Chapter 13 Supplement

Linear Programming

Operations
Operations Management
Management -- 55thth Edition
Edition

Roberta Russell & Bernard W. Taylor, III

Lecture Outline

 What is LP?
 Where is LP used?
 LP Assumptions
 Model Formulation
 Examples
 Solving

LP-2
 Linear Programming (LP)

A model consisting of linear relationships

representing a firm’s objective and resource
constraints
LP is a mathematical modeling technique used to
determine a level of operational activity in order to
achieve an objective, subject to restrictions called
constraints

LP-3
 Example LP Applications

1. Scheduling school buses to minimize total

distance traveled
2. Allocating police patrol units to high crime
areas in order to minimize response time
to 911 calls
3. Scheduling tellers at banks so that needs
are met during each hour of the day while
minimizing the total cost of labor

LP-4
 Example LP Applications

4. Selecting the product mix in a factory to

make best use of machine- and labor-
hours available while maximizing the
firm’s profit
5. Picking blends of raw materials in feed
mills to produce finished feed
combinations at minimum costs
6. Determining the distribution system that
will minimize total shipping cost

LP-5
 Example LP Applications

7. Developing a production schedule that will

satisfy future demands for a firm’s product
and at the same time minimize total
production and inventory costs
8. Allocating space for a tenant mix in a new
shopping mall so as to maximize
revenues to the leasing company

LP-6
 Common Elements to LP
 Decision variables
 Should completely describe the decisions to be made
by the decision maker (DM)
 Objective Function (OF)
 DM wants to maximize or minimize some function of
the decision variables
 Constraints
 Restrictions on resources such as time, money, labor,
etc.

LP-7
 LP Assumptions

 OF and constraints must be linear

 Proportionality
 Contribution of each decision variable is
proportional to the value of the decision
variable
 Additivity
 Contribution of any variable is independent of
values of other decision variables

LP-8
 LP Assumptions, cont’d.

 Divisibility
 Allow both integer and non-integer (real
numbers)
 Certainty
 All coefficients are known with certainty
 We are dealing with a deterministic world

LP-9
 LP Model Formulation

 Data
 Input to the model – given in the problem
 Decision variables
 Mathematical symbols representing levels of
activity of an operation
 The quantities to be determined

LP-10
 LP Model Formulation, cont’d.

 Objective function (OF)

 The quantity to be optimized
 A linear relationship reflecting the objective of an
operation
 Most frequent objective of business firms is to
maximize profit
 Most frequent objective of individual operational
units (such as a production or packaging
department) is to minimize cost

LP-11
 LP Model Formulation, cont’d.

 Constraint
 A linear relationship representing a
restriction on decision making
 Binding relationships
 Attach a word description to each set of
constraints
 Include bounds on variables

LP-12
LP Formulation: Example

RESOURCE REQUIREMENTS
Labor Clay Revenue
PRODUCT (hr/unit) (lb/unit) ($/unit)
Bowl 1 4 40
Mug 2 3 50

There are 40 hours of labor and 120 pounds of clay

available each day

Formulate this problem as a LP model and solve

LP-13
 LP Formulation: Example
 Variables
 b = number of bowls to produce
 m = number of mugs to produce
 z = total revenue
 Objective Function
 Max z = 40b + 50m
 Constraints
 b + 2m < 40 (labor constraint)
 4b + 3m < 120 (clay constraint)
 b, m > 0 (non-negativity)

LP-14
 LP Formulation: Solution

Solution is:
b = 24 bowls m = 8 mugs
z = $1,360

LP-15
 Bowls and Mugs Solved

 Use OMTools > Linear Programming

LP-16
 Another Example

 Joe’s Woodcarving, Inc. manufactures two

types of wooden toys: soldiers and trains.
Sale $ Raw Cost Labor / Overhead Finishing Labor Carpentry Labor
Soldier $27 $10 $14 2 hr 1 hr

Train $21 $9 $10 1 hr 1 hr

 Unlimited supply of raw material, but only 100

finishing hours and 80 carpentry hours
 Demand for trains unlimited, but at most 40
soldiers can be sold each week
LP-17
 Wooden Toys Example
 Variables
 ???
 OF
 ???
 Constraints
 ???

LP-18
Wooden Toys Solved

LP-19
Example – Problem #S13-1a

RESOURCE REQUIREMENTS
Labor Cotton Profit
PRODUCT (hr/unit) (lb/unit) ($/unit)
Corduroy 3.2 7.5 $3.10
Denim 3.0 5.0 $2.25

There are 3000 hours of labor and 6500 pounds of

cotton available each month. There is a maximum
demand of 510 yards of corduroy each month, but no
limit on denim.

Formulate this problem as a LP model and solve it.

LP-20
 #S13-1a

Let c = yards of corduroy to produce

d = yards of denim to produce
z = total profit
Maximize z = 3.1 c + 2.25 d

Subject to
7.5c +5d 6500 (cotton constraint)
3.2c +3d < 3000 (labor constraint)
c 510 (demand constraint)
c, d 0 (non-negativity)
LP-21
 Mixed Nuts

 Crazy Joe makes two blends of mixed nuts:

party mix and regular mix.
Sale Price ($/lb) Peanuts Cashews

Party Mix $6 60% 40%

Regular Mix $4 90% 10%

 Crazy Joe has 10 lbs of cashews and 24 lbs of

peanuts
 Crazy Joe wants to maximize revenue. Please
help him.
LP-22
 Ah, Nuts Formulation
 Let
 p = lbs of party mix to make
 r = lbs of regular mix to make
 z = total revenue
 Max z = 6p + 4r
 Subject to
 0.6p + 0.9r < 24 (peanut constraint)
 0.4p + 0.1r < 10 (cashew constraint)
 p, r > 0 (non-negativity constraints)
LP-23
 Blending

 Determines “recipe” requirements to

come up with an end product
 Examples
 Diet
 Gasoline

LP-24
 Jack Sprat

 A well-known nursery rhyme goes “Jack Sprat could

eat no fat. His wife (Jill) could eat no lean …” Suppose
Jack needs to have at least one pound of lean meat
per day, while Jill needs at least 0.4 lbs of fat per day.
They can buy either beef or pork with the following
attributes:
Cost ($/lb) Lean Fat
Beef $4.50 90% 10%
Pork $3.50 60% 40%

 How much of each meat product should they buy to

meet their daily requirements and minimize costs?

LP-25
 Jack Sprat Formulation

 Let
 ???
 Min ???
 Subject to
 ???
 Non-negativity

LP-26
 Sensitivity Analysis
 How sensitive the results are to
parameter changes
 Change in the value of coefficients
 Change in a right-hand-side value of a
constraint
 Trial-and-error approach
 Analytic postoptimality method

LP-27
 Sensitivity Report

Program B.1

LP-28
 Changes in Resources

 The right-hand-side values of

constraint equations may change as
resource availability changes
 The shadow price of a constraint is
the change in the value of the
objective function resulting from a
one-unit change in the right-hand-side
value of the constraint
LP-29
 Changes in Resources

 Shadow prices are often explained as

answering the question “How much
would you pay for one additional unit
of a resource?”
 Shadow prices are only valid over a
particular range of changes in right-
hand-side values
 Sensitivity reports provide the upper
and lower limits of this range LP-30
 Multiple Optimal Solutions

 Often, real world problems can have

more than one optimal solution
 When would this happen?
 What does the graph have to look
like?
 Do want to have “ties”?

LP-31
 No Solutions

 Can we ever have a problem without a

feasible solution?
 When would this happen?
 What would the graph look like?
 Does this mean we did something
wrong?

LP-32