MANAGEMENT

SCIENCE
TECHNIQUES

LINEAR
PROGRAMMING
LINEAR PROGRAMMING
is a model that consists of
linear relationships
representing a firm’s
decision(s), given an objective
and resource constraints.
DEFINITION

 Linear Programming is a computer science technique that

address issues of optimization process. The word "linear"

implies the linearity of all mathematical relationships within
a model. The standard model is the set of linear equations
and/or inequalities (called constraints) and the linear
objective function (to be maximized or minimized). The
constraints of non-negativity (variables are negative or
positive) are also included in the model.
EXAMPLE

 ABC, Inc. creates 2 types of toys: car and boat. The car is priced

at P550, and the boat at P700. The cost of the car is P50, while
P70 for the boat. The car needs 1 hour of woodwork labor and 1
hour of painting and assembling labor. The boat requires 2
hours of woodwork labor and1 hour of painting and assembling
labor. Cost of woodwork labor is P30 per hour, worth of painting
and assembling labor is P20 per hour. Monthly, ABC has 5000
existing hours of woodwork labor and 3000 hours of painting
and assembling labor. There is an unlimited demand for boat,
while an average demand for car is at most 2000. ABC wants to
get the best out of monthly profit (total revenue - total cost).
MODEL FORMULATION

1. Decision variables

The variables would explain thoroughly the management's

decisions to be made. To optimize the income, the manager
needs to determine how many cars and how many boats will
be generated per month. In this scenario, the variables to the
decision are:

x1= number of cars produce each month;

x2= number of boats produce each month
2. Objective function

This function reflects the criteria of the management

which must be maximized or minimized. The
management aims to optimize gross monthly income in
the circumstance of the ABC as the disparity between
total monthly revenues and total monthly costs.
Revenue and cost can be represented as the function of
the variables x1 and x2 for decision.
2.1 Total revenue (TR) = revenue from sold car +
revenues from sold boat. The price of one car is P550
and ABC produces x1 of car, the revenue resulting
from the cars is 550x1. Likewise, the revenue from
sold boats is 700x2.

The total monthly revenue from production is

expressed as:

TR= 500x1 + 700x2

2.2 Monthly wood cost (WC) = WC of produced cars +
WC of produced boats. The wood cost of production
of one car (50 ) and the total number of produced car
is x1, the monthly wood cost of all produced cars is
50x1. Likewise, the monthly wood cost of all boats is
70x2.

Total monthly wood cost is :

WC= 50x1 + 70x2

2.3 Woodwork labor cost (WLC) = WLC of produced cars +
WLC of produced boats. One car needs 1 hour of woodwork
labor and cost of 1 hour of this labor is 30 , the unit cost is
30 . The monthly cost of carpentry labor used for all
produced cars is 30x1. One boat requires 2 hours, the
monthly cost of woodwork labor used for boats is 60x2.

Total monthly cost of woodwork labor:

WLC= 30x1 + 60x2

2.4 Painting and assembling labor cost (PALC) =
PALC of produced cars + PALC of produced boats.
Both a piece of car and boat need 1 hour of painting
and assembling labor. Cost of this labor is 20 per
hour. Therefore the total monthly cost of painting
and assembling labor:

PALC= 20x1 +20x2

2.5 The total monthly cost can be expressed as:
 TC= WC + WLC + PALC= (50x1 + 70x2) + (30x1 + 60x2) +
(20x1 +20x2)
 TC= 100x1 + 150x2

2.6 The total profit:

 TP = TR − TC = (550x1 + 700x2) − (100x1 + 150x2 ) =
450x1 + 550x2

the objective function in the linear programming model is:

Maximize z = 450x1 + 550x2

 Note: 450 and 550 in the function are termed objective

function coefficients.
3. MODEL CONSTRAINTS
If no restrictions are imposed, objective function (profit) can
expand to infinity. There are three limits (called constraints) to
the development of toys, though:
 1.ABC, Inc. has just 5000 hours of woodwork labor
accessible per month.
 2. No more than 3000 hours of finished labor can be used
each month.
 3. Because of minimal demand, there will be a maximum of
2000 cars delivered each month.

