ulation

Linear Programming· Applications and Model Form

given objective function is obtained by the graphical

n,ca,urc-of.pcrfonnance 7.. The optimal \'alue of the
mcth('(i or ,implc'\ method.
31 (or constraints) on the use of resources. such as:
The constraints There_arc " ays certain limitations can be achieved.
, n,achmc. ra\\ matcnal, space,
mo?ey, etc., that limit the degree to which an objective
The
ities or inequalities in terms of decision variables.
i,.

,, , con,tramb mu,t be e'\prc,sc~ l~s lmcar equal

.
,,,
1
,on of an LP model must satisfy these constraints

ons of an LP Model
2,2.2 Assumpti
mg the complex real-world problems into a
lo all mathematical models. assumptions are made for reduc
ing are the maJor assumptions of an LP model:
sirophfied form that can be more readily analyzed The follow Assumptions of an
LP mode l are:
eters such as: availability of resources, profit
1. Certainty: In LP models, 11 is assumed that all its param (i) certai nty,
(o1 cost) contribution per umt of dec1s1on vanab
le and consumption of resources per unit of decision (ii) additivity,
(iii) proport1onahty, &
,wab le must be known and constant. (iv) divisibility
on and the total amount of each resource used (or
-- -- -
2. Additivity: The value of the obJective functi
individual contribution (profit or cost) of the
s1.pplied). must be equal to the sum of the respective
d from the sale of two products A and B must
aecis1on Yanables. For example, the total profit earne
from A and B. Similarly, the amount of a resource
be equal to the sum of the profits earned separately
to the total sum of resources used for A and B
consumed for producing A and B must be equal
mdindually
n
of each resource used (or supplied) and its contributio
3. Unearity (or proportionality): The amount le.
proportional to the value of each decision variab
,o the profit (or cost) in objective function must be
uses 5 hours of a particular resource, then making
For example, if production of one unit of a product
3 units of that product uses 3x5 = 15 hours of
that resource.
e
values of decision variables are allowed to assum
4. Divisibility (or continuity): The solution and litres of milk by a m1lk dairy
t 6.254 thous
c.ontmuous values. For instance, it is possi ble to collec
ble. But, it is not desira ble to produce 2.5 machines and such vanables
and such vanables are divisi
r values. Hence, if any of the variable can
.ire not divisible and therefore must be assigned intege
er of values, LP model is no longer applicable.
a,,sume only mteger values or are limited to discrete numb

GRAMMING
2.3 ADVA NTAGES OF USING LINEAR PRO
amming technique:
Following are certain advantages of using linear progr
akers to use their productive resources effectively.
1. Linear programming technique helps decision-m
approach of the
2 Linear programming technique improves the quality of decisions. The decision-making
less subjective.
user of this techmque becomes more objective and
b)' taking into
3 linear programmmg technique helps to arrive at optimal solution of a decision problem
ple, saying that so many units of any product
account constraints on the use of resources. For exam
be sold.
may be produced does not mean that all units can ction
4· linear programming approach for solving decision probl em highlight bottlenecks m the produ
ine cannot produce sufficient number of units
pr~1.-sscs. For example, when a bottle neck occurs, mach
01 a product to meet demand Also, machines may remain idle.

24 NG
· LIMITATIONS OF LIN EAR PRO GRA MMI
- s, there arc ~ome
- areas of apphca11on - · ons assoc1
1·umtau · at ed
In Sp1te of havmg many advantages and wide
·
wnh this te chnique. Thesi: arc as fo llows:
1 g decision variables. l lowever, 111 real-hfe problems,
· ~:n~ar programming assumes linear relationships amon
m the constraints are linearly related.
~cision vanables, neither m the objective function nor
Operations Research : Theory and Applications

2. While solving an LP model there 1s no guarantee that dec1s1on vanables will get integer value.
For
example, how many men/machines would be required to pcrfonn a pa~1cular job, a non-integer
valued
solution will be meanmgless Rounding off the solution to the nearest integer will not yield an
optimal
solution.
3. The hnear programmmg model docs not take into cons1derat1on the effect of time and uncertainty
.
4. Parameters in the model are assumed to be constant but m real-life situations, they are frequently
neither known nor constant.
5. Linear programming deals with only single objective, whereas in real-ltfe situations a decision problem
may have conflicting and multiple objectives.

2.5 APPLICATION AREAS OF LINEAR PROGRAMMING

Linear programming is the most widely used technique of decision-makmg in business and industry
and
m vanous other fields. In this section, broad application areas of linear programming are discussed:

Applications in Agriculture
These applications fall into categories of farm economics and farm management. The fonner deals
with inter-
regional competition, optimum allocation of crop production, efficient production patterns under
regional
land resources and national demand constraints, while the latter is concerned with the problems
of the
rnd1V1dual farm such as allocation of limited resources such as acreage, labour, water supply, workmg
capital.
etc., so as to maximize the net revenue.

Applications in Military

Military applications include {i) selection of an air weapon system against the enemy, (ii) ensuring
minimum
use of aviation gasoline (iii) updating supply-chain to maximize the total tonnage of bombs dropped
on a
set of targets and takes care of the problem of community defence against disaster at the lowest
cost. possible

Production Management

Produ~t Mix To determine the quantity of several different products to be produced

, knowing their
per urn~ p_rofit (cost) contribution and amount of limited production resources used. The objective
to max1m1ze the total profit subject to all constraints. is
• Production Planning This ~eals with the determmation of mirumum cost productio
n plan over the
planrung penod, of an item with a fluctuating demand, while considering the initial number of units
mventory in
. •. prod u~t'1~n capac,·1y, constrarnt
· s on
production, manpower and all relevant cost factors. The
obJecllve 1s to mimmize total operation costs.
• A~semb/y-line Balancing This problem is likely to arise when
an item can be made by assembling
?1ffere~t co~ponents. The process of assembling requires some specified sequence(s). The obJecnve
1s to m1mm1ze the total elapse time.
• Blending Problems These probl · when · Ie
ems anse a product can be made from a variety of availab
raw matenals each of which ha rt' ..
th - . ' . s a pa icu 1ar compositi on and price. .
The objective here 1s to determine
e mi~imum co 5t b(end, subJect to availability of the raw materials , and to mm1murn and maximum
constramts on certam product constituents.
• Trim Loss When an item is mad tO ta d d
which combinatio f . e as n ar size (e.g. glass, paper sheet), the problem of determining
the trim loss, aris;/ requirements should be produced from standard matenals m order to minimize

Financial Management
• Portfolio Selection This deals with the . . . •
activities. The objective here is to fin se1eclton of spec1:ic investment act1v1ty among several
other
· · ·
mm1m1ze •k d
s ns . . . . d the allocation which max1m1zes the total expected return or
un er certam hm1tat1ons.
• Profit Planning This deals with the ma · · · ···
and equipment cash 1· h d d . x1m1za1ton of the profit margm from mvestment m plant facil1t1es
, n an an mventory.
 Linear Programming ApphcatlOnS and Model Fonnu!ation

