EXPERIMENT NO.

02

DATE OF PERFORMANCE: GRADE:

SIGNATURE OF LECTURER/
DATE OF ASSESSMENT:
TTA:

AIM: To study and implement linear programming in formulation

method.

Theory:

The term formulation refers to the process of converting the verbal description
and numerical data into mathematical expressions, which represents the
relationship among relevant decision variables (or factors), objective and
restrictions (constraints) on the use of scarce resources (such as labour, material,
machine, time, warehouse space, capital, energy, etc.) to several competing
activities (such as products, services, jobs, new equipment, projects, etc.) on the
basis of a given criterion of optimality. The term scarce resources refers to
resources that are not available in infinite quantity during the planning period.
The criterion of optimality is generally either performance, return on
investment, profit, cost, utility, time, distance and the like.

General Structure of an LP Model:

The general structure of an LP model consists of following three basic
components (or parts).
Decision variables (activities): The evaluation of various courses of action
(alternatives) and select the best to arrive at the optimal value of objective
function, is guided by the nature of objective function and availability of
resources. For this, certain activities (also called decision variables) usually
denoted by x1, x2, . . ., xn are conducted. The value of these variables
(activities) represents the extent to which each of these is performed.
The value of certain variables may or may not be under the decision-maker’s
control. If values are under the control of the decision-maker, then such
variables are said to be controllable, otherwise they are said to be
uncontrollable. These decision variables, usually interrelated in terms of
consumption of resources, require simultaneous solutions. In an LP model all

1
decision variables are continuous, controllable and non negative. That is, x1 ≥ 0,
x2 ≥ 0, . . ., xn ≥ 0.
The objective function: The objective function of each LP problem is
expressed in terms of decision variables to optimize the criterion of optimality
(also called measure-of-performance) such as profit, cost, revenue, distance etc.
In its general form, it is represented as:
Optimize (Maximize or Minimize) Z = c1x1 + c2 x2 + . . . + cn xn
, where Z is the measure-of-performance variable, which is a function of x1, x2,
. . ., xn. Quantities c1, c2, . . ., cn are parameters that represent the contribution
of a unit of the respective variable x1, x2, . . ., xn to measure-of-performance Z.
The optimal value of the given objective function is obtained by the graphical
method or simplex method.
The constraints: There are always certain limitations (or constraints) on the use
of resources that limit the degree to which an objective can be achieved. Such
constraints must be expressed as linear equalities or inequalities in terms of
decision variables. The solution of an LP model must satisfy these constraints.

Assumptions of an LP Model:
The following are the major assumptions of an LP model:
1. Certainty: In LP models, it is assumed that all its parameters such as:
availability of resources, profit (or cost) contribution per unit of decision
variable and consumption of resources per unit of decision variable must be
known and constant.
2. Additivity: The value of the objective function and the total amount of each
resource used (or supplied), must be equal to the sum of the respective
individual contribution (profit or cost) of the decision variables.
3. Linearity (or proportionality): The amount of each resource used (or
supplied) and its contribution to the profit (or cost) in objective function must
be proportional to the value of each decision variable.
4. Divisibility (or continuity): The solution values of decision variables are
allowed to assume continuous values.

Advantages of using linear programming:

Following are certain advantages of using linear programming technique:
1. Linear programming technique helps decision-makers to use their productive
resources effectively.

2
2. Linear programming technique improves the quality of decisions. The
decision-making approach of the user of this technique becomes more objective
and less subjective.
3. Linear programming technique helps to arrive at optimal solution of a
decision problem by taking into account constraints on the use of resources.
4. Linear programming approach for solving decision problem highlight
bottlenecks in the production processes.

Limitations of linear programming:

1. Linear programming assumes linear relationships among decision
variables. However, in real-life problems, decision variables, neither in
the objective function nor in the constraints are linearly related.
2. While solving an LP model there is no guarantee that decision variables
will get integer value.
3. The linear programming model does not take into consideration the
effect of time and uncertainty.
4. Parameters in the model are assumed to be constant but in real-life
situations, they are frequently neither known nor constant.
5. Linear programming deals with only single objective, whereas in real-life
situations a decision problem may have conflicting and multiple
objectives.

