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Principles of Operations Management, 5e, and Operations


Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-1
Operations
Management

Linear Programming
Module B
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-2
Outline
REQUIREMENTS OF A LINEAR PROGRAMMING
PROBLEM
FORMULATING LINEAR PROGRAMMING
PROBLEMS
Shader Electronics example
GRAPHICAL SOLUTION TO A LINEAR
PROGRAMMING PROBLEM
Graphical representation of Constraints
Iso-Profit Line Solution Method
Corner-Point Solution Method
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-3
Outline - Continued
SENSITIVITY ANALYSIS
Sensitivity Report
Change in the Resources of the Right-Hand-Side
Values
Changes in the Objective Function Coefficient
SOLVING MINIMIZATION PROBLEMS
LINEAR PROGRAMMING APPLICATIONS
Production Mix Example
Diet Problem Example
Production Scheduling Example
Labor Scheduling Example
THE SIMPLEX METHOD OF LP
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-4
When you complete this chapter, you should be
able to :
Identify or Define:
Objective function
Constraints
Feasible region
Iso-profit/iso-cost methods
Corner-point solution
Shadow price
Learning Objectives
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-5
When you complete this chapter, you should be
able to :
Describe or Explain:
How to formulate linear models
Graphical method of linear programming
How to interpret sensitivity analysis
Learning Objectives - Continued
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-6
Mathematical technique
Not computer programming
Allocates scarce resources to achieve an
objective
Pioneered by George Dantzig in World War II
Developed workable solution called Simplex
Method in 1947

What is Linear Programming?
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-7
Scheduling school busses to minimize total
distance traveled when carrying students
Allocating police patrol units to high crime areas in
order to minimize response time to 911 calls
Scheduling tellers at banks to that needs are met
during each hour of the day while minimizing the
total cost of labor
Examples of Successful LP
Applications
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-8
Examples of Successful LP
Applications - Continued
Picking blends of raw materials in feed mills to
produce finished feed combinations at minimum
costs
Selecting the product mix in a factory to make
best use of machine- and labor-hours available
while maximizing the firms profit
Allocating space for a tenant mix in a new
shopping mall so as to maximize revenues to the
leasing company

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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-9
Requirements of a Linear
Programming Problem
1 Must seek to maximize or minimize some
quantity (the objective function)
2 Presence of restrictions or constraints - limits
ability to achieve objective
3 Must be alternative courses of action from
which to choose
4 Objectives and constraints must be expressible as
linear equations or inequalities
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-10
Formulating Linear Programming
Problems
Assume:
You wish to produce two products (1) Walkman
AM/FM/Cassette and (2) Watch-TV
Walkman takes 4 hours of electronic work and 2 hours
assembly
Watch-TV takes 3 hours electronic work and 1 hour
assembly
There are 240 hours of electronic work time and 100
hours of assembly time available
Profit on a Walkman is $7; profit on a Watch-TV $5
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-11
Formulating Linear Programming
Problems - continued
Let:
X
1
= number of Walkmans
X
2
= number of Watch-TVs
Then:
4X
1
+ 3X
2
240 electronics constraint
2 X
1
+ 1X
2
100 assembly constraint
7X
1
+ 5X
2
= profit maximize profit
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-12
Draw graph with vertical & horizontal axes (1st
quadrant only)
Plot constraints as lines, then as planes
Use (X
1
,0), (0,X
2
) for line
Find feasible region
Find optimal solution
Corner point method
Iso-profit line method
Graphical Solution Method
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-13
Shader Electronic Company Problem
Hours Required to
Produce 1 Unit
Department X
1

Walkmans
X
2

Watch-TVs
Available Hours
This Week
Electronic 4 3 240
Assembly 2 1 100
Profit/unit $7 $5
Constraints: 4x
1
+ 3x
2
240 (Hours of Electronic Time)
2x
1
+ 1x
2
100 (Hours of Assembly Time)
Objective: Maximize: 7x
1
+ 5x
2

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2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-14
Shader Electronic Company
Constraints
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80
Number of Walkmans (X
1
)
N
u
m
b
e
r

o
f

W
a
t
c
h
-
T
V
s

(
X
2
)

Electronics
(Constraint A)
Assembly
(Constraint B)
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2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-15
Shader Electronic Company
Feasible Region
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80
Number of Walkmans (X
1
)
N
u
m
b
e
r

o
f

W
a
t
c
h
-
T
V
s

(
X
2
)

Feasible
Region
Electronics
(Constraint A)
Assembly
(Constraint B)
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-16
Shader Electronic Company
Iso-Profit Lines
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80
Number of Walkmans (X
1
)
N
u
m
b
e
r

o
f

W
a
t
c
h
-
T
V
s

(
X
2
)

