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CHAPTER TWO

LINEAR PROGRAMMING

2.1. Model Formulation and Graphic Solution

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Linear Programming: An Overview

 Objectives of business decisions frequently involve maximizing

profit or minimizing costs.
 Linear programming is an analytical technique in which a firm’s
decisions is represent by linear algebraic relationships, given a
business objective, and resource constraints.
 Steps in application:
 Identify problem as solvable by linear programming.
 Formulate a mathematical model of the unstructured problem.
 Solve the model.
 Implementation
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Model Components

• Decision variables: mathematical symbols representing

levels of activity of a firm.
• Objective function: a linear mathematical relationship
describing an objective of the firm, in terms of decision
variables - this function is to be maximized or minimized.
• Constraints: requirements or restrictions placed on the
firm by the operating environment, stated in linear
relationships of the decision variables.
• Parameters: numerical coefficients and constants used in
the objective function and constraints.
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LP Model Formulation
A Maximization Example
Product mix problem - Beaver Creek Pottery Company
•How many bowls and mugs should be produced to maximize
profits given labor and materials constraints?
•Product resource requirements and unit profit:

Resource Requirements
Labor Clay Profit
Product
(hr/unit) (lb/unit) ($/unit)
Bowl 1 4 40
Mug 2 3 50
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LP Model Formulation
A Maximization Example
Resource 40 hrs of labor per day
Availability: 120 lbs of clay
Decision x1 = number of bowls to produce per
day
Variables: x2 = number of mugs to produce per
day
Objective Maximize Z = $40x1 + $50x2
Function: Where Z = profit per day
Resource 1x1 + 2x2  40 hours of labor
Constraints: 4x1 + 3x2  120 pounds of clay

Non-Negativity x1  0; x2  0
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LP Model Formulation
A Maximization Example

Complete Linear Programming Model:

Maximize Z = $40x1 + $50x2

subject to (s.t): 1x1 + 2x2  40
4x1 + 3x2  120
x1, x2  0
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Feasible Solutions

 A feasible solution does not violate any of the constraints:

Example x1 = 5 bowls
x2 = 10 mugs
Z = $40x1 + $50x2 = $700
Labor constraint check:
1(5) + 2(10) = 25 < 40 hours, within constraint
Clay constraint check:
4(5) + 3(10) = 70 < 120 pounds, within constraint
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Infeasible Solutions

 An infeasible solution violates at least one of the

constraints:
Example x1 = 10 bowls
x2 = 20 mugs
Z = $1400
Labor constraint check:
1(10) + 2(20) = 50 > 40 hours, violates constraint
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Graphical Solution of LP Models

• Graphical solution is limited to linear programming models

containing only two decision variables (can be used with
three variables but only with great difficulty).

• Graphical methods provide visualization of how a solution

for a linear programming problem is obtained.
 Coordinate Axes 11

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1, x2  0
 Labor Constraint 12

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1, x2  0
 Labor Constraint Area 13

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1, x2  0
 Clay Constraint Area 14

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1, x2  0
 Both Constraints 15

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1 , x 2  0
 Objective Function Solution = $800 16

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1 , x 2  0
 Extreme (Corner) Point Solutions 17

Graphical Solution of Maximization Model

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40
4x1 + 3x2  120
x1, x2  0
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Slack Variables

 Standard form of linear formulation requires that all

constraints be in the form of equations (equalities).
 A slack variable is added to a  constraint (inequality) to
convert it to an equation (=).
 A slack variable typically represents an unused resource.
 A slack variable contributes nothing to the objective function
value.
 Linear Programming Model: Standard Form 19

Max Z = 40x1 + 50x2 + s1 + s2

subject to:1x1 + 2x2 + s1 = 40
4x1 + 3x2 + s2 = 120
x1, x2, s1, s2  0
Where:
x1 = number of bowls
x2 = number of mugs
s1, s2 are slack variables
 LP Model Formulation 20

A Minimization Example

 Two brands of fertilizer available - Super-Gro, Crop-Quick.

