2022

Linear Programing

GROUP:
1. Aaliyan
2. Huzaifa
3. Abdullah
4. Arhum
5. Abdullah
Submitted to: MAM SEEMA IDREES
Linear Programming

Assignment: Menegerial Economics.

Submitted To: Mam Seema Idrees.
Bs 5 (Commerce) Section “A”
Group Members:
Aaliyan Nadeem (02)
Huzaifa Kamal (29)
Abdullah Khan (04)
Muhammad Arham (49)
Abdullah Shakeel (05)

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Linear Programming

Table of Contents
Linear Programing.......................................................................................................................................3
Understanding Of Linear Programming Technique:....................................................................................3
1. Express the Problem Mathematically:.................................................................................................3
2. Graph the Problem:..............................................................................................................................4
3. Calculate the Optimal Value:...............................................................................................................5
Four Application Of Linear Programming Techniques:..............................................................................6
1. Food And Agriculture:.........................................................................................................................6
2. Application In Engineering:.................................................................................................................6
3.Tranportation Optimization:.................................................................................................................7
4. Efficient Manufacturing:.....................................................................................................................7
How Are Linear Equations Used in Everyday Life?....................................................................................7
1. Variable Costs:................................................................................................................................7
2. Rates:...............................................................................................................................................7
3. Budgeting:.......................................................................................................................................7
4. Making Predictions:.........................................................................................................................8
Characteristics of a Linear Programming Problem......................................................................................8
1. Optimization....................................................................................................................................8
2. Linearity..........................................................................................................................................8
3. Objective Function..........................................................................................................................9
4. Constraints.......................................................................................................................................9
The Disadvantages of Linear Programming................................................................................................9
1. Modeling:........................................................................................................................................9
2. Linearity:.........................................................................................................................................9
3. Reality:..........................................................................................................................................10
4. Inflexibility:...................................................................................................................................10
Conclusion.................................................................................................................................................11

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Linear Programming

Linear Programing
If you've only got limited resources at your disposal, then it's helpful to calculate
how best to maximize those resources – whether that's time, money, or space.
Let's say, for example, that you have 50 square feet of office space to use for
storage. Your budget is $200, and there are a variety of cabinet types and sizes from
which to choose. How do you optimize the space you have available, and stay within
the allotted budget?
Or consider that you manufacture three products using the same basic raw
materials. However, as each product uses different amounts of material, some are more
expensive to produce than others. A few of the materials are perishable, and need to be
used quickly. How much of each product should you manufacture to minimize your
cost? And which combination produces the least waste?
Questions like these may seem very complex. With so many variables and
constraints to take into consideration, how do you decide what to do? The answer is to
use linear programming. So basically:
“Linear programming is a mathematical or graphical technique which helps
to find the optimal way to use limited resources.”
When you have a problem that involves a variety of resource constraints, linear
programming can generate the best possible solution. Whether it's maximizing things
like profit or space, or minimizing factors like cost and waste, using this tool is a quick
and efficient way to structure the problem, and find a solution.

Understanding Of Linear Programming

Technique:
For example, A company makes two products – Bags and Caps. The capacity of
manufacturing unit is 525 hours per week. It takes five hours to produce one bag, and
three hours to produce one cap. Company’s customer demand for Caps is unlimited.
They will buy as much as company can produce. Bags, on the other hand, have a
maximum demand of only 100 per week. But company’s suppliers can only provide the
raw materials needed to produce a maximum of 75 Caps per week. The raw materials
for Bags are freely available.
The profit per unit, (C) is $2.50 for a Bags, and $2.00 for a Caps. How many units
of Bags and Caps should you produce each week to maximize your profit?

1. Express the Problem Mathematically:

Maximize:
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C = 2.5J + 2G (maximum profit)

Subject to these capacity constraints:

5J + 3G ≤ 525 (capacity constraint)

J ≤ 100 (Bag sales constraint)
G ≤ 75 (Cap raw materials constraint)

2. Graph the Problem:

When you have two variables (our example has two product combinations), you
can draw up a graph to show the solution. This is a great tool for understanding the
question in its entirety. With Bags production on the x-axis, and Caps production on the
y-axis, your graph can show the maximum production capacities for all possible
combinations of Bags and Caps. Now:

1. Draw the capacity line:

The end points of the capacity line are the maximum possible Bags and Caps
that can be produced. So You can produce:

105 Bags (525/5) and 0 Caps (100,0)

or
0 Bags (0,175) and 175 Caps (525/3)

The capacity line joins these two points.

