Session 1: LPP-Introduction,

Formulation & Graphical Solution

The Maximization Problem

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 The Flair Furniture Company (FFC)
• FFC produces inexpensive tables and chairs. The
production process is similar in that both requires a
certain number of hours of carpentry work and a certain
number of labor hours in the painting and varnishing
department. Each table requires 4 hours of carpentry and 2
hours in painting and varnishing department. Each chair
requires 3 hours in carpentry and 1 hour in painting and
varnishing department. During the current production
period, 240 hours of carpentry time available and 100
hours in painting and varnishing time are available. The
profit contribution from each table sold is $70 and from
each chair sold is $50.

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 Linear Programming Problem (LPP)
• A large number of decision problems faced by a business
manager involves allocation of resources to various
activities, with the objective of increasing profits or
decreasing costs, or both.
• Resources are used to make products (furniture, food,
machines etc.) or services (advertisement policies,
investment decisions etc.).
• Resources typically involves machinery, labor, money, time,
raw materials etc.

• When resources are in excess, no difficulty is experienced.

• Practically the mangers are confronted with the problem of
scarce resources.
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 LPP Cont’d.
• LPP: A widely used mathematical modelling technique that
helps in resource allocation decisions.
• The word ‘programming’ means ‘choosing a course of
action’ or refers to modeling and solving a problem
mathematically.
• Linear programming involves a course of action when
mathematical model of the problem contains only linear
functions.

• Note that in general, we maximize the profit contribution

which is the difference between unit selling price and
costs.

• Depreciation, general expense and advertising are

excluded from calculations.
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 LPP: Components
• The decision variables that represent the actual decisions that
the decision maker will make. Generally, denoted by x, y, z etc.
• In all LPPs the maximization or minimization of some quantity
referred as the objective function. Usually, profit or cost.
• The objectives must be clearly stated and defined
mathematically.

• Restrictions or constraints that limit the degree to which the

objective can be fulfilled.
• There must be alternatives available.

• The values of the decision variables must be non-negative.

• The above four components together constitute a LP model.

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 LPP: Assumptions
• Proportionality (production of one unit uses 3hrs, then 10
units would use 30 hrs.)
• Additivity (total of all activities is equal to sum of
individual activities)
• Certainty (the values in the model do not change over
time)
• Divisibility (the decision variables may take fractional any
value)

• The LP method is a technique for choosing the best

alternative from a set of feasible alternatives, in
situations in which the objective function as well as the
constraints can be expressed as a linear mathematical
function.
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 General form of LPP
• A general form of LPP consisting of n variables and m
constraints can be defined as follows:
Max. or Min. Z  c1 x1  c 2 x 2  ....  c n x n Objective Function
Subject to:
a11 x1  a12 x 2  ....  a1m x n  or  b1 
a 21 x1  a 22 x 2  ....  a 2 m x n  or  b2 

.  Constra int s 
. 

a m1 x1  a m 2 x 2  ....  a mn x n  or  bm 
xi  0 for all i  1,2,..n (Non-negativity)

where cj, aij and bi ( i = 1, 2, ….., m ; j = 1, 2, ….., n) are

known constants and respectively termed as the profit/cost
coefficients, technological coefficients, and resource values
and xj’s are decision variables.
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 LP (Mathematical) Formulation of FFC
• Decision variables: Let x and y represents the number
of tables and chairs produced.
• Objective Function: Max. Z =70x +50y
• Subject to (constraints):
4x+3y ≤ 240 (Carpentry)
2x+y ≤ 100 (Painting & Varnishing)
• x, y ≥ 0 (Non-negativity)

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 FFC Graphical Solution
• Draw the constraint lines considering equality.
• Identify a region satisfying all constraints including
non-negativity. This region is called feasible region.
• Identify the corner points of the feasible region.
• Evaluate the objective function at each corner points.
• Select the corner point with maximum/minimum
value will give the required optimal solution.

