Management Science

Course Code: BBMASCIX

College: Business and Accountancy
Term: First Trimester AY 2021-2022

Instructor: Mr. Juanito J. Valles, Sr.

 LINEAR PROGRAMMING

Objectives

After this topic you should be able to:

1. Explain the characteristics and assumptions of linear programming

models.
2. Formulate models for various problems
3. Perform graphic analysis for two—variable problems and find the
algebraic solution for the corner point found to be optimal.
 LINEAR PROGRAMMING

Linear Programming – a technique use for allocating scarce resources

among competing demands.

This resources may be time, money, or materials, and the limitations are
known as the constraints.

Linear programming can help managers find the best allocation solution
And provide information about the value of additional resources.
 LINEAR PROGRAMMING

For example, in business situations, resources are limited and demand for
them is great. Let say, a limited number of vehicles may have to be
scheduled to make multiple trips to customers, or a staffing plan may have
to be developed to cover expected variable demand with the fewest
employees.
 BASIC CONCEPTS

These are the several characteristics of all linear programming models and
mathematical assumptions that apply to them:

1. Objective function
2. Decision variables
3. Constraints
4. Feasible region
5. Parameters
6. Linearity
7. Nonnegativity
 Objective Function

Linear programming is an optimization process. A single objective function

states mathematically what is being maximized(e.g., profit or present value)
or minimized (e.g., cost scrap). The objective function provides the scorecard
on which the attractiveness of different solutions is judged.
 Decision Variables
Decision variables represent choices that the decision maker can control.
solving the problem yields their optimal values. For example, a decision
variable could be the number of units of a product to make next month or
the number of units of inventory to hold next month.

Linear programming is based on the assumption that decision variables are

Continuous – they can be fractional quantities and need not be whole
numbers.

Even when the decision variables represent nondivisible units such as

workers, tables, or trucks, we sometimes can simply round the linear
programming solution up or down to get a reasonable solution that does not
Violate any constraints, or we can use advanced technique –integer
programming
 Constraints
Constraints are limitations that restrict the permissible choices for the
decision variables. Each limitation can be expressed mathematically in one
Of three ways: a less than or equal to(≤), equal to(=), or greater than or equal
to(≥) constraint.

A ≤ constraint may specify the maximum number of customers who can be

served or the capacity limit of a machine.

An = constraint means that the function must equal some value. For
example, 100(not 99 or 101) units of one product must be made. An =
constraint often is used for certain mandatory relationships, such as the
fact that ending inventory always equals beginning inventory plus
production minus sales.
 Feasible Region
The constraints define as a feasible region, which represents all permissible
Combinations of the decision variables. In some usual situations, the
problem is so tightly constrained that there is only one possible solution –
or perhaps none.

However, in the usual case the feasibility region contains

Infinitely many possible solutions, assuming that the feasible combinations
of the decision variables can be fractional values.

The goal of the decision maker is to find the best possible solution.
 Parameter
The objective function and constraints are functions of decision variables
and parameters.

A parameter, also known as a coefficient or given constant, is a value that

the decision maker cannot control and that doesn’t change when the
solution is implemented.

Each parameter is assumed to be known with certainty. For example, a

Computer programmer may know that running a software program will take
Three hours – no more, no less.
 Linearity
Linearity implies proportionality and additivity – there can be no products
(e.g., ) or powers (e.g., of decision variables. Suppose that the profit
Gained by producing two types of products( represented by decision
variables and ) is . Proportionality implies that one unit of contributes to
profits and two units contribute , regardless of how much is produced.

Similarly, each unit of whether it is the first or the tenth unit produced.
Additivity means that the total objective function value
Equals the profits from plus the profits from .
 Nonnegativity
Finally, we make an assumption of nonnegativity, which means that the
decision variables must be positive or zero.

For example, a firm making spaghetti sauce, can’t produce a negative

number of jars. To be formally correct, a linear programming formulation
should show a constraint for each decision variable.
 FORMULATING A PROBLEM
Linear programming applications begin with the formulation of a model of
the problem with the general characteristics just described. Formulating a
model to represent each unique problem, using the following three-step
sequence is the most creative and perhaps the most difficult part of linear
programming.

Step 1. Define the decision variables. Define each decision variable

specifically, remembering that the definitions used in the objective function
must be equally useful in the constraints. The definition should be as
specific as possible.

.
 FORMULATING A PROBLEM
Step 2. Write out the objective function. What is to be maximized or
minimized? If it is next month’s profits a linear function of the decision
variable. For example, if each unit of sold yields a profit of the total profit
from product equals . If a variable has no impact on the objective function,
its objective function coefficient is

Step 3. Write out the constraints. What limits the values of the decision
variables? Identify the constraints and the parameters for each decision
variable in them. As with the objective function, the parameter for a variable
that has no impact in a constraint is zero. To be formally correct, also write
out the nonnegativity constraints.
 As a consistency check,
Make sure that the same unit of measure is being used on both sides of
each constraint and in the objective function.

For example, suppose that the right-hand side of a constraint is hours of

capacity per month. Then if a decision variable on the left-hand side of the
constraint measures the number of units produced per month, the
dimensions of the parameter that is multiplied by the decision variable must
be hours per unit.
 Formulating a Linear Programming Model
1.
2. The Stratton Company produces two basic types of plastics pipe. Three resources are crucial to
the output of pipe: extrusion hours, packaging hours and a special additive to the plastic raw
material. The following data represent next week’s situation. All data are expressed in units of 100
feet of pipe.
Product
Resource Type 1 Type 2 Resource Availability
Extrusion 4 hr 6 hr 48 hr
Packaging 2 hr 2 hr 18 hr
Additive mix 2 lb 1 lb 16 lb

The contribution to profits and overhead per 100 feet of pipe is $34 for type 1 and $40 for type 2.
Formulate a linear programming model to determine how much of each type of pipe should be
produced to maximize contribution to profits and to overhead.
For asynchronous classes on Thursday and Friday
the topic to be discussed is Graphical Analysis.
3. The Healthy Pet Food Company manufactures two types of dog food:
Meaties and Yum- mies. Each package of Meaties contains 2 pounds of
cereal and 3 pounds of meat; each package of Yummies contains 3
pounds of cereal and 1.5 pounds of meat. Healthy believes it can sell as
much of each dog food as it can make. Meaties sell for $2.80 per package
and Yummies sell for $2.00 per package. Healthy’s production is limited
in several ways. First, Healthy can buy only up to 400,000 pounds of
cereal each month at $0.20 per pound. It can buy only up to 300,000
pounds of meat per month at $0.50 per pound. In addition, a spe- cial
piece of machinery is required to make Meaties, and this machine has a
capacity of 90,000 packages per month. The variable cost of blending and
packing the dog food is $0.25 per package for Meaties and $0.20 per
package for Yummies