Parameters are numerical values that are included in the

objective functions and constraints.
EXPRESSING THE CONSTRAINTS IN
MATHEMATICAL WAY:
1. One car needs 1 hour of woodwork labor. If ABC
manufactures monthly x1 of cars, x1 hours of labor are
consumed. Since one boat requires 2 hours and the
manufacturing quantity equals x2, the monthly
consumption of woodwork labor is 2x2 hours.

 Total consumption of woodwork 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, the constraint can be:

x1 + 2x2 ≤ 5000
EXPRESSING THE CONSTRAINTS IN
MATHEMATICAL WAY:
2. The creation of the second constraint regarding painting
and assembling labor is like the foregoing:
 x1 + x2 ≤ 3000

3. The last constraint is easy to be construct. The number of

produced cars x1 must be less than or equal to 2000:
x1 ≤ 2000
Note: Technological coefficients are coefficients of the decision
variables in the constraints while numbers 5000, 3000 and
2000 are termed right-hand side values.
4. NON-NEGATIVITY CONSTRAINTS

Both decision variables have rational sign restrictions:

because the values of variables reflect numbers of toys made,
we would expect them not to be negative:
x1, x2 ≥ 0
Summary of mathematical model in standard form:

Maximize z = 450x1 + 550x2 subject to

 x1 + 2x2 ≤ 5000,
 x1 + x2 ≤ 3000 ,
 x1 ≤ 2000 ,
 x1, x2 ≥ 0 .
GRAPHICAL SOLUTION OF LINEAR
PROGRAMMING PROBLEMS

Step 1 - Graphing a feasible area

That restriction (including non-negativity constraints) can

be drawn very easily; because all constraints have to be
met concurrently, the mixture of drawn constraints
defines the area that is feasible. Each point from the
feasible area suits the feasible solution.

There are 3 constraints and 2 nonnegativity constraints in

the ABC’s problem. Nonnegativity constraints are simple
to graph, as all x1 and x2 variations must be in the first
quadrant of x1-x2 plane (Figure 2.1).
 Linear inequality graphing (woodwork labor constraint)

x1 + 2x2 ≤ 5000

 the borderline needs to be draw, corresponding to the

linear equation
x1 + 2x2 = 5000 .

 Coordinates of two points must be find to get the

borderline. The simplest way is to look for the
borderline’s intersection points with axes x1 and x2. If
x1 is set to zero (i.e. no cars are manufactured), then
x2 = 5000/2 = 2500 (2500 boats can be
manufactured). This condition refers to the point A (0,
2500) in Figure 2.2.

 Also, if x2 is set to zero (no boats are manufactured),

then x1 = 5000 (5000 cars can be manufactured). It
links to the point B (5000, 0) in Figure 2.2.
 Linking points A and B by a straight get a graphical

illustration of the equation x1 + 2x2 = 5000 We must

now decide which portion of the first quadrant (divided
by line AB) conforms to the x1 + 2x2 5000 inequality.

 For this reason the general approach is to pick an

arbitrary point (of course not from the line) and to test
if it is feasible. When the point is feasible so the whole
area is always feasible.

 The best way is to take origin, (0 , 0) in our case. After

these coordinates have been substituted by the

constraints, we get 5000 0 (the restriction is met).
Therefore, the area of origin included is feasible
Figure 2.2 Woodwork Labor
 Note: We omitted negative values of x1 and x2

due to non-negativity constraints (Figure 2.1) in

graphing the feasible field.

 Drawn in Figure 2.3 is the second inequality 3000

x1 + x2 ≤ (painting and assembling labor

constraint), the last constraint 2000x1 ≤ is
comprehended in Figure 2.4. Feasible area can be
seen on the left side of the line while 2000x1 = is
emphasized by a line parallel to the axis x2.
Figure 2.3 Painting and Assembling Labor
Step 2 - Combining the constraints

If all of the restrictions are drawn independently,

they must be placed together in a single graph.
Practically, this final graph may be built by
systematic addition of the individual feasible
areas from the beginning. The ultimate graph of
the feasible area in the example is seen in figure
2.5. Any solution in this area is feasible as
regards all the constraints.
Step 3 – Graphing an objective function