Management
~etln9 · h• ·
~ar 10 S /ecr1O11 The linear programmmg tee nique helps m dctermmml! the ad,crti,inl! media mL, so
, 1(d e mize the effeclt\'e exposure, subject to limitation of budget, ,pec7ficd c:v•n~ure ~tes to different
to n1ax1 fi d . . d . t ·~
asarkcl segment,, spcct ic mm1mum nn max~mum number of ad, cm,cme.nb m ,iuious media.
01 Sale~man Problem The salesman s problem ts to find the ,horte,t route from a c:,•
m,cn city
11,arc//lllg d h ·
,, O f the specified c1t1es an t en rctummg to the origmal pomt of departure, provtdcd no c1tv
10 each dunng the t our Suc h type of problems can be :.ohcd ,,,th the help of the,
be nsited twice
wouId h q e
01od1fied assignment tccL m u . . d .
I Dism/11111O11 mcar programmmg etenumcs the most economic and efficient manner of
phr~1ca ,anufacturing plants and d'tsll t'butlon .
• ·. centres for physical distnbution.
1ocattng n
el Management
personn - · d 11
, Problem Lmcar programmmg is use to a ocate optimum manpo\\ er to a pan,cular Job ,o
• SiaOmg. - nizc the total overtime co~l or total manpower.
as to 11111111 • •
·
Dt1cn11 1
,,ario11 of Eq111table Satan~·
.
Lmear programmmg technique has been used in dctennining
• . ble salaries nnd sales mcenttves
cqui~ . /uation and Selection Selection of suttable person for a specified job and evaluauon of job
• )llh ,a zattons has been done with the help of the linear programming technique.
tn orgam . .
Other applications of linear p~o-~ m g he m the area of adnurustratton, education, fleet utilizauon,
_..,1; contracts. hospital adm1D1stration, capital budgettng, etc.
aWlllUlng
GENERAL MATHEMATICAL MODEL OF
26
. LINEAR PROGRAMMING PROBLEM
The general linear programming problem (or model) with 11 dec1s1on variables and m constramts can be
stated 10 the following form:
Optinuze (Max. or Min.) Z = c 1x 1 + c2x2 + . .. + cnxn
subJecl to the linear constraints,
011X1 + a12X2 + ... + a,nxn (~. =, 2:) bl
a21X1 + a 22X2 + ... + a 2nxn ( ::;, =, ~) b2

and
The above formulation can also be expressed in a compact form as follows.
n
Opturnze (Max. or Min.) Z = I. c x (Objective function) (1)
i= I J J
subject to the linear constraints
n
I.aiJxi(~. =. ~)b;; i=l,2 , .. . ,m (Constraints) l~)
J-1

and x1 ~ 0 ; J = 1, 2, ... , n (Non-negativlt) conditions) (3)

where, th ~ c, s are coefficients representing the per unit profit (or cost) of decision , anable •" to the ,-atue
~ ~l!;e function. The a/s are referred as technological coeffic~ents (or i11p11t-011tp11r_ c<x1fici: •·;s)
·'r
can beep es~nt the amount of resource, say i consumed per umt of vanable (actml)) The:se coetnl tents
positive, negative or zero. The b represents the total amilabilit1 of the 1th resource The tem1
resource ·
1s used 10 a very general sense to' include any numerical value associated · the nght-hand stde
"1th
of
, isa constramt It is assumed that b > 0 for all i However if nny b < O. then both sides of constraint
muh1phed b I '- . • '
In the Y- lo make b; > 0 and reverse the inequality of the constramt .
lllay take ~~neral LP problem, the expression(::;, =, 2:) means that 111 an) specific problem each constraint
0
(i) le Y one of the three possible fonns:
( . ss than or equal to (~)
-~) equal to H
hu) &reate h
r t an or equal to (~)
 Operations Research: Theory and Applications

2.7 GUIDELINES ON LINEAR PROGRAMMING MODEL FORMULATION

The cflccltve use and oppltcnllon requires, us u firsl ,Lcp the. mathematical formulatJOn of an LP model
Steps of LP model formulation ore smnmari;cd us follows
Step 1 · Identify the decision variables
(a) E:,,prcss each eonstralllt m words. for this you should first sec whether the conc;traint is of the forti
~ (at least as large as), of the fonn ~ (no larger than) or of the form == (exactly equal to).
(b) E"\.prcss verbally the objective funcuon.
LP model (c) Verbally identify the decision variables with the help of Step (a) and (b). For this you need to a,
formulation requires:
yourself the question What decisions must be made in order to optimize the ob;ecttve func110,,,
(i) identilicat1on of
decision variables Ha, mg followed Step t (a) to (c) decide the symbolic notation for the decision van able;, and specify
and input data, their umts of measurement. Such specification of umts of measuremen t would help m mterpreting the final
(ii) formulation of
constraints, and solunon of the LP problem.
(Iii) objective
function
Step 2: Identify the problem data
To fonnulate an LP model, identify the problem data in terms of constants, and parameters associated with
dec1s1on vanables. It may be noted that the decision-maker can control values of the variables but cannot
control values m the data set.
Step 3: Formulate the constraints
Convert the verbal expression of the constraints in terms of resource requirement and availability of each
resource. Then express each o f them as linear equality or inequality, in terms of the decision variables
defined in Step 1.
Values of these decision variables in the optimal LP problem solution must satisfy these constrainl.S
in order to constitute an acceptable (feasible) solution. Wrong formulation can either lead to a solution that
is not feasible or to the exclusion o f a solution that is actually feasible and possibly op tima l.
Step 4: Formulate the objective function
Identify whether the objective function is to be maximized or minimized. Then express it in the form of linear
mathematical expression in terms of decision variables along with profit ( cost) contributions associated with
them.
Aft~r gaining enough experience in model building, readers may skip verbal description. The following
3:e certam e~amples of LP model formulation that may be used to strengthen the ability to translate a real-
hfe problem mto a mathematical model.

2.8 EXAMPLES OF LP MODEL FORMULATION

In th1s section a number of illustrations have been presented on LP model formulation w ith the hope that
readers may gam enough expenenee in model building.

