Learning Objectives

MGMT 2012: Introduction to Quantitative Methods

LINEAR PROGRAMMING II
SOLVING LINEAR PROBLEMS
Lecture 4

Lecturer: Dr. Dwayne Devonish

Students should be able to:

To outline the key steps of solving linear
programming (LP) problems graphically

To apply the graphical method to solving LP
problems in real-life situations dealing with profit
maximization and cost minimization,

To apply QM software in solving larger and more
complex LP problems

To conduct sensitivity analysis to determine the
stability of LP model results

Graphical Method

Solving linear problems

Once linear programs (LPs) for problems are
developed, we must seek to solve them.
Methods for solving LPs include:

The graphical procedure

Simplex method

Computer-assisted procedures (i.e. QM software)
We will focus on the graphical procedure and
computer-assisted procedures.
The simplex method requires an iterative
mathematical process to solving linear problems
but is often tedious when done manually.

The graphical method is a method for obtaining an

optimal solution to two-variable problems.
It can be used for problems with only 2 decision
variables (X1 and X2).
The graphical method first involves plotting the
constraints of the linear problem on a graph, and
an area of the graph is located that satisfies all
constraints. This area is the feasible solution
space (shape of polygon).
Several corner points or vertices of this space
(shape) are identified and assessed, and the
optimal solution is determined.

STEPS TO GRAPHICAL
PROCEDURE

Flair Furniture Company Data

1. Set up objective function and constraints in

mathematical format (i.e. Formulation).
2. Plot the constraints
3. Identify the feasible solution space
4. Examine corner points of feasible solution
space (the corner-point solution method: an
easier alternative to the traditional isoprofit
line solution method)
5. Choose the x,y coordinates that generate the
optimal solution.

Department
Carpentry (hrs)
Painting
&Varnishing (hrs)
Profit Amount

X1
Tables
4

X2
Chairs
3

Available
Hours This
Week
240

100

$70 per table

$50 per chair

Mathematical formulation: (Step 1)

Maximize Profit: 70X1 + 50X2
Constraints: 4X1 + 3X2 240 (Carpentry)
2X1 + 1X2 100 (Paint & Varnishing)
X1, X2
0 ( nonnegative constraints)

Flair Furniture Company Step 2:

Plot Constraints

Using a graph, the X1 variable (no. of tables) is

placed on horizontal axis, and X2 (no. of chairs)
variable on the vertical axis. Each constraint must
now be graphically plotted.
Nonnegativity constraints suggest that one is
always working in the first (or north-east) quadrant
of the graph.

Number of Chairs X2

Step 2: Plotting Constraints

Graphically

100
80

This axis represents non-negative

Constraint: X2 0

60
40

This axis represents non-negative

Constraint: X1 0

20
0
20

40

60

80

100

Number of Tables X1

Plotting Constraints

Plotting Constraints

The
constraint on hours of carpentry: 4X1 +3X2
240: must be converted to an equation of a
straight line.
This is done by changing sign to = sign so you
will have a linear equation: 4X1 +3X2 = 240 .
You will then have to have to find any two points
that satisfy this equation, then draw a line through
these two points on the graph.
The two easiest points are those at which the line
intersects the X1 and X2 axes.
So when X1 = 0, find the value of X2. Then when
X2 = 0, find the value of X1. Use the equation to
obtain these values.

So for the 1st constraint on carpentry hrs, if X1 = 0,

we have: 4(0) +3X2 = 240 , which is works out as:
3X2 = 240, so X2 = 240/3 = 80. So if we had no
tables for carpentry, we can produce 80 chairs
(x2) within the 240 hours (80 x 3hrs). Locate 80
on the x2 vertical axis.
Then, if X2 = 0, we have: 4X1 +3(0) = 240 , which
is 4X1 = 240, so X1 = 240/4 = 60. So if we had no
chairs for carpentry, we can produce 60 tables
(x1) within the 240 hours (60 x 4hrs). Locate 60
on the x1 horizontal axis.
Lets plot the points, and draw a line joining them.
Focus on red line.

