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2.1 LINEAR PROGRAMMING PROBLEM(LPP)

LEARNING OBJECTIVES

What is LPP?

Understand the basic assumptions and properties of Linear Programming (LP).

Applications of LPP

Formulation of LPP

INTRODUCTION

In a decision-making embroilment, model formulation is important because it represents the essence of business decision problem. The term formulation is used to mean the process of converting the verbal description and numerical data into mathematical expressions which represents the relevant relationship among decision factors, objectives and restrictions on the use of resources. Linear Programming (LP) is a particular type of technique used for economic allocation of 'scarce' or 'limited' resources, such as labour, material, machine, time, warehouse space, capital, energy, etc. to several competing activities, such as products, services, jobs, new equipment, projects, etc. on the basis of a given criterion of optimally. The phrase scarce resources means resources that are not in unlimited in availability during the planning period. The criterion of optimality, generally is either performance, return on investment, profit, cost, utilily, time, distance, etc.

George B Dantzing while working with US Air Force during World War II, developed this technique, primarily for solving military logistics problems. But now, it is being used extensively in all functional areas of management, hospitals, airlines, agriculture, military operations, oil refining, education, energy planning, pollution control, transportation planning and scheduling, research and development, etc. Even though these applications are diverse, all I.P models consist of certain common properties and assumptions. Before applying linear programming to a real-life decision problem, the decision-maker must be aware of all these properties and assumptions, which are discussed later in this module.

Before discussing in detail the basic concepts and applications of linear programming, let us be clear about the two words, linear and programming. The word linear refers to linear relationship among variables in a model. Thus, a given change in one variable will always cause a resulting proportional change in another variable. For example, doubling the investment on a certain project will exactly double the rate of return. The word programming refers to modelling and solving a problem mathematically that involves the economic allocation of limited resources by choosing a particular course of action or strategy among various alternative strategies to achieve the desired objective.

A large number of computer packages are available for solving a mathematical LP model but there is no general package for building a model. Model building is an art that improves with practice. To illustrate, how to build I.P models, a variety of examples are given in this chapter.

STRUCTURE OF LINEAR PROGRAMMING

General Structure of LP Model The general structure of LP model consists of three components.

Decision variables (activities):

We need to evaluate various alternatives (courses of action) for arriving at the optimal value of objective function. Obviously, if there are no alternatives to select from, we would not need LP. The evaluation of various alternatives is guided by the nature of objective function and availability of resources. For this, we pursue certain activities usually denoted by x 1 , x 2 x n . The value of these activities represent the extent to which each of these is performed. For example, in a product-mix manufacturing, the management may use LP to decide how many units of each of the product to manufacture by using its limited resources such as personnel, machinery, money, material, etc.

These activities are also known as decision variables because they arc under the decision-

maker's control. These decision variables, usually interrelated in terms of consumption of limited resources, require simultaneous solutions. All decision variables are continuous, controllable

and non-negative. That is, x 1 >0, x 2 >0,

x n >0.

The objective function:

The objective function of each L.P problem is a mathematical representation of the objective in terms of a measurable quantity such as profit, cost, revenue, distance, etc. In its general form, it is represented as:

Optimise (Maximise or Minimise) Z = c 1 x 1 + c 2 X 2 . … c n x n

where Z is the mcasure-of-performance variable, which is a function of x 1 , x 2

c 1 , c 2 c n are parameters that represent the contribution of a unit of the respective variable x 1 ,

x 2

, x n to the measure-of-performance Z. The optimal value of the given objective function is

obtained by the graphical method or simplex method.

, x n . Quantities

The constraints:

There are always certain limitations (or constraints) on the use of resources, e.g. labour, machine, raw material, space, money, etc. that limit the degree to which objective can be achieved. Such constraints must be expressed as linear equalities or inequalities in terms of decision variables. The solution of an L.P model must satisfy these constraints.

