UNIT 4

LINEAR PROGRAMMING
 Topics
• Translating a business problem in mathematical
language,
• formulating mathematical constraints using given
business restrictions,
• determining the appropriate cost or profit function to
be optimized such that all imposed restrictions will be
satisfied,
• arriving at the optimal production schedules for
optimum cost/profit,
• sensitivity analysis
 Objectives

• Arriving at mathematical equations using the relevant

information provided with the given setup,
• deciding the function to be optimized,
• arriving at the appropriate solution.
 Introduction
• Linear programming is a widely used mathematical modeling
technique to determine the optimum allocation of scarce resources
among competing demands. Resources typically include raw
materials, manpower, machinery, time, money and space.
• The technique is very powerful and found especially useful because
of its application to many different types of real business problems
in areas like finance, production, sales and distribution, personnel,
marketing and many more areas of management.
• As its name implies, the linear programming model consists of
linear objectives and linear constraints, which means that the
variables in a model have a proportionate relationship. For example,
an increase in manpower resource will result in an increase in work
output.
 ESSENTIALS OF LINEAR PROGRAMMING MODEL
For a given problem situation, there are certain essential conditions that
need to be solved by using linear programming.
• Limited resources : limited number of labour, material
equipment and finance
• Objective : refers to the aim to optimize (maximize the profits or
minimize the costs).
• Linearity : increase in labour input will have a proportionate
increase in output.
• Homogeneity : the products, worker’s efficiency, and machines are
assumed to be identical.
• Divisibility : it is assumed that resources and products can be
divided into fractions. (in case the fractions are not possible, like
production of one-third of a computer, a modification of linear
programming called integer programming can be used).
PROPERTIES OF LINEAR PROGRAMMING MODEL

1. Relationship among decision variables must be

linear in nature.
2. A model must have an objective function.
3. Resource constraints are essential.
4. A model must have a non-negativity constraint.
FORMULATION OF LINEAR PROGRAMMING
It is the representation of problem situation in a mathematical form. It
involves well defined decision variables, with an objective function
and set of constraints.
• Objective Function
• Constraints
• Non- negativity constraint
 FORMULATION OF LINEAR PROGRAMMING
Objective function: The objective of the problem is identified and
converted into a suitable objective function. The objective function
represents the aim or goal of the system (i.e., decision variables) which
has to be determined from the problem. Generally, the objective in most
cases will be either to maximize resources or profits or, to minimize the
cost or time.
Constraints: When the availability of resources are in surplus, there will be
no problem in making decisions. But in real life, organizations normally
have scarce resources within which the job has to be performed in the
most effective way. Therefore, problem situations are within confined
limits in which the optimal solution to the problem must be found.
Non-negativity constraint: Negative values of physical quantities are
impossible, like producing negative number of chairs, tables, etc., so it is
necessary to include the element of non-negativity as a constraint.
GENERAL LINEAR PROGRAMMING MODEL
 Example 1
A company manufactures two types of boxes,
corrugated and ordinary cartons. The boxes undergo
two major processes: cutting and pinning operations.
The profits per unit are Rs. 6 and Rs. 4 respectively.
Each corrugated box requires 2 minutes for cutting and
3 minutes for pinning operation, whereas each carton
box requires 2 minutes for cutting and 1 minute for
pinning. The available operating time is 120 minutes
and 60 minutes for cutting and pinning machines. The
manager has to determine the optimum quantities to be
manufacture the two boxes to maximize the profits.
 Solution
• Decision variables completely describe the decisions to be made (in this case, by Manager).
Manager must decide how many corrugated and ordinary cartons should be manufactured
each week. With this in mind, he has to define:

x be the number of corrugated boxes to be manufactured.

