Management

Science

This report analyzes the

Agricultural planning, linear
programming problem of
Management Science.

GROUP – 11
 A PROJECT REPORT

On

Agricultural Planning
Submitted in partial fulfilments for the Award of degree

Of
MASTERS IN BUSINESS ADMINISTRATION
Batch 2021-23

AMBEDKAR UNIVERSITY DELHI

Submitted to: Submitted by: Group 11

Prof. Kiran Tushar Kumar Koli

(Management Science) Abhinav Jha
Modoni Annie
Paras Panchal
Shivani

AGRICULTURAL PLANNING 2
AGRICULTURAL PLANNING 3
 Acknowledgment

We would like to convey our gratitude to Dr. Kiran, our professor of Management
Science, for providing us with this amazing chance to do a project on the topic of
Agricultural Planning of Linear Programming, who assisted us in doing a great deal
of research on Management science and help us learning these concepts smoothly.

We are extremely grateful to you. Also, We'd like to thank all the people for their
assistance in completing this project in such a short period of time. It was only
because of them that we were able to develop our project and make it a fun and
rewarding experience.

AGRICULTURAL PLANNING 4
 CONTENTS

Preface ........................................................................................................................ 6
Introduction ........................................................................................................ 7
History of Operations Research .............................................................................................................7
History of Operations Research in India…………………………………………………….8
What is Management
Science?………………………………………………………………………10
Applications of MS ………………………………………………………11
Management Science Process…………………………………………

Types of Models Studied So far………………. 17

Transportation
Assignment Problem
Graphical Model

Tools Of Linear Programming………………………………………….16

Agricultural Planning………………………………………………....26
LPP Formulation
Applications and uses of Agricultural Planning
Problem Description
Excel Solutions

Methodology………………………………………………………………..31

Conclusion……………………………………………………………….37

AGRICULTURAL PLANNING 5
 Preface

Optimization is the way of life. We all have finite resources and time
and we want to make the most of them. Everything uses optimization
from using your time productively to solving supply chain problems
for your company. It’s an especially interesting and relevant topic in
data science.

It starts with simple problems, but it can get very complex. For
example, sharing a bar of chocolate between siblings is a simple
optimization problem.

We don’t think in mathematical

terms while solving it. On the other
hand, devising inventory and
warehousing strategy for an e-
tailer can be very complex.
Millions of SKUs with different
popularity in different regions to
be delivered in defined time and
resources.
Linear programming (LP) is one of
the simplest ways to perform
optimization. It helps you solve
some very complex optimization
problems by making a few
simplifying assumptions. As an
analyst, you are bound to come
across applications and problems
to be solved by Linear
Programming.

AGRICULTURAL PLANNING 6
 Management science is a powerful tool in

NTRODUCTION decision-making. Also known as “Operations

Research”, it is an interdisciplinary study of
problem-solving and decision making in

O human organizations. It is a discipline that

deals with the development and application
of advanced analytical methods to improve

ANAGEMENT decision-making. The term management

science is occasionally used as a synonym. It
is also known as initialism operations

CIENCE research.
Operations research encompasses the
development and the use of a wide range of

PERATIONS problem-solving techniques and methods

applied in pursuit of improved decision-
making and efficiency, such as simulation,
ESEARCH mathematical optimization, queueing theory,
and other stochastic process models,
decision analysis, etc.

HISTORY OF OPERATIONS RESEARCH

It is generally agreed that operations research came into existence during Second
World War when there was a critical need to manage scarce resources. However, a
particular model and technique of OR can be traced back as early as in World War I,
when Thomas Edison (1914–15) made an effort to use a tactical game board for finding
a solution to minimize shipping losses from enemy submarines, instead of risking
ships in actual war conditions. About the same time AK Erlang, a Danish engineer,
carried out experiments to study the fluctuations in demand for telephone facilities
using automatic dialing equipment.

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During the second world war, close to 1000 men and women in Britain were engaged in
operations research. About 200 operations research scientists worked for the British
Army. Since the second world war involved many complicated problems to expect higher
adequate solutions from individuals or specialists in a single discipline. Thus, groups of
those people who specialized in economics, statistics, mathematics and probability
theories, etc. were formed by the British Air Force. The same did the American Armed
Forces in the USA.

Following are the factors behind the appreciation of operations research approach after
the second world war:
1. The economic and industrial boom resulted in mechanization, automation and
decentralization of operations and management functions. This industrialization
resulted in complex managerial problems and therefore, the application of
operations researches to managerial decisions became popular.
2. Continued research after the war resulted in advancements in various techniques
of operations research. In 1947, G B Dantzig, developed the concept of linear
programming, the solution of which is found by a method known as simplex
method. Besides linear programming, many other techniques of OR, such as
statistical quality control, dynamic programming, queuing theory and inventory
theory were well-developed before 1950s.
3. The use of high-speed computers made it possible to apply OR techniques for
solving real-life decision problems.

History of Operations Research in India:

In India during the same period, Prof. RS Verma set up an operations research team to
solve the problems of purchase, store and planning. In 1953, Prashant Mahala Nobis
established an OR team in the Indian Statistical Institute, Kolkata for solving problems
related to national planning and survey. The OR Society of India was founded in 1957 and
it started publishing its annual journal, OPSEARCH 1964 onwards.

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Features of Operations Research Approach

1. Systems Orientation: The systems approach to problems recognizes that the

behaviour of any part of the system has some effect on the behaviour of the system
as a whole. Even if the individual components are performing well, however, the
system as a whole is not necessarily performing equally well. Thus operations
research attempts to evaluate the effect o changes in any part of the system on the
performance of the entire system and to search for the causes of the problem that
arises in one part of a system in other parts or in the interrelationship between
parts.
2. The Interdisciplinary Team: scientific and technological disciplines have
proliferated rapidly in the last 100 years. The proliferation, resulting from the
enormous increase in scientific knowledge, has provided science with a filing
system that permits a systematic classification of knowledge which is helpful in
solving many problems by identifying a discipline to appear for a solution. Hence,
operations research may be characterized by rather unusual combinations of
disciplines on research teams and by the use of varied research procedures.