 Field requires at least 16 pounds of nitrogen and 24 pounds
of phosphate.
 Super-Gro costs $6 per bag, Crop-Quick $3 per bag.
 Problem: How much of each brand to purchase to minimize
total cost of fertilizer given following data ?
Chemical Contribution

Nitrogen Phosphate
Brand
(lb/bag) (lb/bag)
Super-gro 2 4
Crop-quick 4 3
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LP Model Formulation
A Minimization Example
Decision Variables:
x1 = bags of Super-Gro
x2 = bags of Crop-Quick
The Objective Function:
Minimize Z = $6x1 + 3x2
Where: $6x1 = cost of bags of Super-Gro
$3x2 = cost of bags of Crop-Quick
Model Constraints:
2x1 + 4x2  16 lb (nitrogen constraint)
4x1 + 3x2  24 lb (phosphate constraint)
x1, x2  0 (non-negativity constraint)
 LP Model Formulation and Constraint Graph 23

A Minimization Example

Minimize Z = $6x1 + $3x2

subject to: 2x1 + 4x2  16
4x1 + 3x2  24
x1 , x 2  0
 Feasible Solution Area 24

A Minimization Example

Minimize Z = $6x1 + $3x2

subject to: 2x1 + 4x2  16
4x1 + 3x2  24
x1 , x 2  0
 Optimal Solution Point 25

A Minimization Example

Minimize Z = $6x1 + $3x2

subject to: 2x1 + 4x2  16
4x1 + 3x2  24
x1 , x 2  0
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Surplus Variables
A Minimization Example
 A surplus variable is subtracted from a  constraint to
convert it to an equation (=).
 A surplus variable represents an excess above a constraint
requirement level.
 Surplus variables contribute nothing to the calculated value
of the objective function.
 Subtracting surplus variables in the farmer problem
constraints:
2x1 + 4x2 - s1 = 16 (nitrogen)
4x1 + 3x2 - s2 = 24 (phosphate)
 Graphical Solutions 27

A Minimization Example

Minimize Z = $6x1 + $3x2 + 0s1 + 0s2

subject to: 2x1 + 4x2 – s1 = 16
4x1 + 3x2 – s2 = 24
x 1 , x 2 , s1 , s 2  0
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Characteristics of Linear Programming Problems

• A linear programming problem requires a decision - a

choice amongst alternative courses of action.
• The decision is represented in the model by decision
variables.
• The problem encompasses a goal, expressed as an
objective function, that the decision maker wants to
achieve.
• Constraints exist that limit the extent of achievement of
the objective.
• The objective and constraints must be definable by linear
mathematical functional relationships.
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Properties of Linear Programming Models

• Proportionality: a change in a variable results in a

proportionate change in that variable's contribution to the
value of the function.
• Additivity: Terms in the objective function and constraint
equations must be additive.
• Divisibility: Decision variables can take on any fractional
value and are therefore continuous as opposed to integer
in nature.
• Certainty: Values of all the model parameters are
assumed to be known with certainty (non-probabilistic).
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Problem Statement
Example Problem

Hot dog mixture in 1000-pound batches.

Two ingredients, chicken ($3/lb) and beef ($5/lb).
Recipe requirements:
at least 500 pounds of chicken
at least 200 pounds of beef
Ratio of chicken to beef must be at least 2 to 1.
Determine optimal mixture of ingredients that will minimize
costs.
 Solution 31

Example Problem

Step 1:
Identify decision variables.
x1 = lb of chicken in mixture (1000 lb.)
x2 = lb of beef in mixture (1000 lb.)
Step 2:
Formulate the objective function.
Minimize Z = $3x1 + $5x2
where Z = cost per 1,000-lb batch
$3x1 = cost of chicken
$5x2 = cost of beef
 Solution 32

Example Problem
Step 3:
Establish Model Constraints
x1 + x2 = 1,000 lb
x1  500 lb of chicken
x2  200 lb of beef
x1/x2  2/1 or x1 - 2x2  0
x1, x2  0
The Model: Minimize Z = $3x1 + 5x2
subject to: x1 + x2 = 1,000 lb
x1  50
x2  200
x1 - 2x2  0
x1,x2  0
 Example Problem 33

Solve the following model

graphically:
Maximize Z = 4x1 + 5x2
subject to: x1 + 2x2  10
6x1 + 6x2  36
x1  4
x1 , x 2  0
Step 1: Plot the constraints
as equations
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Example Problem

Maximize Z = 4x1 + 5x2

subject to: x1 + 2x2  10
6x1 + 6x2  36
x1  4
x1 , x 2  0
Step 2: Determine the
feasible solution space
 Example Problem 35

Maximize Z = 4x1 + 5x2

subject to: x1 + 2x2  10
6x1 + 6x2  36
x1  4
x1 , x 2  0
Step 3 and 4: Determine
the solution points and
optimal solution
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End of part one

(LP model formulation and Graphic
Solution)