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Contents
• Introduction
• Structure of LPM
Chapter 2 • Graphical solution technique
• Matrix Algebra
Introduction to Linear Programming
• Simplex method
• Duality
• Sensitivity analysis

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2.1 LP concepts 1.2 Structure of the LPM

• Linear programming- is an optimization method which shows A. Components of the LPM
how to allocate scarce resources in the best possible way subject 1. Objective function: mathematical/ quantitative expression of the
to more than one limiting condition expressed in equations. objective of the company/ model.
• The Seven-Step Model-Building Process 2. The Decision Variables: represent unknown quantities to be
1. Identify the Problem resolved for.
2. Observe the System 3. The constraints: are restrictions which define or limit the
3. Formulate a Mathematical Model of the Problem attainability (achievability) or feasibility of a proposed course of
4. Verify the Model and Use the Model for Prediction action.
5. Select a Suitable Alternative 4. Parameters: are fixed values that specify the impact that one unit of
6. Present the Results and Conclusion(s) of the Study to the Organization each decision variable will have on the objective and on any
7. Implement and Evaluate Recommendations constraint

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1.2 Structure of the LPM… 1.2 Structure of the LPM…

B. Assumptions of LPM
1. Linearity: each decision variable has a linear impact on the objective
function and in each constraint in which it appears.
2. Divisibility: Non-integer values are acceptable.
3. Certainty: The parameters are known and constant.
4. Non-negativity: Negative values of decision variables are unrealistic.

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1.2 Structure of the LPM… Example -1

• Example: • A firm that assembles computers is about to start production of two
new micro computers. Each type of microcomputer will require
assembly time, inspection time, and storage space. The amount of each
of these resources that can be devoted to the production of micro
computers is limited. The manager of the firm would like to determine
the quantity of each micro computer to produce per week in order to
maximize the profit generated by sales of these micro computers.
Additional information
• In order to develop a suitable model of the problem, the manager has
constraints met with the design and manufacturing personnel. As a result of these
meetings, the manager has obtained the following information:
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Example -1 … Example - 1 …
Type - I Type - II 1. Define the problem:
Assembly time per unit 4 hrs 10 hrs
Determine the number of type I &II micro computers to be produced (and
sold) per week to maximize profit given the restrictions.
Inspection time per unit 2 hrs 1 hr 2. Identify the decision variables
Storage space per unit 3 cubic ft. 3 cubic fit Let X1 be Quantity of Type I Micro Computer to be produced per week
X2 be Quantity of Type II Micro Computer to be produced per week
Profit per unit $60 $50
3. Develop the objective function
Available resources 4. Identify the Constraint
Assembly time 100 hrs
Inspection time 22 hrs
Storage space 39 cubic ft.
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Example -2 2.3 Graphical solution Methods

Formulate an LPM for DTU Toys Co.
• DTU Toys manufactures wooden soldiers and trains. • Steps that involve in graphic solution Method
• Each soldier built:
1st. Graph all the constraints that involve in the model
• Sells for $27 and uses $10 worth of raw materials; increases DTU Toy’s variable
labor/overhead costs by $14; Requires 2 hours of finishing labor; and Requires 1 2nd. Identify the feasible region.
hour of carpentry labor. 3rd. Determine the coordinates of all corner points of the feasible
• Each train built: region.
• Sells for $21 and used $9 worth of raw materials; Increases DTU Toy’s variable 4th. Calculate the value of the objective function at each corner
labor/overhead costs by $10; Requires 1 hour of finishing labor; and Requires 1 points of the feasible region by using the coordinates.
hour of carpentry labor.
• If the objective function is maximization (minimization), the point
• Each week DTU Toys can obtain all needed raw material, only 100 finishing hours that gives the largest(least) value of the objective function is the
and only 80 carpentry hours. optimal/best solution.
• Also, Demand for the trains is unlimited but at most 40 soldiers are bought each
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2.3 Graphical solution Methods 2.4 Matrix and System of Linear Equations
Example 1: Maximization problem
Solve the computer assembler firm’s problem graphically.

