Linear Programming Problems

Introduction

Today many of the resources needed as inputs to

operations are in limited supply.
Operations managers must understand the impact of
this situation on meeting their objectives.
Linear programming (LP) is one way that operations
managers can determine how best to allocate their
scarce resources, under constraints.
The constraints can be time, labor, energy, material,
money, engineering specifications etc.
Most frequently the objective of business firm is to
maximize profit whereas the objective of individual
operational units within firm is often minimize cost. 2

Linear Programming (LP) in OM

There are five common types of decisions in which

LP may play a role
Product mix
Ingredient mix
Transportation
Production plan
Assignment

LP Problems in OM: Product Mix

Objective
To select the mix of products or services that results
in maximum profits for the planning period
Decision Variables
How much to produce and market of each product or
service for the planning period
Constraints
Maximum amount of each product or service
demanded; Minimum amount of product or service
policy will allow; Maximum amount of resources
available
4

LP Problems in OM: Ingredient Mix

Objective
To select the mix of ingredients going into products
that results in minimum operating costs for the
planning period
Decision Variables
How much of each ingredient to use in the planning
period
Constraints
Amount of products demanded; Relationship
between ingredients and products; Maximum amount
of ingredients and production capacity available
5

LP Problems in OM: Transportation

Objective
To select the distribution plan from sources to
destinations that results in minimum shipping costs
for the planning period
Decision Variables
How much product to ship from each source to each
destination for the planning period
Constraints
Minimum or exact amount of products needed at each
destination; Maximum or exact amount of products
available at each source
6

LP Problems in OM: Production Plan

Objective
To select the mix of products or services that results
in maximum profits for the planning period
Decision Variables
How much to produce on straight-time labor and
overtime labor during each month of the year
Constraints
Amount of products demanded in each month;
Maximum labor and machine capacity available in
each month; Maximum inventory space available in
each month
7

LP Problems in OM: Assignment

Objective
To assign projects to teams so that the total cost for
all projects is minimized during the planning period
Decision Variables
To which team is each project assigned
Constraints
Each project must be assigned to a team; Each team
must be assigned a project

Recognizing LP Problems
Characteristics of LP Problems in OM
A well-defined single objective must be stated.
There must be alternative courses of action.
The total achievement of the objective must be
constrained by scarce resources or other restraints.
The objective and each of the constraints must be
expressed as linear mathematical functions.

Steps in Formulating LP Problems

1.
2.
3.
4.
5.
6.
7.
8.

Define the objective.

Define the decision variables.
Write the mathematical function for the objective.
Write a 1- or 2-word description of each constraint.
Write the right-hand side (RHS) of each constraint.
Write <, =, or > for each constraint.
Write the decision variables on LHS of each constraint.
Write the coefficient for each decision variable in each
constraint.
9. Write non-negativity restriction
10

Example:1. LP Formulation
Cycle Trends is introducing two new lightweight
bicycle frames, the Deluxe and the Professional, to be
made from aluminum and steel alloys. The anticipated
unit profits are 10 units for the Deluxe and 15 units for
the Professional.
The number of pounds of each alloy needed per
frame is summarized on the next slide. A supplier
delivers 100 pounds of the aluminum alloy and 80
pounds of the steel alloy weekly. How many Deluxe
and Professional frames should Cycle Trends produce
each week?
11

Example: LP Formulation

Deluxe
Professional

Aluminum Alloy
2
4

Steel Alloy
3
2

12

Example: LP Formulation
Define the objective
Maximize total weekly profit
Define the decision variables
x = number of Deluxe frames produced weekly
1
x = number of Professional frames produced
2
weekly
Write the mathematical objective function
Max Z = 10x + 15x
1
2

13

Example:1 LP Formulation
Write a one- or two-word description of each constraint
Aluminum available
Steel available
Write the right-hand side of each constraint
100

80
Write <, =, > for each constraint
< 100
<
80
14

Example: LP Formulation
Write all the decision variables on the left-hand side
of each constraint
x
1 x2 < 100
x
1 x2 < 80
Write the coefficient for each decision in each constraint
+ 2x + 4x
1
2 < 100
+ 3x + 2x
1
2 < 80

15

Example 2: Product-Mix Problem

Consider a small manufacturer making two products

A and B. Two resources R1 and R2 are required to
make these products. Each unit of product A requires
1 unit of R1 and 3 units of R2. Each unit of product B
requires 1 unit of R1 and 2 unit of R2. the
manufacturer has 5 units of R1 and 12 units of R2
available. He makes profit of Rs 6 per unit of A and
Rs 5 per unit of B sold.
Formulate this problem as linear programming
problem.
16

Example 3: Production Planning Problem

A textile company can use any or all of three different

processes for weaving its standard white polyester
fabric. The different costs and capacities of three
production process are shown in the table. The daily
demand forecast for its white polyester fabric is 4000
sq. metre. Develop a linear programming model to
determine combination of production process to be
utilized to meet daily demand forecast at minimum
total production cost.

17

Example 3:Production Planning Problem

cont
Cost of Production Process

Process Weaving M/c

No.
Set up cost
(Rs)
1
150
2
240
3
300

Processing
Cost/sq.
m. (Rs)
15
10
8

Maximum Daily
capacity (Sq. m.)
2000
3000
3500

18

Example 4: Product Mix Problem

A company is planning to determine its product mix

out of three different products:P1, P2 and P3. The
monthly sales of the product P1 is limited to
maximum of 500 units. For every two units of P2
produced, there will be one unit of by-product which
can be sold at the rate of Rs.20 per unit. The highest
monthly demand for this by-product is 200 units. The
contributions per unit of the products P1, P2 and P3
are Rs 50, Rs 70,and Rs.60 respectively. The
processing requirements of these products are shown
in table. Formulate a linear programming model of
this problem to find the optimum product mix such
19
that the total contribution is minimized.