The linear programming method is a technique for choosing the best alternative from a set of feasible alternatives, in situations in which the objective function as well as the constraints can be expressed as linear mathematical functions. In order to apply linear programming, there are certain requirements to me met.

a) There should be an objective which should be clearly identifiable and measurable in quantitative terms. It could be, for example, maximisation of sales, of profit, minimisation of cost, and so on.

b) The activities to be included should be distinctly identifiable and measurable in quantitative terms, for instance, the products included in a production planning problem.

c) The resources of the system which arc to be allocated for the attainment of the goal should also be identifiable and measurable quantitatively. They must be in limited supply. The technique would involve allocation of these resources in a manner that would trade off the returns on the investment of the resources for the attainment of the objective.

d) The relationships representing the objective as also the resource limitation considerations, represented by the objective function and the constraint equations or inequalities, respectively must be linear in nature.

e) There should be a series of feasible alternative courses of action available to the decision makers, which are determined by the resource constraints.

When these stated conditions are satisfied in a given situation, the problem can be expressed in algebraic form, called the Linear Programming Problem (LPP) and then solved for optimal decision. We shall first illustrate the formulation of linear programming problems and then consider the method of their solution.

ASSUMPTIONS OF LINEAR PROGRAMMING

The following four basic assumptions are necessary for all linear programming models.

Certainty:

In all LP models, it is assumed, that all model parameters such as availability of resources, profit (or cost) contribution of a unit of decision variable and consumption of resources by a unit of decision variable must be known and is constant. In some cases, these may be either random variables represented by a known distribution (general or may be statistical) or may tend to change, then the given problem can be solved by a stochastic LP model or parametric programming. The linear programming is obviously deterministic in nature.

Divisibility (or continuity):

The solution values of decision variables and resources are assumed to have either whole numbers (integers) or mixed numbers (integer and fractional). However, if only integer variables are desired, e.g. machines, employees, etc. the integer programming method may be applied to get the desired values.

It is also an assumption of a linear programming model that the decision variables are continuous. As a consequence, combinations of output with fractional values, in the context of production problems, are possible and obtained frequently. For example, the best solution to a problem might be to produce 5 2/3 units of product A and 10 1/3 units of product B per week. Although in many situations we can have only integer values, but we can deal with the fractional values, when they appear, in the following ways. Firstly, when the decision is a one-shot decision, that is to say, it is not repetitive in nature and has to be taken only once, we may round the fractional values to the nearest integer values. However, when we do so, we should evaluate the revised solution to determine whether the solution represented by the rounded values is a feasible solution and also whether the solution is the best integer solution. Secondly, if the problem relates to a continuum of time and it is designed to determine optimal solution for a given time period only, then the fractional values may not be rounded. For instance in the context of a production problem, a solution like the one given earlier to make 5 2/3 units of A and 10 units of B per week, can be adopted without any difficulty. The fractional amount of production would be taken to be the work-in-progress and become a portion of the production of the following week. In this case an output of 17 units of A and 31 units of B over a three- week period would imply 5 2/3 units of A and 10 units of B per week. Lastly, if we must insist on obtaining only integer values of the decision variables, we may restate the problem as an integer programming problem, forcing the solutions to be in integers only.

The value of the objective function for the given values of decision variables and the total sum of resources used, must be equal to the sum of the contributions (profit or cost) earned from each decision variable and the sum of the resources used by each decision variable, respectively. For example, the total profit earned by the sale of two products A and B must be equal to the sum of the profits earned separately from A and B. Similarly, the amount of a resource consumed by A and B must be equal to the sum of resources used for A and B individually.

This assumption implies that there is no interaction among the decision variables (interaction is possible when, for example, some product is a by-product of another one).

Finite choices

 A linear programming model also assumes that a limited number of choices are available to a decision-maker and the decision variables do not assume negative values. Thus, only

non-negative levels of activity are considered feasible. This assumption is indeed a realistic one. For instance, in the production problems, the output cannot obviously be negative, because a negative production implies that we should be able to reverse the production process and convert the finished output back into the raw materials!

Linearity (or proportionality):

All relationships in the LP model (i.e. in both objective function and constraints) must be linear. In other words, for any decision variable j, the amount of particular resource say i used and its contribution to the cost one in objective function must be proportional to its amount. For example, if production of one unit of a product uses 5 hours of a particular resource, then making 3 units of that product uses 3 x 5 = 15 hours of that resource.

Following are certain advantages of linear programming.

1. Linear programming helps in attaining the optimum use of productive resources. It also indicates how a decision-maker can employ his productive factors effectively by selecting and distributing (allocating) these resources.

