Operations Management

Linear Programming Overview

What is Linear Programming?
What is Linear Programming?

• A mathematical technique to help plan and make decisions

relative to the trade-offs necessary to allocate resources
• Will find the minimum or maximum value of the objective
• Guarantees the optimal solution to the model formulated

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LP Applications

• Scheduling school buses to minimize total distance traveled

• Allocating police patrol units to high crime areas in order to
minimize response time to 911 calls
• Scheduling tellers at banks so that needs are met during each
hour of the day while minimizing the total cost of labor
• Selecting the product mix in a factory to make best use of
machine- and labor-hours available while maximizing the firm’s
profit
• Determining the distribution system that will minimize total
shipping cost

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Requirements of an LP Problem

• LP problems seek to maximize or minimize some quantity

(usually profit or cost) expressed as an objective function
• The presence of restrictions, or constraints, limits the degree to
which we can pursue our objective
• There must be alternative set of action to choose from
• The objective and constraints in linear programming problems
must be expressed in terms of linear equations or inequalities

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LP formulations
Steps in Formulating LP

1. Identify your decision variables (the variables that you want

optimize over), make sure the decision variables are clearly
defined
2. Find the set of constraints
3. Find the objective function

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Formulating an LP

The Glickman Electronics Company in Washington, DC, produces two products: (1) the
Glickman x-pod, a portable music player, and (2) the Glickman BlueBerry, an internet
connected color telephone. The production process for each product is similar in that
both require a certain number of hours of electronic work and a certain number of
labor-hours in the assembly department. Each x-pod takes 4 hours of electronic work
and 2 hours in the assembly shop. Each BlueBerry requires 3 hours in electronics and 1
hour in assembly. During the current production period, 240 hours of electronic time
are available, and 100 hours of assembly department time are available. Each x-pod
sold yields a profit of $7; each BlueBerry produced may be sold for a $5 profit.
Glickman’s problem is to determine the best possible combination of x-pods and
BlueBerrys to manufacture to reach the maximum profit. This product-mix situation can
be formulated as a linear programming problem.

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Formulating an LP

• Two products: x-pod, BlueBerry

• Objective is to determine the mix of products that will produce the maximum profit
• Problem Data:

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Formulating an LP

• Step 1: Identify the decision variables:

X1= number of x-pods to be produced
X2= number of BlueBerrys to be produced
• Step 2: Find the constraint set:
Electronic time used ≤ Electronic time available
4X1 + 3X2 ≤ 240 (hours of electronic time)
Assembly time used ≤ Assembly time available
2X1 + 1X2 ≤ 100 (hours of assembly time)
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Formulating an LP

Step 3: Find the Objective Function:

Maximize profit = $7X1 + $5X2

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Example

A post office requires different number of full-time employees on

different days of the week. The number of full-time employees
required on each day is as shown below. Union rules state that each
full-time employee must work five consecutive days and then
receive two days off. For example, an employee who works Tuesday
to Saturday must be off Sunday and Monday. The post office wants
to meet its daily requirements using the minimum possible number
of full-time employees.

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Example Continued

Day Number of
employees
required
Monday 17
Tuesday 13
Wednesday 15
Thursday 19
Friday 14
Saturday 16
Sunday 11
Formulate an LP that the post office can use to decide on the
number of full-time employees.

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Example Continued

1. Find the decision variables:

Note that defining the decision variables: 𝑥1 : Number of people
working on a Monday is wrong since some workers have their first
work day on Monday, while other employees have their first day on
Sunday. To be able to distinguish those nuances a better decision
variable definition:
𝑥1 , … , 𝑥7 : Number of people where their first shift is Day i, 𝑖 =
1, … , 7

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Example Continued

Step 2: Find the constraint set

In this problem, the minimum number of shifts have to be satisfied
𝑥4 + 𝑥5 + 𝑥6 + 𝑥7 + 𝑥1 ≥ 17 (Monday)
𝑥5 + 𝑥6 + 𝑥7 + 𝑥1 + 𝑥2 ≥ 13 (Tuesday)
𝑥6 + 𝑥7 + 𝑥1 + 𝑥2 + 𝑥3 ≥ 15 (Wednesday)
𝑥7 + 𝑥1 + 𝑥2 + 𝑥3 + 𝑥4 ≥ 19 (Thursday)
𝑥1 + 𝑥2 + 𝑥3 + 𝑥4 + 𝑥5 ≥ 14 (Friday)
𝑥2 + 𝑥3 + 𝑥4 + 𝑥5 + 𝑥6 ≥ 16 (Saturday)
𝑥3 + 𝑥4 + 𝑥5 + 𝑥6 + 𝑥7 ≥ 16 (Sunday)

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Example Continued

Step 3: Find the objective function: Objective is to minimize the total

number of employees
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𝑀𝑖𝑛 𝑥1 + 𝑥2 + ⋯ + 𝑥7 = ෍ 𝑥𝑖
𝑖=1

