Chapter 13 Supplement
Linear Programming
Operations
Operations Management
Management -- 55thth Edition
Edition
Roberta Russell & Bernard W. Taylor, III
Lecture Outline
What is LP?
Where is LP used?
LP Assumptions
Model Formulation
Examples
Solving
LP-2
Linear Programming (LP)
A model consisting of linear relationships
representing a firm’s objective and resource
constraints
LP is a mathematical modeling technique used to
determine a level of operational activity in order to
achieve an objective, subject to restrictions called
constraints
LP-3
Example LP Applications
1. Scheduling school buses to minimize total
distance traveled
2. Allocating police patrol units to high crime
areas in order to minimize response time
to 911 calls
3. Scheduling tellers at banks so that needs
are met during each hour of the day while
minimizing the total cost of labor
LP-4
Example LP Applications
4. Selecting the product mix in a factory to
make best use of machine- and labor-
hours available while maximizing the
firm’s profit
5. Picking blends of raw materials in feed
mills to produce finished feed
combinations at minimum costs
6. Determining the distribution system that
will minimize total shipping cost
LP-5
Example LP Applications
7. Developing a production schedule that will
satisfy future demands for a firm’s product
and at the same time minimize total
production and inventory costs
8. Allocating space for a tenant mix in a new
shopping mall so as to maximize
revenues to the leasing company
LP-6
Common Elements to LP
Decision variables
Should completely describe the decisions to be made
by the decision maker (DM)
Objective Function (OF)
DM wants to maximize or minimize some function of
the decision variables
Constraints
Restrictions on resources such as time, money, labor,
etc.
LP-7
LP Assumptions
OF and constraints must be linear
Proportionality
Contribution of each decision variable is
proportional to the value of the decision
variable
Additivity
Contribution of any variable is independent of
values of other decision variables
LP-8
LP Assumptions, cont’d.
Divisibility
Allow both integer and non-integer (real
numbers)
Certainty
All coefficients are known with certainty
We are dealing with a deterministic world
LP-9
LP Model Formulation
Data
Input to the model – given in the problem
Decision variables
Mathematical symbols representing levels of
activity of an operation
The quantities to be determined
LP-10
LP Model Formulation, cont’d.
Objective function (OF)
The quantity to be optimized
A linear relationship reflecting the objective of an
operation
Most frequent objective of business firms is to
maximize profit
Most frequent objective of individual operational
units (such as a production or packaging
department) is to minimize cost
LP-11
LP Model Formulation, cont’d.
Constraint
A linear relationship representing a
restriction on decision making
Binding relationships
Attach a word description to each set of
constraints
Include bounds on variables
LP-12
LP Formulation: Example
RESOURCE REQUIREMENTS
Labor Clay Revenue
PRODUCT (hr/unit) (lb/unit) ($/unit)
Bowl 1 4 40
Mug 2 3 50
There are 40 hours of labor and 120 pounds of clay
available each day
Formulate this problem as a LP model and solve
LP-13
LP Formulation: Example
Variables
b = number of bowls to produce
m = number of mugs to produce
z = total revenue
Objective Function
Max z = 40b + 50m
Constraints
b + 2m < 40 (labor constraint)
4b + 3m < 120 (clay constraint)
b, m > 0 (non-negativity)
LP-14
LP Formulation: Solution
Solution is:
b = 24 bowls m = 8 mugs
z = $1,360
LP-15
Bowls and Mugs Solved
Use OMTools > Linear Programming
LP-16
Another Example
Joe’s Woodcarving, Inc. manufactures two
types of wooden toys: soldiers and trains.
Sale $ Raw Cost Labor / Overhead Finishing Labor Carpentry Labor
Soldier $27 $10 $14 2 hr 1 hr
Train $21 $9 $10 1 hr 1 hr
Unlimited supply of raw material, but only 100
finishing hours and 80 carpentry hours
Demand for trains unlimited, but at most 40
soldiers can be sold each week
LP-17
Wooden Toys Example
Variables
???
OF
???
Constraints
???
LP-18
Wooden Toys Solved
LP-19
Example – Problem #S13-1a
RESOURCE REQUIREMENTS
Labor Cotton Profit
PRODUCT (hr/unit) (lb/unit) ($/unit)
Corduroy 3.2 7.5 $3.10
Denim 3.0 5.0 $2.25
There are 3000 hours of labor and 6500 pounds of
cotton available each month. There is a maximum
demand of 510 yards of corduroy each month, but no
limit on denim.
Formulate this problem as a LP model and solve it.
LP-20
#S13-1a
Let c = yards of corduroy to produce
d = yards of denim to produce
z = total profit
Maximize z = 3.1 c + 2.25 d
Subject to
7.5c +5d 6500 (cotton constraint)
3.2c +3d < 3000 (labor constraint)
c 510 (demand constraint)
c, d 0 (non-negativity)
LP-21
Mixed Nuts
Crazy Joe makes two blends of mixed nuts:
party mix and regular mix.
Sale Price ($/lb) Peanuts Cashews
Party Mix $6 60% 40%
Regular Mix $4 90% 10%
Crazy Joe has 10 lbs of cashews and 24 lbs of
peanuts
Crazy Joe wants to maximize revenue. Please
help him.
LP-22
Ah, Nuts Formulation
Let
p = lbs of party mix to make
r = lbs of regular mix to make
z = total revenue
Max z = 6p + 4r
Subject to
0.6p + 0.9r < 24 (peanut constraint)
0.4p + 0.1r < 10 (cashew constraint)
p, r > 0 (non-negativity constraints)
LP-23
Blending
Determines “recipe” requirements to
come up with an end product
Examples
Diet
Gasoline
LP-24
Jack Sprat
A well-known nursery rhyme goes “Jack Sprat could
eat no fat. His wife (Jill) could eat no lean …” Suppose
Jack needs to have at least one pound of lean meat
per day, while Jill needs at least 0.4 lbs of fat per day.
They can buy either beef or pork with the following
attributes:
Cost ($/lb) Lean Fat
Beef $4.50 90% 10%
Pork $3.50 60% 40%
How much of each meat product should they buy to
meet their daily requirements and minimize costs?
LP-25
Jack Sprat Formulation
Let
???
Min ???
Subject to
???
Non-negativity
LP-26
Sensitivity Analysis
How sensitive the results are to
parameter changes
Change in the value of coefficients
Change in a right-hand-side value of a
constraint
Trial-and-error approach
Analytic postoptimality method
LP-27
Sensitivity Report
Program B.1
LP-28
Changes in Resources
The right-hand-side values of
constraint equations may change as
resource availability changes
The shadow price of a constraint is
the change in the value of the
objective function resulting from a
one-unit change in the right-hand-side
value of the constraint
LP-29
Changes in Resources
Shadow prices are often explained as
answering the question “How much
would you pay for one additional unit
of a resource?”
Shadow prices are only valid over a
particular range of changes in right-
hand-side values
Sensitivity reports provide the upper
and lower limits of this range LP-30
Multiple Optimal Solutions
Often, real world problems can have
more than one optimal solution
When would this happen?
What does the graph have to look
like?
Do want to have “ties”?
LP-31
No Solutions
Can we ever have a problem without a
feasible solution?
When would this happen?
What would the graph look like?
Does this mean we did something
wrong?
LP-32