2. Linear programming techniques improve the quality of decisions. The decision-making approach of the user of this technique becomes more objective and less subjective.

3. Linear programming techniques provide possible and practical solutions since there might be other constraints operating outside the problem which must be taken into account. Just because we can produce so many units docs not mean that they can be sold. Thus, necessary modification of its mathematical solution is required for the sake of convenience to the decision-maker.

4. Highlighting of bottlenecks in the production processes is the most significant advantage

of this technique. For example, when a bottleneck occurs, some machines cannot meet demand while other remains idle for some of the time.

5. Linear programming also helps in re-evaluation of a basic plan for changing conditions. If conditions change when the plan is partly carried out, they can be determined so as to adjust the remainder of the plan for best results.

LIMITATIONS OF LINEAR PROGRAMMING

In spite of having many advantages and wide areas of applications, there arc some limitations associated with this technique. These are given below. Linear programming treats all relationships among decision variables as linear. However, generally, neither the objective functions nor the constraints in real-life situations concerning business and industrial problems are linearly related to the variables.

1. While solving an LP model, there is no guarantee that we will get integer valued solutions. For example, in finding out how many men and machines would be required lo perform a particular job, a non-integer valued solution will be meaningless. Rounding off the solution to the nearest integer will not yield an optimal solution. In such cases, integer programming is used to ensure integer value to the decision variables.

2. Linear programming model does not take into consideration the effect of time and uncertainty. Thus, the LP model should be defined in such a way that any change due to internal as well as external factors can be incorporated.

3. Sometimes large-scale problems can be solved with linear programming techniques even when assistance of computer is available. For it, the main problem can be fragmented into several small problems and solving each one separately.

4. Parameters appearing in the model are assumed to be constant but in real-life situations, they are frequently neither known nor constant.

It deals with only single objective, whereas in real-life situations we may come across conflicting multi-objective problems. In such cases, instead of the LP model, a goal programming model is used to get satisfactory values of these objectives.

APPLICATION AREAS OF LINEAR PROGRAMMING

Linear programming is the most widely used technique of decision-making in business and Industry and in various other fields. In this section, we will discuss a few of the broad application areas of linear programming.

Agricultural Applications

These applications fall into categories of farm economics and farm management. The former deals with agricultural economy of a nation or region, while the latter is concerned with the problems of the individual farm.

The study of farm economics deals with inter-regional competition and optimum allocation of crop production. Efficient production patterns can be specified by a linear programming model under regional land resources and national demand constraints. Linear programming can be applied in agricultural planning, e.g. allocation of limited resources such as acreage, labour, water supply and working capital, etc. in a way so as to maximise net revenue.

Military Applications

Military applications include the problem of selecting an air weapon system against enemy so as to keep them pinned down and at the same time minimising the amount of aviation gasoline used. A variation of the transportation problem that maximises the total tonnage of bombs dropped on a set of targets and the problem of community defence against disaster, the solution of which yields the number of defence units that should be used in a given attack in order to provide the required level of protection at the lowest possible cost.

Production Management

(i) Product mix A company can produce several different products, each of which requires the use of limited production resources. In such cases, it is essential to determine the quantity of each product to be produced knowing its marginal contribution and amount of available resource used by it. The objective is to maximise the total contribution, subject to all constraints.

(ii) Production planning This deals with the determination of minimum cost production plan over planning period of an item with a fluctuating demand, considering the initial number of units in inventory, production capacity, constraints on production, manpower and all relevant cost factors. The objective is to minimise total operation costs.

(iii) Assembly-line balancing This problem is likely to arise when an item can be made by

assembling different components. The process of assembling requires some specified sequcnce(s). The objective is to minimise the total elapse time.

(iv) Blending problems These problems arise when a product can be made from a variety of

available raw materials, each of which has a particular composition and price. The objective here is to determine the minimum cost blend, subject to availability of the raw materials, and minimum and maximum constraints on certain product constituents.

(v)

Trim loss When an item is made to a standard size (e.g. glass, paper sheet), the problem

that arises is to determine which combination of requirements should be produced from standard materials in order to minimise the trim loss.