Problems Addressed by Operations Research

1. Critical path analysis or project planning: identifying those processes in a complex

project which affect the overall duration of the project.
2. Floor planning: designing the layout of equipment in a facoty or components on a
computer chip to reduce manufacturing time (therefore reducing cost)
3. Network optimization: for instance, setup of telecommunications or power system
networks to maintain quality of service during outages.
4. Assignment problems:
a. Assignment problem
b. Generalized assignment problem
c. Quadratic assignment problem
5. Cutting stock problem: cutting stock items out of bigger ones.
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What Is Management Science?
Management Science is the discipline that adapts the scientific approach for problem
solving to help managers make informed decisions. The goal of management science is
to recommend the course of action that is expected to yield the best outcome with what
is available.

The basic steps in the management science problem-solving process involves

o Analyzing business situations and building mathematical models to describe

them.
o Solving the mathematical models.
o Communicating/implementing recommendations based on the models and their
solutions.

The Management Science Approach

A scientific method of providing executive departments with a quantitative basis for

decisions regarding operations (Philip McCord Morse).

Logic and common sense are basic components in supporting the decision making
process.

The use of techniques such as (US army pamphlet 660-3):

o Statistical inference
o Mathematical programming
o Probabilistic models
o Network and computer science

Breadth of Management Science Techniques

The scope of management science techniques is broad. These techniques include:

o Mathematical programming
o Linear programming
o Simplex method
o Dynamic programming
o Goal programming
o Integer programming
o Nonlinear programming
o Stochastic programming
o Markov processes
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 o Queuing theory/waiting-line theory
o Transportation method
o Simulation

Management Science Applications

o Linear Programming was used by Burger King to find how to best blend cuts of
meat to minimize costs.
o Integer Linear Programming model was used by American Air Lines to
determine an optimal flight schedule.
o The Shortest Route Algorithm was implemented by the Sony Corporation to
developed an onboard car navigation system.
o Project Scheduling Techniques were used by a contractor to rebuild Interstate
10 damaged in the 1994 earthquake in the Los Angeles area.
o Decision Analysis approach was the basis for the development of a
comprehensive framework for planning environmental policy in Finland.
o Queuing models are incorporated into the overall design plans for Disneyland
and Disney World, which lead to the development of ‘waiting line entertainment’
in order to improve customer satisfaction.

Mathematical Modeling
Many managerial decision situations lend themselves to quantitative analyses.

A constrained mathematical model consists of

o An objective
o One or more constraints

Classification of Mathematical Models

Classification by the model purpose
o Optimization models
o Prediction models
Classification by the degree of certainty of the data in the model
o Deterministic models
o Probabilistic (stochastic) models

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The Management Science Process
Management Science is a discipline that adopts the scientific method to provide
management with key information needed in making informed decisions.

The team concept calls for the formation of (consulting) teams consisting of members
who come from various areas of expertise.

The four-step management science process:

MATHEMATICAL PROGRAMMING

Mathematical programming deals with models comprised of an objective function and a

set of constraints. Linear, integer, nonlinear, dynamic, goal, and stochastic
programming are all types of mathematical programming.

An objective function is a mathematical expression of the quantity to be maximized or

minimized. Manufacturers may wish to maximize production or minimize costs,
advertisers may wish to maximize a product's exposure, and financial analysts may wish
to maximize rate of return.

Constraints are mathematical expressions of restrictions that are placed on potential

values of the objective function. Production may be constrained by the total amount of
labor at hand and machine production capacity, an advertiser may be constrained by an
advertising budget, and an investment portfolio may be restricted by the allowable risk.

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LINEAR PROGRAMMING
Linear programming problems are a special class of mathematical programming problems for
which the objective function and all constraints are linear. A classic example of the application
of linear programming is the maximization of profits given various production or cost
constraints.

Linear programming can be applied to a variety of business problems, such as marketing mix
determination, financial decision making, production scheduling, workforce assignment, and
resource blending. Such problems are generally solved using the "simplex method."

MEDIA SELECTION PROBLEM

The local Chamber of Commerce periodically sponsors public service seminars and programs.
Promotional plans are under way for this year's program. Advertising alternatives include
television, radio, and newspaper. Audience estimates, costs, and maximum media usage
limitations are shown in Exhibit 1.

If the promotional budget is limited to $18,200, how many commercial messages should be
run on each medium to maximize total audience contact? Linear programming can find the
answer.

SIMPLEX METHOD
The simplex method is a specific algebraic procedure for solving linear programming problems.
The simplex method begins with simultaneous linear equations and solves the equations by
finding the best solution for the system of equations. This method first finds an initial basic
feasible solution and then tries to find a better solution. A series of iterations results in an
optimal solution.

SIMPLEX PROBLEM.
Georgia Television buys components that are used to manufacture two television models. One
model is called High Quality and the other is called Medium Quality. A weekly production
schedule needs to be developed given the following production considerations.

The High Quality model produces a gross profit of $125 per unit, and the Medium Quality
model has a $75 gross profit. Only 180 hours of production time are available for the next time
period. High Quality models require a total production time of six hours and Medium Quality
models require eight hours. In addition, there are only forty-five Medium Quality components
on hand.

To complicate matters, only 250 square feet of warehouse space can be used for new
production. The High Quality model requires 9 square feet of space while the Medium Quality
model requires 7 square feet.

Given the above situation, the simplex method can provide a solution for the production
allocation of High Quality models and Medium Quality models.

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DYNAMIC PROGRAMMING
Dynamic programming is a process of segmenting a large problem into a several
smaller problems. The approach is to solve the all the smaller, easier problems
individually in order to reach a solution to the original problem.

This technique is useful for making decisions that consist of several steps, each of which
also requires a decision. In addition, it is assumed that the smaller problems are not
independent of one another given they contribute to the larger question.

