COURSE CODE: QMETHODS Part 1: Maximization Problem

COURSE TITLE: Quantitative Methods in Sample Problem:

Business
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check on the other materials provided by their
professors. This reviewer is based on the
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Module 1: Linear Programming
Linear Programming
● is a method of dealing with decision
problems that can be expressed as
constrained linear models. The primary
objectives of all linear programming
models are certainty of the parameters
and linearity of the objective function
and all constraints.
● is a mathematical technique for finding
the best uses of an organization’s
resources.
A tailor has the following materials
available: 18 square meter cotton, 20 square
meter silk, 5 square meter wool. A gown
requires the following: 3 square meters cotton, 2
square meter silk and 1 square meter wool. A
suit requires the following: 2 square meter
cotton, 4 square meter silk. If a gown sells for
P1,200 and a suit for P1,600, how many of each
garments should the tailor make to obtain the
maximum amount of money?
Solution:
Step 01: Represent the unknown in the
problem.
Let: x be the number of gowns, and
y be the number of suits.
Step 02: Tabulate the data about the facts (if
necessary)

Materials Gown (x) Suit (y) Available

Graphical Solution Method
Cotton 3 2 18
● is a two-dimensional geometric analysis
of Linear Programming problems. Silk 2 4 20

Wool 1 0 5

Profit 1200 1600

Note: Step 04: Plot the constraints in the problem
● Objective Function is an expression, on a graph, with gowns (x) shown on the
which shows the relationship between horizontal axis and suits (y) shown in the
the variables in the problem and the vertical axis, using the intercept rule.
firm’s goal.
● Structural Constraint, also called 3x + 2y ≤ 18 2x + 4y ≤ 20 x≤5
explicit constraints, is a limit on the 3x + 2y = 18 2x + 4y = 20 x=5
availability of resources.
● Non-Negativity Constraint, also called
implicit constraints, is a constraint that
restricts all variables to zero or positive.
Using excel table to show the values of x and y

Step 03: Formulate the objective function and 3x + 2y ≤ 18 2x + 4y ≤ 20 x≤5

constraints by restating the information in 3x + 2y = 18 2x + 4y = 20 x=5

mathematical form.

The objective function is:

Maximize: Zj = 1200x + 1600y
Step 05: Identify the area that satisfies the
The constraints are: constraints. The area that satisfies the
Structural constraints is called the feasible region.
3x + 2y ≤ 18 → Cotton ● Feasible Region is the set of
2x + 4y ≤ 20 → Silk combination of values for the decision
x≤5 → Wool variables that satisfy the non-negativity
Non-negativity conditions and all the constraints
x, y ≥ 0 simultaneously that is, the allowable
decision.
● Extreme Point is the corner of the
feasible region. If a Linear
Programming problem has a solution,
 there is always at least one extreme Substitute the value of y in the first equation or
point solution. the second equation to obtain the intersection of
the two.
Step 06: Solve the intersection of the lines, 3x + 2(3) = 18
which satisfies the feasible solution 3x + 6 = 18
simultaneously. 3x = 18 – 6
3x = 12
x = 4 (4,3)

Solving the intersection of the 1st and 3rd

equation
First Equation 3x + 2y = 18
Third Equation x=5

Substitute the value of x in the first constraint.

Solving the intersection of the first and second 3 (5) + 2y = 18
equation using elimination method. 15 + 2y = 18
First equation: 3x + 2y = 18 2y = 18
Second equation: 2x + 4y = 20 2y = 18 – 5
2y = 3
Find the Least Common Multiple (LCM) of x in y = 1.5 (5, 1.5)
order to eliminate the variable x.
2 ( 3x + 2y = 18) → 6x + 4y = 36
3 ( 2x + 4y = 20) → (-) 6x + 12y = 60
0x – 8y = -24
– 8y = -24
y=3
Step 07: Substitute the coordinates at the Part 2: Minimization Problem
extreme points of the feasible region in the
objective function. Sample Problem:
A Drug Company produces a drug from
Objective Function: 1200x + 1600y two ingredients. Each ingredient contains the
same three antibiotics in different proportions.
Extreme Points: Each ingredient 1 produced results in P80 in
cost; each ingredient 2 results in P50 in cost.
The production of the antibiotic is dependent on
the availability of limited resources. The
resource requirements for the production are as
Optimal Solution is a combination of decision follows:
variable amounts that yields the best possible
value of the objective function and satisfies all
the constraints. There may be multiple
combinations of decision variables that yield the
same best value of the objective function. The company wants to determine the
number of grams of each ingredient 1 and 2 that
Step 08: Formulate the decision. must go in to the drug in order to meet the
Therefore, the coordinate ( 4, 3 ) will give the antibiotic’s minimum requirements at the
highest value of P9,600. The decision s to create minimum cost.
4 gowns and 3 suits in order to maximize profit.
In order to solve the problem, it is necessary
Decision: formulate first the standard form of the model.
x = 4 gowns y = 3 suits Zj = Php9,600
Solution:

Step 01: Represent the unknown in the

problem.
Let: x be the quantity of ingredient 1, and
y be the quantity of ingredient 2.
Step 2: Tabulate the data about the facts (if 3x + y ≥6 x+y≥4 2x + 6y ≤ 12
necessary). 3x + y = 6 x+y=4 2x + 6y = 12

3x + y ≥6 x+y≥4 2x + 6y ≤ 12

Step 03: Formulate the objective function and 3x + y = 6 x+y=4 2x + 6y = 12

constraints by restating the information in

mathematical form.