Financial Management (i) Portfolio selection This deals with the selection of specific investment activity among several other activities. The objective is to find the allocation which maximises the total expected return or minimises risk under certain limitations.

(ii) Profit planning This deals with the maximisation of the profit margin from investment in

plant facilities and equipment, cash in hand and inventory.

Marketing Management

(i) Media selection Linear programming technique helps in determining the advertising

media mix so as to maximise the effective exposure, subject to limitation of budget, specified exposure rates to different market segments, specified minimum and maximum number of advertisements in various media.

(ii) Travelling salesman problem The problem of salesman is to find the shortest route from a

given city, visiting each of the specified cities and then returning to the original point of departure, provided no city shall be visited twice during the tour. Such type of problems can be solved with the help of the modified assignment technique. (iii) Physical distribution Linear programming determines the most economic and efficient manner of locating manufacturing plants and distribution centres for physical distribution.

Personnel Management a) Staffing problem Linear programming is used to allocate optimum manpower to a particular job so as to minimise the total overtime cost or total manpower. b) Determination of equitable salaries Linear programming technique has been used in determining equitable salaries and sales incentives. c) Job evaluation and selection of suitable person for a specified job and evaluation of job in organisations has been done with the help of linear programming technique.

Other applications of linear programming lie in the area of administration, education, fleet utilisation, awarding contracts, hospital administration and capital budgeting, etc.

FORMULATING LP PROBLEMS

Formulating a linear program involves developing a mathematical model to represent the managerial problem. Thus, in order to formulate a linear program, it is necessary to completely understand the managerial problem being faced. Once this is understood, develop the mathematical statement of the problem. The steps in formulating a linear program follow:

1. Completely understand the managerial problem being faced.

2. Identify and define the decision variable of the problem

3. Define the objective function

4. State the constraints to which the objective function should be optimized(i.e. Maximization or Minimization)

5.Add the non-negative constraints from the consideration that the negative values of the decision variables do not have any valid physical interpretation

One of the most common LP applications is the product mix problem. Two or more products are usually produced using limited resources such as personnel, machines, raw materials, and so on. The profit that the firm seeks to maximize is based on the profit contribution per unit of each product. (Profit contribution, is the selling price per unit minus the variable cost per unit.) The company would like to determine how many units of each product it should produce so as to maximize overall profit given its limited resources. A problem of this type is formulated in the following example.

Example 1

The Abhi Furniture Company produces inexpensive tables and chairs. The production process for each is similar in that both require a certain number of hours of carpentry work and a certain number of labor hours in the painting and varnishing department. Each table takes 4 hours of carpentry and 2hours in the painting and varnishing shop. Each chair requires 3 hours in carpentry and 1 hour in painting and varnishing shop. During the current production period, 240 hours of carpentry time are available and 100 hours in painting and varnishing time are available. Each table sold yields a profit of Rs.7; each chair produced is sold for a Rs.5 profit.

Abhi Furniture’s problem is to determine the best possible combination of tables and chairs to manufacture in order to reach the maximum profit. The firm would like this production mix situation formulated as an LP problem.

 HOURS REQUIRED TO PRODUCE 01 UNIT DEPARTMENT (T) (C) AVAILABLE HOURS TABLES CHAIRS THIS WEEK Carpentry 4 3 240 Painting and 2 1 100 varnishing Profit per unit Rs.7 Rs.5

We begin by summarizing the information needed to formulate and solve this problem. This helps us understand the problem being faced. Next we identify the objective and the constraints. The objective is to maximize the profit The constraints are

1. The hours of carpentry time used cannot exceed 240 hours per week.

2. The hours of painting and varnishing time used cannot exceed 100 hours per week.

The decision variables that represent the actual decisions we will make are defined as T = number of tables to be produced

C= number of chairs to be produced Now we can create the LP objective function in terms of T and C. The objective function is maximize profit = Rs.7 T + Rs.5C. Our next step is to develop mathematical relationships to describe the two constraints in this problem. One general relationship is that the amount of a resource used is to be less than or equal to () the amount of resource available. In the case of the carpentry department, the total time used is

(4 hours per table)(number of tables produced) + (3 hours per chair)(number of chairs produced) So the first constraint may be stated as follows: Carpentry time used is carpentry time available. 4T + 3C 240 (hours of carpentry time) Similarly, the second constraint is as follows: Painting and varnishing time used is painting and varnishing time available.