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2.4 Matrix and System of Linear Equations 2.4 Matrix and System of Linear Equations

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2.4 Matrix and System of Linear Equations 2.4 Matrix and System of Linear Equations
• Matrix multiplication …

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Inverse of a Matrix Inverse of a Matrix

• For any given m x m matrix A, the m x m matrix B is the inverse of A if: BA AB I
• Some square matrices do not have inverses. If there does exist
an m x m matrix B that satisfies BA = AB = I, then we write:
B=A-1

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Inverse of a Matrix Inverse of a Matrix

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2.5 Simplex Method 2.5 Simplex Method

Step 1: Convert a linear programming model into a standard form by  Elementary row operations (ero).
introducing slacks and surplus variables and the inequalities should An ero transforms a given matrix A into a new
be changed into equalities. matrix A’ via one of the following operations:
Step 2: Develop the initial tableau.
Step 3: Determine the entering variable (i.e., non-basic variable Type 1 ero – Matrix A’ is obtained by multiplying
becomes basic variable) any row of A by a nonzero scalar.
Step 4: Determine the leaving variable (i.e, basic variable becomes
non-basic variable) Type 2 ero – Multiply any row of A (say, row i) by a
The process is continued until: nonzero scalar c. For some j ≠ i.
i. All values of Cj – Zj < 0 if the objective function is maximization
ii. All values of Cj – Zj >0 if the objective function is minimization Type 3 ero – Interchange any two rows of A.

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2.5 Simplex Method 2.5 Simplex Method

• Example solve the following linear programming model using The standard form is:
simplex method

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2.5 Simplex Method 2.5 Simplex Method

Initial tableau is: Entering and Leaving Variables

Pivot element

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2.5 Simplex Method 2.5 Simplex Method

• Next iteration • Optimal solution

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1. A change in the right hand side values

2.6 Sensitivity analysis
of the constraints
• Explores how a change in parameters (coefficients of the • A shadow price reveals the amount by which the value of the
constraints, coefficients of the objective function and the right objective function would increase if the level of the constraint
hand side values) will affect our decisions. was increased by one unit.

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1. A change in the right hand side values Range of feasibility for the three constraints
of the constraints …
Range of feasibility: the range over which we can change the
right hand side quantities and still have the same shadow price.
• For each constraint, the entries in the associated slack column
must be divided into the values in the Quantity column.
Allowable decrease: The smallest positive ratio.
Allowable increase: The negative ratio closest to zero.

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2. A change in the objective function 2. A change in the objective function

coefficients coefficients
• There are two cases to consider: • For NBVs, range of insignificance: if a variable is not currently
1. Changes for a variable that is not currently in the solution mix in solution in a maximization problem, its objective function
(range of insignificance), and coefficient would have to increase by an amount that exceeds the
C-Z value for that variable in the final tableau in order for it to
2. Changes for a variable that is currently in the solution mix end up as a basic variable in the optimal solution.
(range of optimality).
• For BVs, range of optimality:
• Allowable increase: The smallest positive ratio of C-Z value and the
For Non-Basic For Basic variable substitution rate.
Variables (NBV) Variable (BV) • Allowable decrease: The smallest negative ratio of C-Z value and the
variable substitution rate.
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2. A change in the objective function

2.7 Duality
coefficients
• Every linear programming problem can have two forms. The
original formulation of a problem is referred to as its primal
form.
• The other form is referred to as its dual form.
• In both its formulation and its solution, the values of the dual
are flip-flop versions of the primal values.
• The solution to the primal problem contains the solution to the
dual problem, and vice versa.

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2.7 Duality 2.7 Duality: formulation of the dual

• All of the problems formulated in the preceding sections can be classified • Recall the primal of the Winder-Glass company.
as primal problems because they were formulated directly from • Its dual is given as follows
descriptions of the problem.
• Transforming the Primal into Its Dual

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Example 2 Solutions
• Consider the primal of the following problems and find their
dual.
1. 2.

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Primal and dual relationships on the final Primal and dual relationships on the final
tableau tableau
Primal solution to the Dual solution to the microcomputer
• Primal of the microcomputer example problem
microcomputers problem

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Economic implications for duals

• Discuss the economic implication of the dual of the
microcomputer problem.

Questions?
Next class: LP

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