Graph of Carpentry Constraint Equation:

4X1 + 3X2 = 240

Plotting Constraints

Number of Chairs X2

1st

100
80

(X1= 0, X2 =80)

60
40
20

(X1 = 60, X2 = 0)

0
20

40

60

80

100

Number of Tables X1

Next,
2nd
constraint
on
hours
of
painting/varnishing: 2X1 + 1X2 100: must be
converted to an equation of a straight line.
This is done by changing sign to = sign so you
will have a linear equation: 2X1 +1X2 = 100.
You will then have to have to find any two points
that satisfy this equation, then draw a line through
these two points on the graph.
The two easiest points are those at which the line
intersects the X1 and X2 axes.
So when X1 = O, find the value of X2. Then when
X2 = 0, find the value of X1. Use the equation to
obtain these values.

Graph of Carpentry Constraint Equation:

4X1 + 3X2 = 240 and Painting/Varnis. Constraint
Equation: 2X1 + 1X2 = 100

So if X1 = 0, we have: 2(0) +1X2 = 100 , which is

1X2 (or X2) = 100. So if we had no tables to
paint/varnish, we can organise 100 chairs (x2)
within the 100 hours. Locate 100 on the x2
vertical axis.
Then, if X2 = 0, we have: 2X1 +1(0) = 100 , which
is 2X1 = 100, so X1 = 100/2 = 50. So if we had no
chairs to paint/varnish we can organise 50 tables
(x1) within the 100 hours. Locate 50 on the x1
horizontal axis.
Lets plot the points, and draw a line joining them.
Focus on blue line.

Number of Chairs X2

Plotting Constraints

Carpentry line: red

Painting/varnishing: blue

80
60
40
20

(X1 = 50, X2 = 0)

0
20

40 50

60

80

100

Number of Tables X1

Graph of Carpentry Constraint Equation:

4X1 + 3X2 = 240 and Painting/Varnis. Constraint
Equation: 2X1 + 1X2 = 100
Number of Chairs X2

Step 3: Locate Feasible Solution

Space
After all constraints are plotted, you must find the
feasible solution space, which is the area that contains
all points (x1, x2) that satisfy constraints
simultaneously.
We are going to shade this area. Any combination of
X1:X2 coordinate points in this area will satisfy
constraints, hence, it is known as a feasible solution.
There are multiple feasible solutions, but the one that
with the best profit maximization is the optimal one.

(X1 = 0, X2 =100)
100

(X1 = 0, X2 =100)
100

Carpentry line: red

Painting/varnishing: blue

80

Infeasible area

60
40
20

(X1 = 50, X2 = 0)

0
20

Feasible area
shown

Infeasible Solution Space

Any point outside of the region will violate one or
more of the constraints. For example, if we said
we would make 70 tables (x1) and 40 chairs (x2).
We would have violated:
4X1 + 3X2 240 (Carpentry) where 4 (70) x 3 (40)
= 400 hrs. 400 is more than 240.
2X1 + 1X2 100 (Paint & Varnishing) where
2 (70) x 1 (40) = 180 hrs. 180 is more than 100
Hence, we have to focus on points within the
feasible region.

40 50

60

80

100

Number of Tables X1

Step 4: Examine the corner-points

of the feasible space
The feasible space typically forms a polygon shape.
The solution to any problem is found at any one of
the corner points of the space (intersections).
You have to determine the coordinates (x1,x2) at
each corner point of the space, and use those
values to compute the value of objective function
(e.g. profit).
After all corner-points have been evaluated, the one
that generates the optimal value (i.e. maximum for
profit maximization problems) is the optimal
solution.
I have placed the corner point coordinates in boxes.

