Quantitative Methods

MM ZG515 / QM ZG515

L10: Linear Programming
BITS Pilani Srinivas Kota
Work Integrated Learning 
Programmes Division
Scope of this lecture

• Formulate linear programming models, including an objective 
function and constraints
• Graphically solve an LP problem with the iso‐profit line 
method
• Graphically solve an LP problem with the corner‐point 
method
• Interpret sensitivity analysis and shadow prices
• Construct and solve a minimization problem
• Formulate production‐mix, diet, and labor scheduling 
problems

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 Linear Programming

• A mathematical technique to help plan and make

decisions relative to the trade‐offs necessary to
allocate resources

• Will find the minimum or maximum value of the objective
• Guarantees the optimal solution to the model formulated

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 LP Applications

• Scheduling school buses to minimize total distance traveled

• Allocating police patrol units to high crime areas in order to minimize
response time to 911 calls
• Scheduling tellers at banks so that needs are met during each hour of the
day while minimizing the total cost of labor
• Selecting the product mix in a factory to make best use of machine‐ and
labor‐hours available while maximizing the firm’s profit
• Picking blends of raw materials in feed mills to produce finished feed
combinations at minimum costs
• Determining the distribution system that will minimize total shipping cost
• Developing a production schedule that will satisfy future demands for a
firm’s product and at the same time minimize total production and
inventory costs
• Allocating space for a tenant mix in a new shopping mall
so as to maximize revenues to the leasing company
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 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
3. There must be alternative courses of action to
choose from
4. The objective and constraints in linear
programming problems must be expressed in
terms of linear equations or inequalities
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 Formulating LP Problems

The product-mix problem at Shader Electronics

Two products
• Shader X-pod, a portable music player
• Shader BlueBerry, an internet-connected color
telephone

Determine the mix of products that will produce the

maximum profit

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 Formulating LP Problems

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

Decision Variables:
X1 = number of X-pods to be produced
X2 = number of BlueBerrys to be produced

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 Formulating LP Problems

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

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 Formulating LP Problems

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)
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 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

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 Graphical Solution

X2
Iso-Profit
100 –
Line Solution Method
–
Choose80 a– possible value for the
Number of BlueBerrys

objective–function Assembly (constraint B)

60 –
210 = 7X1 + 5X2
–
40 –
Solve for–the axis intercepts of the
Electronics function
(constraint A)
and plot the line
20 – Feasible
region
–
X2 = 42 X1 = 30
|– | | | | | | | | | | X1
0 20 40 60 80 100
Number of X-pods
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 Graphical Solution

X2

100 –
– 350 = 7X1 + 5X2

80 –
Number of BlueBerrys

280 = 7X1 + 5X2

–
60 – 210 = 7X1 + 5X2
–
40 –
– 420 = 7X1 + 5X2
20 –
–
|– | | | | | | | | | | X1
0 20 40 60 80 100
Number of X-pods
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 Graphical Solution

X2

100 –
– Maximum profit line

80 –
Number of BlueBerrys

–
Optimal solution point
60 – (X1 = 30, X2 = 40)
–
40 –
– 420 = 7X1 + 5X2
20 –
–
|– | | | | | | | | | | X1
0 20 40 60 80 100
Number of X-pods
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 Corner‐Point Method

• The optimal
X2 value will always be at a corner
point 100 –
Solve for the intersection of two constraints
2 –
• Find the objective function value at each
4X
80 – + 3X ≤ 240 (electronics time)
Number of BlueBerrys

corner point
–
1 and 2 choose the one with the
2X 1 + 1X2 ≤ 100 (assembly time)
highest60profit
–

4X1 +– 3X2 = 240 3 4X1 + 3(40) = 240

(X401 =–- 0,
Point 1 : - 4X 2X X2 ==0)
-200 4X17(0)
Profit + + 120
5(0) = =
0 240
1 – 2
Point 2 : (X201 =
+– 0,1XX2 ==80)40 Profit 7(0) + 5(80)
X1 == 40030
2
Point 4 : (X1 =– 50, X2 = 0) Profit 7(50) + 5(0) = 350
|– | | | | | | | | | | X1
1
0 20 40 60 80 100
4
Number of X-pods
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 Corner‐Point Method

• The optimal
X2 value will always be at a corner
point 100 –
2 –
• Find the objective
80 –
function value at each
Number of BlueBerrys

corner point
–
and choose the one with the
highest60profit
–
–
3
Point 1 : (X401 =– 0, X2 = 0) Profit 7(0) + 5(0) = 0
–
Point 2 : (X201 =– 0, X2 = 80) Profit 7(0) + 5(80) = 400
Point 4 : (X1 =– 50, X2 = 0) Profit 7(50) + 5(0) = 350
|– | | | | | | | | | | X
Point 3 : 1 = 30, X = 40)
(X Profit 7(30) +100
5(40) = 4101
1 0 20
2 40 60 80
4
Number of X-pods
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 Sensitivity Analysis

How sensitive the results are to parameter changes

• Change in the value of coefficients
• Change in a right-hand-side value of a
constraint
Trial-and-error approach
Analytic post-optimality method

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 Changes in Resources

• The right-hand-side values of constraint equations may

change as resource availability changes
• The shadow price of a constraint is the change in the value
of the objective function resulting from a one-unit change in
the right-hand-side value of the constraint
• Shadow prices are often explained as answering the
question “How much would you pay for one additional unit
of a resource?”
• Shadow prices are only valid over a particular range of
changes in right-hand-side values
• Sensitivity reports provide the upper and lower limits of this
range

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 Sensitivity Analysis

X2
–
Changed assembly constraint from 2X1
100 –
+ 1X2 = 100
–
to 2X1 + 1X2 = 110
80 – 2
–
Corner point 3 is still optimal, but
60 –
values at this point are now X1 = 45, X2
–
= 20, with a profit = 415
40 –
–
20 – Electronics constraint is
3 unchanged
–
1 |– | | | | | | | | | |
0 20 40 4 60 80 100 X1

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 Sensitivity Analysis

X2
–
100 – Changed assembly constraint from 2X1
– + 1X2 = 100
80 –
to 2X1 + 1X2 = 90
2 –
Corner point 3 is still optimal, but
60 –
values at this point are now X1 = 15, X2
– 3
= 60, with a profit = 405
40 –
–
20 – Electronics constraint is
unchanged
–
1 |– | | | | | | | | | |
0 20 40 4 60 80 100 X1

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 Changes in the Objective Function 
Coefficients
• A change in the coefficients in the objective function may
cause a different corner point to become the optimal
solution
• The sensitivity report shows how much objective function
coefficients may change without changing the optimal
solution point

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 Solving Minimization Problem

• 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

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 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
Subject to:
X1 ≥ 30 tons of black-and-white chemical
X2 ≥ 20 tons of color chemical
X1 + X2 ≥ 60 tons total
X1, X2 ≥ 0 nonnegativity requirements
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 Minimization Example

X2
60 – X1 + X2 = 60

50 –
Feasible
40 – region

30 –
b

20 –
a
10 – X1 = 30
X2 = 20

|– | | | | | |
X1
0 10 20 30 40 50 60
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 Minimization Example

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 Minimization Example

Total cost at a = 2,500X1 + 3,000X2

= 2,500 (40)+ 3,000(20)
= 160,000
Total cost at b = 2,500X1 + 3,000X2
= 2,500 (30)+ 3,000(30)
= 165,000

Lowest total cost is at point a

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 LP Applications
Formulate the Linear Programming Model for the following Problem

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