ROAD TO LINEAR

PROGRAMMING

► Technological development - necessitated organizations for

optimally utilizing resources.
► Use knowledge and exp for decision making together with
quantitative approaches to business.
► “OPERATIONS RESEARCH”-technique of using quantitative
approach to solve business problems.
► Helps a manager in effective decision making by
effectively utilizing the available resources.
► Complex problems- easily solved by managers
knowledge+ quantitative techniques.
 RACING TOWARDS LINEAR
PROGRAMMING
► Method formulated by a Russian mathematician
‘L.V. KANTROVICH’ and later developed by George
B. Dantzig in 1947.

► The word “LINEAR” means that the relationships

handled are those represented by straight lines . .

► The word “PROGRAMMING” means taking decisions

systematically.

► Thus linear programming is a decision making

technique under the given constraints on the
assumption that the relationships among the
variables representing different phenomena happen
 CONCEPT OF LINEAR
PROGRAMMING
► The mathematical method of trying to achieve something
while taking into account a number of constraints. Typical
EXAMPLES include:

- maximizing consumer satisfaction or utility subject to a

. ……..budget constraint;
- maximizing profits subject to cost constraints;
- minimizing a firm’s wage bill taking into account a given
capital-……..labour ratio; or
- maximizing revenues for a sales maximizing firm subject
to the own price elasticity of demand.

► Put more formally, linear programming problems are really

about finding optimal solutions to problems which are
expressed in terms of an entity which needs to be optimized
(also known as ‘the objective function’) given certain
constraints.
► Both the objective function and all of the constraints are
expressed as linear equations eg. y = 4x+7 etc
GEARING UP LINEAR PROGRAMMING
BY

“UNDERSTANDING THE OBJECTIVE FUNCTION”

 GOAL OF THE COMPANY

 EITHER TO MAXIMIZE PROFIT
OR
 TO MINIMIZE THE LOSSES
 UNDERSTANDING THE CONSTRAINTS

o RESOURCES IN LIMITED SUPPLY .

o LIMITATIONS UNDER WHICH ONE HAS TO PLAN .
o FOR EX…
 REQUIREMENTS OF A LINEAR PROGRAMMING
PROBLEM

► Their should be an objective which is easily identifiable and

measurable in quantitative terms.
► The activities to be included should be distinctly identifiable in
quantitative terms.
► The resources of the system which are to be allocated for the
attainment of the goal, should be quantitatively measured.
They must be in limited supply.
► T he relationships representing the objective and constraints
shall be linear.
► There should be a series of feasible alternative courses of
action available .
 SOLUTION OF THE LPP PROBLEMS

► SOLVED BY TWO METHODS :

* THE GRAPHICAL METHOD

* “THE SIMPLEX METHOD”……

 THE SIMPLEX METHOD

► The simplex method was developed by Prof. G.B. DANTZIG in

1947 .
► He demonstrated how to use an objective function to find a
optimal solution from amongst the several feasible solutions
to a linear programming problem.
► Simplex method is a computational routine of repeating the
procedure over and over until an optimal solution is achieved.
► Here each new solution obtains a value of the objective
function at least as large as the previous solution., thus
leading closer to the optimal solution and thus the iteration
can be determined
 ESSENTIALS FOR SIMPLEX METHOD

► The types of problems for which the simplex method are

suitable are ones that can be expressed in the following
STANDARD FORM: 

* The constraints must include the non-negativity

constraints for all . the decision variables

* The other constraints must be expressed in the form

(linear . . …….expression) ≤ No. where the No. on the right
hand side must be …….positive.

* The objective must be to MAXIMISE some linear

expression
 APPLICATION OF SIMPLEX METHOD IN
BUSINESS PROBLEMS:-

M/S Greenply Industries uses 3 machines in the

manufacture of three plywood products of different
thickness i.e. 6mm, 18mm and 12mm ply.

Each unit of product A requires 6 hrs on machine

1,4 hrs on machine 2,and 2 hrs on machine 3.

Each unit of product b requires 8 hrs on machine

1,2 hrs on machine 2 and 6 hrs on machine3,while
each unit of product c requires 4 hrs on each of the
three machines.

The contribution margin of the three products is Rs.

60,Rs 80and Rs 70 respectively. The machine hours
 FORMATION OF THE EQUATIONS

► Max Z= 60x1 + 80x2 + 70x3

(objective)
► 6x1+8x2+4x3 ≤ 180
► 4x1+2x2+4x3 ≤ 108
► 2x1+6x2+4x3 ≤ 186
addition of some slack
variables/constraints
to ramove the inequality sign !
 INTIAL TABLE
60 80 70 0 0 0
Cj x₁ x₂ x₃ s₁ s₂ s₃ s M.
olu R
0 s₁ 6 8 4 1 0 0 18
tio 2
4 0 1 0
0
n
108
2.5
54
0 s₂ 4 2
0 2 4 0 0 1 186 31
s₃ 6
0 0 0 0 0
zj 0
60 70 0 0 0
Dj 80
 SECOND TABLE
60 80 0 0 0
70
Cj x₁ x₂ x₃ s₁ s₂ s₃ S M.
80 6/8 1 1/8 0 0
olu R
22.5 45
x₂ 1/
2
0 s₂ 5/ 0 3 - 1 0 63 21
0
2
-5/2 0
1/
-3/4 0 1 51 51
s₃ 1 4
60 80 10 0 0
Zj 40
0 0 -10 0 0
Dj 30
 THIRD TABLE
60 80 70 0 0 0

Cj x₁ x₂ x₃ s₁ s₂ s₃ s M.
80 0.33 1 0 5/2 -1/6 0
olu
12
R
x₂
70 5/6 0 1 -1 1/3 0 21
x₃ /12
0 -20 0 0 -8 -1/3 1 30
s₃ /6 /12
84.7 80 70 10.8 10 0
Z
-24. -10 0 -10. -10 0
Dj 7 8
 Result
►Putting values of x₁, x₂, x₃, s₁, s₂, s₃ in
the objective function.
Maximize Z = 60x₁ +80x₂+70x₃ +0s₁
+0s₂ +0s₃
=
60(0)+80(12)+70(21)+0(0)+0(0)+0(0)
= 0+960+1470+0+0+0
Maximize Z = 2430