Dynamic programming can be utilized in the areas of capital budgeting, inventory

control, resource allocation, production scheduling, and equipment replacement. These
applications generally begin with a longer time horizon, such as a year, and then break
down the problem into smaller time units such as months or weeks. For example, it
may be necessary to determine an optimal production schedule for a twelve-month
period.

Dynamic programming would first find a solution for smaller time periods, for example,
monthly production schedules. By answering such questions, dynamic programming
can identify solutions to a problem that are most efficient or that best serve other
business needs given various constraints.

GOAL PROGRAMMING
Goal programming is a technique for solving multi-criteria rather than single-criteria
decision problems, usually within the framework of linear programming. For example,
in a location decision a bank would use not just one criterion, but several. The bank
would consider cost of construction, land cost, and customer attractiveness, among
other factors.

Goal programming establishes primary and secondary goals. The primary goal is
generally referred to as a priority level 1 goal. Secondary goals are often labeled level 2,
priority level 3, and so on. It should be noted that trade-offs are not allowed between
higher and lower level goals.

Assume a bank is searching for a site to locate a new branch. The primary goal is to be
located in a five-mile proximity to a population of 40,000 consumers. A secondary goal
might be to be located at least two miles from a competitor. Given the no trade-off rule,
we would first search for a target solution of locating close to 40,000 consumers.

BLENDING PROBLEM
The XYZ Company mixes three raw materials to produce two products: a fuel additive
and a solvent. Each ton of fuel additive is a mixture of 2/5 ton of material A and 3/5 ton
of material C. A ton of solvent base is a mixture of 1/2 ton of material A, 1/5 ton of
material B, and 3/10 ton of material C. Production is constrained by a limited
availability of the three raw materials. For the current production period XYZ has the
following quantities of each raw material: 20 tons of material A, 5 tons of material B,
AGRICULTURAL PLANNING 14
and 21 tons of material C. Management would like to achieve the following priority level
goals:

Goal 1. Produce at least 30 tons of fuel additive.

Goal 2. Produce at least 15 tons of solvent.

Goal programming would provide directions for production.

INTEGER PROGRAMMING

Integer programming is useful when values of one or more decision variables are
limited to integer values. This is particularly useful when modeling production
processes for which fractional amounts of products cannot be produced. Integer
variables are often limited to two values—zero or one. Such variables are particularly
useful in modeling either/or decisions.

Areas of business that use integer linear programming include capital budgeting and
physical distribution. For example, faced with limited capital a firm needs to select
capital projects in which to invest. This type of problem is represented in Table 1.

As can be seen in the table, capital requirements exceed the available funds for each
year. Consequently, decisions to accept or reject regarding each of the projects must be
made and integer programming would require the following integer definitions for each
of the projects.
x1 = 1 if the new office project is accepted; 0 if rejected
x2 = 1 if the new warehouse project is accepted; 0 if rejected
x3 = 1 if the new branch project is accepted; 0 if rejected

A set of equations is developed from the definitions to provide an optimal solution.

NONLINEAR PROGRAMMING

Nonlinear programming is useful when the objective function or at least one of the
constraints is not linear with respect to values of at least one decision variable. For
example, the per-unit cost of a product may increase at a decreasing rate as the number
of units produced increases because of economies of scale.

STOCHASTIC PROGRAMMING

Stochastic programming is useful when the value of a coefficient in the objective

function or one of the constraints is not know with certainty but has a known
probability distribution. For instance, the exact demand for a product may not be
known, but its probability distribution may be understood. For such a problem, random
values from this distribution can be substituted into the problem formulation. The

AGRICULTURAL PLANNING 15
optimal objective function values associated with these formulations provide the basis
of the probability distribution of the objective function.

MARKOV PROCESS MODELS

Markov process models are used to predict the future of systems given repeated use.
For example, Markov models are used to predict the probability that production
machinery will function properly given its past performance in any one period. Markov
process models are also used to predict future market share given any specific period's
market share.

TOOLS OF LINEAR PROGRAMMING

The LP model is made up of different tools that are essential in the optimization
of linear programming models. These include software like LINDO, LINGO, and
TORA can be mentioned. Below are some popular software used to optimize solutions
in LP problems.
Excel Solver
Microsoft Excel has powerful functions as a quantitative analysis tool. It can
provide a simple Solver function for identified feasible and optimum solutions.
Explained the steps of how adding the Add-Ins solver function in MS Excel with a
detailed description. The Solver is often referred to as the what-if analysis method.
Many researchers used MS-Excel to solve most optimization problems easily and
quickly. For example, provided a model for controlling uncertainty in agriculture
income by Fuzzy Multi-objective Linear Programming (FMOLP) model that solves it
very simply using the Solver tool in MS-Excel.
AMPL
AMPL (A Mathematical Programming Language) is used to solve mathematical
models to optimize the model efficiently. It can solve models with many variables and
constraints. Other research used AMPL to solve the vegetables' delivery problem to
the point of sale within a short period. Also, solved the problem of production and
distribution of agricultural products by using AMPL with MINOS.
Other Tools
There are other tools used to solve the LP problem. For example, used Python 2.7
and PyCharm as a code editor for creating an analytical program to maximize the
revenue of the farm depending on the farmers' decisions during the plantation
season. Other researchers evaluated their solutions by using LINGO software. The
major benefit of LINGO is its ability to formulate and analyzes big problems.
We can say that all previous tools can solve problems quickly and efficiently on
formulating equations and solve problems. With linear programming models, these
tools are essential in the optimization problems, and identify the optimal solutions
helps to get valuable insight that enhances the decision-making process.

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 TYPES OF MODELS STUDIED SO FAR

1) Transportation Model

Transportation problem basically deals with the problem, which aims to find the
best way to fulfill the demand of n demand points using the capacities of m
supply points. While trying to find the best way, generally a variable cost of
shipping the product from one supply point to a demand point or a similar
constraint should be taken intoconsideration.

