Module 2: Linear Programming: Model Formulation and Graphical Solution

AEC 24: Summer SY 2020 – 2021

Many major decisions faced by a manager of a business focus on the best wat to achieve the objectives
of the firm, subject to the restrictions placed on the manager by the operating environment. These
restrictions can be in the form of time, labor, energy, material, or money. They can also take form of
restrictive guidelines.

One of the most frequent objectives of business firms is to gain the most profit or in other terms, maximize
profit. The objective of individual organizational units within a firm is often to minimize cost.

When a manager attempts to solve a general type of problem by seeking an objective that is subject to
restrictions, the management science technique frequently used is Linear Programming.

To illustrate some of the properties that all linear programming problems have in common, consider the
following typical applications:

1. A manufacturer wants to develop a production schedule and an inventory policy that will satisfy
sales demand in future periods. Ideally, the schedule and policy will enable the company to satisfy
demand and at the same time minimize the total production and inventory costs.
2. A financial analyst must select an investment portfolio from a variety of stock and bond
investment alternatives. The analyst would like to establish the portfolio that maximizes the
return on investment.
3. A marketing manager wants to determine how best to allocate a fixed advertising budget among
alternative advertising media such as radio, television, newspaper, and magazine. The manager
would like to determine the media mix that maximizes advertising effectiveness.
4. A company has warehouses in a number of locations throughout the United States. For a set of
customer demands, the company would like to determine how much each warehouse should ship
to each customer so that total transportation costs are minimized.

There are three steps in applying the linear programming technique.

1. The problem must be identified as being solvable by linear programming;

2. The unstructured problem must be formulated as a mathematical model;
3. The model must be solved by using established mathematical techniques

The linear programming technique derives its name from the fact that the functional relationships in the
mathematical model are linear, and the solution technique consists of predetermined mathematical
steps—that is, a program.

A. Model Formulation

Linear programming model consists of certain common components and characteristics

Model components:

1. Decision Variables: mathematical symbols that represent levels of activity by the firm

For example, an electrical manufacturing firm desires to produce 𝑥1 radios, 𝑥2 toasters, 𝑥3 clocks
where 𝑥1 , 𝑥2 , and 𝑥3 are symbols representing unknown variable quantities of item.
 The final values of 𝑥1 , 𝑥2 , and 𝑥3 , as determined by the firm constitute a decision (example when
it is determined that 𝑥1 = 100)

2. Objective Function: a linear mathematical relationship that describes the objective of the firm in
terms of the decision variables. The objective function always consists of either maximizing or
minimizing some value (example maximizing profit or minimizing cost of producing radios)

3. Model Constraints: linear relationships of the decision variables; they represent the restrictions
placed on the firm by the operating environment. This may be in the form of limited resources or
restrictive guidelines.

For example, only 40 hours of labor may be available to produce radios during production. The
actual numeric values in the objective function and the constraints are parameters

A Maximization Model Example

Bran Pottery Company is a small crafts operation run by a native tribal council. The company employs
skilled artisans to produce clay bowls and mugs with authentic designs and colors. The two primary
resources used by the company are special pottery clay and skilled labor. Given these limited resources,
the company desires to know how many bowls and mugs to produce each day in order to maximize profit.
This is generally referred to as a product mix problem type.

The two products have the following resource requirements for production and profit per item produced
(i.e., the model parameters):

Resource Requirements
Product Labor (hour per unit) Clay (pound per unit) Profit (PhP per unit)
Bowl 1 4 40
Mug 2 3 50

There are 40 hours of labor and 120 pounds of clay available each day for production. We will formulate
this problem as a linear programming model by defining each component of the model separately and
then combining the components into a single model. The steps in this formulation process are summarized
as follows:
 Summary of Linear Programming Model Formulation Steps
Define the decision variables How many bowls and mugs to produce?
Define the objective function Maximize profit
Define the constraints The resources (clay and labor available)

• Decision Variables:
The decision confronting management in this problem is how many bowls and mugs to produce.
The two decision variables represent the number of bowls and mugs to be produced on a daily
basis. The quantities to be produced can be represented as
𝑥1 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑏𝑜𝑤𝑙𝑠 𝑡𝑜 𝑝𝑟𝑜𝑑𝑢𝑐𝑒
𝑥2 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑢𝑔𝑠 𝑡𝑜 𝑝𝑟𝑜𝑑𝑢𝑐𝑒

• Objective function
The objective of the company is to maximize total profit which can be computed as the sum of
the profits gained from each bowl and mug.

