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Introduction to Operations

Research
Chapter 3 Introduction to
Linear Programming

What is linear programming
p g
g
Linear
Linear programming provides methods
for allocating limited resources among
competing activities in an optimal way.
way
Linear: all mathematical functions are linear
Programming: involves the planning of
activities

Any problem
A
bl
whose
h
model
d l fit
fits th
the fformatt
for the linear programming model is a
linear programming problem.

Agenda
Chapter 3 Introduction to Linear Programming
3.1 Prototype Example
3 2 The Linear Programming Model
3.2
3.3 Assumptions of Linear Programming
3.4 Additional Examples
3.5 Some Case Studies
3.6 Displaying
p y g and Solvingg Linear Programming
g
g Models on a
Spreadsheet
3.7 Formulating Very Large Linear Programming Models
3.8 Conclusions

LP Example
p
 Leo
needsresources?
to make someCompeting
money to payactivities?
his MBA
(a)
Limited
tuition in two years. Leo can participate in either or
(b)both
data into ai ltable
bOrganize
h off two entrepreneurial
ventures. H
He can choose
h

any number of shares (fractional or integer) in each
venture
venture.
 Each share of Venture 1 needs $1,000 investment
and requires
q
Leo to work 3 hours p
per day.
y Each share
of Venture 1 can produce $20,000 profit.
 Each share of Venture 2 requires Leo to work 1 hour
per day and provides an advance of $1
$1,000
000 (can’t
(can t be
used as profit) per share in return for the work
commitment that accompanies shares of this venture.
E h share
Each
h
off V
Venture
t
2 can produce
d
$10
$10,000
000 profit.
fit
 Leo has $1000 for investment and he’s
he s willing to work
a maximum 7 hours per day.

LP Example p Gathering data LP Example: p formulate the model  Leo needs to decide how many shares of each venture to take (decision variables) x1 = number of shares of Venture 1 x2 = number of shares of Venture 2  Leo wants to maximize his total income: Z = total profit (in thousands of dollars) from investing these two ventures Subject to (money) (time) Graphical solution:feasible region Graphical solution:feasible region g Feasible region .

Let x2=0. with a total profit of $70. get x2=4. Z=60=20x1+10x2 A segment of the line lies within the feasible region. 2) in the feasible region to get: 20x1 + 10 x2 =40 Graphical solution Now try a larger arbitrary value of Z.000 Optimal solution . say. g This p point is the optimal solution. Notice the two lines are parallel since the slope is fixed fixed.2) Let x1=0.1Z Graphical solution • Move the ruler with fixed slope p through the feasible region in the direction of improving p g Z until it passes through a point in the feasible region. get x1=2 Begin by trial and error to find the maximum value of Z. g so that the maximum permissible value of Z must be at least 60. Z = 20x1 + 10 x2  x2 = -2x1 + 0.Graphical solution Graphical solution Drawing D i th the liline: 20x1 + 10 x2 = 40 (1. For example. Z=70。 • Leo should invest 7 shares of venture 2 and 0 share of venture 1. •In the example. example Z reaches the maximum value at (0. try (1. 7).

move the ruler with fixed slope through the feasible region in the direction of decreasing Z until it passes through a point in the feasible region. x2 = number of 20-inch TV sets to be produced per month. . the decision variables for the model are x1 = number of 27-inch TV sets to be produced per month. Therefore.Graphical method for linear programming  Step 1:determine the feasible region  Step 2: If the objective is maximize. This point is the optimal solution. This point is the optimal solution. research Exercise (a) Formulate a linear programming model d l for f this thi problem. The maximum number of work-hours work hours available is 500 per month. bl  Step 1: determine the decision variables  The decisions that need to be made are the number of 27-inch and 20-inch TV sets to be p produced p per month by the Apex Television Company. Each 27-inch 27 inch set produces a profit of $120 and each 20-inch set produces a profit of $80. maximize move the ruler with fixed slope through the feasible region in the direction of improving Z until it passes through a point in the feasible region. ((b)) Use the graphical g p method to solve this model. If the objective is minimize. Exercise (a) Formulate a linear programming model for this problem. A wholesaler o esa e has as ag agreed eed to o pu purchase c ase a all the e television sets produced if the numbers do not exceed the maxima indicated by the market research.and 20-inch sets to be produced at one of its factories.  The g graphic p method for linear p programming g g can be used to solve any linear programming problem with 2 decision variables. Market research indicates that at most 40 of the 27 27-inch inch sets and 10 of the 20-inch sets can be sold per month. A 27-inch set requires 20 workhours and a 20-inch set requires 10 work-hours. Exercise  The Apex Television Company has to decide on the number of 27.

. 32 Max Z = CTX S T AX ≤ B.Exercise  Step 2: determine the objective function Z = total profit per month Max Z = 120x1 + 80x2  Step 3: determine the resource constraints  Number of 27-inch sets sold per month: x1  40  Number of 20-inch sets sold per month: x2  10 Exercise  Step 4: construct the LP model Maximize Z = 120x1 + 80x2 Subject to x1  40 x2  10 20 x1 + 10 x2  500 and x1 ≥ 0, x2 ≥ 0  Work-hours availability: 20 x1 + 10 x2  500. bi. x2  0 Exercise (b) Use the graphical method to solve this model.  Nonnegativity constraints on TV sets produced:  x1  0.T. Z=2400 The Linear Programming Model  A standard form of the model:P model:P. aij .+cnxn Constraints Parameters: cj. B X≥ 0  Other forms of LP problems  Common terminology for the LP model: The objective function: Z=c1x1+. S.

nonlinear programming should be used.  Proportionality-The Proportionality The contribution of each activity to Z or a constraint is proportional to the level of activity xj .The Linear Programming g g Model Linear programming assumptions S Solution l ti – Any A specification ifi ti off values l ffor th the d decision i i variables (xj)  Feasible solution – A solution for which all constraints are satisfied  Infeasible solution – A solution for which at least one constraint is violated  Feasible region g – The collection of all feasible solutions  Optimal solution – A feasible solution that has the most favorable value of the objective function Linear programming assumptions Increasing marginal return (economies Case of3scale) Startup cost Profit from door x1(door) Proportionality satisfied 0 0 0 0 1 3 2 3 2 6 5 7 3 9 8 12 Decreasi ng marginal 3 return t 5 (marketi g cost)) 6 ng 4 12 11 18 6 Case 1 Case 2 0  When the proportionality assumption does not hold.