Graph of Carpentry Constraint Equation:

4X1 + 3X2 = 240 and Painting/Varnis. Constraint
Equation: 2X1 + 1X2 = 100

Flair Furniture Company

Corner Point

Number of Chairs X2

Corner Point Solution Method

Carpentry line: red
Painting/varnishing: blue

100
80

Infeasible area

60

40
20
0

4
20

Feasible area
shown

40 50

60

80

100

Number of Tables X1

Given that point 3 (where x1 = 30, x2 = 40)

generates the highest profit (i.e $4100), the
optimal number of tables and chairs are 30 and
40, respectively.
If we had a minimization problem (minimizing
costs), we can use the same graphical
procedure, but in most cases, the feasible
solution is found on the right of the constraint
lines (given constraints).
The next three slides were provided by Render
et al to show you a demonstration of
minimization problems.

Solving Minimization Problems

Holiday Meal Turkey Ranch example
2X1 + 3X2
5X1 + 10X2 90 oz.

(A)

4X1 + 3X2 48 oz.

(B)

X1

(C)

3 oz.

Point 1:(x1 = 0,x2 = 0) profit = $70(0) + $50(0) = $0

Point 2:(x1 = 0,x2 = 80) profit = $70(0) + $50(80) = $4000
Point 3:(x1 = 30,x2 = 40) profit = $70(30) + $50(40) = $4100
Point 4 : (x1 = 50, x2 = 0) profit = $70(50) + $50(0) = $3500

MINIMIZATION PROBLEM

ANDI

Minimize:
Subject to:

 The feasible region for the Flair Furniture Company

problem is a four-sided polygon with four corner,
or extreme, points.
 These points are labeled 1 ,2 ,3 , and 4 on the next
graph.
 To find the (x1, x2) values producing the maximum
profit, find the coordinates of each corner point
and test their profit levels.

where,
X1,
X2 0
(D)
X 1 = # of pounds of brand 1 feed to purchase
X 2 = # of pounds of brand 2 feed to purchase
(A) = ingredient A constraint
(B) = ingredient B constraint
(C) = ingredient C constraint
(D) = non-negativity constraints

Holiday Meal Turkey purchases two brands of feed to

provide a good quality but low cost diet for its turkeys.
Three important nutritional ingredients are needed for
the turkeys diet. Each pound of brand 1 contains 5
ounces of Ingredient A, 4 ounces of Ingredient B, and
1 ounce of Ingredient C. Each pound of brand 2
contains 10 ounces of Ingredient A, 3 ounces of
Ingredient B, and no Ingredient C. Brand 1 costs 2
cents per pound, and Brand 2 costs 3 cents per
pound. The minimum monthly requirements of each
Ingredient for the turkeys are 90 ounces of A, 48
ounces of B, and 3 ounces of C. Lets determine the
lowest cost diet that meets monthly intake
requirements i.e. the minimum number of pounds of
each brand to purchase.

Holiday Meal Turkey Ranch

Using the Corner Point Method
To solve this problem:
1. Construct the feasible solution region.
 This is done by plotting each of the three constraint
equations.
2. Find the corner points.
 This problem has 3 corner points, labeled a, b, and c.
- Minimization problems are often unbound
outward (i.e., to the right and on top), but this causes no
difficulty in solving them.
- As long as they are bounded inward (on the left side and
the bottom), corner points may be established.
- The optimal solution will lie at one of the corners as it
would in a maximization problem.

Holiday Meal Turkey Problem

Holiday Meal Turkey Problem

Corner Points

Corner Points
This shaded
side is the
feasible
space

The
unshaded
area below
lines is
infeasible

Corner Points and Solution

There are three corner points and one must work out
the optimal values (cost) for x1, x2 at these points.
Then we plug in the values in objective function: Min
C. = 2X1 + 3X2 (in cents)
A: X1 = 3; X2 = 12: Total Cost: 2(3) + 3(12) = 42
cents
B: X1 =8.4, X2 =4.8: Total Cost: 2(8.4) + 3(4.8) =
31.2 cents
C: X1 = 18, X2 = 0: Total Cost: 2(18) + 3(0) = 36
cents.
Given that the lowest cost is needed, the manager
should purchase 8.4 lbs of Brand 1, and 4.8 pounds
of Brand 2 (with only a cost of 31 cents).

