Group Assignment

Program : BS (Accounts & Finance)

Assignment : Mathematical Economics
Topic : Linear Program Members
Members : Atika Ikram & Abdullah Khalid
Submitted to: Prof. Iqbal Shoukat
 CHAPTER # 13
“ LINEAR PROGRAMMING”
Introduction:
The use of the word “programming” here means “Planning”

Linear programming enables us to find solution set of a system consisting of linear questions
e.g. x₁ + x₂ = 8 and linear inequations e.g. x₁ + x₂ ≤ 8 ,4 x₁ - x₂ ≥ 12

Linear programming is used to find the best or optimal solution to a problem requiring a
decision or set of decisions about how best limited resources can be used to achieve a stare
goal of objectives.

Linear programming requires that all the mathematical functions in the model be linear
function.

Graphic Solution:
Graphical solution is limited to linear programming models containing only two decision
variable (can be used with three variables but only with great difficulty).

Graphical method provides visualization of how a solution for a linear programming problem
is obtained.

Graphical method can be classified under two categories:

I so - Profit (Cost) Line method

Extreme – Point evaluation Method.

Example:

π 3x₁ + 4x₂ Objective Function

2.5x₁ + x₂ ≤ 20

3x₁ +3x₂≤ 30 Regular Constraints

X₁ +2x₂≤ 1

X₁, x₂≥ 0 Non-negatively constraint

The first inequation is objective function and second three inequations are technical
constraints, determined by the state of technology and the availability of inputs; the fifth is a
non-negatively constraint imposed on every problem to preclude negative (hence
unacceptable) value from the solution.

2. Treat the three inequality constraints are equations, solve each one foe x₂ in term of x₁

X₂ = 20 - 2.5x₁ Form A

X₂ = 10 - x ₁ Forms B

X₂ = 8 - 0.5x₁ Form C

The graph of the original “Less than or equal to” inequality will include all the points on the line and
to the left of it. The non-negatively constraints x₁, x₂ ≥ 0 are represented by the vertical and
horizontal axes, respectively. The shades area is called feasible region. It contains all the point that
satisfy all these constraints plus the non-negatively constraints. The variable x₁ and x₂ are called
decision or structural variable.

3. to find the optimal solution within the feasible region, if it exists, graphs the objective
function as a series of isoprofit line.

X₂ = / π 4 – 3/4x₁
 4. Profit is maximized at the intersection of two constraints, called an extreme point

THE EXTREME POINT

Introduction:
The corners or vertices of the feasible region are referred to as the extreme points or critical
point.

An optimal solution to an L.P problem can be found at an extreme point of the feasible
region.

Example:
A Farmer wants to see that his herd gets the minimum daily requirement of these
basic nutrients A, B and C. Daily requirements are 14 for A. 12 for B, and 18 for C. Product y₁
has two units for A and 1 unit beach foe B and C. The cost of y₁ is $2, and the cost of y₂ is $4.
The graphic method is used below to determine the least-cost combination of y₁ and y₂ that
will fulfill all minimum requirements.

1. C = 2y₁+4y₂ Objective function

2y₁+ y₂ ≥ 14

Y₁+ y₂ ≥ 12 Constraint Function

Y₁+ 3y₂ ≥ 18

Y₁, y₂ ≤ 0 Non-negatively

Where the constraints read ≥ since minimum requirements must be fulfilled but may be
exceeded.

2. Treat the inequalities as equation, solve each one for y₂ is term of y₁, and graph. The
graph of the original ‘greater’ than or equal to “inequality” will include all the points on the
line and to the right of it. The shaded area in the feasible region containing all the points
that satisfy all three requirements plus the non-negatively constraint.
 3. To find the optimal solution, graph the objective function as a series of (dashed) isocost
line.

y₂ = c/4 – ½ y₁

The lowest isocost line that will touch the feasible region in tangent at Ῡ₁ = 9 and Ῡ₂ =
3.Thus Ḡ = 2(9) + 4(10) [for minimization problem, (0, 0) is not in the feasible region.]