(2) T + 1C 100 (hours of painting and varnishing time) (This means that each table produced takes two hours of the painting and varnishing resource.) Both of these constraints represent production capacity restrictions and, of course, affect the total profit. For example, Abhi Furniture cannot produce 70 tables during the production period because if T =70, both constraints will be violated. It also cannot make T = 50 tables and C=10 chairs. Why? Because this world violate the second constraint that no more than 100 hours of painting and varnishing time be allocated. To obtain meaningful solutions, the values for T and C must be nonnegative. That is, all potential solutions must represent real tables and real chairs. Mathematically, this means that

T 0 (number of tables produced is greater than or equal to 0)

C 0 (number of chairs produced is greater than or equal to 0) The complete problem may now be restated mathematically as maximize profit = Rs.7T + Rs.5C subject to the constraints

4T + 3C 240 2T + 1C 100

T 0 C 0

(carpentry constraint) (painting and varnishing constraint)

(first nonnegativity constraint) (second nonnegativity constraint)

Example 2

A manufacturer produces two types of models M1 and M2.Each model of the type M1 requires 4 hours of grinding and 2 hours of polishing; where as each model of M2 requires 2 hours of grinding and 5 hours of polishing. The manufacturer has 2 grinders and 3 polishers. Each grinder works for 40 hours a week and each polisher works 60 hours a week. Profit on M1 model is Rs.3.00 and on model M2 is Rs.4.00.Whatever produced in a week is sold in the market. How should the manufacturer allocate his production capacity to the two types of models, so that he makes maximum profit in a week?

1. Identify and define the decision variable of the problem Let X1 and X2 be the number of units of M1 and M2 model.

2. Define the objective function

Since the profits on both the models are given, the objective function is to maximize the profit.

Max Z = 3X1 + 4X2

3. State the constraints to which the objective function should be optimized (i.e. Maximization or Minimization)

There are two constraints one for grinding and the other for polishing. The grinding constraint is given by

4X1 + 2X2 < 80

No of hours available on grinding machine per week is 40 hrs. There are two grinders. Hence the total grinding hour available is 40 X 2 = 80 hours. The polishing constraint is given by

2X1 + 5X2 < 180

No of hours available on polishing machine per week is 60 hrs. There are three grinders. Hence the total grinding hour available is 60 X 3 = 180 hours.

Finally we have,

Max Z = 3X1 + 4X2 Subject to constraints, 4X1 + 2X2 < 80 2X1 + 5X2 < 180 X1, X2 > 0

Example 3

A firm is engaged in producing two products. A and B. Each unit of product A requires 2 kg of

raw material and 4 labour hours for processing, where as each unit of B requires 3 kg of raw materials and 3 labour hours for the same type. Every week, the firm has an availability of 60 kg

of raw material and 96 labour hours. One unit of product A sold yields Rs.40 and one unit of

product B sold gives Rs.35 as profit. Formulate this as an Linear Programming Problem to determine as to how many units of each of the products should be produced per week so that the firm can earn maximum profit.

1. Identify and define the decision variable of the problem Let X 1 and X 2 be the number of units of product A and product B produced per week.

2. Define the objective function Since the profits of both the products are given, the objective function is to maximize the profit. Max Z = 40X 1 + 35X 2

3. State the constraints to which the objective function should be optimized (i.e. Maximization or Minimization)

There are two constraints one is raw material constraint and the other one is labour constraint The raw material constraint is given by

2X 1 + 3X 2 <

60

The labour hours constraint is given by

4X 1 + 3X 2

< 96

Finally we have, MaxZ = 40X1 + 35X2

Subject to constraints,

2X 1 + 3X 2 <

4X 1 + 3X 2 X 1 ,X 2 > 0

60

< 96

Example 4

The agricultural research institute suggested the farmer to spread out atleast 4800 kg of special phosphate fertilizer and not less than 7200 kg of a special nitrogen fertilizer to raise the productivity of crops in his fields. There are two sources for obtaining these – mixtures A and mixtures B. Both of these are available in bags weighing 100kg each and they cost Rs.40 and Rs.24 respectively. Mixture A contains phosphate and nitrogen equivalent of 20kg and 80 kg respectively, while mixture B contains these ingredients equivalent of 50 kg each. Write this as an LPP and determine how many bags of each type the farmer should buy in order to obtain the required fertilizer at minimum cost.