Mathematic model

Objective Function:
Min Z = c11x11 + c12x12 + ... + c1nx1n + c21x22 + c22x22 + ... +
c2nx2n +........................................... + cm1xm1 + cm2xm2+ ...
+cmnxmn
S.T. Constraints

With capacity constraints:

x11 + x12 + ... + x1n = a1x21 + x22 + ... + x2n = a2
...........................................
xm1 + xm2 + ... +xmn = am
Needs constraints:
x11 + x21 + ... + xm1 = b1x12 + x22 + ... + xm2 = b2
…......................................
x1n + x2n + ... +xmn = bn

and the non negativity constraints; xij  0,

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Methods for finding an initial basic feasible solution

o Northwest corner method

o Minimum cost method
o Vogel method

Northwest corner method

The maximum possible quantity is assigned to the northwest (up left) cell depending on
the supply and demand of the corresponding row or column. The supply of the row and
the demand of the column are adjusted appropriately.

Either the row of which the supply is exhausted or the column of which the demand is
satisfied is crossed out.
If all supplies are exhausted and all demands are satisfied then END, otherwise:
transfer to step 1.

Minimum cost method

Minimum cost method Using the minimum cost method, the route that has the lowest
transportation cost is filled first, and each successively lower cost cell is filled in from
available supply until all demand has been satisfied. This method provides the lowest
possible transportation costs.

Vogel method

Addition - below and right of the transportation tableau – of a new row and a new
column with elements the difference of the two smaller cost elements of each row and
each column respectively.

Selection of the largest element of the added two new lines.

Finding of the minimum element of row i or column j in which belongs the element
identified in step 2.

Assignment of the value xij = min (ai, bj) to the route corresponding to the position of
the smallest element in order to meet the capacity of a source or the demand of a
destination.

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Transportation problems solution methodology

Initial step:
Creation of an initial basic feasible solution using one of the three relevant methods. Transfer
to the termination rule.

Repeating step:
Determination of the incoming variable that will be introduced to the base: Selection of the non
basic variable xij with maximum negative difference cij - ui - vj
Determination of the outgoing variable that will be retransferred from the base: Identification
of the (unique) loop, which vertices are only basic variables.

Determination of the new basic feasible solution:

Addition of quantity θ to each recipient route and deduction from each donor route, so that all
constraints of sources and destinations are met.

Example

The ICARE Company has three plants located throughout a state with production capacity 50,
75 and 25 gallons. Each day the firm must furnish its four retail shops R1, R2, R3, & R4 with at
least 20, 20 , 50, and 60 gallons respectively. The transportation costs (in Rs.) are given below.

The economic problem is to distribute the available product to different retail shops in such a
way so that the total transportation cost is minimum?
Solution: Starting from the North West corner, we allocate min (50, 20) to P1R1, i.e., 20 units
to cell P1R1. The demand for the first column is satisfied. The allocation is shown in the
following table.

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Now we move horizontally to the second column in the first row and allocate 20 units to cell
P1R2. The demand for the second column is also satisfied. Proceeding in this way, we observe
that P1R3 = 10, P2R3 = 40, P2R4 = 35, P3R4 = 25. The resulting feasible solution is shown in
the following table.

Here, number of retail shops (n) = 4

Number of plants (m) = 3.

Number of basic variables = m + n – 1 = 3 + 4 – 1 = 6.

Initial basic feasible solution

The initial basic feasible solution is x11=20, x12=5, x13=20, x23=40, x24=35, x34=25 and
minimum cost of transportation=20 X 3 + 20 X 5 + 10 X 7 + 40 X 8 + 35 X 2 + 25 X 2 = 670.

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 Assignment problem

Assignment Problem is a special type of linear programming problem where the objective is to
minimize the cost or time of completing a number of jobs by a number of persons.

The assignment problem in the general form can be stated as follows:

“Given n facilities, n jobs and the effectiveness of each facility for each job, the problem is to
assign each facility to one and only one job in such a way that the measure of effectiveness is
optimize (Maximized or Minimized).”

Several problems of management have a structure identical with the assignment problem. For
example:

Example:
A manager has four persons (i.e. facilities) available for four separate jobs (i.e. jobs) and the cost
of assigning (i.e. effectiveness) each job to each person is given. His objective is to assign each
person to one and only one job in such a way that the total cost of assignment is minimized.

Hungarian Method:

Although an assignment problem can be formulated as a linear programming problem, it is

solved by a special method known as Hungarian Method because of its special structure. If the
time of completion or the costs corresponding to every assignment is written down in a matrix
form, it is referred to as a Cost matrix. The Hungarian Method is based on the principle that if a
constant is added to every element of a row and/or a column of cost matrix, the optimum
solution of the resulting assignment problem is the same as the original problem and vice versa.
The original cost matrix can be reduced to another cost matrix by adding constants to the
elements of rows and columns where the total cost or the total completion time of an assignment
is zero. Since the optimum solution remains unchanged after this reduction, this assignment is
also the optimum solution of the original problem. If the objective is to maximize the
effectiveness through Assignment, Hungarian Method can be applied to a revised cost matrix
obtained from the original matrix.

Balanced Assignment Problem:

Balanced Assignment Problem is an assignment problem where the number of facilities is
equal to the number of jobs.

Unbalanced Assignment Problem:

Unbalanced Assignment problem is an assignment problem where the number of facilities is
not equal to the number of jobs. To make unbalanced assignment problem, a balanced one, a
dummy facility(s) or a dummy job(s) (as the case may be) is introduced with zero cost or time.

Dummy Job/Facility:
A dummy job or facility is an imaginary job/facility with zero cost or time introduced to make
an unbalanced assignment problem balanced.

AGRICULTURAL PLANNING 21
Infeasible Assignment:
An Infeasible Assignment occurs in the cell (i, j) of the assignment cost matrix if ith person is
unable to perform jth job. It is sometimes possible that a particular person is incapable of doing
certain work or a specific job cannot be performed on a particular machine. The solution of the
assignment problem should take into account these restrictions so that the infeasible
assignments can be avoided.