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LP Applications
Production-Mix Example

Failsafe Electronics Corporation primarily manufactures four highly technical products, which it
supplies to aerospace firms that hold NASA contracts. Each of the products must pass through the
following departments before they are shipped: wiring, drilling, assembly, and inspection. The time
requirements in each department (in hours) for each unit produced and its corresponding profit value
are summarized in this table:

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Production-Mix Example

The production time available in each department each month and the minimum monthly production
requirement to fulfill contracts are as follows

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Production-Mix Example

X1 = number of units of XJ201 produced

X2 = number of units of XM897 produced
X3 = number of units of TR29 produced
X4 = number of units of BR788 produced
Maximize profit = 9X1 + 12X2 + 15X3 + 11X4
subject to .5X1 + 1.5X2 + 1.5X3 + 1X4 ≤ 1,500 hours of wiring
3X1 + 1X2 + 2X3 + 3X4 ≤ 2,350 hours of drilling
2X1 + 4X2 + 1X3 + 2X4 ≤ 2,600 hours of assembly
.5X1 + 1X2 + .5X3 + .5X4 ≤ 1,200 hours of inspection
X1 ≥ 150 units of XJ201
X2 ≥ 100 units of XM897
X3 ≥ 200 units of TR29
X4 ≥ 400 units of BR788
X1, X2, X3, X4 ≥0

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Production-Mix Example

subject to .5X1 + 1.5X2 + 1.5X3 + 1X4 ≤ 1,500 hours of wiring

3X1 + 1X2 + 2X3 + 3X4 ≤ 2,350 hours of drilling
2X1 + 4X2 + 1X3 + 2X4 ≤ 2,600 hours of assembly
.5X1 + 1X2 + .5X3 + .5X4 ≤ 1,200 hours of inspection
X1 ≥ 150 units of XJ201
X2 ≥ 100 units of XM897
X3 ≥ 200 units of TR29
X4 ≥ 400 units of BR788
X1, X2, X3, X4 ≥0

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Diet Problem Example

The Feed ’N Ship feedlot fattens cattle for local farmers and ships them to meat
markets in Kansas City and Omaha. The owners of the feedlot seek to determine the
amounts of cattle feed to buy to satisfy minimum nutritional standards and, at the
same time, minimize total feed costs. Each grain stock contains different amounts of
four nutritional ingredients: A, B, C, and D. Here are
the ingredient contents of each grain, in ounces per pound of grain:

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Diet Problem Example

The cost per pound of grains X, Y, and Z is $0.02, $0.04, and

$0.025, respectively. The minimum requirement per cow per month
is 64 ounces of ingredient A, 80 ounces of ingredient B, 16 ounces
of ingredient C, and 128 ounces of ingredient D. The feedlot faces
one additional restriction—it can obtain only 500 pounds of stock Z
per month from the feed supplier, regardless of its need. Because
there are usually 100 cows at the Feed ’N Ship feedlot at any given
time, this constraint limits the amount of stock Z for use in the feed
of each cow to no more than 5 pounds, or 80 ounces, per month.

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Diet Problem Example

X1 = number of pounds of stock X purchased per cow each month

X2 = number of pounds of stock Y purchased per cow each month
X3 = number of pounds of stock Z purchased per cow each month
Minimize cost = .02X1 + .04X2 + .025X3
Ingredient A requirement: 3X1 + 2X2 + 4X3 ≥ 64
Ingredient B requirement: 2X1 + 3X2 + 1X3 ≥ 80
Ingredient C requirement: 1X1 + 0X2 + 2X3 ≥ 16
Ingredient D requirement: 6X1 + 8X2 + 4X3 ≥ 128
Stock Z limitation: X3 ≤ 5
X1, X2, X3 ≥ 0 24
Labor Scheduling Example

Mexico City Bank of Commerce and Industry is a busy bank that has requirements for
between 10 and 18 tellers depending on the time of day. Lunchtime, from noon to 2
P.M., is usually heaviest. The table below indicates the workers needed at various hours
that the bank is open.

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Labor Scheduling Example

The bank now employs 12 full-time tellers, but many people are on
its roster of available part-time employees. A part-time employee
must put in exactly 4 hours per day but can start anytime between
9 A.M. and 1 P.M. Part-timers are a fairly inexpensive labor pool
because no retirement or lunch benefits are provided them. Full-
timers, on the other hand, work from 9 A.M. to 5 P.M. but are
allowed 1 hour for lunch. (Half the full-timers eat at 11 A.M., the
other half at noon.) Full-timers thus provide 35 hours per week of
productive labor time. By corporate policy, the bank limits part-time
hours to a maximum of 50% of the day’s total requirement. Part-
timers earn $6 per hour (or $24 per day) on average, whereas full-
timers earn $75 per day in salary and benefits on average.
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Labor Scheduling Example