1. Identify and define the decision variable of the problem Let X 1 and X 2 be the number of bags of mixture A and mixture B.

2. Define the objective function The cost of mixture A and mixture B are given ; the objective function is to minimize the cost Min.Z = 40X 1 + 24X 2

3. State the constraints to which the objective function should be optimized. The above objective function is subjected to following constraints.

20X 1 + 50X 2 >4800 80X 1 + 50X 2 >7200

X 1 , X 2

>0

Phosphate requirement Nitrogen requirement

Finally we have, Min.Z = 40X 1 + 24X 2 is subjected to three constraints 20X 1 + 50X 2 >4800 80X 1 + 50X 2 >7200

X 1 , X 2

>0

Example 5

A firm can produce 3 types of cloth, A , B and C.3 kinds of wool are required Red, Green and

Blue.1 unit of length of type A cloth needs 2 meters of red wool and 3 meters of blue wool.1

unit of length of type B cloth needs 3 meters of red wool, 2 meters of green wool and 2 meters

of blue wool.1 unit type of C cloth needs 5 meters of green wool and 4 meters of blue wool. The

firm has a stock of 8 meters of red, 10 meters of green and 15 meters of blue. It is assumed that the income obtained from 1 unit of type A is Rs.3, from B is Rs.5 and from C is Rs.4.Formulate this as an LPP

1. Identify and define the decision variable of the problem Let X 1 , X 2 and X 3 are the quantity produced of cloth type A,B and C respectively.

2. Define the objective function

The incomes obtained for all the three types of cloths are given; the objective function is to maximize the income. Max Z = 3X 1 + 5X 2 + 4X 3 3) State the constraints to which the objective function should be optimized.

The above objective function is subjected to following three constraints.

2X 1 + 3X 2 <

8

2X 2 + 5X 3

3X 1 + 2X 2 + 4X 3 <

X 1 , X 2 X 3 >0

< 10

15

Finally we have,

Max Z = 3X 1 + 5X 2 + 4X 3 is subjected to three constraints

2X 1 + 3X 2 <

2X 2 + 5X 3

3X 1 + 2X 2 + 4X 3 <

X 1 , X 2 X 3 >0

8

< 10

15

Example 6

A Retired person wants to invest upto an amount of Rs.30,000 in fixed income securities. His

broker recommends investing in two Bonds: Bond A yielding 7% and Bond B yielding 10%. After some consideration, he decides to invest at most of Rs.12,000 in bond B and atleast Rs.6,000 in Bond A. He also wants the amount invested in Bond A to be atleast equal to the amount invested in Bond B. What should the broker recommend if the investor wants to maximize his return on investment? Solve graphically.

1.Identify and define the decision variable of the problem Let X 1 and X 2 be the amount invested in Bonds A and B. 2 Define the objective function

Yielding for investment from two Bonds are given; the objective function is to maximize the yielding. Max Z = 0.07X 1 + 0.1X 2 3. State the constraints to which the objective function should be optimized. The above objective function is subjected to following three constraints. X 1 + X 2 < 30,000 X 1 > 6,000 X 2 < 12,000 X 1 - X 2 >0

X 1 , X 2

>0

Finally we have, MaxZ = 0.07X 1 + 0.1X 2

is subjected to three constraints X 1 + X 2 < 30,000 X 1 > 6,000 X 2 < 12,000 X 1 - X 2 >0

X 1 , X 2

>0

MINIMIZATION PROBLEMS

Example 7.

A person requires 10, 12, and 12 units chemicals A, B and C respectively for his garden. A liquid

product contains 5, 2 and 1 units of A,B and C respectively per jar. A dry product contains 1,2 and 4 units of A,B and C per carton.

 If the liquid product sells for Rs.3 per jar and the dry product sells for Rs.2 per carton, how many of each should be purchased, in order to minimize the cost and meet the requirements? 1. Identify and define the decision variable of the problem Let X 1 and X 2 be the number of units of liquid and dry products. 2. Define the objective function The cost of Liquid and Dry products are given ; the objective function is to minimize the cost Min. Z = 3X 1 + 2X 2 3. State the constraints to which the objective function should be optimized.