2.8.1 Examples on production

Example, 2. 1 A manufacturing companY ts · engaged m · three types of products: A, Band C Th~
· producing
produ~tion department produces , .each day, components s ufficient to make 50 units of A , 25 units of B and
30 umts of · the daily production of the
. C. The management 1s con fronted w,'th the problem of optJ· m1·zmg
products m the assem bly department whe l l 00 • · h
d Th ti • .• . ' re on Y man-hours arc avai lable daily for assembltng t e
pro ucts. 11
e o owmg add1t1onal mformalion 1s available:

12 0.8
20 1.7
45 2.S
The company has a daily order commitment for 20 units o,f .products A and a total of 15 units of
products B and C. Formulate this problen1 as an L P model so as to max imize the total profit.
 Linear Programming: Applications and Model Formulation

lhc dat,1 of the problem is summar11cd as foll ows

P model formulation
l'md11, r 7)11,• TrJtal
Rr,,, ,,x,, t ,,11,11,11111 1
A II ('

\'n,d\Kll\)I\ ,.1pac1t) t11111ts)

so 25 30
0.8 I7 25 100
\\on-h,,11n- per unit
70 t 5 (both for B and C)
Oi\kr ct,mlllit111c111 (units)
12 20 45
Pr,,fit .:,,11tnhutio11 (lh 'umt)

Dt•dii,,n ,•ariah/r., Leu 1. , 2 and,, - number of units of products A, Band C to be produced, respectively.
TIit LP 111()dcl
\\a'\itnizc (total profit) Z 12., 1 + 20xi + 45x3
~ubJl'Ct tt' the constromts
tu Labour nnd materials
ta) 0.8.\ 1 +- l.7x 2 + 2.5x 3 ~ 100, (b) x 1 ~ 50, (c) X i ~ 25 , (d)x3 ~ 30

(n) Order commitment

ta) .\ l ~ 20; (b) Xi + X3 ~ 15
and x 1• x 2, x3 ~ 0.

Example 2.2 A company has two plants, each of which produces and supplies two products: A and B.
The plants can each work up to 16 hours a day. In plant 1, it takes three hours to prepare and pack 1,000
!c.lllons of A and one hour to prepare and pack one quintal of B. In plant 2, it takes two hours to prepare
~d pack 1.000 gallons of A and 1.5 hours to prepare and pack a quintal of B. In plant 1, it costs Rs 15,000
to prepare and pack 1,000 gallons of A and Rs 28,000 to prepare and pack a quintal ofB, whereas in plant
2 these costs are Rs 18,000 and Rs 26,000, respectively. The company is obliged to produce daily at least
10 thousand gallons of A and 8 quintals of B.
Fonnulate this problem as an LP model to find out as to how the company should organize its production
so that the required amounts of the two products be obtained at the minimum cost.
LP model formulation The data of the problem is summarized as follows:

Total
l~Preparation time (hrs) Plant I: 3 hrs/thousand gallons 1 hr/quintal
Availability (hrs}
16
Plant 2: 2 hrs/thousand gallons 1.5 hr/quintal 16
Minimum daily production 10 thousand gallons 8 quintals
Cost of production (Rs) Plant 1: 15,000/thousand gallons 28,000/quintals
Plant 2: 18,000/thousand gallons 26,000/quintals

Dtcision variables Let

X1, Xi quantity of product A (in '000 gallons) to be produced in plant l and 2, respectively.
X3, x◄ - quantity of product B (in quinlals) lo be produced in plant I and 2, respectively.

The LP model
Mimm1ze (total cost) Z ~ 15,000x 1 + 18,000xi + 28,000x3 + 26,000x4
subJcct to the constraints
(i) Preparation time
(a~ ~xi + 2x2 ~ 16, (b) x 3 + 1.Sx4 ~ 16
(ii) Minimum daily production requirement
(a) xi +Xi~ 10, (b) x + x ~ 8
3 4
and
Operations Research: Theory and Applications

Exam ple 2.3 An electronic company 1s engaged

m the production of two components c and c th
used in radio sets. Fach u111t of C costs the company
1
C2 costs the company Rs 25 Ill wages and Rs 15 m
Rs 5 in wages and Rs 5 in material, 1

matenal 1 he company sells both product,;

whil! arc
Qf
ea:~
penod credit ten11S, but the company's labour and maten
al expenses must be paid in cash. The sellin0 n °~e-
of C1 1s Rs 30 per umt and of C 1t is Rs 70 pct unit.
1 Because of the company's strong monopoly ig Pnct
components, it 1s assumed that the company can sell,
at the prevailing pnees, as many units as it pr ~ these
The company's productlon capacity 1s, however, \mute
d by two considerations. First, at the beg~ ces.
period 1, the company has an initial balance of Rs 4,000
(cash plus bank credit plus collections fro g of
credit sales). Second, the company has, in each period
, 2,000 hours of machine time and 1.400 hrn Pa,t
assembly tune. The production of each C requires 3
I hours of machine time and 2 hours of assernb~Ur,; of
whereas the product\on of each C requires 2 hours of
2 machine time and 3 hours of assembly tlme. Fo~1~e,
this problem as an LP model so as to maximize the
total profit to the company. u ate
LP model formulation The data of the proble
m is summarized as follows:

Rcsourc c~ Constraints Compo11e11ts Total Aw1ilabil1ty

Cl C,
Budget {Rs) 10/unit 40/unit Rs 4.000
Machine time 3 hrs/unit 2 hrs/unit 2.000 hours
.\s~cmbl) time 2 hrs/unit 3 hrs/umt 1,400 hours
Sci hug price Rs 30 Rs 70
Cost (wage, + material) price Rs 10 Rs 40
Decision variables Let x and x = number of units
1 2 of components C1 and C2 to be produced, respectively.
The LP model
Maximize (total profit) Z = Selling price - Cost price
= (30 - 10) x + (70 - 40) x = 20x + 30x
1 2 1 2
subject to the constraints
(i) The total budget available
10x1 + 40x2 ~ 4,000
(ri) Production time
(a) 3x 1 + 2x2 ~ 2,000; (b) 2x 1 + 3x2 ~ 1,400
and Xi, x ;;;:: 0.
2
Exam ple 2.4 A company has two grades of inspec
tors 1 and 2, the members of which are to be ass1~
for a quality control inspection. lt is required that at least
2,000 pieces be inspected per 8-hour day. Graut
I inspectors can check pieces at the rate of 40 per hour, with
an accuracy of 97 per cent. Grade 2 inspecto~
check at the rate of 30 pieces per hour with an accura
cy of 95 per cent.
The wage rate of a Grade 1 inspector is Rs 5 per hour
while that of a Grade 2 inspector is Rs 4 ~
hour. An error made by an inspector costs Rs 3 to the
company. There are only nine Grade 1 iuspectori
and eleven Grade 2 inspectors available to the compa
ny. The company wishes to assign work to ~
available inspectors so as to minimize the total cost of the
inspection. Formulate this problem as an LP roodd
so as to mimmize the daily inspection cost.
(Delhi Univ., MBA. 200-1. J)Oo1
LP model formulation The data of the problem
1s summarized as follows:

Grade 2
Numberofiupeetorl
Rate of cbcckiq 11
40 pieces/hr 30 pieces:hr
mtCCllll'IOYiadwdrina 1 - 0.97 = 0.03 I - 0.95 = 0.05
Cote of UIICOlllllY ID obookinl Rs 3/piece Rs 3/piece
Wap-'bom Rs 5 Rs 4
~ o f ~ 8 bis JII' ~
Totol pllcot wb1oh m\llt bo inspooted 2,000
 Linear Programming. Applications and Model Formulation

.. ' . hll'\ Let , 1 and x2 number of Grade I and 2 inspectors to be assigned for inspection.
Dec1~1on , arra respectively.