This can be achieved by assigning a very high cost to the cells where assignments are
prohibited.

Steps Involved in solving minimization problems:

Step 1: See whether number of rows are equal to number of columns. If yes, problem is balanced
one; if not, then add a Dummy Row or Column to make the problem a balanced one by allotting
zero value to each cell of the Dummy Row or Column, as the case may be.
Step 2: Row Subtraction: Subtract the minimum element of each row from all elements of that
row.
Note: If there is zero in each row, there is no need for row subtraction.
Step 3: Column Subtraction: Subtract the minimum element of each column from all elements
of that column.
Note: If there is zero in each column, there is no need for column subtraction.
Step 4: Draw minimum number of horizontal and/or vertical lines to cover all zeros. To draw
minimum number of lines the following procedure may be followed:
1. Select a row containing exactly one uncovered zero and draw a vertical line through the column
containing this zero and repeat the process till no such row is left.
2. Select a column containing exactly one uncovered zero and draw a horizontal line through the
row containing the zero and repeat the process till no such column is left.
Step 5: If the total lines covering all zeros are equal to the size of the matrix of the Table, we have
got the optimal solution; if not, subtract the minimum uncovered element from all uncovered
elements and add this element to all elements at the intersection point of the lines covering zeros.
Step 6: Repeat Steps 4 and 5 till minimum number of lines covering all zeros is equal to the size
of the matrix of the Table.
Step 7: Assignment: Select a row containing exactly one unmarked zero and surround it by,
‘and draw a vertical line through the column containing this zero. Repeat this process till no
such row is left; then select a column containing exactly one unmarked zero and surround it by,
and draw a horizontal line through the row containing this zero and repeat this process till no
such column is left.
Note: If there is more than one unmarked zero in any row or column, it indicates
that an alternative solution exists. In this case, select anyone arbitrarily and pass
two lines horizontally and vertically.
Step 8: Add up the value attributable to the allocation, which shall be the minimum value.
Step 9: Alternate Solution: If there are more than one unmarked zero in any row or column,
select the other one (i.e., other than the one selected in Step 7) and pass two lines horizontally
and vertically. Add up the value attributable to the allocation, which shall be the minimum
value.

AGRICULTURAL PLANNING 22
 LPP GRAPHICAL MODEL

A linear program can be solved by multiple methods. In this section, we are going to look at the
Graphical method for solving a linear program. This method is used to solve a two-variable linear
program. If you have only two decision variables, you should use the graphical method to find
the optimal solution.

A graphical method involves formulating a set of linear inequalities subject to the constraints.
Then the inequalities are plotted on an X-Y plane. Once we have plotted all the inequalities on a
graph the intersecting region gives us a feasible region. The feasible region explains what all
values our model can take. And it also gives us the optimal solution.

Let’s understand this with the help of an example

Example: A farmer has recently acquired a 110 hectares piece of land. He has decided to grow
Wheat and barley on that land. Due to the quality of the sun and the region’s excellent climate,
the entire production of Wheat and Barley can be sold. He wants to know how to plant each
variety in the 110 hectares, given the costs, net profits and labor requirements according to the
data shown below:

Variety Cost (Price/Hec) Net Profit (Price/Hec) Man-days/Hec

Wheat 100 50 10
Barley 200 120 30

The farmer has a budget of US$10,000 and availability of 1,200 man-days during the planning
horizon. Find the optimal solution and the optimal value.

Solution: To solve this problem, first we formulate our linear program.

Formulation of Linear Problem:

Step 1: Identify the decision variables

The total area for growing Wheat = X (in hectares)

The total area for growing Barley = Y (in hectares)

X and Y are my decision variables.

Step 2: Write the objective function

Since the production from the entire land can be sold in the market. The farmer would want to
maximize the profit for his total produce. We are given net profit for both Wheat and Barley.
The farmer earns a net profit of US$50 for each hectare of Wheat and US$120 for each Barley.

Our objective function (given by Z) is, Max Z = 50X + 120Y

Step 3: Writing the constraints

AGRICULTURAL PLANNING 23
1. It is given that the farmer has a total budget of US$10,000. The cost of producing Wheat and
Barley per hectare is also given to us. We have an upper cap on the total cost spent by the
farmer. So our equation becomes:

100X + 200Y ≤ 10,000

2. The next constraint is the upper cap on the availability of the total number of man-days for
the planning horizon. The total number of man-days available is 1200. As per the table, we are
given the man-days per hectare for Wheat and Barley.

10X + 30Y ≤ 1200

3. The third constraint is the total area present for plantation. The total available area is 110
hectares. So the equation becomes,

X + Y ≤ 110

Step 4: The non-negativity restriction

The values of X and Y will be greater than or equal to 0. This goes without saying.

X ≥ 0, Y ≥ 0

We have formulated our linear program.

To plot for the graph for the above equations, first I will simplify all the
equations.

100X + 200Y ≤ 10,000 can be simplified to X + 2Y ≤ 100 by dividing by 100.

10X + 30Y ≤ 1200 can be simplified to X + 3Y ≤ 120 by dividing by 10.

The third equation is in its simplified form, X + Y ≤ 110.

Plot the first 2 lines on a graph in the first quadrant (like shown below)
The optimal feasible solution is achieved at the point of intersection where the budget & man-
days constraints are active. This means the point at which the equations
X + 2Y ≤ 100 and X + 3Y ≤ 120 intersect gives us the optimal solution.

The values for X and Y which gives the optimal solution is at (60,20).

To maximize profit the farmer should produce Wheat and Barley in 60 hectares and 20
hectares of land respectively.