SLACK AND SURPLUS VARIABLE

Slack Variable:
Standard form requires that all constraints be in the form of equations (equalities)

A slack variable is added to a ≤ constraint (weak inequality) to convert it to an equation (=).

A slack variable typically represents an unused resource.

A slack variable contributes nothing to the objective function value.

Surplus Variable:
A surplus variable is subtracted from a ≥ constraint to convert it to an equation (=).

A surplus variable represents an excess above a constraint requirement level.

A surplus variable contributes nothing to the calculated value of the objective function.

Example:

1. This example is according to slack variable:

2.5x₁+x₂ +s₁ = 20 3x₁+3x₂ +s₂ = 30 x₁+2x₂ +s₃ = 16

[] []
X1
X2

[ 2.5 1 1 0 0
3 3 0 1 0
1 2 0 0 1 ] X1
X2
X3 =
2O
30
16

2. This example is according to surplus variable:

2y₁+y₂ -s₁ = 14 y₁+y₂ - s₂ = 12 y₁+3y₂ - s₃ = 18

[]
y1
y2

[ ] []
2 1 −1 0 0 y1 14
1 1 0 −1 0 y2 12
1 3 0 0 −1 y3 = 18

THE BASICSTHEOREM
Introduction:
 For a system of m consistent equation and n variable, where n>m, then will be an
infinite number of solution. But the number of extreme points is finite. The basis theorem
states that for a system of m equation and n variable, where n>m, a solution in which at
least n-m variables equal to zero is an extreme point. Thus by setting n-m variables equal to
zero and solving the equations for the remaining m variables, an extreme point, or basic
solution, can be found. The number of basic solution is given by the formula.

n!
m! ( n−m ) !

Example:
5!
1. 3 ! (2) !

n!
m! ( n−m ) !

Where 5! = 5(4) (3) (2) (1)

5 ( 4 ) ( 3 ) ( 2 )( 1 )
=10
3 ( 2 ) (1 )( 2 ) ( 1 )

PROBLEMS:
Question # 1:

A manufacturer of pebbles for patios produces two different kinds: coarse x₁

and fine x₂. The course pebbles require two hours of crushing, 5 hours of sifting, and 8 hours
of drawing. The fine pebbles require 6 hours of crushing, 3 hours of sifting, and 2 hours of
drawing. The profit margin for coarse pebbles is 40; for fine pebbles it is 50. The
manufacturer has available 36 hours for crushing, 30 sifting and 40 for drying.

Determine the profit-maximization output mix by reading these data to

equations and inequations.

π = 40x₁ + 50x₂

2x₁ 6x₂ ≤ 36 Crushing constraint

 5x₁ + 3x₂ ≤ 30 sifting constraint

8x₁ + 2x₂ ≤ 40 Drying constraint

X₁ X₂ ≥ 0

Question # 2:

A toy manufacturer makes two games: Bong g₁ and zong g₂. The profit
margin on Bong is 30; the profit margin on zong is 20. Bong takes 6 hours of processing, 4
hours of assembly, and 5 hours of packaging Bong is 30; the profit margin on zong is 20. Zong
takes 3 hours of processing, 6 hours of assembly, and 5 hours of packaging. If 54 hours are
available for processing, 48 hours of assembling or 50 hours for packaging, what is the profit-
maximization output mix in term of equations and inequations?

π = 30x₁ + 20x₂

6g₁ + 3g₂ ≤ 5 Processing constraint

 4g₁ + 6g₂ ≤ 48 assembling constraint

5g₁ + 5g₂ ≤ 20 Packaging constraint

g₁, g₂ ≥ 0

Question # 3:
A stereo manufacturer makes three types of stereos; Standards y₁, quality
y₂, and deluxe y₃. His profit margin from each is 15, 20 and 24, respectively. The standards
model requires 3 hours for wiring and 1 hour for encasing. The quality model requires 1 hour
for wiring and 5 hours for encasing. The deluxe model requires 3 hours for wiring and 2 hour
for encasing. If 120 hours are available for wiring and 60 hours for encasing, express the
output mix that will maximize profits as equations and inequations.