Tire LP model s ,cctor of Grade \ and 2 can be computed as follows:

Hourly cost of cac'I lnqGradc I Rs (5 + 3 x 40 x 0.03) Rs 8.60
lnspcc 01 , • _
Inspector Grade 2 : Rs (4 + 3 x 30 x 0.05) - Rs 8.50
. data the LP model can be formulated as follows:
Based .on. the gl\ en ' )_
. (d ·1y mspection cost) Z = 8 (8.60x 1 + 8.50x2 - 68.80x1 + 68.00x2
Mmmuze a1
. t, cct to the constraints . .
~u J Total number of pieces that must be mspected m an 8-hour day
(i) 8 X 40x 1 + 8 X 30X2 ~ 2000
ll) '\umber of inspectors of Grade l and 2 available
l3) '1 :S 9, (b) X2 :S 11
and '1· '2 ~ O.
Eiample 2.5 An electronic company produces three types of parts for automatic washing machines It
purchases castmg of the parts from a local foundry and then finishes the part on drilling, shapmg and
polishlnl! machines.
The-selling pnces of parts A, B and C are Rs 8, Rs 10 and Rs 14 respectively. 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 casting machine. Costs 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 table:
M~

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. Fonnulate this problem as an LP model so as to maximize total
profit to the company. [Delhi Univ., MBA, 2001, .2004, 2007]
LP model formulation Let x 1, x2 and x3 = numbers of type A, B and C parts to be produced per hour,
respectively.
Since 25 type A parts per hour can be run on the drilling machine at a cost of Rs 20, then
Rs 20125 = Re 0.80 1s the drilling cost per type A part. Similar reasoning for shaping and polishing gives
20 30 3
Profit per type A part = (8 - 5) + + o = 0.25
- (
25 25 40)
l
20
Profit per type B part - (10 - 6) _ ( + 30 + 3o = 1
40 20 30)
l
Profit per type C part - (14 - 10) - ( 20 + 30 + 3o = 0.95 l
25 20 40)
On the drilling machme, one type A part consumes I/25th of the available hour, a type B part consumes
1140th, and a type C part consumes I/25th of an hour. Thus, the drilling machine constraint is
x, X1 X3 ,- I
-+-+-.::.
. 25 40 25
S1m1larly, other constraints can be established.
The LP model
. Maximize (total profit) Z = 0.25 x 1 + 1.00 x2 + 0.95 x
3
subJect to the constraints

(i) Drilling machine: ~ + x2 + x3 :S I (ii) Shaping machine: ~+ X2 + X3 ~ 1,

25 40 25 ' 25 20 20
Operations Research: Theory and Applications

(iii) Pohshing much me: -'t ➔ 1''0 ➔ 40

1
· ' -,, I,
40
\ '> 0
d '1•' ' ' l .
an d t O pharmaceutical products A and B. Production of
. I company pro uces w , l . b
F,ampk 2.6 \ phannaceu t,ca . . I . I II The produet1on of B also resu ts m a y-produc1
. , . lh , same process
rofit of Rs 3 per unit and B at a pro 1t of Rs 8 per
anc . fi
both these products rcqu11cs c · Id
-1 , . duct A can be so at a p h b
Id at a unit profit of Rs 2 the remainder as to e destroyed
C at no e:\tnl cost. 1 \1: P 10 .
b
· ftl s by-product can e so ' · f C
umt Some quantity o n . F . sts show that only up to 5 units o can be so ld. The
. o ·t is Re I per unit. o1eca ' . 3 h .
and the dcstruct10n c s . f . duced The manufacturing times are ours per unit for
'\ t Of C for each umt o 8 p10
and 5 hours per unit for B on process I and II , respectively.
.
compall\ gets . um s . d41
A (lll process 1 and n. rcspecll\'Cl;~;:ct o;~r~lO time is used in producing c. The available times are 18
Because the product C ,s a byd pll t' ely Fonnulate this problem as an LP model to determine the
d .., I I . of process I an respee iv . . I
an - 10~ . '
11 1
Id be roduced keeping C in mind, to make the highest tota profit to the
quantit) ot A and B wluc s ,ou p ' [Delhi Univ., MBA (HCA), 2001, 2008]
compan) .
LP model formulation The data of the problem is summarized as follows:
Co11s1ramt1 -Resources Time (hrs) Required by A rnilahilin-

A B C

Process I 3 4 18 hrs
Process I1 3 5 21 hrs
By-product ratio from B 1 3 5 units (max. units that
Profit per unit (Rs) 3 8 2 can be sold)

Decision variables Let

x x2 = units of product A and B to be produced, respectively
, .
1
x , x = units of product C to be produced and destroyed, respectively.
34
Tire LP model
Maximize (total profit) Z = 3x 1 + 8x2 + 2x3 - x4
subject to the constraints
(i) Manufacturing constraints for product A and B
(a) 3x 1 + 4x2 ~ 18, (b) 3x 1 + 5x2 ~ 21
(Ii) Manufacturing constraints for by-product C
{a) x 3 ~ 5, (b) - 3x2 + x 3 + x4 = 0
and x 1, x 2, x 3, x 4 ~ 0.
Example 2.7 A tape recorder company manufactures models A, B and C, which have profit contn'but'ons 1
..
5
per unit of Rs 15, Rs 40 and Rs 60, respectively. The weekly minimum production requirements are 2 untts
for model A, 130 units for model Band 55 units for model C. Each type of recorder requires a certain amount
of time for the manuf~cturing of the component parts for assembling and for packing. Specifically. _a do;~:
units of m~del A require 4 hours for i:nanufacturing, 3 hours for assembling and I hour ~or packagtngC are
corresponding figures for a dozen units of model B are 2.5, 4 and 2 and for a dozen umts of model
· the 1orthcommg
6, 9 and 4. Dunng r · r
week, the company has available 130 hours of manu1actunng,· t 70 hours
. ze
of assembling and 52 hours of packaging time. Formulate this problem as an LP model so as to maxinu
the total profit to the company.
LP model formulation The data of the problem is summarized as follows:

. ,·
"~.
. .
• •
' . .
, t. ~

Production requtrement (units) 25 130 55

Manuficturing time (per dozen) 4 2.5 6 130
Assembling time (per dozen) 3 4 9 170
Packaging time (per dozen) 2 4 52
Contribution per unit (Rs) 15 40 60
----
 Linear Programming: Applications and Model Formulation

r2 and x-1 units of model A, B and C to be produced per week,

.\ I'
[}ed,itm ,,ariab/e.\ Let respectively.