The maximum profit the company will gain is,

Max Z = 50 * (60) + 120 * (20) = $5400

AGRICULTURAL PLANNING 24
 Graphical Representation of the inequalities with an Optimal feasible region

AGRICULTURAL PLANNING 25
 AGRICULTURAL PLANNING
The agricultural sector is at the heart of contemporary societies as well as civilizations.
The sector broadly encompasses livestock and the cultivation of plants. The
agricultural sector makes an imperative role in meeting the growing food
consumption demand across the world amidst the ever-increasing population.
However, the increase in agricultural activities demands agricultural productivity and
improved overall efficiency. Today the agriculture sector moves from agriculture1.0
to 4.0, as shown in Figure1. The Figure explains how the agriculture sector was
changed in a different era. In the first era, traditionally, the farmer used simple tools
such as sickles, axes, pickaxes, shovels, etc. Agriculture productions depend on the
workforce and animals to do agricultural activities. In this period, the production was
very low because the people get tired and they cannot stand the hard work. Today,
agriculture is transforming into Agriculture 4.0, which is called "Smart Farms." The
emergence of many technologies like Big data, Artificial Intelligence, Remote Sensing,
and Cloud Computing continue to improve agricultural efficiency. The efficiency
manifests through a reduction in the water quantity used in irrigation, resource
utilization, and overall environmental effects.
It is also an area where the farmer needs guidance about agricultural operations
such as scheduling equipment for agricultural use, optimal allocation of economic,
social, and developmental resources, optimizing the planting pattern, and
agricultural land, etc. to maximize the incomes. For optimum agricultural production,
the proper use of land, crop, soil, and water resources is necessary. Unfortunately,
due to the intricacy of the agricultural sector, farmers have faced challenges in making
the right decision regarding what to grow, which season, within available resources.
The critical challenge is selecting the best among several activities. Subsequently,
deciding for optimum selection of activities is a key issue.

Quantitative methods such as LP have a profound impact in addressing most problems

faced by farmers in this era of agriculture 4.0. In this regard, Linear Programming was
designed to help farmers in planning and making decisions about attaining and
maximizing efficiency in production planning and resource allocation. The farmer needs
to manage the available resources on the farm, such as labors, fertilizers, seeds, energy,
etc. to maximize the profit. The previous researchers using LP in different aims, for
example helped farmers maximize profits based on proper chose the best crop at the right
time and optimize land and water distributions for each of these crops. Also, attempted
to analyze the possibilities of increasing farm profitability by determining the optimum
crop mix for crop cultivation under the following constraints: total area, intercropped
area, and investment amount. Therefore, production maximization does not guarantee
profit maximization. Therefore, it is apparent that linear programming methods have a
significant role in optimizing the production planning of crops under a set of constraints
set by farmers.

AGRICULTURAL PLANNING 26
 However, due to the lack of survey paper on LP's applications in agriculture's
topics, this review will investigate the applications of the LP model in the agriculture
sector in different areas. Below, we summarize our major objectives:

 We outline the various available tools that are central to analyzing the LP
model’s results and get useful insight that helps in making the right decisions.
 We demonstrate the six of the most common applications that have used LP
to improve production, optimize resource allocations, and increase profits.
 We not only investigate the set of previous work but also present a summary
of the insights behind each LP application and the model that was used to solve
a certain problem.
 We particularly focus in this review on optimizing planting patterns,
agricultural land, and resource allocation among others.

Linear Programming Model

The Linear Programming model is a technique that studies the maximum or minimum
linear objective function under several restrictions to get optimum solutions. Initially, LP
was applied to solve problems relating to the military and industrial sectors. Today, the
model is widely applied to extensive financial, marketing, manufacturing and agricultural
problems. In Finance, LP was used to identify capital budget, asset allocation, financial
planning, etc. While marketing sector used LP to solve the problem related to marketing
research and media selection. Also, LP was used to solve a problem related to the
manufacturing sector for product mix problem, production, and scheduling. Similarly,
the model was applied in the agricultural sector to optimize crop patterns as well as
resource allocations (water, land, fertilizers, etc.).

Uses of LP model

The model is applicable in identifying the optimal solution for selecting or combining
agricultural projects to maximize income or reduce costs within available resources. It's
an alternative method to the traditional way, which is "trial and error" that farmers were
suffering from using it. There are three main reasons for using the LP model to solve most
problems that happen in the farms and these are:

1. Increasing profitability of small farmers' crop production and help them

fulfill production requirements for food crops, and encourage them to use
environmental resources.
2. Used to optimize profit, to examine whether or not profit increased after
implementing the model.
3. Many researchers have been using the LP model's types, such as the fuzzy
goal programming, to solve their problems in the farm field, where ambiguity
and vagueness affect decision-making.

AGRICULTURAL PLANNING 27
This technique can efficiently be applied on various levels in agriculture:
o Farm level
o Regional sector level
o National sector level.

There are many practical problems in agriculture which can efficiently be solved with the linear
programming. Some of them are:

1. Least cost ration formulation,

2. Optimal resource allocation,
3. Otimisation structure of plant production,
4. Opimization of livestock production
5. Optimization of transport

Formulating LP model

This study is premised on optimization by applying the LP model, which is a

mathematical method of solving problems involving the quantity to be optimized
(maximized or minimized) when certain constraints are added to that quantity. It is
considered to be the most popular technique in operational research for models with
objectives and constraints that are all linear functions.

Regardless the problem, each model of linear programming consists of

Max Z = C1X1+C2X2+C3X3+C4X4 +………………………….+CnXn

S.T. Constraints:
a11X1+a12X2+a12X13+……..+a1nXn <= b1
a21X1+a22X2+a23X23………+a2nXn<=b2
.
.
.
.
am1X1+am2X2+………………..+amnXmn<=bn

Xi>=0 (Non-negative Constraints)

Among the most considered criteria in Objective function in agriculture are:

• Maximize total production,

• Maximisation revenue/income,
• Minimisation cost,
• Minimize labour force use,
• Minimize fertilizer usage,
• Minimize water usage,
• Minimize total travelling distance of truck

AGRICULTURAL PLANNING 28
For the various problems which are solved with the linear programming, various constraints
are defined. A sample for optimization problems constraint could be:

1. Avalilable arable agricultural land

2. Agrotechnical constratints (e.g. crop – rotation)
3. Available labour force
4. Available agricultural mechanization resource
5. Limitation of the barn/ stable capacity
6. Available capital
7. Martek constraints....