1

x be the number of carton boxes to be manufactured

2
• Objective function is the function of the decision variables that the decision maker wants to
maximize (revenue or profit) or minimize (costs). Manager can concentrate on maximizing the
total weekly profit (z). Here profit equals to (weekly revenues) – (raw material purchase cost)
– (other variable costs). Hence Manager’s objective function is:

Maximize z = 6X + 4X
1 2
• Constraints show the restrictions on the values of the decision variables. Without constraints
manager could make a large profit by choosing decision variables to be very large. Here there
are three constraints:
Available machine-hours for each machine
Time consumed by each product
Sign restrictions are added if the decision variables can only assume nonnegative values
(Manager can not use negative negative number machine and time never negative number )
 Formulation

All these characteristics explored above give the

following Linear Programming (LP) problem
max z = 6x1 + 4x2(The Objective function)
s. t. 2x1 + 2x2 ≤ 120 (cutting time constraint)
3x1 + x2 ≤ 60 (pinning constraint)
x1, x2 ≥ 0 (Sign restrictions)
 Example 2

• A company sells two different products A and B, making a

profit of Rs. 40 and Rs.30 per unit, respectively. They are both
produced with the help of a common production process and
are sold in two different markets. The production process has a
total capacity of 30,000 man-hours.it takes three hour to
produce a unit of A and one hour to produce a unit of B. The
market has been surveyed and company officials feel that the
maximum number of units of A that can be sold is 8,000 units
and that of B is 12,000 units. Subject to these limitations,
products can be sold in any combination. Formulate this
problem as an LP model to maximize profit.
 Example 2 Formulation

Max Z(profit)= 40 a + 30 b
s.t.
3a+b ≤ 30,000 (Man- hours)
a ≤ 8,000
b ≤ 12,000 (Marketing)
a, b ≥ 0
 Example 3
The Electrocomp Corporation manufactures two electrical
products: air conditioners and large fans. The assembly
process for each is similar in that both require a certain
amount of wiring and drilling. Each air conditioner takes 3
hours of wiring and 2 hours of drilling. Each fan must go
through 2 hours of wiring and 1 hour of drilling. During the
next production period, 240 hours of wiring time are available
and up to 140 hours of drilling time may be used. Each air
conditioner sold yields a profit of $25. Each fan assembled
may be sold for a $15 profit. Formulate
 Ex 3 Formulation

• Max z( profit) = 25A +15F

s.t.
3A + 2F ≤ 240
2A +F ≤140
A,F ≥ 0
 Solution for LPP

• A value of (x1,x2) is in the feasible region if it

satisfies all the constraints and sign
restrictions.
• This type of linear programming can be solve
by two methods
• Graphical method
• Simplex algorithm method
Graphical Method
Graphical method
Example 4 Flair Furniture’s LPP-Graphically

4T + 3C=240

Region that Satisfies the

Carpentry Constraint
Flair Furniture’s LPP-Graphically

Region that Satisfies Feasible Solution Region

the
Painting and
Varnishing
Constraint
Flair Furniture’s LPP-Graphically-Isoprofit line solution
method
1
2

The last point that an isoprofit line would touch in this

feasible region is the corner point where the two
constraint lines intersect, so this point will result in the
maximum possible profit. This results in the point (30,
40)
Profit = 70T + 50C = 701302 + 501402 = $4,100
So producing 30 tables and 40 chairs yields the
maximum profit of $4,100.
 Flair Furniture’s LPP-Graphically-Corner point method

Feasible
Corner Points
and Profits
 Example 5 graphical solution of example 3

The Electrocomp Corporation manufactures two electrical products: air

conditioners and large fans. The assembly process for each is similar in that both
require a certain amount of wiring and drilling. Each air conditioner takes 3 hours
of wiring and 2 hours of drilling. Each fan must go through 2 hours of wiring and 1
hour of drilling. During the next production period, 240 hours of wiring time are
available and up to 140 hours of drilling time may be used. Each air conditioner
sold yields a profit of $25. Each fan assembled may be sold for a $15 profit.
Formulate and solve this LP production mix situation to find the best combination
of air conditioners and fans that yields the highest profit. Use the corner point
graphical approach.
Example 5 graphical solution of example 3
 Example 6 graphical solution using Excel