The LP 111 (11/e/ 40 - 60

r,,1a-.11nizc (total profit)= 15.,·1 + ,\2 X3

- •ct to the constrn1nts .

subJ~(.) \1tnimum production requirement
1
( ) . .., 25 (b) x2 ~ 130, (c) x3 ~ 55
n ·'1"' ,
,h1 2.5x2 6x3 ~ 130
(ii) ~lnnufactunng time · 12+ -12- + 12

+ 9x3 ~ 170
3x1 4x2
+-
(tii) \ssembling time 12 12 12
Xt 2x2 4x3 $; 52
- + - + 12
{1\') Packaging time 12 12
and ~ O.
r1, r2, X3
drink plant He has
onsider the following problem faced by a production planner of a soft
[\amp Ie 2.8 C ~ for 16-ounce bottles._ However,
two bottling machmes A and B. A is designed for_ 8-ounce bottles and
cy. The manufactunng data is
each can also be used for both types of bottles with some loss of efficien
as follows:
Alachine 8-ounce Bottles I 6-ou11ce Bottles

A 100/minute 40/minute
B 60/minute 75/minute
profit on an 8-ounce bottle is
The machines can be run for 8 hoUis per day, 5 days per week. The
drink cannot exceed 3,00,000 bottles
Rs 1,5 and on a 16-ounce bottle is Rs 2.5. Weekly production of the
bottles per week. The planner wishes
and the market can absorb 25,000, 8-ounce bottles and 7,000, 16-ounce
ng restrictions. Formulate this
to maximize his profit, subject of course, to all the production and marketi
problem as an LP model to maximize total profit
formulation The data of the problem is summarized as follows
:
LP model

Com traints Producrion Ami/ability

8-01mce Bottle1 16-ounce Bottle,·

Machine A time 100:mmute 40/mmute 8 x 5 x 60 = 2.400 minutes

Machme B time 60/mmute 75/minute 8 >- 5 60 = 2.400 minutes
Production 3,00,000 units/week
Marketing 25,000 units/week
7,000 units 1week
Profit/unit (Rs) LS 2.5
to be produced weekly,
Decisio11 variables Let x 1 and x2 = units of 8-ounce and 16-ounce bottles
respectively
The LP model
. Maximize (total profit) Z = I .Sx 1 + 2.5x2
subJect to the constraints

(i) Machine time : (a) ~ + x2 $; 2 400 and (b) ..:L + x2 $; 2 400

100 40 ' 60 75 '
(ii) Production Xi + X2 $; 3,00,000

(iii) Marketing (a) Xi $; 25,000, (b) X2 $; 7,000

and Xi, x2 ~ 0.
employees on its rolls, each
!;ampl e 2.9 A company engaged in producing tinned food has 300 trained
to the developing taste of public for this kind of food,
th whom can produce one can of food in a week. Due
by employ ing 150 people, in a phased manner, over
the company plans lo add to the existing labour force,
to undergo a two-we ek trammg programme before being
e next five weeks. The newcomers would have
Operations Research: Theory and Applications

put to work. The traming is to be giYen b) employees from among the existing on~s and it is a kn_own faq
that one employee can train three trainees \ssumc that the~e would be no prod~ct1on from the trainers and
the trainees dunng training period. as the trammg is off-the-Job. However, ~e trainees would be remunerated
at the rate of Rs 300 per week. the <.ame rate \\ ould apply as for ~he trainers.
The compam has booked the folio" ing orders to supply dunng the next five weeks:
\\eek · I 2 3 4 5
"o of c.ans 2S0 Z98 305 360 400
,\s;:;ume that the production in any week would oot be more than the number of cans ordered for, so that
e, m deli, erv of the food would be 'fresh'
formulat.e this problem as an LP model to develop a training schedule that mimmizes the labour Cost
o,-er the fiye-wed.. penod. [Delhi Univ., MBA, 2003, 2005]

LP model formulation The data of the problem is summanzed as given below:

t) Cans supplied \\'eek 1 2 3 4 5
Number : 280 298 305 360 400
~ Each tramee has to undergo a two-week training.
rm: One employee 1s required to tram three trainees.
(I\, E, er) trained worker produces one can/week but there would be no production from trainers and
tramees dunng training.
M ~umber of employees to be employed = 150
(,i) The product:Joo in any week is not to exceed the cans required.
(Yii) ~umber of weeks for which newcomers would be employed: 5, 4, 3, 2, l.
Obser\'-ations based on given data are as follows:
(a) Workers employed at the beginning of the first week would get salary for all the five weeks· those
employed at the beginning of the second week would get salary for four weeks and so ~n.
(b) The value of the objective function would be obtained by multiplying it by 300 because each
person would get a salary of Rs 300 per week:.
(c) lnequal..ines have been used in the constraints because some workers might remain idle in some
week(s).
Decision variables Let xi' Xi• X3, X4 and x 5 = number of trainees appointed in the beginning of
The LP model week 1, 2, 3, 4 and 5, respectively.

Minimize (total labour force) z = 5x -"- 4x + 3 2:

subject to the constraints I . 2 X3 + :r4 + X5

(i) Capacity

(a) 300 - .:!.. ~ 280, (b) 300-.:!_- Xi ~298

3 3 3
(c) 300 + xi - X32 - x; ~ 305, ( d) 300 +x +:c, ----2:360
1
X3 X4
- 3 3
(e) JOO+x, +xi +x3 - X4 -2~400
(II-) .
New recruitment 3 3

x, +xi +x3 +x◄ +xs = 150

and X1, Xi, X3, X4, X5 ~ 0,
Eumple 2.10 XYZ company asse bl
mobiles of each type are manufi tu~ es and markets two types of mobiles - A and B Presently 200
which will maximize the profits~ ~e rper week. You are advised to formulate the production schedule
m e •ght of the following information:

.,,,
; II
 Linear Programming: Applications and Model Formulation

100 assemblers who arc paid Rs 50 per hour actually worked and who will work
The company employs per week The inspectors, who arc presently four. have agreed to a plan
of 48 hours · . ,
to 8 maxnnum of work per week each. l lov,:cvcr, the four inspectors have certain other
uP . ·rage 40 I,ours f
,\hereby they a, 1: . t,ave been found to take up an average o 8 hours per week between them.
. . . duties w 1\IC'1 k
udmin1strat1,e · d a fixed wage of Rs I 2000 per wee
1
t • arc eac 1 pat ' I
The 1nspcc ors . t e requires one camc.•ra of same type. lowever, the company can obtain a
1 of cit11c1 YP
b'lc · I
E~ch mo of 600 cameras per week Then· cost has been me uded m the component's cost, given
1
n1ax11num supp Y t ble above. The other cost mcuned by the company are fixed overheads of Rs
for each mobile tn tI,e a '
20•000 per week . . . .
tlon Computation ol contnbut1011 from radio types A and B 1s as follows:
LP model formu a 1 A B
2000 1600
Component cost
Labour cost in assembly (Rs 50 per hour) 600 300
Labour cost for inspection
l 200 x 1 = Re 0.50 per mmute 5.00 17.5
40 60
Total ,anable cost 2605.00 1917.50
Sclhng price 6000 4800
Contribution (selling price - cost pnce) 3395 2882.50
Decision variables Let x I and x2 = number of units of radio types A and B to be produced, respectively.
Tire LP model
Maximize (total contribution) Z = 3395x 1 + 2882.5x2 - 20,000
subJect to the constraints
2
(i) l2-c 1 + 6x2 ~ 48 x JOO, (ii) 10x 1 +35x2 ~4 x (4o- : ) x 60=7,600

(i.iJ) XI + x2 ~ 600
and x1, x2 ~ 0.
Example 2.11 A plastic products manufacturer has 1,200 boxes of transparent wrap m stock at one factory
and another 1,200 boxes at its second factory. The manufacturer has orders for this product from three
different retailers, in quantities of 1,000, 700 and 500 boxes, respectively. The unit shipping costs (in rupees
per box) from the factories to the retailers are as follows:

Retailer I Retailer II Retailer ml

Factory A 14 11 13
Factory B 13 13 12

Determme a mmimum cost shipping schedule for satisfying all demands from current inventory
Formulate this problem as an LP model.
LP model formulation Given that the total number of boxes available at factory A and B total number
of boxes required by retailers I, 2 and 3.
Decision variables Let x 1, x2 and x3 = number of boxes to be sent from factory A to retailer I; factory B
to retailer 2 and factory C to retailer 3, respectively.