π = 15y₁ + 20y₂ + 24y³

3y₁ + 3g₂ ≤ 5 Processing constraint

4g₁ + y₂ ≤ 120 assembling constraint

y₁ + 5y₂ + 2y≤ 60 Packaging constraint

y₁, y₂, y₃ ≥ 0

Question # 4:
Hank Burdue makes sure his chickens get at least 24 units of iron and 8
units of vitamins each day. Corn x1 provides 2 units of iron and 5 units of vitamins. Bone
meal x2 provides 4 units of iron and 1 units of vitamins. Millet x3 provides 2 units of iron and 1
units of vitamins. How should the feed be raixed to provide least cost satisfaction of daily
requirements if feed cost is $40, $20, and $60, respectively?

c= 40x1 + 20x2 + 60x3

2x1 + 4x2 + 2x3 ≥ 24 iron requirement

5x1 + x3 + x3 ≥ 8 vitamin requirement

X1, x2, x3, ≥ 0

Question # 5:
Draw graph of the following data:
Maximize n = 5x1 + 3x2

Subject to 6x1 + 2x2 < 36 constraint 1 2x1 + 4x2 < 28 constraint 3

5x1 + 5x2 < 40 constraint 2 x 1 , x2 > 0

Diagram:

(a)

X2

20-

18-

16-

14- Constraint 1

12-

10-

8- Constraint 2

6-

4-

2- Constraints 3

0 2 4 6 8 10 12 14 16 18 20 x1

X2
 20-

18-

16-

14-

12-

10-

8-

6- Slope = - 5/3

4-

2-

0 2 4 6 8 10 12 14 16 18 20 x1

Question # 6:
 Draw graph of the following data

Maximize n = 20x1 + 10x2

Subject to 4x1 + 3x2 < 48 constraint 1 x1 < 0 constraint 3

3x1 + 5x2 < 60 constraint 2 x1, x2, > 0

From the critical values x1 = 9, x2 = 4, and n = 20(9) + 10(4) = 220.

Diagram:

X2

22-

20-

18-

16-

14- constraint 1

12-

10- constraint 3

8-

6-

4- constraint 2

2-

0 2 4 6 8 10 12 14 16 18 20 x 1

X2

22-

20-
 18-

16-

14-

12- Slope = - 2

10-

8-

6-

4-

2-

0 2 4 6 8 10 12 14 16 18 20 x1

Question # 7:
Draw the graph of the following data:

Minimize c = 4x1 + 2x2

Subject to 4x1 + x2 > 20 constraint 1 x1 + 6x 2 > 18 constraints 3

 2x1 + x2 > 14 constraint 2 x1, x2 > 0

Diagram:

X2 (a)

22-

20-

18-

16-

14- Constraint 1

12-

10-

8-

6-

4- Constraint 2

2- Constraints 3

0 2 4 6 8 10 12 14 16 18 20 x1

X2 (b)

22-

20-
18-

16-

14-

12-

10-

8-

6-

4-

2- Slope = -2

0 2 4 6 8 10 12 14 16 18 20 x1

(a)

X2

20-

18-

16-
14- Constraint 1

12-

10-

8-

6-

4- Constraint 2

2- Constraints 3

0 2 4 6 8 10 12 14 16 18 20 x1

X2 (b)

20-

18-

16-

14-

12-

10-

8-

6-

4-

2- Slope = - 3/5

0 2 4 6 8 10 12 14 16 18 20 x1

(a)

X2

20-

18-

16-
14- Constraint on input A

12-

10-

8-

6-

4- Constraint on input B

2- Constraint on input C

0 2 4 6 8 10 12 14 16 18 20 x1

X2 (b)

22-

20-
18-

16-

14-

12-

10-

8-

6- E

4-

2-

0 2 4 6 8 10 12 14 16 18 20 x 1