Sensitivity Analysis
Sensitivity analysis is important to assess whether an
optimal solution is likely to change (or remain
constant) if changes occur to other factors such as
prices of raw materials, product demand changes,
production capacity changes, and so on.
Managers must be able to act quickly to determine
whether the decisions they had made would have to
change.
Sensitivity analysis determines the range of value
changes that will not affect the optimal solution.
We will focus on changes to objective function
coefficients (profit/cost values) and to right-hand side
values (quantity constraint values).

QM for Windows: Solving using

Computer Procedures
Lets use QM for Windows, a quantitative software
package that will help formulate and solve our first
maximization scenario regarding the tables and
chairs.
Computer-assisted QM software can
improve the efficiency of formulating and solving
small and large linear problems (i.e multiplevariable problems). See below formulation:
Maximize Profit: 70X1 + 50X2 subject to
4X1 + 3X2 240 (Carpentry)
2X1 + 1X2 100 (Paint & Varnishing)
X1, X2
0 ( nonnegative constraints)

Prior Example
Maximize Profit: 70X1 + 50X2
Subject to Constraints:
4X1 + 3X2 240 (Carpentry)
2X1 + 1X2 100 (Paint & Varnishing)
X1, X2
0 ( nonnegative constraints)
We will look at this example into QM for
windows to examine the sensitivity results.

Sensitivity Analysis I: Objective Function

Coefficient (Profit Values) Changes
In the sensitivity analysis section, you can see
the optimal values of 30 for tables (X1) and 40
for chairs (X2).
You will see profit values for tables is $70 and
$50 for chairs. Recall that sensitivity analysis
can tell you whether you will still need to obtain
30 tables and 40 chairs to maximize profits
based on changes to profits.
These values are usually presented in tabular
form.

So if we have a drop in profit in tables; for

example, the profit dropped from $70 to $68.
Then, we will still need to produce 30 tables and
40 chairs in order to maximise profit.
However, if the profit drops to $59, this is outside
the range of optimality ($66.66 to $100), a
different optimal solution will be needed.
Sensitivity analysis for objective function (profit)
value changes determine whether optimal solution
will change or not change.

Sensitivity Analysis II on Quantity

Constraint Values

Carpentry

Variables Solution Original

Value
(Profit)
Tables
30
$70
Chairs

40

$50

Lower
Bound

Upper
Bound

$66.66

$100

$35

$52.50

So looking at the table from lower bound to upper

bound, the optimal solution (30,40) will remain the same
if profit for tables drop as low as $66.66 or rise as high
as $100. Or it will remain the same if the profit for chairs
drop as low as $35 or rise as high as $52.50.

Sensitivity Analysis II: Quantity

Constraint Changes

SoI

Constraint

Sensitivity Analysis on Profit

Changes

Dual
Price

Slack/
Surplus

Original
Value

Lower
Bound

Upper
Bound

$15

240 hrs

200

300

Painting/Var
$5
0
100 hrs
80
120
.
Dual prices are calculated from the sensitivity analysis for each
constraint. Slack is what remains after you operated on optimal
solution (make 30 tables and 40 chairs). Original value
represents current limits of constraints, and lower and upper
bound represents range of feasibility for quantity constraints. For
example, $15 will be added on total profit for every unit (hour)
added to carpentry from 240 up to 300 hours. Outside of the
range of 200 to 300 hours, dual price will not be relevant.