Retailer 1 Retailer 3
Factory A xi 1,200 - (x 1 + X2)
Factory 8 1,000 - -"1 500 - [(1,000 x 1) t (700 t2}1

The LP model

Minimize (total distance) Z 14x 1 + 13x2 + 11 (1,200 x x) 13 (1,000 - x ) +-

+-
1 2 1
13 (700 X2) + \2 (.\I x2 700) - 2x 1 + x2 + 26,900
Operations Research· Theory and Applications

subject to the constramts

(i) XI +- x S 1,200. (1i) \ I S 1,000, (tii) X2 S 700,
2
and x 1• x2 <!: 0.
E umpIe 2.12 A company produces two types of sauces: . A. .and. B. Both these sauces arc mudc b}
•
blen dmg two mgre d'1ents .,x and y . A certain level of flex1b1hty
. 1s pem11ttcd 111 the , formulae of thesc
• tons
products. Ind eed, t I1e res tnc 1 are that (i) B must contam no more than 75 per cent of X, and
(u) A must contain no less than 25 per cent of X, and no less than 50 per cent of Y. Up t~ 400 kg of X
and 300 kg of y could be purchased. The company can sell as much of these sauces as 1t ?roduccs ai
and Rs 17 for B. The X and Y cost Rs I .60 and 2.05 per kg, respectively.
a pnce of Rs 18 fior A • F . I l·
The company wishes to maximize its net revenue from the sale of these sauces. 0 1mu ate t 11s problem
as an LP model.
LP model formulation Let x I• x2 = kg of sauces A and B to be produced, respectively.
Yi, y 2 = kg of ingredient X used to make sauces A and B, respectively
y 3 , y 4 = kg of ingredient Y used to make sauces A and B, respectively
Tlze LP model
Maximize Z = 18x1 + I7x2 - 1.60 (y1 + y 2) - 2.05 U'3 + Y4)
subject to the constraints
(i) Y1 + Y3 - Xi = o, (i.J) Y2 + Y4 - X2 =O
(w) Yi +Y2 ~ 400} (Purchase) (iv) Y1 - 0 ·25 x, ;: : O } (Sauce A)
Y3 + Y4 ~ 300 y 2 - 0.50 x 2 ;::: 0
(v) y 2 - 0.75x2 ;::: 0 (Sauce B)
and Xi,~• Yp Y2, Y3, Y4 ;::: 0.
Example 2.13 A complete unit of a certain product consists of four units of component A and three units
of component B. The two components (A and B) are manufactured from two different raw materials of which
100 uruts and 200 units, respectively, are available. Three departments are engaged in the production process
with each department using a different method for manufacturing the components per production run and
the resulting units of each component are given below:

Department Input of Raw Materials Output of Components

per Run (units) per Run (units)
I /1 A B
I 7 5 6 4
2 4 8 5 8
3 2 7 7 3
Formulate this problem as an LP model to determine the number of production runs for each department
which will maximize the total number of complete units of the final product.
LP model formulation Let x 1, x 2 and x3 = number of production runs for departments I, 2 and 3.
respectively.
th Since eac_h unit of the final product requires 4 units of component A and 3 units of component B.
erefore maximum number of units of the final product cannot exceed the smaller value of
rotal number of :its of A produced ; Total number of':'' of B produced }

or 6x1+Sx2+7x3 4x +Bx +3x}

{ and I 2 3
4 3
Also if Y is the number of com .
ponent umts of final product, then we obviously have
6X1 +Sx2 +7x3 4x 1 +8x +3x
~ 2 3 2: y
y and -""---...::....--=--
The LP model 4 3
 Linear Programming: Applications and Model Formulation

., t to the constraints
SUbJCC
(i) Ra\\ matc~al + \ S I00 (Material I), (b) 5xi 8x2 + 7x1 S 200 (Material II)
(a) 7\ + .. \ 2 2 3
, b
~ of component u111ts of final product
(u) Nutn cr . ,> (b) 4x + 8x2 + 3x3 4y ;?! 0
(a) 6.\1 Sx, 7\3 4) - 0' i
. >0
and r1,\ 2, ·\ 1 - .
BC mpany manufactures three grades of paint: Venus, Diana and Aurora. The plant
Example 2•1 A h ~ basis and the following data is available from the production records:
4
operates on a thrcc-s • .
Gradt A1•a,/ab1/11y
Req111reme11t
le,111.1 LJ,ana A11rora (wpauf), 111011th)
of Rewurcc
· (k 1·tre) 0.30 0.15 0.75 600 tonnes
Spec 1al add111vc S' 1 . .
,1iihni: (kilolitre, per machine shift) 2.00 3.00 5 00 100 machine sh1t1s
Packi;g (kilolitres per shift) 12.00 12.00 12.00 80 shifts_ _ __
There are no hmitanons on the other resources. The particulars of sales forecasts and the estimated
conoibutton to overheads and profits arc given below·
L Venus Diana Aurora
Maximum possible sales
per month (kilolitres) I 00 400 600
Contribution (Rs/kilolitre) 4,000 3,500 2,000
Due to the comrmtments already made, a minimum of 200 kilolitres per month, of Aurora, must be
supplied the next year.
Just when the company was able to finalize the monthly production programme for the next 12 months,
11 received an offer from a nearby competitor for hmng 40 machme shifts per month of milling capacity for
grinding Diana pamt that could be spared for at least a year. However, due to additional handling at the
competitor's fac1ltty, the contnbution from Diana would be reduced by Re I per litre.
Formulate this problem as an LP model for detennmmg the monthly production programme to maximize
conoibution. [De/111 Unii·.. MBA, 2006]
LP model formulation Let
xi = quantity of Venus (kilolitres) produced in the company
x2 = quantity of Diana (kilolitres) produced in the company
x3 = quantity of Diana (kilolitres) produced by hired facilities
x4 quantity of Aurora (kilolitres) produced m the company
The LP model
. Maximize (total profit) Z = 4,000xi + 3,500x2 + (3,500 1,000µ + 2,000x
3 4
subJect to the constraints
CO Special addtt1ve 0.30x i + 0.15x2 +- 0.15x3 .. 0. 75x $ 600 4
r,,1 X X2 X
,11, Own milling facthty _J_ + - + _i_ $ I 00
2 3 5
X
(iii) Hired milling facility 3
- $40
3
(iv) Packing Xt X2 +X3 X4
- + - - + - $ 80
12 12 12
(v) Marketing:
and (i) X1 $ 1OO (Venus); (ii) x2 + x3 $ 400 (Diana); (iii) 200 $ x $ 600 (Aurora)
4
Xi, X2, X3, X4 ~ 0.
Example 2•15 Four d t h
th b
. pro uc s ave to e processed through a particular plant the quantities required for
e next productton period arc: '
Product I : 2,000 units Product 2 ; 3,000 unit~
Th Product 3 : 3,000 units Product 4 : 6,000 units
d three production Imes on w h.1ch the products could be processed The rates of production
in unitsere are
cost of :rn ayh and the _total available capacity in days are given in the following table. The correspond mg
g t e Imes 1s Rs 600, Rs 500 and Rs 400 per day, respectively.
Operations Research Theory and Apphcatrons