The above objective function is subjected to following three constraints. 5X 1 + X 2 >10 2X 1 + 2X 2 >12 X 1 + 4X 2 >12

X 1 , X 2

>0

Finally we have, Min. Z = 3X 1 + 2X 2

is subjected to three constraints 5X 1 + X 2 >10 2X 1 + 2X 2 >12 X 1 + 4X 2 >12

X 1 , X 2

>0

Example 8 A Scrap metal dealer has received a bulk order from a customer for a supply of atleast 2000 kg of scrap metal. The consumer has specified that atleast 1000 kgs of the order must be high quality copper that can be melted easily and can be used to produce tubes. Further, the customer has specified that the order should not contain more than 200 kgs of scrap which are unfit for commercial purposes. The scrap metal dealer purchases the scrap from two different sources in an unlimited quantity with the following percentages (by weight) of high quality of copper and unfit scrap

 Source A Source B Copper 40% 75% Unfit Scrap 7.5% 10%

The cost of metal purchased from source A and source B are Rs.12.50 and Rs.14.50 per kg respectively. Determine the optimum quantities of metal to be purchased from the two sources by the metal scrap dealer so as to minimize the total cost

1. Identify and define the decision variable of the problem

Let X 1 and X 2 be the quantities of metal to be purchased from the two sources A and B.

2. Define the objective function The cost of metal to be purchased by the metal scrap dealer are given; the objective function is to minimize the cost Min. Z = 12.5X 1 + 14.5X 2

3. State the constraints to which the objective function should be optimized. The above objective function is subjected to following three constraints. X 1 + X 2 >2,000 0.4X 1 + 0.75X 2 >1,000 0.075X 1 + 0.1X 2 < 200

X 1 , X 2

>0

Finally we have, Min. Z = 12.5X 1 + 14.5X 2 is subjected to three constraints X 1 + X 2 >2,000 0.4X 1 + 0.75X 2 >1,000 0.075X 1 + 0.1X 2 < 200

X 1 , X 2

>0

Example 9

A farmer has a 100 acre farm. He can sell all tomatoes, lettuce or radishes and can raise the price to obtain Rs.1.00 per kg. for tomatoes , Rs.0.75 a head for lettuce and Rs.2.00 per kg for radishes. The average yield per acre is 2000kg.of tomatoes, 3000 heads of lettuce and 1000 kgs of radishes. Fertilizers are available at Rs.0.50 per kg and the amount required per acre is 100 kgs for each tomatoes and lettuce and 50kgs for radishes. Labour required for sowing, cultivating and harvesting per acre is 5 man-days for tomatoes and radishes and 6 man-days for lettuce. A total of 400 man-days of labour are available at Rs.20.00 per man-day. Formulate this problem as LP model to maximize the farmers profit.

1. Identify and define the decision variable of the problem Let X 1 and X 2 and X 3 be number acres the farmer grows tomatoes, lettuce and radishes respectively.

2. Define the objective function The objective of the given problem is to maximize the profit. The profit can be calculated by subtracting total expenditure from the total sales Profit = Total sales – Total expenditure

3. The farmer produces 2000X1 kgs of tomatoes, 3000X2 heads of lettuce, 1000X3 kgs of radishes.

Therefore the total sales of the farmer will be = Rs. (1 x 2000X 1 + 0.75 x 3000X 2 + 2 x 100X 3 ) Total expenditure (fertilizer expenditure) will be = Rs.20 ( 5X 1 + 6X 2 + 5X 3 ) Farmer’s profit will be

Z = (1 x 2000X 1 + 0.75 x 3000X 2 + 2 x 100X 3 ) –

{ [0.5 x 100 x X 1 +0.5 x 100 x X 2 + 50X 3 ]+ [20 x 5 x X 1 +20 x 6 x X 2 + 20 x 5 x X 3 ]} =1850X 1 + 2080X 2 + 1875X 3

Therefore the objective function is Maximise Z = 1850X 1 + 2080X 2 + 1875X 3

4. State the constraints to which the objective function should be optimized. The above objective function is subjected to following constraints. Since the total area of the firm is 100 acres

X 1 + X 2 + X 3 <

The total man-days labour is 400 man-days 5X 1 + 6X 2 + 5X 3 < 400

100

Finally we have,

Maximise Z = 1850X 1 + 2080X 2 + 1875X 3

 is subjected to three constraints X 1 + X 2 + X 3 < 100

5X 1 + 6X 2 + 5X 3 < 400

X 1 , X 2 , X 3 >0

Example 10.