A candidate for mayor in a small town has allocated $40,000

for last-minute advertising in the days preceding the
election. Two types of ads will be used: radio and
television. Each radio ad costs $200 and reaches an
estimated 3,000 people. Each television ad costs $500 and
reaches an estimated 7,000 people. In planning the
advertising campaign, the campaign manager would like
to reach as many people as possible, but she has
stipulated that at least 10 ads of each type must be used.
Also, the number of radio ads must be at least as great as
the number of television ads. How many ads of each type
should be used? How many people will this reach?
Example 6 graphical solution using Excel
 Example 7 graphical solution using Excel

The dean of the Western College of Business must plan

the school’s course offerings for the fall semester. Student
demands make it necessary to offer at least 30
undergraduate and 20 graduate courses in the term.
Faculty contracts also dictate that at least 60 courses be
offered in total. Each undergraduate course taught costs
the college an average of $2,500 in faculty wages, and
each graduate course costs $3,000. How many
undergraduate and graduate courses should be taught in
the fall so that total faculty salaries are kept to a
minimum?
Example 7 graphical solution using Excel
Solution by Graphical method

1 2
 Solution by Graphical method

Objective function line (Profit Line)

Equate the objective function for any specific profit value Z,
Consider a Z-value of 60, i.e.,
6x1 + 4x2 = 60
Substituting x1 = 0, we get x2 = 15 and if x2 = 0, then x1 = 10
Therefore, the co-ordinates for the objective function line are (0,15), (10,0) as
indicated objective function line.
The objective function line contains all possible combinations of values of xl and
x2.
Therefore, we conclude that to maximize profit, 15 numbers of corrugated boxes
and 30 numbers of carton boxes should be produced to get a maximum profit.
Substituting x1 = 15 and x2= 30 in objective function, we get Z max = 6x1 + 4x2
= 6(15) + 4(30)
Maximum profit : Rs. 210.00
 Example 8 Infeasible Solution

• Max Z = 4x +2y
s.t. 2x +3y ≤18
x + y ≥ 10
x, y ≥ 0
 Example 9 Unboundedness
• Max z = 3x +5y
s.t. x≥5
y≤10
x+2y ≥10
x,y ≥ 0
 Example 10 Redundancy

• Causes no major difficulties in solving LPPP

graphically, but necessary to identify its
occurrence.
• Max z = x+2y
s.t. x +y ≤ 20
2x+y ≤ 30
X ≤ 25
x ≥0,y ≥0
 Example11 Alternate optimal Solution

• Multiple optimal solution are possible. graphically

this happens when the objective function’s
isoprofit or isocost line runs perfectly parallel to
one of the problem’s constraints – in simple words
, when they have the same slope.
• Max z = 3x +2y
s.t.6x +4y ≤ 24
X≤3
X ,y ≥ 0
Example11 Alternate optimal Solution
 Simplex Method
In practice, most problems contain more than two variables
and are consequently too large to be tackled by conventional
means. Therefore, an algebraic technique is used to solve
large problems using Simplex Method. This method is
carried out through iterative process systematically step by
step, and finally the maximum or minimum values of the
objective function are attained.
The simplex method solves the linear programming problem
in iterations to improve the value of the objective function.
The simplex approach not only yields the optimal solution
but also other valuable information to perform economic and
‘what if’ analysis.
ADDITIONAL VARIABLES USED IN SOLVING LPP
 ADDITIONAL VARIABLES USED IN SOLVING LPP...

• These variables are used to convert the

inequalities into equality equations, as given
in the Given Table below.
 Procedure of simplex Method

Step 1: Formulate the LP problem.

Step 2: Introduce slack /auxiliary variables. if constraint type is ≤ introduce
+ S, if constraint type is ≥introduce – S + a and if constraint type is =
introduce a
Step 3: Find the initial basic solution.
Step 4: Establish a simplex table and enter all variable coefficients. If the
objective function is maximization, enter the opposite sign co-efficient
and if minimization, enter without changing the sign.
Step 5: Take the most negative coefficient in the objective function, Zj to
identify the key column (the corresponding variable is the entering
variable of the next iteration table).
Step 6: Find the ratio between the solution value and the coefficient of the
key column. Enter the values in the minimum ratio column.
Example Simplex method...
Example Simplex method ...
Example Simplex method...
Example Simplex method...
Example Simplex method...