For example, we present one linear programming model for dairy farm which includes crop
production (own forage crops production)

Objective function:

S.T.
Constraints

Non negativity Constraint

{Indexes:
p – number of group activities
q – number of activities in a group
r – number of group limitations
s – number of limitations in a group

Activities:

xij ;i=1,2,...,p j=1,2,...,q

Constraints:
ukl ;k=1,2,...,r l=1,2,...,s

Coefficients in a objective function:

cij ; i=1,2,...,p j=1,2,...,q

Coefficients in constratints:
- the quantity of jth- activities within a ith- group of activities lth- constraints i rth-group of
limitations ijkl a

AGRICULTURAL PLANNING 29
Solving Agricultural Problems by Applying Linear Programming

In most agriculture planning problems, LP was used in different subjects, such as

allocation of limited resources, including acreage of the land, availability of the water
and labor, granted capital, etc. that aims to maximize the net income. It evaluates the
existing resources and then gives appropriate solutions based on quantitative
analysis. In general, there are a wide variety of applications of LP in agriculture.
Figure below illustrates most of the use of linear programming in agriculture. The
following subsections describe the applications of LP in detail.

Feed Mix Problem

The feed is one of the important variables in assessing the efficient production of
livestock. The feed mix problem aims to identify the content of the feed mix by mixing
in particular proportions of raw material with different contents. The required quality
properties and minimum costs should be determined to get the ideal feed mix. The LP
model is the most common approach to solve the feed mix problem. Generally, the feed
mix was used to increase the nutrient amount and weight gain, and livestock yield. LP
model formulates feed mixes to have a minimum cost to satisfy energy and nutritional
requirements needs. The objective function of LP often focuses on minimizing the
overall price of livestock feed, according to the limits of feed sources in each area or
season. Many researchers used LP to optimize the feed mix cost based on livestock
requirements.
Diet-mixing of nutritional needs is also another area in which the model depends on
multiple feed mixes to achieve an optimum feed mixture, taking into account the
animals' nutritional requirements.
The researchers used LP to identify the optimum cropping pattern to give the region a
maximum sales volume. The model is subject to various limitations, including water
supply and the self-sufficiency of the crops, and land area.

AGRICULTURAL PLANNING 30
 Methodology
Under agriculture planning, the farm planner seeks to develop good farm plans in
a normative sense and strives to produce farm plans which improve upon existing
plans.

Undoubtedly, the availability of Linear Programming (L.P.) and related

techniques contributed to the attainment of these goals. The linear production
model became the most common and almost universal procedure for
solving optimizing problems in agriculture planning. Although the
standard model was rather generally applicable and the computing facilities
expanded rapidly many problems remain. The most critical are those related to:

a) the supply of data (data problem)

b) the organization of the preparatory work and the planning work itself
(routine application problem)
c) the description of the real-world decision-making environment in the
computational model (isomorphism problem)

Since the value of the plans produced i.e., the qualitative result of agriculture
planning work depends greatly upon improvements in these three critical problem
areas, considerable effort has been directed to these areas in recent years in order
to overcome or at least to lower obstacles to better farm plans.

It can be visualized that modern recording and storing techniques will permit the
possibility of arriving at an economical form of a data collecting system in the
future. This is possible regardless of the social system involved. But we must keep
in mind that even the most sophisticated data processing system can only supply
historical data. It cannot by itself predict future events and economic conditions.
Here we shall always have to deal with uncertainty, which in a changing world has
to be attacked with other means.

Modified L.P. methods such as parametric programming or

programming discretely with variations in prices and/or resources,
have been used to evaluate the influence of imprecise or uncertain data on
agriculture plans (sensitivity analysis), but even the availability of better data will
not solve our problems very far beyond simple linear programming results if the
decision-making process is not changed. That means the advances in terms of
better data supply are necessary but not sufficient conditions for advances in
agriculture planning.
AGRICULTURAL PLANNING 31
In most approaches to land use planning the aggregation process remains
problematic.

Some major aggregation problems are:

 variables that are exogenous at the micro level may be endogenous at the
micro or macro level;
 aggregation bias; and
 aggregate decision problems involve choices on at least two levels.

In the transition from farm-level to sector-level analysis, an aggregation bias

arises because all farms are not alike. Ideally, to cause the aggregation to be
correct, a model should be constructed for every individual farm.

PROBLEM DESCRIPTION
To illustrate this, with an example onto which the usage of linear programming is shown refers
on the least cost ration formulation. In this example there will be no detail explanation of the
procedure of usage of MS Excel Solver.

The criteria which is used in this task is the minimization of the ration costs. The task is created
by using the existing literature data (Krstic et. Al, 2000) with some modifications.

Task:

To make an optimal ration for cows during the summer period. Considering the average weight
(500kg) and daily lactation of cows (15 kg 4% masti), the daily needs of important nutritive are:

Table 1. Daily needs for dairy cow

No. Component Request

1. Energy units 12.5 kg
(E.U.)
2. Digest 1.45 kg
protein
(D.G.)
3. Calcium 0.09 kg
(Ca)
4. Phosphorus 0.06 kg
(P)
5. Maximum 40 kg
green
biomass

AGRICULTURAL PLANNING 32
 Table 2. Chemical composition of nutrients

Nutritious E.U. D.P. Са Р Price

(kg) (kg) (kg) (kg) (EUR/kg)
Mark Name
Х1 Maize meal 1.222 0.057 0.0004 0.0025 0.150
Х2 Sunflower pellets 0.901 0.336 0.0028 0.0008 0.300
Х3 Sobean pellets 1.190 0.387 0.0062 0.0058 0.350
Х4 Wheat meal 0.712 0.126 0.0012 0.0100 0.150
Х5 Fresh alfalfa 0.172 0.036 0.0035 0.0007 0.030
Х6 Fresh maize 0.202 0.015 0.0013 0.0003 0.025
Х7 Bone meal 0.000 0.000 0.3160 0.1460 0.450

Solution:

LPP Formulation of the above Situation:

Let the decision Variable be Xi which denotes the name of the specific nutrient required in
various separate unit. (Where i= 1,2,3….7).