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• Graph

• Hence the optimal solution: x= 30 tables and y=40 chairs

with Max. profit=$4100.
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 FFC Graphical Solution

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 The Par Inc. Problem

• Par, Inc., is a small manufacturer of golf equipment and

supplies whose management has decided to move into the
market for medium-and high-priced golf bags. Par’s
distributor is enthusiastic about the new product line and
has agreed to buy all bags Par produces over the next 3
months. After a thorough investigation of the steps
involved in the manufacturing a golf bag, management has
determined that each golf bag produced will require the
following operations.
1. Cutting and Dyeing 2. Sewing 3. Finishing and
4. Inspection and Packaging

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 Par Inc. Cont’d

• After analyzing each operations the director of

manufacturing concluded that if the company produces a
medium-priced standard model, each bag will require 7/10
hr, 1/2hr, 1hr and 1/10hr respectively in the above
mentioned departments. Similarly the high-priced deluxe
model will require 1hr, 5/6hr, 2/3hr and 1/4hr
respectively in the above departments.
• After studying the departmental work load projections, the
director estimates that 630hrs,600hrs,708hrs, and 135hrs
will be available for the production of golf bags during the
next 3 months respectively in the above departments.

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 Par Inc…
• The accounting department has analyzed the production
data ,and arrived at prices for both bags that will result in a
profit contribution of $10 for every standard bag and $9 for
every deluxe bag produced.

• Question 1: Develop a mathematical model that can be

used to determine the number of standard bags and the
number of deluxe bags to produce in order to maximize
total profit contribution?
• Question 2: Find which department has not utilized the
available resources?

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 Mathematical model for Par Inc.
• Let the decision variables be S & D where S = Number of
standard bags and D = Number of deluxe bags.

• Max. Z =10S + 9D
• Subject to (s.t) the constraints:
0.7S + 1D ≤ 630 (Cutting & Dyeing)
0.5S + 0.83D ≤ 600 (Sewing)
1S + 0.66D ≤ 708 (Finishing)
0.1S + 0.25D ≤ 135 (Inspection & Packaging)
S,D ≥ 0 (Non-negativity)

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 D

•1062 Finishing Par Inc. Graph

The optimal solution is S = 540 and D = 252
Max. profit = $7668

720 Sewing

630

E
540

D
540, 252
C
C&D
Feasible region
I&P

A B S
0 708 900 1200 1350
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 Continuation of Par Inc.
• To identify the amount of unused resource, we need to
compute slack associated with each constraints.
• Cutting & Dyeing
0.7(540) +1(252) +S1 =630 ⇒S1=0
• Sewing
0.5(540)+0.83(252)+S2 = 600 ⇒S2=120.84
• Finishing
1(540)+0.66(252) +S3=708 ⇒S3=1.68
• Inspection & Packaging
0.1(540)+0.25(252) +S4 =135 ⇒S4=18

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 Homework Problem-1
• A firm is engaged in producing two products A and B. each
unit of product A requires 2kg of raw materials and 4 labor
hrs for processing, whereas each unit of product B requires
3kg material and 3 hrs of labor of the same type. Every
week, the firm has an availability of 60kg raw materials
and 96 labor hrs. One unit of product A sold yields Rs 40
and one unit of product B sold gives Rs 35 as profit.
• Formulate this problem as a LPP to determine as to how
many units of each of the products should be produced per
week so that the firm can earn the max. profit. Assume that
there is no marketing constraint so that all that is produced
can be sold.
• Also identify slack/surplus if any
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 Reference

• Render, B., Stair, R.M., Hanna, M.E., Hale, T.S., and

Badri, T.N., (2016), Quantitative Analysis for
Management, 12th ed., Pearson Education.
• Anderson, D.R., Sweeney, D.J., and Williams, T.A.,
(2005), An Introduction to Management Science,
Thomson South-Western

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