An electronics company produces three types of parts for automatic washing machines .It purchases castings of the parts from a local foundry and then finishes the part on drilling, shaping and polishing machines. The selling prices of parts A, B, and C respectively are Rs 8, Rs.10 and Rs.14.All parts made can be sold. Castings for parts A, B and C respectively cost Rs.5, Rs.6 and Rs.10. The shop possesses only one of each type of machine. Cost per hour to run each of the three machines are Rs.20 for drilling, Rs.30 for shaping and Rs.30 for polishing. The capacities (parts per hour) for each part on each machine are shown in the following table.

 Machine Capacities Per Hour Part A Part B Part C Drilling 25 40 25 Shaping 25 20 20 Polishing 40 30 40

The management of the shop wants to know how many parts of each type it should produce per hour in order to maximize profit for an hour’s run. Formulate this problem as an LP model so as to maximize total profit to the company.

1. Identify and define the decision variable of the problem Let X 1 and X 2 and X 3 be the number of types A, B and C parts produced per hour respectively .

2. Define the objective function With the information given, the hourly profit for part A, B, and C would be as follows Profit per type A part = (8 – 5) – (20/25 +30/25 + 30/40) = 0.25 Profit per type B part = (10 – 6) – (20/40 + 30/20 + 30/30) = 1 Profit per type C part = (14 – 10) – (20/25 + 30/20 + 30/40) = 0.95 Then, Maximize Z = 0.25 X 1 + 1X 2 + 0.95X 3

3. State the constraints to which the objective function should be optimized. The above objective function is subjected to following constraints. i) The drilling machine constraint X 1 /25 + X 2 /40 + X 3 /24 < 1 ii) The shaping machine constraint X 1 /25 + X 2 /20 + X 3 /20 1 iii) The polishing machine constraint X 1 /40 + X 2 /30 + X 3 /40 1

X 1 , X 2 , X 3 0

Finally we have, Maximize Z = 0.25 X 1 + 1X 2 + 0.95X 3 Subject to constraints i)X 1 /25 + X 2 /40 + X 3 /24 < 1 ii) The shaping machine constraint X 1 /25 + X 2 /20 + X 3 /20 1 iii) The polishing machine constraint X 1 /40 + X 2 /30 + X 3 /40 1 X 1 , X 2 , X 3 0

Example 11 A city hospital has the following minimal daily requirements for nurses.

 Period Clock time (24 hours day) Minimum number of nurses required 1 6 a.m. – 10 a.m. 2 2 10 a.m. – 2 p.m. 7 3 2 p.m. – 6 p.m. 15 4 6 p.m. – 10 p.m. 8 5 10 p.m. – 2 a.m. 20 6 2 a.m. – 6 a.m. 6

Nurses report at the hospital at the beginning of each period and work for 8 consecutive hours. The hospital wants to determine the minimal number of nurses to be employed so that there will be a sufficient number of nurses available for each period.

Formulate this as a linear programming problem by setting up appropriate constraints objective function.

and

1. Identify and define the decision variable of the problem Let X1, X2, X3, X4, X5 and X6 be the number of nurses joining duty at the beginning of periods 1, 2, 3, 4, 5 and 6 respectively.

2. Define the objective function Minimize Z = X1 + X2 + X3 + X4 + X5 + X6

3. State the constraints to which the objective function should be optimized. The above objective function is subjected to following constraints. X1 + X2 7 X2 + X3 15 X3 + X4 8 X4 + X5 20 X5 + X6 6

X6 + X1 2 X1, X2, X3, X4, X5, X6 0

REFERENCES:

1. N.D.Vohra – Quantitative Techniques in Management – Tata McGraw Hill – 2 nd Edition

– 2001.

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Decisions – New age international P Ltd – 2 nd Edition – 2002

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