Profit derived from bowls is determined by multiplying the unit profit of each bowl, P40, by the
number of bowls produced, 𝑥1 . Likewise, profit derived from mugs is derived from the unit
profit of a mug, P50, multiplied by the number of mugs produced, 𝑥2 .

Thus, the total profit (defined symbolically as Z) can be mathematically expressed as:
40𝑥1 + 50𝑥2

By placing the term maximize in front of the profit function, it then expresses the objective of
the firm

𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑍 = 40𝑥1 + 50𝑥2

𝑤ℎ𝑒𝑟𝑒 𝑍 = 𝑇𝑜𝑡𝑎𝑙 𝑃𝑟𝑜𝑓𝑖𝑡 𝑝𝑒𝑟 𝑑𝑎𝑦
40𝑥1 = 𝑃𝑟𝑜𝑓𝑖𝑡 𝑓𝑟𝑜𝑚 𝑏𝑜𝑤𝑙𝑠
50𝑥2 = 𝑃𝑟𝑜𝑓𝑖𝑡 𝑓𝑟𝑜𝑚 𝑚𝑢𝑔𝑠

• Model Constraints
Two resources are used for production of the products – labor and clay, both of which are
limited.
Production of bowls and mugs requires both labor and clay. For each bowl produced, 1 hour of
labor is required. Therefore, the labor used for the production of bowl is 1𝑥1hours.
Similarly, each mug requires 2 hours of labor, thus, the labor used to produce mugs on a daily
basis is 2𝑥2 hours.
Total labor used by the company is the sum of the individual amounts of labor used for each
product:
1𝑥1 + 2𝑥2

However, the amount of labor represented by 1𝑥1 + 2𝑥2 is limited to 40 hours per day. The
complete labor constraint would be:
1𝑥1 + 2𝑥2 ≤ 40 ℎ𝑜𝑢𝑟𝑠

The constraint for clay is formulated in the same way as the labor constraint. Since each bowl
requires 4 pounds of clay, the amount of clay used daily for the production of bowls is 4𝑥1
pounds. For the production of the mug, it requires 3 pounds of clay, thus, the amount of clay
used daily for mugs is 3𝑥2 .
Given that the amount of clay available for production each day is 120 pounds, the material
constraint can be formulated as:
4𝑥1 + 3𝑥2 ≤ 120 𝑝𝑜𝑢𝑛𝑑𝑠

Final restriction is that the number of bowls and mugs produced must be either zero or a positive
value because it is impossible to produce negative items. This type of restriction is referred as
nonnegativity constraint. This is mathematically expressed as:
𝑥1 ≥ 0, 𝑥2 ≥ 0

The complete linear programming model for this problem is as follows:

𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑍 = 40𝑥1 + 50𝑥2
𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜
1𝑥1 + 2𝑥2 ≤ 40
4𝑥1 + 3𝑥2 ≤ 120
𝑥1 , 𝑥2 ≥ 0

The solution of this model will result in numeric values for 𝑥1 and 𝑥2 that will maximize total profit
(Z).

As one possible solution, consider 𝑥1 = 5 𝑏𝑜𝑤𝑙𝑠 and 𝑥2 = 10 𝑚𝑢𝑔𝑠 . Substitute the hypothetical
solution into each of the constraints in order to make sure that the solution does not require more
resources that the constraints show:
1(5) + 1(10) ≤ 40
25 ≤ 40
and
4(5) + 3(10) ≤ 120
50 ≤ 120

Since neither of the constraints is violated by the hypothetical solution, this makes the solution
feasible. A feasible solution does not violate any of the constraints.

Substituting these solution values in the objective function would give:

𝑍 = 40(5) + 50(10) = 700

However, for the time being, it cannot be concluded that P700.00 is the maximum profit.

Now, consider another hypothetical solution wherein 𝑥1 = 10 𝑏𝑜𝑤𝑙𝑠 and 𝑥2 = 20 𝑚𝑢𝑔𝑠.