Example 4: Product Mix Problem Cont..

Process
I
II
III

Hours per units

P1
P2
P3
3
5
2
4
3
4
3
2

Available
Hours
1000
700
1300

20

Example 5:

A company manufactures three products, P1, P2 and

P3. The machine hours requirements and labor hour
requirements to process the three products and the
maximum machine hours per week for each machine
type and maximum available labour hours per week
are summarized in table along with selling and cost
price. The company wants to limit the production
volume per week of the product P3 to utmost 35
units. Formulate a linear programming model to find
the production volume per week of each product such
that the total profit is maximum.
21

Example 5 : cont.
Machine hours required

Machine 1
Machine 2
Machine 3
Labour
Selling
Price/unit (Rs)
Product Cost
Price/unit (Rs)

P1

P2

P3

4
3
5
3
500

6
7
2
400

3
2
8
4
550

350

280

390

Maximum
available hours
per week

500
300
600
200

22

Example 6:

A computer company procures cabinet from three

different suppliers (A, B and C) located at three
different cities. The company has production plants
(P,Q and Q) in three different cities. The cost of
transportation per cabinet for different combination of
supplier and production plant are given in the table.
Formulate a linear programming model to find
optimal procurement plan for the cabinets such that
the total cost is minimized.

23

Example 6: cont..
Supplier

Production Plant
P

Supply

Price
per
cabinet

10

15

300

85

20

21

15

500

90

12

16

13

100

75

200

300

Demand 100

24

Example 7: Manpower Scheduling Problem

In a multi-speciality hospital, nurses report to duty at

the end of every 4 hour as shown in the table. Each
nurse, after reporting, will work for 8 hours
continuously. The minimum number of nurses
required during various periods are also given in the
table. Develop a mathematical model to determine the
number of nurses to report at the begining of each
period such that the total number of nurses who have
to report to duty in a day is minimized.

25

Example 7: Manpower Scheduling Problem

cont..
Interval
Number

Time Period

12 midnight 4 a.m.

20

4 a.m.

8 a.m.

25

8 a.m.

12 noon

35

12 noon

4 p.m.

32

4 p.m.

8 p.m.

22

8 p.m.

12 midnight 15

From

to

Minimum
number of
nurses
required

26

LP Problems in General

Units of each term in a constraint must be the same as

the RHS
Units of each term in the objective function must be
the same as Z
Units between constraints do not have to be the same
LP problem can have a mixture of constraint types

27

Graphical Solution Approach

1. Formulate the objective and constraint functions.
2. Draw the graph with one variable on the horizontal
axis and one on the vertical axis.
3. Plot the no-negativity restriction ( restrict yourself the
quadrant where both X1 and X2 are 0.
4. Plot each of the constraints as if they were lines or
equalities.
5. Outline the feasible solution space that contain the set
of points satisfying all the constraints.
28

Graphical Solution Approach cont..

6. Identify corner points.
7. Evaluate the objective function at all the corner points
8. Substitute each of the potential solution point values
of the two decision variables into the objective
function and solve for Z.
9. Select the solution point that optimizes Z.

29

Example 8: Graphical Method

Z = 10x1 + 15x2 (Profit)

Maximize the above objective function subjected to

following constraints:
3x1 + 2x2 < 80 (Steel)
2x1 + 4x2 < 100 (Aluminum)
x1 , x2 0
30

Example: Graphical Solution Approach

x2

3x1 + 2x2 < 80 (Steel)

Potential Solution Point
x1 = 0, x2 = 25, Z = 375.00

40
35

Optimal Solution Point

x1 = 15, x2 = 17.5, Z = 412.50

30
25

2x1 + 4x2 < 100 (Aluminum)

20
15
10

Feasible
Solution
Space

MAX 10x1 + 15x2 (Profit)

Potential Solution Point
x1 = 26.67, x2 = 0, Z = 266.67

10

15

20

25

30

35

40

45

50

x1
31

Example 9: Graphical Method

Z = 6x1 + 8x2

Maximize the above objective function subjected to

following constraints:
5x1 + 10x2 < 60
4x1 + 4x2 < 40
x1 , x2 0
32

Example 10: Graphical Method

Z = 2x1 + 3x2

Minimize the above objective function subjected to

following constraints:
x1 + x2 6
7x1 + x2 14
x1 , x2 0
33

Example 11: Graphical Method

Z = 100x1 + 80x2

Maximize the above objective function subjected to

following constraints:
5x1 + 10x2 < 50
8x1 + 2x2 16
3x1 - 2x2 6
x1 , x2 0
34

A mutual fund company has Rs.20 lakhs available for investment

in government bonds, blue chip stocks, speculative stocks and
short term deposits. Mutual fund is required to keep at least Rs 2
lakhs in short term deposits and not to exceed average risk factor
of 42. Speculative stocks must be at most 20% of the total
amount invested. How should mutual fund invest the funds so as
to maximize its total expected annual return? Formulate this as
linear programming problem.
The annual expected return and risk factor are given below:

Type of investment

Annual expected return

%

Risk factor (0-100)

Government bond

14

12

Blue chip stocks

19

24

Speculative stocks

23

48

Short term deposit

12

35