Electronics
(Constraint A)
Assembly
(Constraint B)
Iso-profit line
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-17
Shader Electronic Company
Corner Point Solutions
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80
Number of Walkmans (X
1
)
N
u
m
b
e
r

o
f

W
a
t
c
h
-
T
V
s

(
X
2
)

Iso-profit line
Electronics
(Constraint A)
Assembly
(Constraint B)
Possible Corner
Point Solution
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-18
Shader Electronic Company
Optimal Solution
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80
Number of Walkmans (X
1
)
N
u
m
b
e
r

o
f

W
a
t
c
h
-
T
V
s

(
X
2
)

Optimal solution
Iso-profit line
Electronics
(Constraint A)
Assembly
(Constraint B)
Possible Corner
Point Solution
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-19
Shader Electronic Company
Optimal Solution
0
20
40
60
80
100
120
0 10 20 30 40 50 70 80
Number of Walkmans (X
1
)
N
u
m
b
e
r

o
f

W
a
t
c
h
-
T
V
s

(
X
2
)

Optimal solution
Iso-profit line
Electronics
(Constraint A)
Assembly
(Constraint B)
Possible Corner
Point Solution
X
1
= 30
X
2
= 40
60
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-20
Decision variables
X
1
= tons of BW chemical produced
X
2
= tons of color chemical produced
Objective
Minimize Z = 2500X
1
+ 3000X
2
Constraints
X
1
30 (BW); X
2
20 (Color)
X
1
+ X
2
60 (Total tonnage)
X
1
0; X
2
0 (Non-negativity)
Formulation of Solution
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-21
Simplex Steps for Maximization
1. Choose the variable with the greatest positive C
j
- Z
j
to enter
the solution
2. Determine the row to be replaced by selecting that one with
the smallest (non-negative) quantity-to-pivot column ratio
3. Calculate the new values for the pivot row
4. Calculate the new values for the other row(s)
5. Calculate the C
j
and C
j
-Z
j
values for this tableau.
If there are any C
j
-Z
j
numbers greater than zero, return to
step 1.
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Principles of Operations Management, 5e, and Operations
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2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-22
Simplex Steps for Minimization
1 Choose the variable with the greatest negative C
j
-
Z
j
to enter the solution
2 Determine the row to be replaced by selecting
that one with the smallest (non-negative) quantity-
to-pivot column ratio
3 Calculate the new values for the pivot row
4 Calculate the new values for the other row(s)
5 Calculate the C
j
and C
j
-Z
j
values for this tableau.
If there are any C
j
-Z
j
numbers less than zero,
return to step 1.
Transparency Masters to accompany Heizer/Render
Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-23
Sensitivity Analysis
Projects how much a solution might change if
there were changes in variables or input data.
Shadow price (dual) - value of one additional unit
of a resource
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-24
Youre an analyst for a division of
Kodak, which makes BW & color
chemicals. At least 30 tons of BW and
at least 20 tons of color must be made
each month. The total chemicals made
must be at least 60 tons. How many
tons of each chemical should be made
to minimize costs?
BW: $2,500
manufacturing cost
per month
Color: $ 3,000 manufacturing cost
per month
1995 Corel Corp.
Minimization Example
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Principles of Operations Management, 5e, and Operations
Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-25
Graphical Solution
X
1
Feasible
Region
0
20
40
60
80
0
T
o
n
s
,

C
o
l
o
r

C
h
e
m
i
c
a
l

(
X
2
)

20 40 60 80
Tons, BW Chemical (X
1
)
BW
Color
Total
Find values for
X
1
+ X
2
60.
X
1
30, X
2
20.
X
1
X
2
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Principles of Operations Management, 5e, and Operations
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2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-26
Optimal Solution:
Corner Point Method
Feasible
Region
0
20
40
60
80
0
T
o
n
s
,

C
o
l
o
r

C
h
e
m
i
c
a
l

20 40 60 80
Tons, BW Chemical
BW
Color
Total
A
B
Find corner points
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Management, 7e
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-27
Assembly Constraint RHS
Increased by 10
X
1
0
20
40
60
80
100
0 20 40 60
Original
assembly
constraint
Assembly constraint
increased by 10
Soln
Soln
X
2
Original Solution
Electronics
Constraint
New
Solution
Feasible
Region
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Principles of Operations Management, 5e, and Operations
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2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-28
Assembly Constraint RHS
Decreased by 10
X
1
0
20
40
60
80
100
0 20 40 60
Original
assembly
constraint
Soln
Soln
X
2
Assembly
constraint
decreased by 10
Original
Solution
New
Solution
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Principles of Operations Management, 5e, and Operations
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2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
07458
B-29
0
10
20
30
40
50
60
0 10 20 30 40 50 60
A Minimization Problem
Feasible
region
X
1
= 30
X
2
= 20
x
1
+ x
2
= 60
a
b

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