𝑍 = 40(10) + 50(20)
𝑍 = 1,400

Although this is certainly a better solution in terms of profit, it is actually infeasible. An infeasible
solution violates at least one of the constraints.
Constraint 1:
1(10) + 2(20) ≤ 40
50 ≰ 40
 Constraint 2:
4(10) + 3(20) ≤ 120
100 ≤ 120
Constraint 3:
𝑥1 , 𝑥2 ≥ 0
10, 20 ≥ 0

The solution to the problem must maximize profit without violating the constraints. The solution that
achieves this objective is 𝑥1 = 24 𝑏𝑜𝑤𝑙𝑠 and 𝑥2 = 8𝑚𝑢𝑔𝑠, with a corresponding profit of P1,360.00.

The determination of this solution is shown using the graphical solution approach.

B. Graphical Solutions of Linear Programming Models

Following the formulation of a mathematical model, the next stage in the application of linear
programming to a decision-making problem is to find the solution of the model.

A common solution approach is to solve algebraically the set of mathematical relationships that form the
model either manually or using a computer program, thus determining the values for the decision
variables. However, because the relationships are linear, some models and solutions can be illustrated
graphically.

The graphical method is realistically limited to models with only two decision variables, which can be
represented on a graph of two dimensions. Models with three decision variables can be graphed in three
dimensions, but the process is quite unmanageable, and models of four or more decision variables cannot
be graphed at all.

Although the graphical method is limited as a solution approach, it is very useful at this point in our
presentation of linear programming in that it gives a picture of how a solution is derived. Graphs can
provide a clearer understanding of how the computer and mathematical solution approaches presented
in subsequent chapters work and, thus, a better understanding of the solutions.

Graphical Solution of a Maximization Model

The product mix model will be used to demonstrate the graphical interpretation of a linear programming
problem.

Recall the example of Bran Pottery Company’s attempt to decide how many bowls and mugs to produce
daily, given limited amounts of labor and clay.
The complete linear programming model was formulated as:
𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑍 = 40𝑥1 + 50𝑥2
𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜
1𝑥1 + 2𝑥2 ≤ 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
4𝑥1 + 3𝑥2 ≤ 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
𝑥1 , 𝑥2 ≥ 0
𝑤ℎ𝑒𝑟𝑒
𝑥1 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑏𝑜𝑤𝑙𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑
𝑥2 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑢𝑔𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑
The figure below is a set of coordinates for the decision variables 𝑥1 and 𝑥2 , on which the graph of the
model will be plotted. Note that only the positive quadrant is drawn because of the nonnegativity
constraints 𝑥1 ≥ 0 and 𝑥2 ≥ 0.

The first step in drawing the graph of the model is to plot the constraints on the graph.

This is done by treating both constraints as equations (or straight lines) and plotting each line on the graph.
Let’s consider the labor constraint line first:
𝑥1 + 2𝑥2 = 40
A simple procedure for plotting this line is to determine two points that are on the line and then draw a
straight line through the points. One point can be found by letting and solving for:
0 + 2𝑥2 = 40
𝑥2 = 20
Thus, one point is at the coordinates 𝑥1 = 0 and 𝑥2 = 20. A second point can be found by letting 𝑥2 = 0
and solving for 𝑥1 :
𝑥1 + 2(0) = 40
𝑥1 = 40
The second point is 𝑥1 = 40, 𝑥2 = 0. The line on the graph representing this equation is drawn by
connecting these two points, as shown below.
However, this is only the graph of the constraint line and does not reflect the entire constraint, which also
includes the values that are less than or equal to this line. The area representing the entire constraint is
shown here:

To test the correctness of the constraint area, check any two (2) points – one inside the constraint area
and one outside.
For example, check point A in the figure above, which is at the intersection of 𝑥1 = 10 and 𝑥2 = 10.
Substituting these values into the following labor constraint:
1𝑥1 + 2𝑥2 ≤ 40
1(10) + 2(10) ≤ 40
30 ≤ 40 ℎ𝑟𝑠.

This shows that point A is indeed within the constraint area, as these values for 𝑥1 and 𝑥2 yield a
quantity that does not exceed the limit of 40 hours.

Next, check point B at 𝑥1 = 40 and 𝑥2 = 30:

1𝑥1 + 2𝑥2 ≤ 40
1 40) + 2(30) ≤ 40
(
100 ≰ 40 ℎ𝑟𝑠.

Point B is obviously outside the constraint area because the values for 𝑥1 and 𝑥2 yield a quantity (100)
that exceeds the limit of 40 hours.

A line is drawn for the clay constraint the same way as the one for the labor constraint – by finding two
(2) points on the constraint line and connecting them with a straight line.

