Linear Programming in

Operational Research

Ashutosh Sharma 23/BBA/33

Arnav Sharma 23/BBA/30
Aum Goel 23/BBA/36
Riti Kapoor 23/BBA/129
Linear Programming: Optimizing with
Linearity

● Linear Programming (LP) is a mathematical technique used in OR to find the

optimal solution for a problem.
● It involves a linear objective function (e.g., maximizing profit, minimizing cost) that
needs to be optimized.
● The solution is achieved while considering constraints (limitations on resources,
production, etc.) that are also linear in nature.
● Key components of an LP problem:
○ Decision variables (quantities to be determined)
○ Objective function (what needs to be optimized)
○ Constraints (limitations to consider)
A Timeline of LP: From Early Ideas to
Modern Applications

○ The concept of linear optimization can be traced back to the 18th

century with early work by Georg Cantor.
○ In the 1930s, Leonid Kantorovich developed linear programming
techniques for economic planning in the Soviet Union.
○ The simplex method, a widely used algorithm for solving LP
problems, was formalized by George Dantzig in the 1940s during
World War II to optimize military logistics.
○ Since then, LP has become a cornerstone of operational research
with vast applications across various industries.
The Benefits of LP: Optimizing for
Success

● Improved decision-making: Provides a data-driven approach for

optimal solutions based on mathematical models.
● Increased efficiency: Helps optimize resource allocation and
production processes, leading to better utilization.
● Cost savings: Reduces operational costs by identifying the most
efficient solutions that minimize waste.
● Enhanced planning: Enables better forecasting and planning by
considering various scenarios and constraints.
● Wider applicability: Can be applied to a wide range of problems
across different industries.
 Putting LP to Work: Real-World
Applications

● Production planning: Optimizing production levels for different

products while considering resource limitations.
● Resource allocation: Assigning resources like machines, workers,
or budget to projects efficiently.
● Blending problems: Determining the optimal mix of ingredients
for a product to achieve desired qualities at minimal cost.
● Transportation problems: Finding the most cost-effective way to
transport goods.
Key Components of an LP Model

● Objective Function: Represents the goal we want to

optimize (e.g., maximize profit, minimize cost)
● Variables: Represent the decision-making factors we can
control (e.g., production levels, resource allocation)
● Constraints: Represent limitations that restrict the feasible
solutions (e.g., resource availability, production capacity)
Formulating the LP Model

● Let's consider a company that produces two products, A and B.

● Each unit of product A requires 1 hour of labor and 2 machine
hours, while each unit of product B requires 2 hours of labor and
1 machine hour.
● The company has 100 hours of labor and 120 machine hours
available per day.
● The profit per unit of product A is $10, and the profit per unit of
product B is $15.
Solving the LP Model

● There are various methods for solving LP models,

including:
○ The simplex method (a common iterative approach)
○ Software tools specifically designed for LP
Interpreting the Results

● The solution of the LP model will provide the optimal values for
the variables (x1 and x2) that maximize the total profit.
● These values represent the optimal production quantities for
products A and B.
● Additionally, the solution may indicate unused resources (slack
variables) or binding constraints that restrict production.
Applications of LP in OR

● LP has a wide range of applications in OR, including:

○ Production planning: Optimizing production levels, resource allocation,
and scheduling
○ Inventory management: Determining optimal inventory levels to
minimize costs and prevent stockouts
○ Resource allocation: Assigning resources (e.g., personnel, equipment) to
maximize efficiency
○ Transportation planning: Designing efficient routes for delivery or
transportation of goods
○ Scheduling: Optimizing schedules for tasks, appointments, or resource
utilization
Graphical Solution of LP

● It visually represents the feasible region formed by the

constraints and the objective function line.
● By moving the objective function line, we can see how it
intersects the feasible region at the optimal solution point.
Advantages of Linear Programming

● LP offers several advantages for solving optimization problems:

○ Efficiency: Provides a systematic approach to find optimal solutions
within a reasonable time frame.
○ Accuracy: Helps identify the best possible solution based on the
defined objective function and constraints.
○ Clarity: Simplifies complex problems into a structured mathematical
model, aiding in clear communication and analysis.
Limitations of Linear Programming

● It's important to acknowledge the limitations of LP:

○ Assumes linearity: The objective function and constraints must be
linear, which may not always be realistic.
○ Requires continuous variables: LP works best with variables that can
take any value within a range. In some cases, variables may be
discrete (e.g., whole numbers).
○ Difficulty with multiple optimal solutions: In some scenarios, LP may
identify multiple solutions that yield the same optimal value.
Resource Allocation(example):

● Hospital Staffing: Hospitals can use LP to optimize staff scheduling,

ensuring they have the right number of doctors, nurses, and other
personnel on duty to meet patient needs while managing labor costs.
● Project Management: Project managers can use LP to allocate
resources (e.g., personnel, equipment) to different project tasks. This
helps them complete projects on time and within budget while
optimizing resource utilization.
Production Planning:

● Manufacturing: Manufacturing companies use LP to determine

optimal production quantities for different products. They consider
factors like production capacity, raw material availability, labor
costs, and customer demand. This ensures they produce the right
amount of each product to meet demand while minimizing
production costs.
● Inventory Management: Retail and wholesale businesses use LP to
optimize inventory levels. This involves deciding how much stock to
keep on hand for each product to minimize storage costs while
ensuring they don't run out of stock and lose sales.
Marketing and Advertising(example):

● Campaign Budget Allocation: Marketing teams can utilize LP to allocate

advertising budgets across different channels (e.g., TV, social media, print) to
maximize their campaign reach and impact. LP considers factors like target
audience demographics, reach of each channel, and cost per impression.
● Product Pricing: Companies can use LP to determine optimal pricing
strategies for their products. This involves considering production costs,
competitor pricing, market demand, and desired profit margin. LP helps them
set prices that are competitive, profitable, and attractive to customers.
Linear programming empowers
organizations to make informed
decisions and optimize their
operations, leading to improved
efficiency and achieving desired
goals.