Guidelines on linear programming model formulation:

Steps of LP model formulation are as follows:
Step 1: Identify the decision variables
(a) Express each constraint in words. For this you should first see
whether the constraint is of the form ≥ (at least as large as), of the form ≤
(no larger than) or of the form = (exactly equal to).
(b) Express verbally the objective function.
(c) Verbally identify the decision variables with the help of Step (a)
and (b).
Step 2: Identify the problem data: To formulate an LP model, identify
the problem data in terms of constants, and parameters associated with
decision variables. It may be noted that the decision-maker can control
values of the variables but cannot control values in 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 of them as linear equality or inequality, in
terms of the decision variables defined in Step 1. Values of these decision

3
 variables in the optimal LP problem solution must satisfy these
constraints in order to constitute an acceptable (feasible) solution. Wrong
formulation can either lead to a solution that is not feasible or to the
exclusion of a solution that is actually feasible and possibly optimal.
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.

Application areas of linear programming:

1. Applications in Agriculture: These applications fall into categories of
farm economics and farm management. The former 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 individual farm such as allocation of limited resources such as
acreage, labour, water supply, working capital, etc., so as to maximize
the net revenue.
2. 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
possible cost.
3. Production Management:
(i) Product Mix: To determine the quantity of several different
products to be produced, knowing their per unit profit (cost)
contribution and amount of limited production resources used.
The objective is to maximize the total profit subject to all
constraints.
(ii) Production Planning: This deals with the determination of
minimum cost production plan over the planning period, of an
item with a fluctuating demand, while considering the initial
number of units in inventory, production capacity, constraints
on production, manpower and all relevant cost factors. The
objective is to minimize total operation costs.
(iii) Assembly-line Balancing: This problem is likely to arise when
an item can be made by assembling different components. The

4
 process of assembling requires some specified sequence(s). The
objective is to minimize the total elapse time.
(iv) Blending Problems: These problems arise when a product can
be made from a variety of available raw materials, each of
which has a particular composition and price. The objective
here is to determine the minimum cost blend, subject to
availability of the raw materials, and to minimum and
maximum constraints on certain product constituents.
(v) Trim Loss: When an item is made to a standard size (e.g. glass,
paper sheet), the problem of determining which combination of
requirements should be produced from standard materials in
order to minimize the trim loss, arises.
4. Financial Management:
(i) Portfolio Selection: This deals with the selection of specific
investment activity among several other activities. The
objective here is to find the allocation which maximizes the
total expected return or minimizes risk under certain
limitations.
(ii) Profit Planning This deals with the maximization of the profit
margin from investment in plant facilities and equipment, cash
in hand and inventory.
5. Marketing Management:
(i) Media Selection: The linear programming technique helps in
determining the advertising media mix so as to maximize the
effective exposure, subject to limitation of budget, specified
exposure rates to different market segments, specified minimum
and maximum number of advertisements in various media.
(ii) Travelling Salesman Problem: The salesman’s problem is to
find the shortest route from a given city to each of the specified
cities and then returning to the original point of departure,
provided no city would be visited twice during the tour. Such
type of problems can be solved with the help of the modified
assignment technique.
(iii) Physical Distribution: Linear programming determines the most
economic and efficient manner of locating manufacturing plants
and distribution centres for physical distribution.
6. Personnel Management
(i) Staffing Problem: Linear programming is used to allocate
optimum manpower to a particular job so as to minimize the
total overtime cost or total manpower. (ii)

5
(ii) Determination of Equitable Salaries: Linear programming
technique has been used in determining equitable salaries and
sales incentives.
(iii) Job Evaluation and Selection: Selection of suitable person for a
specified job and evaluation of job in organizations has been
done with the help of the linear programming technique.