First, let 𝑥1 = 0 and solve for 𝑥2 :

4(0) + 3𝑥2 = 120
𝑥2 = 40

Performing this operation results in a point, 𝑥1 = 0, 𝑥2 = 40. Next, let 𝑥2 = 0 and solve for 𝑥1 :
4𝑥1 + 3(0) = 120
𝑥1 = 30

This operation yields a second point, 𝑥1 = 30, 𝑥2 = 0. Plotting these points on the graph and connecting
them with a line gives the constraint line and area for clay as shown in this graph below:
Combining the two individual graphs for both labor and clay produces a graph of the model constraints,
as shown below:

The shaded area in the figure above is the area that is common to both model constraints. Therefore,
this is the only area on the graph that contains points (i.e., values for 𝑥1 and 𝑥2 ) that will satisfy both
constraints simultaneously.

For example, consider the points R, S, and T in this figure:

Point R satisfies both constraints; thus, we say it is a feasible solution point.
Point S satisfies the clay constraint but exceeds the labor constraint; thus, it is infeasible.
Point T satisfies neither constraint; thus, it is also infeasible.

The shaded area in the figure above is referred to as the feasible solution area because all the points in
this area satisfy both constraints. Some point within this feasible solution area will result in maximum
profit for Bran Pottery Company. The next step in the graphical solution approach is to locate this point.

C. Optimal Solution Point

The second step in the graphical solution method is to locate the point in the feasible solution area that
will result in the greatest total profit.

To begin the solution analysis, first plot the objective function line for an arbitrarily selected level of profit.
For example, if we say profit, Z, is P800, the objective function is:
800 = 40𝑥1 + 50𝑥2

Plotting this line just as we plotted the constraint line results in the graph shown below:

Every point on this line is in the feasible solution area and will result in a profit of P800.00. However, we
will check whether an even greater profit will still provide a feasible solution. For example, consider
profits of P1,200.00 and P1,600.00 as shown in this graph:
A portion of the objective function line for a profit of P1,200.00 is outside the feasible solution area but
part of the line remains within the feasible area. Therefore, this profit line indicates that there are
feasible solution points that give a profit greater than P800.00.

If the profit is increased again to P1,600.00, the profit line (also shown in the graph above) is completely
outside the feasible solution area. The fact that no points on this line are feasible indicates that a profit
of P1,600 is not possible.

Because a profit of P1,600.00 is too great for the constraint limitations, the question of the maximum
profit value remains. It can be seen in the graph that profit increases as the objective function line
moves away from the origin.
Given this characteristic, the maximum profit will be attained at the point where the objective function
line is farthest from the origin and is still touching a point in the feasible solution area. This point is
shown as point B in this graph:

To find point B, wee place a straightedge parallel to the objective function line 800 = 40𝑥1 + 50𝑥2 as
presented in the graph above and move it outward from the origin as far as we can without losing contact
with the feasible solution area. Point B here is referred to as the Optimal Solution.

D. Solution Values
The third step in the graphical solution approach is to solve for the values of 𝑥1 and 𝑥2 once the optimal
solution point has been found. It is possible to determine the 𝑥1 and 𝑥2 coordinates of point B in the
previous graph directly from the graph, as shown below:
The graphical coordinates corresponding to point B as shown in the graph above are 𝑥1 = 24 and 𝑥2 =
8. This is the optimal solution for the decision variables in the problem.

However, unless an absolutely accurate graph is drawn, it is frequently difficult to determine the correct
solution directly from the graph. A more exact approach is to determine the solution values
mathematically once the optimal point on the graph has been determined.

First, however, we will consider a few characteristics of the solution.

As the objective function was increased, the last point it touched in the feasible solution area was on the
boundary of the feasible solution area. The solution point is always on this boundary because the boundary
contains the points farthest from the origin (i.e., the points corresponding to the greatest profit).
This characteristic of linear programming problems reduces the number of possible solution points
considerably, from all points in the solution area to just those points on the boundary. However, the
number of possible solution points is reduced even more by another characteristic of linear programming
problems.

The solution point will be on the boundary of the feasible solution area and at one of the corners of the
boundary where two constraint lines intersect. (The graphical axes are also constraints because 𝑥1 ≥ 0
and 𝑥2 ≥ 0).

These corners (points A, B, and C in latest graph) are protrusions, or extremes, in the feasible solution
area; they are called extreme points. Extreme Points are corner points on the boundary of the feasible
solution area.