2. Draw the sales constraint line for Bags:

As J = 100 for all values of G

3. Draw the raw materials constraint for Caps:

As G = 75 for all values of J.

These three constraint lines are shown below:

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Linear Programming

The area bounded by the three constraint lines and the x and y axes is the set of
possible combinations of Bags and Goop production. Anything beyond those borders is
not possible – given these constraints, and assuming that production of Bags and caps
is greater than 0. The optimal combination will be somewhere along the outside border.
Anything inside the boundary would not use all of the available capacity.

3. Calculate the Optimal Value:

In this example, there are four intersection points (w, x, y, and z). To determine
the exact point of optimization, company examine each of these. As you already know
that points w and z represent the extreme points used in the constraint lines, you can
consider the calculations below:
Maximum contribution (C) at point w:
J = 0, G = 75
C = 2.5J + 2G (maximum profit)
C = (2.5 x 0) + (2 x 75)
C = 150
Maximum contribution (C) at point x:
5J + 3G = 525
G = 75
Substitute the value of G in the first equation, and solve for J:
5J + (3 x 75) = 525
5J = 300
J = 60
So at point x the production is 60 Bags and 75 Goops:
C = 2.5J + 2G (maximum profit)
C = (2.5 x 60) + (2 x 75)

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Linear Programming

C = 120 +150
C = 270
Maximum contribution (C) at point y:
5J + 3G = 525
J = 100
Substitute J = 100 into the first equation:
(5 x 100) +3G = 525
3G = 25
G = 8 (round down because you cannot sell part of a Goop) 
C = 2.5J + 2G (maximum profit)
C = (2.5 x 100) + (2 x 8)
C = 250 +16
C = 266
Maximum contribution (C) at point z:
J = 100, G = 0
C = 2.5J + 2G (maximum profit)
C = (2.5 x 100) + (2 x 0)
C = 250
Based on these calculations, the optimal production for Bags and Caps is at point
x (60 Bags and 75 Caps). This is a simple linear programming example.
In reality, most business problems involve so many variables and constraints that
you wouldn't try a manual solution. Linear programming software programs can solve
the equations quickly and easily, and they provide a great deal of information about the
various points within the possible set.

Four Application Of Linear

Programming Techniques:
1. Food And Agriculture:
Farmers apply linear programming techniques to their work. By determining what
crops they should grow, the quantity of it and how to use it efficiently, farmers can
increase their revenue.

2. Application In Engineering:
In the field of construction, civil engineers use linear programming techniques to
solve design related problems and manufacturing problems.

3.Tranportation Optimization:

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Linear Programming

Transportation systems rely upon linear programming for cost and time
efficiency.
For example: Airlines use linear programming to optimize their profits according
to different seat prices and customer demand. Airlines also use linear programming for
pilot scheduling and routes.

4. Efficient Manufacturing:
Manufacturing requires transforming raw materials into products that maximize
company revenue. A company can use a linear expression of how much raw material to
use and how much company earn profit.

How Are Linear Equations Used in

Everyday Life?
1. Variable Costs:
Imagine that you are taking a taxi while on vacation. You know that the taxi
service charges $9 to pick your family up from your hotel and another $0.15 per mile
for the trip. Without knowing how many miles it will be to each destination, you can set
up a linear equation that can be used to find the cost of any taxi trip you take on your
trip. By using "x" to represent the number of miles to your destination and "y" to
represent the cost of that taxi ride, the linear equation would be: y = 0.15x + 9.
2. Rates:
Linear equations can be a useful tool for comparing rates of pay. For example,
if one company offers to pay you $450 per week and the other offers $10 per hour,
and both ask you to work 40 hours per week, which company is offering the better rate
of pay? A linear equation can help you figure it out! The first company's offer is
expressed as 450 = 40x. The second company's offer is expressed as y = 10(40).
After comparing the two offers, the equations tell you that the first company is offering
the better rate of pay at $11.25 per hour.
3. Budgeting:
A party planner has a limited budget for an upcoming event. She'll need to
figure out how much it will cost her client to rent a space and pay per person for
meals. If the cost of the rental space is $780 and the price per person for food is
$9.75, a linear equation can be constructed to show the total cost, expressed as y, for
any number of people in attendance, or x. The linear equation would be written as y =
9.75x + 780. With this equation, the party planner can substitute any number of party

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guests and give her client the actual cost of the event with the food and rental costs
included.
4. Making Predictions:
One of the most helpful ways to apply linear equations in everyday life is to
make predictions about what will happen in the future. If a bake sale committee
spends $200 in initial start up costs and then earns $150 per month in sales, the linear
equation y = 150x - 200 can be used to predict cumulative profits from month to
month. For instance, after six months, the committee can expect to have netted $700
because (150 x 6) - 200 = $700. While real world factors certainly impact how
accurate predictions are, they can be a good indication of what to expect in the future.
Linear equations are a tool that make this possible.

