Lecture 2:

LP: MODEL FORMULATION & GRAPHICAL

SOLUTION

LINEAR PROGRAMMING: AN OVERVIEW

 Objectives of business decisions frequently

involve maximizing profit or minimizing costs.

 Linear programming uses linear algebraic

relationships to represent a firm’s decisions,
given a business objective, and resource
constraints.

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MODEL COMPONENTS
 Decision variables - mathematical symbols representing levels
of activity of a firm.
 Objective function - a linear mathematical relationship
describing an objective of the firm, in terms of decision
variables - this function is to be maximized or minimized.
 Constraints – requirements or restrictions placed on the firm by
the operating environment, stated in linear relationships of the
decision variables.
 Parameters - numerical coefficients and constants used in the
objective function and constraints.

MODEL FORMULATION STEPS

Step 1 : Clearly define the decision variables

Step 2 : Construct the objective function

Step 3 : Formulate the constraints

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 MAXIMIZATION PROBLEM

A MAXIMIZATION PROBLEM (1 OF 4)
 Product mix problem - Beaver Creek Pottery Company
 How many bowls and mugs should be produced to maximize
profits given labor and materials constraints?
 Product resource requirements and unit profit:
Resource Requirements

Labor Clay Profit

Product
(Hr./Unit) (Lb./Unit) ($/Unit)

Bowl 1 4 40
Mug 2 3 50

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A MAXIMIZATION PROBLEM (2 OF 4)

A MAXIMIZATION PROBLEM (3 OF 4)
Decision x1 = number of bowls to produce per day
Variables: x2 = number of mugs to produce per day

Objective Maximize Z = $40x1 + $50x2

Function: Where Z = profit per day

Resource 40 hrs of labor per day

Availability: 120 lbs of clay

Resource 1x1 + 2x2 ≤ 40 hours of labor

Constraints: 4x1 + 3x2 ≤ 120 pounds of clay

Non-
Non-Negativity
Constraints: x1 ≥ 0; x2 ≥ 0

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A MAXIMIZATION PROBLEM (4 OF 4)
Complete Linear Programming Model:

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2 ≤ 40

4x2 + 3x2 ≤ 120
x1, x2 ≥ 0

FEASIBLE SOLUTION
 A feasible solution does not violate any of the
constraints:

Example:x1 = 5 bowls
x2 = 10 mugs
Z = $40x1 + $50x2 = $700

Labor constraint check:1(5) + 2(10) = 25 < 40 hrs

Clay constraint check: 4(5) + 3(10) = 70 < 120 lbs

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INFEASIBLE SOLUTION
 A infeasible solution violates at least one of the
constraints:

Example: x1 = 10 bowls
x2 = 20 mugs
Z = $40x1 + $50x2 = $1400

Labor constraint check: 1(10) + 2(20) = 50 < 40 hours

Clay constraint check: 4(10) + 3(20) = 100 < 120 lbs

GRAPHICAL SOLUTION OF LP MODELS

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

 Graphical methods provide visualization of how a solution for a

linear programming problem is obtained.

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 GRAPHICAL SOLUTION: COORDINATE AXES

X2 is mugs

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2 ≤ 40
4x2 + 3x2 ≤ 120
x1, x2 ≥ 0

X1 is bowls

GRAPHICAL SOLUTION: LABOUR CONSTRAINT

1x1 + 2x2 ≤ 40
when x1 = 0, x2 = 20
when x2 = 0, x1 = 40

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 1x1 + 2x2 ≤ 40

Labor Constraint Feasible Region

GRAPHICAL SOLUTION: CLAY CONSTRAINT

4x1 + 3x2 ≤ 120

when x1 = 0, x2 = 40
when x2 = 0, x1 = 30

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 GRAPHICAL SOLUTION: FEASIBLE SOLUTION

R → Feasible Solution
S → Feasible only to Clay
T → Infeasible Solution

GRAPHICAL SOLUTION: OBJECTIVE FUNCTION

SOLUTION LINES

Maximize Z = $40x1 + $50x2

$800 profit → Feasible

$1200 profit → Partially Feasible
$1600 profit → Infeasible

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GRAPHICAL SOLUTION: OPTIMAL SOLUTION
COORDINATES

Corner Points X1 X2
A 0 20
B 24 8
C 30 0

Optimal solution at point B

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SLACK VARIABLES
 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.

SLACK VARIABLES: STANDARD FORM

LP Model:
Maximize Z = $40x1 + $50x2
subject to: 1x1 + 2x2 ≤ 40
4x2 + 3x2 ≤ 120
x1, x2 ≥ 0

Standard Form:
Maximize Z = $40x1 + $50x2 + 0s1 + 0s2
subject to: 1x1 + 2x2 + s1 = 40
4x2 + 3x2 + s2 = 120
x1, x2, s1, s2 ≥ 0

Where: s1, s2 are slack variables

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Solution Points A, B, and C with Slack

MINIMIZATION PROBLEM

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A MINIMIZATION PROBLEM (1 OF 5)
 Two brands of fertilizer available - Super-gro, Crop-quick.
 Field requires at least 16 pounds of nitrogen and 24 pounds of
phosphate.
 Super-gro costs $6 per bag, Crop-quick $3 per bag.
 Problem: How much of each brand to purchase to minimize
total cost of fertilizer given following data ?
Chemical Contribution