It has been proven mathematically that the optimal solution in a linear programming model will always
occur at an extreme point. Therefore, in our sample problem, the possible solution points are limited to
the three extreme points, A, B, and C. The optimal extreme point is the extreme point the objective
function touches last as it leaves the feasible solution area.

As shown in the previous graphs, the optimal solution point is B. Since point B is formed by the intersection
of two (2) constraint lines, the two (2) lines are equal at point B. Thus, the values of 𝑥1 and 𝑥2 at that
intersection can be found by solving the two (2) equations simultaneously.

First, convert both equations of functions of 𝑥1 :

𝑥1 + 2 𝑥2 = 40
𝑥1 = 40 − 2 𝑥2
and
4𝑥1 + 3 𝑥2 = 120
4𝑥1 = 120 − 3 𝑥2
3 𝑥2
𝑥1 = 30 − ( )
4

Now, let 𝑥1 in the first equation equal 𝑥1 in the second equation:

3 𝑥2
40 − 2𝑥2 = 30 − ( )
4
and solve for 𝑥2 :
 5 𝑥2
= 10
4
5𝑥2 = 10(4)
𝑥2 = 8

Substituting 𝑥2 = 8 into either one of the original equations gives a value for 𝑥1 :
𝑥1 = 40 − 2 𝑥2
𝑥1 = 40 − 2(8)
𝑥1 = 24

Thus, the optimal solution at point B is 𝑥1 = 24 and 𝑥2 = 8.

Substituting these values into the objective function gives the maximum profit:
𝑍 = 40𝑥1 + 50 𝑥2
𝑍 = 40(24) + 50(8)
𝑍 = 1,360

In terms of the original problem, the solution indicates that if the pottery company produces 24 bowls
and 8 mugs, it will receive P1,360, the maximum daily profit possible (given the resource constraints).

Given that the optimal solution will be at one of the extreme corner points, A, B, or C, we can also find the
solution by testing each of the three points to see which results in the greatest profit, rather than by
graphing the objective function and seeing which point it last touches as it moves out of the feasible
solution area.

This graph shows the solution values for all three points, A, B, and C, and the amount of profit, Z, at each
point:

Assume for a moment that the profit for a bowl is P70 instead of P40, and the profit for a mug is P20
instead of P50. These values result in a new objective function, 𝑍 = 70𝑥1 + 20𝑥2 . If the model constraints
for labor or clay are not changed, the feasible solution area remains the same, as shown below:
However, the location of the objective function above is different from that of the original objective
function. The reason for this change is that the new profit coefficients give the linear objective function a
new slope.

The slope can be determined by transforming the objective function into the general equation for a
straight line, 𝑦 = 𝑎 + 𝑏𝑥, where y is the dependent variable, a is the y intercept, b is the slope, and x is
the independent variable.

For our sample objective function, 𝑥2 is the dependent variable corresponding to y (i.e., it is on the
vertical axis), and 𝑥1 is the independent variable. Thus, the objective function can be transformed into
the general equation of a line as follows:
𝑍 = 70𝑥1 + 20𝑥2
20𝑥2 = 𝑍 − 70𝑥1
𝑍 7
𝑥2 = − 𝑥
20 2 1
where
𝑥2 = 𝑦
𝑍
=𝑎
20
7
− 𝑥1 = 𝑏
2
7
This transformation identifies the slope of the new objective function as − (the minus sign indicates that
2
4
the line slopes downward). In contrast, the slope of the original objective function was − 5.

If we move this new objective function out through the feasible solution area, the last extreme point it
touches is point C. Simultaneously solving the constraint lines at point C results in the following solution:
𝑥1 = 30
4𝑥1 + 3𝑥2 = 120
and
4𝑥1
𝑥2 = 40 − ( )
3
4(30)
𝑥2 = 40 − ( )
3
𝑥2 = 0
Thus, the optimal solution at point C is 𝑥2 = 30 𝑏𝑜𝑤𝑙𝑠, 𝑥2 = 0 𝑚𝑢𝑔𝑠, 𝑎𝑛𝑑 𝑍 = 2,100 𝑝𝑟𝑜𝑓𝑖𝑡. Altering
the objective function coefficients results in a new solution.

