Linear Programming:

Model Formulation and

Graphical Solution

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 Chapter Topics

 Model Formulation
 A Maximization Model Example
 Graphical Solutions of Linear Programming Models
 A Minimization Model Example
 Irregular Types of Linear Programming Models
 Characteristics of Linear Programming Problems

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Linear Programming: An Overview

 Objectives of business decisions frequently involve

maximizing profit or minimizing costs.
 Linear programming uses linear algebraic relationships
to represent a firm’s decisions, given a business
objective, and resource constraints.
 Steps in application:
1. Identify problem as solvable by linear
programming.
2. Formulate a mathematical model of the
unstructured problem.
3. Solve the model.
4. Implementation
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Model Components

 Decision variables - mathematical symbols representing

levels of activity of a firm.
 Objective function - a linear mathematical relationship
describing an objective of the firm, in terms of decision
variables - this function is to be maximized or minimized.
 Constraints – requirements or restrictions placed on the firm
by the operating environment, stated in linear relationships of
the decision variables.
 Parameters - numerical coefficients and constants used in the
objective function and constraints.

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Summary of Model Formulation Steps

Step 1 : Clearly define the decision variables

Step 2 : Construct the objective function

Step 3 : Formulate the constraints

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 Mathematical models
can be used to represent just about
everything in the real world. This lesson
will explain what mathematical models
are, in addition to describing and
providing examples of the various types
of models.

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Mathematical Models
Suppose you are building a rectangular sandbox for
your neighbour's toddler to play in, and you have two
options available based on the building materials you
have. The sandbox can have a length of 8 feet and a
width of 5 feet, or a length of 7 feet and a width of 6
feet, and you want the sandbox to have as large an area
as possible. In other words, you want to determine
which dimensions will result in the larger area of a
rectangle. Thankfully, in mathematics, we have a
formula for the area (A) of a rectangle based on its
length (l) and width (w).
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A=l×w

A1 = 8 × 5 = 40 square feet

A2 = 7 × 6 = 42 square feet

We see that a length of 7 feet and a width of

6 feet will result in the larger area of 42
square feet.
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A mathematical model is a tool
we can use to replicate real-
world situations and solve
problems or analyze behavior
and predict future behavior in
real world scenarios.

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Types of Mathematical Models

Equations

The mathematical model we just used was

in the form of a formula, or equation.
Equations are the most common type of
mathematical model.
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Example:
Suppose that a store is having a closeout sale
where everything in the store is 15% off. That
is, if an item is x dollars, then the discount is
15% of x, or 0.15x. The sale price can be found
by subtracting the discount (0.15x) from the
original price (x), giving the following equation
that models the sale price of any item in the
store with the original price x:

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S = x - 0.15x
We can also combine like terms and write
this equation as:

S = 0.85x
Both of these equations are mathematical
models, because they represent a real-world
scenario by using a formula to find the sale
price of anything in the store. For instance, if
something is originally $5, then the sale price
can be found using our model by plugging in
x = 5:

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S = 0.85(5) = 4.25
We see that the sale price is $4.25.

Graphs

Another type of mathematical model is a graph. As we just

said, most mathematical models are expressed in the form
of an equation. Equations can be graphed, so it makes
sense that another type of mathematical model would be a
graph. For example, we could illustrate the sale prices of
store items on a graph, where the y-axis is the sale price,
and the x-axis is the original price of an item.

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A graph is another type of mathematical model.

We can determine the sale price of an item by locating

its original price along the x-axis and then finding the
corresponding y-value, or sale price, on the graph. As
shown on the graph, if an item has an original sale
price of $5, then the corresponding sale price is $4.25,
which is what we expected based on our findings from
the equation. A graph is another tool, or mathematical
model, that we can use to understand real-world
scenarios.

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Other Types of Models
Though equations and graphs are the most
common types of mathematical models, there
are other types that fall into this category.
Some of these include pie charts, tables, line
graphs, chemical formulas, or diagrams.

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Chemical Formulas
A chemical formula is an expression that specifies
the types and numbers of atoms present in a
molecule. It can take on the following form:

(Atom abbreviation)N, where N is the number of

the atoms in the molecule.

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LP Model Formulation
A Maximization Example (1 of 4)

 Product mix problem - Beaver Creek Pottery Company

 How many bowls and mugs should be produced to maximize
profits given labor and materials constraints?
 Product resource requirements and unit profit:
Resource Requirements

Labor Clay Profit

Product
(Hr./Unit) (Lb./Unit) ($/Unit)

Bowl 1 4 40
Mug 2 3 50

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LP Model Formulation
A Maximization Example (2 of 4)

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LP Model Formulation
A Maximization Example (3 of 4)

Resource 40 hrs of labor per day

Availability: 120 lbs of clay
Decision x1 = number of bowls to produce per day
Variables: x2 = number of mugs to produce per day
Objective Maximize Z = $40x1 + $50x2
Function: Where Z = profit per day
Resource 1x1 + 2x2  40 hours of labor
Constraints: 4x1 + 3x2  120 pounds of clay
Non-Negativity x1  0; x2  0
Constraints:

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LP Model Formulation
A Maximization Example (4 of 4)

Complete Linear Programming Model:

Maximize Z = $40x1 + $50x2

subject to: 1x1 + 2x2  40

4x1 + 3x2  120
x1, x2  0

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 Formulation of the Mathematical Model
Example :
Pinocchio, Inc. manufactures 2 types of wooden toys: trucks
and trains. The price of a piece of truck is 550 CZK, of a
piece of train 700 CZK. The wood cost for the truck is 50
CZK, whereas for the train 70 CZK. The truck requires 1
hour of carpentry labor and 1 hour of finishing labor
(assembling and painting). The train requires 2 hours of
carpentry labor and 1 hour of finishing labor. Worth of
carpentry labor is 30 CZK per hour, worth of finishing labor
is 20 CZK per hour. Each month, Pinocchio has 5000
available hours of carpentry labor and 3000 hours of finishing
labor. Demand for trains is unlimited, but at most 2000 trucks
are, at an average, bought each month. The Pinocchio’s
management wants to maximize monthly profit (total revenue
- total cost).
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1. Decision variables
The variables should completely describe the
decisions to be made by the management.
The manager must decide how many trucks and
how many trains should be manufactured
each month in order to maximize the profit. In this
case the decision variables are:
x1 = number of trucks produced each month,
x2 = number of trains produced each month.

