Operations

Management
Linear Programming
Module B
PowerPoint

B-1

2001 by Prentice

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

PowerPoint

B-2

2001 by Prentice

Outline - continued
Sensitivity Analysis
Solving Minimization Problems
Linear Programming Applications
Production Mix Example
Diet Problem Example
Production Scheduling Example
Labor Scheduling Example

The Simplex Method of LP

PowerPoint

B-3

2001 by Prentice

Learning Objectives
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

PowerPoint

B-4

2001 by Prentice

Learning Objectives - continued

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

PowerPoint

B-5

2001 by Prentice

What is Linear Programming?

Mathematical technique

Not computer programming

Allocates scarce resources to achieve an

objective
Pioneered by George Dantzig in World War II

Developed workable solution in 1947

Called Simplex Method

PowerPoint

B-6

2001 by Prentice

Examples of Successful LP
Applications
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
PowerPoint

B-7

2001 by Prentice

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
PowerPoint

B-8

2001 by Prentice

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
PowerPoint

B-9

2001 by Prentice

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

PowerPoint

B-10

2001 by Prentice

Formulating Linear Programming

Problems - continued
Let:

X1 = number of Walkmans

X2 = number of Watch-TVs

Then:

4X1 + 3X2 240

electronics constraint

2X1 + 1X2 100

assembly constraint

7X1 + 5X2 = profit

maximize profit

PowerPoint

B-11

2001 by Prentice

Graphical Solution Method

Draw graph with vertical & horizontal axes
(1st quadrant only)
Plot constraints as lines, then as planes

Use (X1,0), (0,X2) for line

Find feasible region

Find optimal solution

Corner point method

Iso-profit line method

PowerPoint

B-12

2001 by Prentice

Shader Electronic Company Problem

Department
Electronic

Hours Required to
Produce 1 Unit
X1
X2
Walkmans Watch-TVs
4
3

Assembly

Profit/unit

$7

$5

Available Hours
This Week
240
100

Constraints: 4x1 + 3x2 240 (Hours of Electronic Time)

2x1 + 1x2 100 (Hours of Assembly Time)
Objective:
Maximize: 7x1 + 5x2
PowerPoint

B-13

2001 by Prentice

Number of Watch-TVs (X2)

Shader Electronic Company

Constraints
Electronics

120

(Constraint A)

100

Assembly
(Constraint B)

80
60
40
20
0
0

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

PowerPoint

B-14

2001 by Prentice

Number of Watch-TVs (X2)

Shader Electronic Company

Feasible Region
Electronics
(Constraint A)

120
100

Assembly
(Constraint B)

80
60
40

Feasible
Region

20
0
0

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

PowerPoint

B-15

2001 by Prentice

Number of Watch-TVs (X2)

Shader Electronic Company

Iso-Profit Lines
Electronics
(Constraint A)
Assembly
(Constraint B)

120
100
80

7*X1 + 5*X2 = 420

60

7*X

40

+ 5*
X2 =

20

210

0
0

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

PowerPoint

B-16

2001 by Prentice

Number of Watch-TVs (X2)

Shader Electronic Company Solution

Electronics
(Constraint A)
Assembly
(Constraint B)

120
ISO-Profit Line

100
80

Solution Point
(X1=30, X2=40)

60
40
20
0
0

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

PowerPoint

B-17

2001 by Prentice

Number of Watch-TVs (X2)

Shader Electronic Company Solution

Corner Point Solution
Electronics
(Constraint A)
Assembly
(Constraint B)

120
100

Possible Corner
Point Solution

80
60

Optimal solution

40
20
0
0

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

PowerPoint

B-18

2001 by Prentice

Formulation of Solution
Decision variables

X1 = tons of BW chemical produced

X2 = tons of color chemical produced

Objective

Minimize Z = 2500X1 + 3000X2

Constraints

X1 30 (BW); X2 20 (Color)

X1 + X2 60 (Total tonnage)
X1 0; X2 0 (Non-negativity)

PowerPoint

B-19

2001 by Prentice

Simplex Steps for Maximization

1 Choose the variable with the greatest positive C j- Zj 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 Cj and Cj-Zj values for this tableau.
If there are any Cj-Zj numbers greater than zero, return to
step 1.

PowerPoint

B-20

2001 by Prentice

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

PowerPoint

B-21

2001 by Prentice

Minimization Example
BW: $2,500
Youre an analyst for a division of
manufacturing cost
Kodak, which makes BW & color
per month
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?
Color: $ 3,000 manufacturing

1995 Corel Corp.

cost per month

PowerPoint

B-22

2001 by Prentice

Graphical Solution
80

BW

60

Find values for

X1 + X2 60.
X1 30, X2 20.

Total

Feasible
Region

Tons, Color
Chemical 40
(X2)
20

Color

0
0
PowerPoint

20
40
60
Tons, BW Chemical (X1)
B-23

80

2001 by Prentice

Optimal Solution:
Corner Point Method
80

Find corner
points.

BW

60

Total

Tons, Color
Chemical 40

Feasible
Region
B

20

Color

0
0
PowerPoint

20
40
60
Tons, BW Chemical
B-24

80

2001 by Prentice

Simplex Steps for Minimization

1 Choose the variable with the greatest negative C j- Zj 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 Cj and Cj-Zj values for this tableau. If there
are any Cj-Zj numbers less than zero, return to step 1.

PowerPoint

B-25

2001 by Prentice