In the example the goal of the management is represented

as the function of profit z= 450x1+550x2. Because of the
endless number of equations this feature can not
necessarily be viewed as a single line. The basic equation
depends on z value.
Figure 2.6 introduces three of those equations of values
495,000, 1,485,000 and 2,475,000. All the lines are
parallel to each other and can be constructed in the same
way as the constraints borderline in Step 1. Both points on
a specific line produce the same profit, and hence the lines
are typically called isoprofit lines. The arrow expressed
income growth.
Step 4 – Finding the optimal solution

Integrating the feasible region with the isoprofit

lines, we will consider the isoprofit line that is as
far from the origin as feasible, which also crosses
the feasible field.

The dotted isoprofit line in Figure 2.7 correlates

to the maximum profit z = 1,550 000. This line
intersects a viable area corner point, which is
considered an optimal solution. It is point X
(1000, 2000)
There are two potential ways of seeking the best
approach using the model's graphical representation:

1. The first approach has only been illustrated. We

can determine the "best" point of the feasible area,
by finding a slope and the growth direction of the iso-
profit line. This level is the optimal solution, and the
iso-profit line suits the ideal objective function
optimal value. Within this section of the text it is
important to notice that a convex set is the feasible
field of all linear programming models.

A set of points S is a convex set if the section of the

line connecting each pair of points in S is entirely
The disparity between convex and non-convex sets is
shown in Figure 2.8. Although the first three examples are
convex sets (a), (b ) and ( c), the group (d) is non-convex.
 The set (a) varies significantly from the sets (b ) and ( c), due
to nonlinear border. If the convex set boundary consists only
of linear segments, as seen in cases (b ) and ( c), the set is
called a convex polyhedron, which reflects the standard
feasible field of linear programming models. It is the feature
which is useful in linear programming methods.

 The key problem is how to measure optimum solution of

coordinates X(1000, 2000). As it is apparent from Figure 2.6,
this point is the borderline intersection of two constraints.
Determining the co-ordinates is therefore very simple by
solving the series of two linear equations. The borderlines
compare in our situation are:
x1 + 2x2 = 5000 ,
x1 + x2 = 3000 .

 Pretty simple solution: x1 = 1000 and x2 = 2000. Those

values are point X coordinates. Incorporating them into
objective function z = 450x1 + 550x2 = 1 550 000.
2. It is important to identify a corner point before beginning to
explain the second approach used to find the best solution in
the graph. With respect to the convex polyhedron definition it
is possible to describe the corner point clearly as follows:

A point P in convex polyhedron S is a corner point if it does not

lie on any line joining any pair of other (than P) points in S.

Keystone of the second approach is the basic linear

programming theorem:

The optimal feasible solution, if it exists, will occur at one or

more of the corner points.

In this theorem, what we need is to define the feasible area's

corner points and determine the objective values for all of
those points. The optimal solution is the corner point and has
the highest objective value.
 The feasible area in the example contains 5 corner points
(Figure 2.9), of which the coordinates can be observed in
Table 2.1. All the coordinates were calculated in the manner
described above: after classification of the intersected lines,
the set of equations is solved and the x1 and x2 co-ordinates
provide the solution. The objective value z is then calculated
for each solution by incorporating the co-ordinates into the
objective function. From the table it is evident that the
optimal solution corresponds to the maximum objective
value z = 1,550,000.
Corner point x1 x2 z
A 0 0 0
B 2000 0 900 000
C 2000 1000 1 450 000
D 1000 2000 1 550 000
E 0 2500 1 375 000
Simplex method is a general method used for
solving linear programming problems. It is an
iterative algorithm for efficient searching for the
optimal solution. The method uses the Gauss-Jordan
method of solving simultaneous equations. In
addition, the method is based on the basic linear
programming theorem (the search can concentrate
only on the corner points of the feasible area). The
run of algorithm starts in one of the corner points
(usually in the origin) and moves to adjacent corner
that improves the value of the objective function.
The process of movement continues until no further
improvement is possible. The simplex method and
its variations have been programmed and therefore
even large linear programming problems can be
easy solved