to the constraints

3𝑥1 + 6𝑥2 ≥ 80
4𝑥1 + 3𝑥2 ≥ 100
𝑥1 , 𝑥2 ≥ 0

Scheduling problems: Optimization problems that involve assigning resources to perform a set of
tasks at specific times are called scheduling problems. The goal of such problems is to find a
schedule that minimizes the total amount of time (or cost) required to complete all the tasks.
LP model of scheduling problem
Let t= number of time periods, Periods are indexed by i= 1,2, 3,…….t
n= number of workforce patterns, patterns are indexed by j=0,1……n
 ri = workforce requirement in period t
ci = cost associated with assigning one worker with pattern j

1 𝑖𝑓 𝑝𝑎𝑡𝑡𝑒𝑟𝑛 𝑗 𝑐𝑜𝑣𝑒𝑟𝑠 𝑝𝑒𝑟𝑖𝑜𝑑 𝑖

𝑎𝑖𝑗 = {
0 𝑖𝑓 𝑝𝑎𝑡𝑡𝑒𝑟𝑛 𝑗 𝑑𝑜𝑒𝑠 𝑛𝑜𝑡 𝑐𝑜𝑣𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑 𝑖

𝑥𝑗 = number of workers assigned with patterns j

𝑀𝑖𝑛 𝑍 = ∑𝑛𝑗=1 𝑐𝑗 𝑥𝑗

Subject to

∑𝑛𝑗=1 𝑎𝑖𝑗 𝑥𝑗 ≥ 𝑟𝑖 𝑓𝑜𝑟 𝑖 = 1, … , 𝑡

𝑥𝑗 ≥ 0 for j= 1,….,n

Production Planning: Production planning means to fix the production goals and to estimate the
resources which are required to achieve these goals. It prepares a detailed plan for achieving the
production goals economically, efficiently and in time. It forecasts each step in the production process. It
forecasts the problems, which may arise in the production process. It tries to remove these problems. It
also tries to remove the causes of wastage. Production planning provides answers for two major questions

1) What work should be done?

2) How much time will be taken to perform the work?
So, production planning decides the ways and means of production. It shows the direction. It is
based on sales forecasting. It is a prerequisite of production control.

Example: A pharmaceutical company produces two pharmaceutical products: A and B. Production of both
products requires the same process I and II. The production of B results also in a by product C at no extra
cost. the product A can be sold at a profit of Rs3 per unit and B at a profit of Rs8 per unit. Some of this by
product can be sold at a unit profit of Rs2, the remainder has to be destroyed and the destruction cost in
Rs1per unit. Forecasts show that only upto 5 units of C can be sold. The company gets 3 units of C for each
unit of B produced. The manufacturing times are 3 hrs per unit for A on process I and II, respectively and
4 hrs and 5 hrs per unit for B on process I and II resp. Because the product C results from producing C. the
available times are 18 and 21 hrs of process I and II resp. Formulate this problem as an LP model to
determine the quantity of A and B which should be produced , keeping C in mind, to make the highest
total profit to the company.