Quantity constraint (Right Hand Side) values are the

values right of the inequality sign. i.e. 240 hours
available for carpentry, and 100 hours available for
painting and varnishing.
Sensitivity analysis for quantity constraint values
focuses on the range of feasibility.
You are interested in the following questions:

Keeping all other factors the same, how much would
the optimal value of the objective function (for
example, the profit) change if the right-hand side of a
constraint changed by one unit? (aka Dual price)

For how many additional or fewer units will this per
unit change be valid? (range of feasibility within
which the dual price will be valid)

Dual (Shadow) Prices

The dual price is the value of the optimal solution for
one additional unit of a scare resource.
It is the improvement of the optimal solution per unit
increase in the right-hand side constraint.
The dual price for carpentry (constraint 1) is $15 per
hour, and for painting/varnishing, it is $5.
So if one additional carpentry hour was added to the
total available, the overall optimal profit will increase
by $15, or if one additional hour for
painting/varnishing to the total available, the overall
profit will increase by $5. However, if we lose 1 hour
from either carpentry or painting/varnishing available
hours, our profit will drop by $15 or $5 respectively.
Note: this is only true within the ranges of
feasibility.

Sensitivity Analysis II on Quantity

Constraint Values
Constraint

Carpentry

Dual
Price

Slack/
Surplus

Original
Value

Lower
Bound

Upper
Bound

$15

240

200

300

Painting/Var
$5
0
100
80
120
.
Dual prices are calculated from the sensitivity analysis for each
constraint. Slack is what remains after you operated on optimal
solution (make 30 tables and 40 chairs). Original value
represents current limits of constraints, and lower and upper
bound represents range of feasibility for quantity constraints. For
example, $15 will be added on total profit for every unit (hour)
added to carpentry from 240 up to 300 hours. Outside of the limit
of 200 to 300 hours, dual price will not be relevant.

Practice Example
Using the same example, remember the profit
of $4100.
1. If the manager had obtained an additional 25
hours to the total carpentry hours, what will be
the total profit (i.e. value of objective function)?
2. If the manager had lost 12 hours of total
carpentry hours, what will be the total profit?
3. If the painting/varnishing hours had increased
from 100 to 110 hrs, what will be the total
profit?

Range of Feasibility for RHS

So the range of feasibility for carpentry is 200 to 300
hrs this is the range of values for the right hand
side of a constraint in which dual prices for the
constraint remain unchanged. Dual price for this
constraint is $15.
The range of feasibility for painting/varnishing is 80
to 120 hours. Dual price is $5.
To find out how the objective profit value changes in
the range of feasibility:
Change in objective value =
[Dual price][Change in the right hand side value]

Sensitivity Analysis on Quantity Constraint

Values
Constraint

Carpentry

Dual
Price

Slack/
Surplus

Original
Value

Lower
Bound

Upper
Bound

$15

240

200

300

Painting/Var
$5
0
100
80
120
.
Dual prices are calculated from the sensitivity analysis for each
constraint. Slack is what remains after you operated on optimal
solution (make 30 tables and 40 chairs). Original value
represents current limits of constraints, and lower and upper
bound represents range of feasibility for quantity constraints. For
example, $15 will be added on total profit for every unit (hour)
added to carpentry from 240 up to 300 hours. Outside of the limit
of 200 to 300 hours, dual price will not be relevant.

Practice Solution 1

END OF LECTURE

Recall that total carpentry hours is 240 hours, so

if we had an additional 25 hours, we now have
265 hours of total carpentry hours. This is still
within the range of optimality: 200 to 300 hrs for
carpentry,
The dual price for carpentry was recorded to be
$15. So to obtain the profit, we multiply $15 by
each hour added to current value (i.e. total 25
hrs), so we obtain additional $375. So we add
this to $4100 to obtain a total profit of $4475.

Download tutorial assignment for solving

linear programming problems.
Read Chapter 7 (Linear programming)
focus on problem formulations and
solutions as well as Chapter 8 of Render
et. al.