subJ

I 'i0 20
200 JOO
160 0
3
1 00 6 0 0
0
T I
t
Fonnulnte this problem as on LP model 10 mm1m1ze the coS of operation.
LP model formulation I ct , number of units of product , (1 I, 2, 3. 4) produced on prod
hnc / ( / 1, 2, 3)

The lP model 4 4 4
600 r l",1 +500 r x,2 +400 r I :r13 and
Mm1mizc (10101 cost) L ' I ,_, I

subJCCl to the constr.unt.s 3

2.s.2
(b) r x, 2 == 3.000
(i) Producuon (a)
I
r'I .:r,1 = 2,000. ,-1 £xSlll
tel~
3
3 (d) r x, == 6,000 BS paJ
(c) 1:
I I
x,, == 3,000. •=•
4

u Lme capac1!)
a) .:!!.+ X12 + X13 + X14 $'. 20.
X21
(b) - + l"22
- +X23 - -<-'>O
- - X24
200 I 00 760 400
150 100 500 400
X ;r X34 X33
() ---1.L+__R+-+-:5: 18
C )60 80 890 600
and x ~0foralliandj.
Eumple 2.J 6 XYZ company produces a specific automobile spare part. A contract that the compan~ bJs (i)
signed v,ith a large truck manufacturer calls for the following 4-month shipping schedule. (n)
(rii)
(I\)
Formu
LP ffl4
Januaiy
fcbruuy 4,000
Tle~L
March 5,000
M
April 5,000 subjec1
(i)
The company can manufacture 3,000 parts per month on a regular time basis and 2.000 parts per month
(n)
on an overtime basis. Jts production cost is Rs 15,000 for a part produced during regular rime and ~5.00o
for a part produced during overtime. Jts monthly inventory holding cost is Rs 500. Fonnulate this problelll
(m)
as an LP model to minimiu the overall cost. th (iv)
number of units of automobile spare part manufactured in month
LP model formulation Let xl)4 and
I (I I, 2, 3, 4) using shift j ( j = I. 2) and shipped in mon
k (k I, 2, 3, 4) Exam1
for the
The LP /llodel (i)
Minimize (total COit) Z Replar time production cost + Overtime production cost (u)
+ Ooe-moDth invomory cost + Two-month inventory cost (iii)
+ Tbreo-moatb inventory coet (iv)
JS,OOO(xlll + X11z + X113 + X114 + X212 + X2t3 + X214 + :C31J + :CJt 4 + .\',IIJ~ Tb
4 Tbean
+ l$,OOO(Xm + %122 + X123 + .%124 + X222 + X223 + X224 + :C323 + .l):!-' + .\' ;J below:
+ 500(X112 + x,22 + Xz13 + X223 + X314 + X32J + 1,000(X11J + .t,23 + -"21J
+ X22-4) + l,500(x114 + x 124)
 Linear Programming· Applications and Model Formulation

. the constraints .
subject to hi regular time production
(i) Mont y S 3 000 (b) x 212 + x213 x214 S 3,000
(a) .\'111 X 3 Xll4 ' '
\112 II
.L x c:; 3,000, (d) X414 < 3,000
(c) ,\'13 · 314
hi overtime production constraints
(ii) Mont y S 2 000
(a) ,\121 t X122 X123 + X124 ' '
(b) X222 1 X223 1 X224 s 2,000
(C) X323 .L \324 S 2,000, (d) X424 S 2,000
...) Monthly demand constraints
(Ill . ., x 3,000, (b) XI 12-,. X122 + X212 + X222 = 4,000
(a) \111 · 121 _
(c) \IIJ +.X123 + ·X213 + X223 + X313 + X323 - 5 ' 000 _
(d) X114 + x124 + "214 + Xz24 + X314 + X324 + X414 + X424 - 5,000

and \. . ~ o for all ,, j

. yk
and k.

2.8.2 Examples on Marketing

Eump1e 2•17 An adverttsmg company wishes to plan an advertisi
. . .
ng campaign for three different media:
.
tcIens1on, radi·o and a magazine The purpose of the advertising ts to reach as many potential customers
·
as possible The following are the results of a market study:
Television
-- ·- ·-·
Prime Day Prime Time Radio Magazine
(Rs) (Rs) (Rs) (Rs)
Cost of an advertising unit 40,000 75,000 30,000 15,000
Number of potential customers reached per unit 4,00,000 9.00,000 5,00,000 2,00,000
Number of women customers reached per unit 3,00,000 4,00,000 2,00,000 1,00,000
The company does not want to spend more than Rs 8,00,000 on advertising. It is further
required that
(i) at least 2 million exposures take place amongst women,
(11) the cost of advertising on television be limited to Rs 5,00,000,
(iit) at least 3 advertising units be bought on prime day and two units during
pnme time; and
(iv) the number of advertising units on the radio and the magazine should each be
between 5 and I0.
Formulate this problem as an LP model to maximize potential customer reach.
LP model formulation Let x , x , x and x = number of advertising umts bought
1 2 3 4 in prime day and
time on television, radio and magazine, respectively.
The LP model
Maximize (total potential customer reach) Z = 4,00,000x + 9,00,000x + 5,00,000 x
1 2 3
+ 2,00,000x4
subJect to the constraints
(i) Advertising budget: 40,000x + 75,000x + 30,000x + 15,000x $ 8,00,000
1 2 3 4
(11) Number of women customers reached by the advertising campaign
3,00,000x 1+ 4,00,000x2 + 2,00,000x + 1,00,000x ~ 20,00,000
3 4
(iii) Television advertising: (a) 40,000x + 75,000x $ 5,00,000; (b) x ~ 3;
1 2 1
(c) x2 ~ 2
(iv) Radio and magazine advertising : (a) 5 $ x $ l O; (b) 5 S x $ l 0
and 3 4
XI• X2, x 3, x4 ~ 0.
Example 2.18 A businessman is opening a new restaurant and has budgeted Rs 8,00,000
for advertisement,
for the coming month. He is considering four types of advertising.
(i) 30 second television commercials
(ii) 30 second radio commercials
(~) Half-page advertisement in a newspaper
(tv) Full-page advertisement in a weekly magazine which will appear four times during
the coming month.
Th The owner wishes to reach families (a) with income over Rs 50,000 and (b) with income
under Rs 50,000.
e amount of exposure of each media to fami lies of type (a) and (b) and the cost of each
below: med ta is shown
Operations Research Theory and Appltcat1ons