Characteristics of a Linear Programming

Problem
1. Optimization
All linear programming problems are problems of optimization. This means that
the true purpose behind solving a linear programming problem is to either maximize or
minimize some value. Thus, linear programming problems are often found in
economics, business, advertising and many other fields that value efficiency and
resource conservation. Examples of items that can be optimized are profit, resource
acquisition, free time and utility.

2. Linearity
As the name hints, linear programming problems all have the trait of being
linear. However, this trait of linearity can be misleading, as linearity only refers to
variables being to the first power (and therefore excluding power functions, square
roots and other non-linear functions). Linearity does not, however, mean that the
functions of a linear programming problem are only of one variable. In short, linearity
in linear programming problems allows the variables to relate to each other as
coordinates on a line, excluding other shapes and curves.

3. Objective Function
All linear programming problems have a function called the “objective function.”
The objective function is written in terms of the variables that can be changed at will
(e.g., time spent on a job, units produced and so on). The objective function is the one
that the solver of a linear programming problem wishes to maximize or minimize. The
result of a linear programming problem will be given in terms of the objective function.
The objective function is written with the capital letter “Z” in most linear programming
problems.

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Linear Programming

4. Constraints
All linear programming problems have constraints on the variables inside the
objective function. These constraints take the form of inequalities (e.g., “b < 3” where
b may represent the units of books written by an author per month). These inequalities
define how the objective function can be maximized or minimized, as together they
determine the “domain” in which an organization can make decisions about resources.

The Disadvantages of Linear

Programming
1. Modeling:
To use linear programming, you must convert your problem into a mathematical
model. To do this, you need an objective such as maximizing profit or minimizing
losses. The model must also include decision variables that affect those objectives,
and constraints that limit what you can do. For example, if you have limited supplies
and want to know whether to concentrate on high-end products or a larger output of
cheaper goods to maximize profit, for this model you have an objective, variables and
constraints, so you have what you need to begin.

2. Linearity:
Linear programming relies, logically enough, on linear equations: If you double
sales while everything else stays constant, the equation will show you doubling your
revenue. Some decision variables have a non-linear effect, however. If you double
your budget for a business start-up, for example, that doesn't mean your first-year
profits or expenses double as well. Efficiencies of scale also often do not relate to
linear effects. Alternatives to linear programming such as goal programming take
nonlinear variables into account.

3. Reality:
Linear programming is only effective if the model you use reflects the real
world. Every model relies on certain assumptions and they may be invalid: you
assume, for example, that tripling production will triple sales, but in reality it saturates
the market. Linear equations sometimes give results that don't make sense in the real
world, such as a result indicating that you should contract to build 23.75 battleships for
the Navy to maximize profits -- how will you deal with the .75 in practical terms?.
Skilled linear programmers can tweak models and equations to deal with these
problems.

4. Inflexibility:

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Linear Programming

Some situations have too many possibilities to fit into a linear programming
formula. A medical practice could use linear programming to determine the optimum
radiation treatments for cancer patients, but medical conditions are so diverse, doctors
inevitably find some that don't fit any linear model. Linear programming also of course
has no intuition or gut instinct; Heath Hammett, who works on linear programs for the
military, told "Signal" magazine in 2005 that this is why it's necessary for people to
review linear programming conclusions before acting on them.

Conclusion
Linear programming is a mathematical or graphical technique which helps to find the
optimal way to use limited resources. In a nutshell linear programming helps a firm to
utilize its resources more conveniently to boost up production. There are many
application of linear programming in different fields like food and agriculture, transport
optimization, manufacturing and engineering. Linear Equation can also be used in

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everyday life and household. The main Characteristics of linear equation are
optimization, linearity, objective function and constraints. While there are pros of linear
programing, there are still some cons of linear programming like modeling, linearity,
reality and inflexibility

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