Minimize total daily

= $75F + $24(P1 + P2 + P3 + P4 + P5)
manpower cost
F + P1 ≥ 10 (9 AM - 10 AM needs)
F + P1 + P2 ≥ 12 (10 AM - 11 AM needs)
1/2 F + P1 + P2 + P3 ≥ 14 (11 AM - noon needs)
1/2 F + P1 + P2 + P3 + P4 ≥ 16 (noon - 1 PM needs)
F + P2 + P3 + P4 + P5 ≥ 18 (1 PM - 2 PM needs)
F + P3 + P4 + P5 ≥ 17 (2 PM - 3 PM needs)
F + P4 + P5 ≥ 15 (3 PM - 4 PM needs)
F + P5 ≥ 10 (4 PM - 5 PM needs)
F ≤ 12
4(P1 + P2 + P3 + P4 + P5) ≤ .50(10 + 12 + 14 + 16 + 18 + 17 + 15 + 10)
F, P1, P2 , P3 , P4, P5 ≥ 0
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Integer and Binary Variables
Integer and Binary Variables

• In some cases solutions must be integers

• Binary variables allow for “yes-or-no” decisions
• Not good practice to round variables to integers
• Constraints can be added to force integer or binary values
• Larger programs may take longer to solve

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Integer and Binary Variables

1, 𝑖𝑓 𝑠𝑜𝑚𝑒 𝑐𝑜𝑛𝑑𝑖𝑡𝑖𝑜𝑛𝑠 ℎ𝑜𝑙𝑑𝑠

• Binary variables defined by 𝑦 = ቊ
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
• Limiting the number of alternatives selected from a group
Y1 + Y2 + Y3 ≤ 2 no more than 2 conditions met
Y1 + Y2 + Y3 = 2 exactly 2 conditions met

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• Dependent selections
Y1 ≤ Y2 ,Y1 can only occur if Y2 occurs
Y1 = Y2both events or neither event

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Example

A chemical company owns three factories that manufacture a

certain chemical. The company needs to produce 38000 kgs to this
chemical this year. The company can produce these chemicals at
any of these sites where the annual cost of operating the factory,
variable cost per unit and the factories capacities is given in this
table. Find the plan that minimizes the yearly annual cost.

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Example

Decision variables
𝑦1 , 𝑦2 , 𝑦3 : binary variables that are equal to 1 if a factory is built at
locations 1,2,3
X1 , X2 , X3 = number of units produced at the plants 1,2,3

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Example

Min cost =340,000Y1 + 270,000Y2 + 290,000Y3 + 32X1 + 33X2 +

30X3
subject to: X1 + X2 + X3 ≥ 38,000
X1 ≤ 21,000Y1
X2 ≤ 20,000Y2
X3 ≤ 19,000Y3
X1, X2, X3 ≥ 0 and integer
Y1, X2, Y3 = 0 or 1

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SOLVING LINEAR PROGRAMMING PROBLEMS
WITH EXCEL
Example

Sidneyville manufactures household and commercial furnishings. The Office Division

produces two desks, rolltop and regular. Sidneyville constructs the desks in its plant
outside Medford, Oregon, from a selection of woods. The woods are cut to a uniform
thickness of 1 inch. For this reason, one measures the wood in units of square feet. One
rolltop desk requires 10 square feet of pine, 4 square feet of cedar, and 15 square feet
of maple. One regular desk requires 20 square feet of pine, 16 square feet of cedar,
and 10 square feet of maple. The desks yield respectively $115 and $90 profit per sale.
At the current time the firm has available 200 square feet of pine, 128 square feet of
cedar, and 220 square feet of maple. The firm has backlogged orders for both desks
and would like to produce the number of rolltop and regular desks that would maximize
profit. How many of each should it produce?

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a) Sidneyville’s sales manager has renegotiated the contract for
regular desks and now expects to make a profit of $125 on
each. He excitedly conveys this information to the firm’s
production manager, expecting that the optimal mix of rolltop
and regular desks will change as a result. Does it?
b) Suppose that the new contract also has a higher profit for the
rolltop desks. If the new profit for the rolltop desks is $140, how
will this change the optimal solution?

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c) A logging company has offered to sell Sidneyville an additional 50 square feet of
maple for $5.00 per square foot. Based on the original objective function, would you
recommend that it accept the offer?
d) Assuming that Sidneyville purchases the 50 square feet of maple, how is the optimal
solution affected?
e) The firm is considering a pine desk that would require 25 square feet of pine and no
other wood. What profit for pine desks would be required to make its production
worthwhile, assuming current levels of resources and original profits on regular and
rolltop desks?
f) During inspection, the quality department discovered that 50 square feet of pine had
water damage and could not be used. Will it be optimal to produce both desks under
these circumstances? Will the product mix change?

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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

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Sensitivity Analysis

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