1th l tpo u r, Fam

A1111ual fnrnm

40.000 2.00,000
300,000
20 000 500,000
7,00,000
Ne\ paper IS 000 3,00,000 1,50,000
"-1 zm 5 000 I 00,000
1.00 000
To have a balanced campaign, the O\\ncr has determined the following four restriction
s:
(i) there i.hould be no more than four television advertisements
(n) there should be no more than four advertisements in the magazine
(iii) there should not be more than 60 per cent of all advertisements in newspaper and magazme
put tog
(iv) there must be at least 45,00,000 exposures to _families with annual income
of over Rs SO,OOQ
Formulate this problem as an LP model to determine the number of each type of advertisem
ent~
givM ,n 1s to maximize the total number of exposures.

LP model formulation Let x , x • x and x = number of television, radio, newspap

1 2 3 4 er, magazme
advertisements to be pursued, respectively.
The LP model
Maximize (total number of exposures of both groups) Z
= (2,00,000 + 3,00,000) XI + (5,00,000 + 7,00,000) X2 + (3,00,000 + ),50,000) X3
+ ( J,00,000 ~ J,00,000) X4

5,00,000 x 1 + 12,00,000 X2 + 4,50,000 X3 + 2,00,000 X4

subject to the constramts
(i) Available budget: 40,000x + 20,000x + 15,000x + 5,000x ~ 8,00,000
1 2 3 4
(ti) Maximum television advertisement : x ~ 4
1
(tii) Maximum magazine advertisement
x4 ~ 4 (because magazin e will appear only four times in the next month)
(1vJ Maximum newspaper and magazine advertisement

or - 0.6x 1 - 0.6x2 + 0.4x + 0.4x ~ 0

xi +x2 +x3 +x4 3 4
(v) Exposure to families with income over Rs 50,000
2,00,000x1 • 5,00,000x2 + 3,00,000x + l,00,000x ~ 45,00,000
3 4
and x 1, x2, X3, x4 ~ 0.
Example 2.19 An advertising agency is preparing an advertising campaign for a group
of agencies. Thes
agencies have decided that different characteristics of their target customers should be given
different importanct
(weightage). The followin g table gives the characteristics with their corresponding importan
ce (weightagel
Cht11Y11.!lllriirtftJII.
1

Age 25- 40 years 20

Annual income Above Rs 60,000 30
Female Married 50
The agency has carefully analyzed three media and has compiled the following
data:

Reader characteristics
(i) Age: 2S-40 years
80 70 60
(ii) Annual income: Above Rs 60,000 45
60 50
(hi) Females/Married
40 35 25
Cost per advertisement (Rs)
9,500 25,000 I 00,000
Minimum number of advertisement allowed , 5
10 5
Maximum number of advertisement allowed JO
20 10
Audience size ( I000s)
750 1,000
~
 L1noar Programm· A
ing pphcalions and Model Formulation
lhc h\l\lgl't for lnund11ng the Olh crt1si11g '" lllll)"I R ~
" " gn ,, s ' on ooo r
modi:\ for the :wcnc) to Hl:\\\\ll\7l' the tot·1l c\11cctc I ell • , . . ·om1ulate th1~ problem ns an I p
• l cc11, c cwosurc ·
LP model formulation l ct , , , 1 ,
I' 2 ,\\ll ,, num1)l'r of lllh erllscmcnts in d . ..
. . women's mngu,inc, r· d10 a c using . . ndvcrt1s mg med',a
The cllectl\ cness coctlic,cnt corresponding 1, .. , f , . , _. _: •' ond _1clcv1s1on, rcspcct,\ely.
l c. c11 l1 11 H.: ,ll1vc1t1s111g media is calculated
1 r 11 .
~ as ,o ov.s,

------~-_____::.::~-~-
\\omen·~ magaimc
--~---~]
0.RO (0,20) t 0.60 (010) t 0.40 (O 50) 0_54
Radio
0.70 (0 20) ... 0 50 (0.30) + o35 (0 'iO) o46
Tck, 1,1011
0.60 (0.20) t 0.45 (0.10) + 0.2S (0.50) oJS
The codlic1cnt of the obJccth , f t' • f' .
be computed as follows c unc ton, t.e. e fecllve exposure for all the three media employed, can

, Etrn ti\t_ c,pornre

· · -- £Vr: ·
:1.,cc11,·c11css ·
coef]ic1e11t x Audience si-e
,, here ctlcctl\ cncss cocfhctcnt 1s a weighted averag Of d. h . ~
of each media 1s as follows· e au tence c aractenSltcs. Thus, the effective exposure
Women\ magazine = 0.54 x 7,50,000 4,05,000
Radio = 0.46 x I0,00,000 4,60,000
Television = 0.38 x \5,00,000 =5,70,000
The LP model
Ma.'\.im1ze (effectl\'e exposure) 2=4,05,000x +4 60 000 "5 70 000
.
subject to the constraints I ' ' -"2 ' ' X3

(i) B~d?et: 9,50Qt 1 + 25,000x2 + l,00,000x 5 5,00,000

3
(u) Mmunum number of advertisements allowed
(a) -~ 1 ~ 10; (b) x2 ~ 5; and (c) x ~ 5
3
(w) Maximum number of advertisements allowed constraints
(a) x1 5 20; (b) x2 5 10; and (c) x 5 10
3
and x 1, x2, x3 ~ 0.

2.8.3 Examples on Finance

Example 2.20 An engineering company planned to diversify its operat10ns during the year
2005-06 The company allocated capital expenditure budget equal to Rs 5.15 crore in the year 2005 and
Rs 6.50 crore in the year 2006. The company had to take five investment projects under consideration. The
estimated net returns at that present value and the expected cash expenditures on each project in those
two years are as follows.
Assume that the return from a particular project would be in direct proportion to the investment in it,
so that, for example, if in a project, say A, 20% (of 120 in 2005 and of320 in 2006) was invested, then the
resulting net return in it would be 20% (of240). This assumption also implies that individuality of the project
should be ignored. Fonnulate this capital budgeting problem as an LP model to maximize the net return.
~- ,-', -- ---.-~7~1
~/-/:..:,, - , I i' ''.vf~.:i§i Cash Expenditure
,... - ' ·,.-~!ti~:;, J •• (in 000 Rs)
'
• •
-
.
. .~ ..•.t t
.,, 2005 Year 2006
A 240 120 320
B 390 550 594
C 80 118 202
D 150 250 340
E 182 324 474
LP model formulation Let xi, x2, x3, x4 and x5 = proportion of investment in projects A, B, C, D and
E, respectively.
The LP model
Maximize (net return)= 240x1 + 390x2 + 80x + 150x + 182t
3 4 5