The objective function is:

Maximize: Zj = 80x + 50y Step 05: Identify the area that satisfies the
constraints. The area is called the feasible

The constraints are: region.

Structural
3x + y ≥ 6 → antibiotic 1 Step 06: Solve the intersection of the lines,

x+y≥4 → antibiotic 2 which satisfies the feasible solution

2x + 6y ≥ 12 → antibiotic 3 simultaneously.

Non-negativity
x, y ≥ 0

Step 04: Plot the constraints in the problem

on a graph, with ingredient 1 (x) shown on
the horizontal axis and ingredient 2 (y) shown
in the vertical axis, using the intercept rule.

Solving the intersection of the first and second

equation using elimination method.
First equation: 3x + y = 6
Second equation: x+y=4
Find the Least Common Multiple (LCM) of x in Substitute the value of x in the first constraint.
order to eliminate the variable x. x+1=4
1 (3x + y = 6) → 3x + y = 6 x = 4 -1
3 (x + y = 4) → (-) 3x + 3y = 12 x = 3 (3,1)
0x – 2y = -6
– 2y = -6
y=3

Substitute the value of y in the first equation or

the second equation to obtain the intersection of
the two.
3x + 2 = 6
3x = 6 – 3
3x = 3
Step 07: Substitute the coordinates at the
x = 1 (1,3)
extreme points of the feasible region in the
objective function.
Solving the intersection of the 1st and 3rd
equation
Objective Function: 80x + 50y
First Equation: x+y=4
Second Equation: 2x + 6y = 12
Extreme Points:

Find the Least Common Multiple (LCM) of x in

order to eliminate the variable x.
2 (x + y = 4) → 2x + 2y = 8
1 (2x + 6y = 12) → (-) 2x + 6y = 12
Step 08: Formulate the decision.
0x – 4y = -4
Therefore, the coordinate ( 1, 3 ) will give the
– 4y = -4
lowest value of P230. The decision is to mix 1
y=1
unit of ingredient 1 and 3 units of ingredient 2 in
order minimize cost.
Decision: ● Opportunity Cost is the cost of the
x = 1 ingredient 1 y = 3 ingredient 2 opportunities that are sacrificed in order
Zj = Php230 to take a certain action.

Module 2: Vogel’s Approximation Method Sample Problem:

(VAM) The Epsilon Computers Company sells
desktop computers to universities in the
Transportation Model university belt, and ship them from three
● is a linear programming problem in distribution warehouses. The firm is able to
which a product is to be transported supply the following numbers of desktop
from a number of sources to a number computers to the universities by the beginning of
of destinations at the minimum cost or the academic year:
maximum profit.
Distribution Warehouse Supply
● Destination is a point of demand in a
Sta. Mesa 150
transportation problem and Origin is the
source or supply location in a Taft Avenue 200

transportation problem. Unused Squares Divisoria 50

are squares, which represent routes
Total 400
where no quantity is shipped between a
source destination while used squares in
The shipping cost per desktop computer from
the transportation problem are called
each distributor to each university are as
Stone Squares.
follows:

At
Vogel’s Approximation Method (VAM)
● An algorithm that finds an initial From A B C
feasible solution to a transportation 1 7 5 9
problem by considering the “penalty
2 10 12 10
cost” of not using the cheapest available
3 6 3 14
route.
Universities have ordered desktop computers Step 02: Allocate 50 units of cell X3B that
that must be delivered and installed by the contains the lowest cost in row 3 and cross out
beginning of the academic year: row 3. Compute for the next opportunity cost.

University/College Demand (desktop

computer)

CEU 100

FEU 80

UE 220

Total 400

Solution:

Step 03: Then identify the difference of the

Step 01: Determine the difference of the lowest lowest and second lowest cost alternatives for
and second lowest cost alternatives for each row each remaining row or column. Identify the row
or column. Identify the row or column with or column with largest opportunity cost.
largest opportunity cost.
Step 04: Allocate 30 units in cell X1B that
contains the lowest cost in column B and cross
out column B. Compute for the next opportunity
cost.
Step 05: Again select the largest difference
between the lowest and second lowest cost
alternatives for each row or column. Identify the
row or column with the largest opportunity cost.
Step 06: Allocate 120 units in cell X1A that
contains the lowest cost in column A and cross
out column A. If there are only two unused
squares, select the lowest cost and allocate the
necessary amount.
Step 07: In the previous table the lowest cost is
in X1C. Allocate 20 units in X1C and then
allocate 200 units in X2C.
Summary of Steps in Vogel’s Approximation
Method (VAM)
1. For each row with an available supply
and each column with an unfilled
demand, calculate an
opportunity/penalty cost by subtracting
 the smallest entry form the second
smallest entry for a minimization
problem. For maximization calculate an
opportunity cost by getting the
difference between the highest and
second highest entry.
2. Identify the row or column with largest
opportunity/penalty cost for
minimization or opportunity/penalty
profit maximization. (Ties may be
broken arbitrarily.)
3. Allocate the maximum amount possible
to the available route with the lowest
cost for minimization or highest revenue
for maximization in the row or column
selected in Step 2.
4. Reduce the appropriate supply and
demand by the amount allocated in Step
3.
5. Remove any rows with zero available
supply and columns with zero unfilled
demand form further consideration.
6. Return to Step 1.

GOOD LUCK ON YOUR PRELIM

EXAMINATIONS, AFFILIATES! 😊