Objective function:

Min Z = 3X1 + 4X2 + 6.5X3 + 3X4 + 0.34X5 +0.26X6 + 4.5X7

List of constraints:

Constraint for green fresh biomass:

o X5 + X6 ≤ 40

Constraint for energy:

o 1.222X1 + 0.901X2 + 1.19X3 + 0.712X4 + 0.172X2 + 0.202X6 = 12.5

Constraint for digest protein:

o 0.057X1 + 0.336 X2 + 0.387X3 + 0.126X4 + 0.036X5 + 0.015X6 = 1.45

Constraint for calcium:

o 0.0004X1 + 0.0028 X2 + 0.0062X3 + 0.0012X4 + 0.0035X5 + 0.0013X6 + 0.316X7 = 0.09

Constraint for phosphorus:

o 0.0025X1 + 0.0008 X2 + 0.0058X3 + 0.01X4 + 0.0007X5 + 0.0003X6 + 0,146X7 = 0.06

Non negative Constraints: Xi >= 0 (i=0,1,2…7)

AGRICULTURAL PLANNING 33
SOLVER SOLUTION

Solution after bringing the Optimal solution on Excel.

Maize Sunflower Soybean Wheat Fresh Fresh Bone

Constraints/Variables Meals Pellets Pellets Meal Alfalfa Maize Meal
Descision Variables X1 X2 X3 X4 X5 X6 X7
Objective Coefficients 0.15 0.3 0.35 0.15 0.034 0.026 0.45
Target Solution 1.81559 0 0 3.6634 13.567 26.433 0.0096
Constraints for Green Fresh Biomass 1 1
Constraints for Energy Units 1.222 0.901 1.19 0.712 0.172 0.202 0
Constraints for Digest Protein 0.057 0.336 0.387 0.126 0.036 0.015 0
Constraints for Calcium 0.0004 0.0028 0.0062 0.0012 0.0035 0.0013 0.316
Constraints for Phosphorus 0.0025 0.0008 0.0058 0.01 0.0007 0.0003 0.146

Constraints LHS Relation RHS

OPTIMAL SOLUTION 1.974709

Constraints for Green Fresh

Biomass 40 <= 40
Constraints for Energy Units 12.5 = 12.5
Constraints for Digest Protein 1.45 = 1.45
Constraints for Calcium 0.09 = 0.09
Constraints for Phosphorus 0.06 = 0.06

Interpretation:

As it could be seen from the Table, for a daily ration it is needed:

Maize ration : 1.82 kg

Sunflower pellets : 0.00 kg
Soybean pellets : 0.00 kg
Wheat ration : 3.66 kg
Fresh alfalfa : 13.57 kg
Fresh maize : 26.43 kg
Bone ration : 0.096 kg

AGRICULTURAL PLANNING 34
By congregating the quantity of Fresh alfalfa (13.57 kg) and Fresh maize (26.43) it is
visible that the constraint number 1 - Constraint for green fresh biomass is totally used.
It means that the green fresh nutrient is more competitive than the rest of the nutrients.

The linear programming even offers data per levels of competitiveness of certain
variables (in this case the nutrients). It is acquired by the post optimal analyses, yet it os
over the scope of this course.

Problem 2

A farmer in Georgia owns 45 acres of land, where they can plant wheat and corn. Each acre
planted with wheat generates a profit of $200, whereas an acres of corn generates a profit of
$300 (after harvested and sold). To plant and harvest an acre of each crop, the farm uses
labour and fertilizers as follows:

WHEAT CORN
Labor 3 2
Fertilizer 2 4
Land 1 1
Profit 200 300

Formulate the LPP function optimizing the maximum profit. Using Solver, bring the optimal
solution of the problem.

Solution:

Let the decision variable be X1, X2 for Wheat and Corn respectively.

Objective Function

Max Z= 200X1+300X2

Subject to:

Labor Constraint 3X1+2X2<=100

Fertilizer Constraint 2X1+4X2<=120
Land Constraint X1+X2<=45
Non Negativity X1,X2>=0

AGRICULTURAL PLANNING 35
Using Solver, we get the Optimal Solution:
CORN
WHEAT (X1) (X2) LHS RHS
Target Solution 20 20
Labor 3 2 100 <= 100
Fertilizer 2 4 120 <= 120
Land 1 1 40 <= 45
Profit 200 300 10000

Optimal Solution 10000

Decision
Variable(X1,X2) (20,20)

Implications And Importance of Management

Science:
The implemented processes require constant analysis and review. Management
science will provide answers and prediction, but just like any other approach to
management, it’s not a magic pill to fix everything.
Therefore, you must make sure you continue to collect data and analyze the
effectiveness of the processes in place. Only this will guarantee they are working
as intended and will provide the organization better chances of tweaking the
approach as you go.
Management science is a logical and analytical approach to management
and how it impacts an organization. The approach has been used in a
variety of industries since its inception during World War II. By using the
approach, an organization is able to identify different management
processes and whether they are working as efficiently as they could.

AGRICULTURAL PLANNING 36
Conclusion
The agribusiness is becoming a field into which various tools are applied which serve as a support
in the realization of the various functions of management. The today’s planning process in the
agribusiness is unthinkable without the usage of some of the quantitative techniques.

The operational researches offer various techniques which could efficiently be applied in the
process of planning in agribusiness. The linear programming is one of the most frequently used
quantitative techniques. There are many practical problems in the field of agribusiness which
could be solved by linear programming.

The relatively good accessibility of software tools provides for the wider usage of the linear
programing. The Add-In Solver within MS Excel is one of the mostly approached such tools.
This material presents practical examples for creating models and solution of problems for linear
programming for crop production and livestock production.

AGRICULTURAL PLANNING 37