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2. Objective function
This function represents the management’s criterion that is to be
maximized or
minimized. In the Pinocchio’s situation the management intends to
maximize total monthly
profit as the difference between total monthly revenue and total monthly
cost. Both revenue
and cost can be expressed as the function of decision variables x1
and x2.

1. Total revenue (TR) = revenue from sold trucks + revenues from sold
trains.
Since the price of one truck is 550 CZK and the manufacturer produces
x1 of trucks, the revenue ensuing from all the realized trucks is 550x1.
Similarly, the revenue from sold trains is 700x2.
The total monthly revenue ensuing from the production is then
TR =550x
expressed as: 1+700x2
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2. Monthly wood cost (WC) = WC of produced
trucks + WC of produced trains.
If we know the wood cost of production of one truck
(50 CZK) and the total number of
produced trucks is x1, the monthly wood cost of all
produced trucks is 50x. Similarly, the
monthly wood cost of all trains is 70x2.
The total monthly wood cost is then:

WC = 50x1 + 70x2

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3. Carpentry labor cost (CLC) = CLC of produced
trucks + CLC of produced trains.
If one truck requires 1 hour of carpentry labor and
cost of 1 hour of this labor is 30 CZK, the
unit cost is 30 CZK. The monthly cost of carpentry
labor used for all produced trucks is 30x1.
Since one train requires 2 hours, the monthly cost of
carpentry labor used for trains is 60x2.
The total monthly cost of carpentry labor is:
CLC = 30x1+60x2.

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4. Finishing labor cost (FLC) = FLC of produced
trucks + FLC of produced trains.
Both a piece of truck and a piece of train require 1
hour of finishing labor. Cost of this labor is
20 CZK per hour. Hence the total monthly cost of
finishing labor: FLC =20x1+20x2.

5. The total monthly cost can be expressed as: TC

= WC + CLC + FLC =
(50x1+70x2)+(30x1+60x2)+(20x2+20x2)TC=
100x1+150x2.

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6. The total profit, as the objective, is the difference
between the total monthly revenue and
the total monthly cost:
TP = TR − TC = (550x1+700x2)−(100x1+150x2)
= 450x1+550x2.
In the linear programming model the objective function is
expressed as:
Maximize 450x1+550x2

Numbers 450 and 550 in the

function are called objectives
function coefficients.

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3. Constraints
If there are no restrictions, objective function (profit) can
grow to infinity. However,
there are three restrictions (called constraints) for the toys
production:
1. Each month Pinocchio, Inc. has only 5000 available hours
of carpentry labor.
2. Each month no more than 3000 hours of finishing labor may be
used.
3. Because of limited demand, at most 2000 trucks should be
produced each month.
We express these three constraints in the mathematical way

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We express these three constraints in the mathematical way:
1. One truck requires 1 hour of carpentry labor. If the
manufacturer produces monthly x1 of
trucks, x1 hours of labor are used. Considering that one train
requires 2 hours and the
production quantity equals x2, the monthly use of carpentry labor
is 2x2 hours.
The total use of carpentry labor for both products can be
expressed as x1 + 2x2. This is actual
use of labor (in hours) that cannot be greater than available
number of hours (5000). With this
in mind, the constraint can be expressed as:

x1+2x2 ≤ 5000 .

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2. The construction of the second
constraint concerning finishing labor is
similar to the
previous one:
x1 + x2 ≤ 3000 .
3. The last constraint is very easy to be built. The
number of produced trucks x1 must be less
than or equal to 2000

x1 ≤ 2000 .

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4. Non-negativity constraints
There are reasonable sign restrictions associated with both the
decision variables: since
the values of variables represent numbers of produced toys we
should expect them not to be
negative:

x1, x2 ≥ 0

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The mathematical model can be summarized in
standard form as follows:

Maximize z= 450x1 + 550x2 ,

subject to
x1 + x2 ≤ 5000,
x1 + x2 ≤ 3000 ,
x1 ≤ 2000 ,
x1 , x 2 ≥ 0 .

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Feasible Solutions

A feasible solution does not violate any of the constraints:

Example: x1 = 5 bowls
x2 = 10 mugs
Z = $40x1 + $50x2 = $700

Labor constraint check: 1(5) + 2(10) = 25 < 40 hours

Clay constraint check: 4(5) + 3(10) = 50 < 120 pounds

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Infeasible Solutions

An infeasible solution violates at least one of the

constraints:

Example: x1 = 10 bowls
x2 = 20 mugs
Z = $40x1 + $50x2 = $1400

Labor constraint check: 1(10) + 2(20) = 50 > 40 hours

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ASSIGNMENT:

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Problem Statement
Formulate the Mathematical Model

■ Hot dog mixture in 1000-pound batches.

■ Two ingredients, chicken ($3/lb) and beef ($5/lb).
■ Recipe requirements:
at least 500 pounds of “chicken”
at least 200 pounds of “beef”
■ Ratio of chicken to beef must be at least 2 to 1.
■ Determine optimal mixture of ingredients that will
minimize costs.

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