Nitrogen Phosphate
Brand
(lb/bag) (lb/bag)
Super-gro 2 4
Crop-quick 4 3

A MINIMIZATION PROBLEM (2 OF 5)
Decision Variables:
x1 = bags of Super-gro
x2 = bags of Crop-quick

The Objective Function:

Minimize Z = $6x1 + 3x2
Where: $6x1 = cost of bags of Super-Gro
$3x2 = cost of bags of Crop-Quick

Model Constraints:
2x1 + 4x2 ≥ 16 lb (nitrogen constraint)
4x1 + 3x2 ≥ 24 lb (phosphate constraint)
x1, x2 ≥ 0 (non-negativity constraint)

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 A MINIMIZATION PROBLEM (3 OF 5)

Minimize Z = $6x1 + $3x2

subject to: 2x1 + 4x2 ≥ 16
4x2 + 3x2 ≥ 24
x1, x2 ≥ 0

A MINIMIZATION PROBLEM (4 OF 5)

Feasible Solution Area

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A MINIMIZATION PROBLEM (5 OF 5)

Minimize Z = $6x1 + $3x2

Corner Points X1 X2 Cost

A 0 8 24
B 4.8 1.6 33.6
C 8 0 48

SURPLUS VARIABLES
 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.
 Subtracting surplus variables in the farmer problem
constraints:
2x1 + 4x2 - s1 = 16 (nitrogen)
4x1 + 3x2 - s2 = 24 (phosphate)

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 SURPLUS VARIABLES CONTINUED

Minimize Z = $6x1 + $3x2 + 0s1 + 0s2

subject to: 2x1 + 4x2 – s1 = 16
4x2 + 3x2 – s2 = 24
x1, x2, s1, s2 ≥ 0

IRREGULAR TYPES OF LP PROBLEMS

For some linear programming models, the general
rules do not apply.

 Special types of problems include those with:

Multiple optimal solutions

Infeasible solutions

Unbounded solutions

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 MULTIPLE OPTIMAL SOLUTIONS

The objective function is

parallel to a constraint line.
Maximize Z=$40x1 + 30x2
subject to: 1x1 + 2x2 ≤ 40
4x2 + 3x2 ≤ 120
x1, x2 ≥ 0
Where:
x1 = number of bowls
x2 = number of mugs

INFEASIBLE PROBLEM

Every possible solution

violates at least one constraint:
Maximize Z = 5x1 + 3x2
subject to: 4x1 + 2x2 ≤ 8
x1 ≥ 4
x2 ≥ 6
x1, x2 ≥ 0

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 UNBOUNDED PROBLEM

Value of the objective

function increases indefinitely:
Maximize Z = 4x1 + 2x2
subject to: x1 ≥ 4
x2 ≤ 2
x1, x2 ≥ 0

LP PROBLEM

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PROBLEM STATEMENT

 Hot dog mixture in 1000-pound batches.

 Two ingredients, chicken ($3/lb) and beef ($5/lb).

 Recipe requirements:

at least 500 pounds of “chicken”

at least 200 pounds of “beef”
 Ratio of chicken to beef must be at least 2 to 1.

 Determine optimal mixture of ingredients that will

minimize costs.

MODEL FORMULATION
Step 1:
Identify decision variables.
x1 = lb of chicken in mixture
x2 = lb of beef in mixture
Step 2:
Formulate the objective function.
Minimize Z = $3x1 + $5x2
where Z = cost per 1,000-lb batch
$3x1 = cost of chicken
$5x2 = cost of beef

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MODEL FORMULATION
Step 3:
Establish Model Constraints
x1 + x2 = 1,000 lb
x1 ≥ 500 lb of chicken
x2 ≥ 200 lb of beef
x1/x2 ≥ 2/1 or x1 - 2x2 ≥ 0
x1, x2 ≥ 0
The Model: Minimize Z = $3x1 + 5x2
subject to: x1 + x2 = 1,000 lb
x1 ≥ 50
x2 ≥ 200
x1 - 2x2 ≥ 0
x1,x2 ≥ 0

GRAPHICAL SOLUTION

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 SOLUTION
Solve the following model
graphically:
Maximize Z = 4x1 + 5x2
subject to: x1 + 2x2 ≤ 10
6x1 + 6x2 ≤ 36
x1 ≤ 4
x1, x2 ≥ 0

Step 1: Plot the constraints

as equations

SOLUTION

Maximize Z = 4x1 + 5x2

subject to: x1 + 2x2 ≤ 10
6x1 + 6x2 ≤ 36
x1 ≤ 4
x1, x2 ≥ 0
Step 2: Determine the feasible
solution space

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 SOLUTION
Maximize Z = 4x1 + 5x2
subject to: x1 + 2x2 ≤ 10
6x1 + 6x2 ≤ 36
x1 ≤ 4
x1, x2 ≥ 0
Step 3 and 4: Determine the
solution points and optimal
solution

RECAP
 A decision amongst alternative courses of action is required.
 The decision is represented in the model by decision variables.
variables
 The problem encompasses a goal, expressed as an objective
function,
function that the decision maker wants to achieve.
 Restrictions (represented by constraints
constraints)) exist that limit the
extent of achievement of the objective.
 The objective and constraints must be definable by linear
mathematical functional relationships.

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