This brief example of the effects of altering the objective function highlights two useful points:
a. Optimal extreme point is determined by the objective function, and an extreme point
on one axis of the graph is as likely to be the optimal solution as is an extreme point
on a different axis; and,
b. Solution is sensitive to the values of the coefficients in the objective function.

If the objective function coefficients are changed, the solution may change. Likewise, if the constraint
coefficients are changed, the solution space and solution points may change also. This information can
be of consequence to the decision maker trying to determine how much of a product to produce.

It should be noted that some problems do not have a single extreme point solution. For example, when
the objective function line parallels one of the constraint lines, an entire line segment is bounded by two
adjacent corner points that are optimal; there is no single extreme point on the objective function line.
In this situation, there are multiple optimal solutions. Multiple Optimal Solutions can occur when the
objective function is parallel to a constraint line.

E. Slack Variables
Once the optimal solution was found at point B, simultaneous equations were solved to determine the
values of 𝑥1 and 𝑥2 . The solution occurs at an extreme point where constraint equation lines intersect
with each other or with the axis. Thus, the model constraints are considered as equations (=) rather than
≥ 𝑜𝑟 ≤ inequalities.

There is a standard procedure for transforming ≤ inequality constraints into equations. This
transformation is achieved by adding a new variable, called a slack variable, to each constraint. Slack
Variables represent unused resources. For the pottery company example, the model constraints are:
1𝑥1 + 2𝑥2 ≤ 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
4𝑥1 + 3𝑥2 ≤ 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦

The addition of a unique slack variable, 𝑠1 , to the labor constraint and 𝑠2 to the constraint for clay results
in the following equations:
1𝑥1 + 2𝑥2 + 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
4𝑥1 + 3𝑥2 + 𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦

The slack variables in the equations, 𝑠1 and 𝑠2 , will take on any value necessary to make the left-hand side
of the equation equal to the right-hand side.

Consider a hypothetical solution of 𝑥1 = 5 and 𝑥2 = 10. Substituting these values into the foregoing
equation yields:
1𝑥1 + 2𝑥2 + 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
1(5) + 2(10) + 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
𝑠1 = 15 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
and
4𝑥1 + 3𝑥2 + 𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
4(5) + 3(10) + 𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
𝑠2 = 70 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
The example above wherein 𝑥1 = 5 𝑏𝑜𝑤𝑙𝑠 and 𝑥2 = 10 𝑚𝑢𝑔𝑠 represent a solution that does not make
use of the total available amount of labor and clay. In the labor constraint, 5 bowls and 10 mugs require
only 25 hours of labor. This leaves 15 hours that are not used. Thus, 𝑠1 represents the amount of unused
labor, or slack.

In the clay constraint, 5 bowls and 10 mugs require only 50 pounds of clay. This leaves 70 pounds of clay
unused. Thus, 𝑠2 represents the amount of unused clay. In general, slack variables represent the amount
of unused resources.

The ultimate instance of unused resources occurs at the origin, where 𝑥1 = 0 and 𝑥2 = 0. Substituting
these values into the foregoing equation yields:
1𝑥1 + 2𝑥2 + 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
1(0) + 2(0) + 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
and
4𝑥1 + 3𝑥2 + 𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
4(0) + 3(0) + 𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦

Since there is no production that is taking place at the origin, all the resources are unused; thus, the slack
variables equal the total available amounts of each resources: 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟 and 𝑠2 =
120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦.

What is the effect of these new slack variables on the objective function? The objective function for our
example represents the profit gained from the production of bowls and mugs,
𝑍 = 40𝑥1 + 50𝑥2

The coefficient P40.00 is the contribution to profit of each bowl; P50.00 is the contribution to profit of
each mug. What, then, do the slack variables 𝑠1 and 𝑠2 contribute? They contribute nothing to profit
because they represent unused resources. Profit is made only after the resources are put to use in making
bowls and mugs. Using slack variables, the objective function can be written as:
𝑚𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑍 = 40𝑥1 + 50𝑥2 + 0𝑠1 + 0𝑠2

As in the case of decision variables (𝑥1 and 𝑥2 ), slack variables can have only nonnegative values because
negative resources are not possible. Therefore, for this model formulation, 𝑥1 , 𝑥2 , 𝑠1 , 𝑎𝑛𝑑 𝑠2 ≥ 0.

The complete linear programming model can be written in what is referred to as standard form with
slack variables as follows:
𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑍 = 40𝑥1 + 50𝑥2 + 0𝑠1 + 0𝑠2
𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜
1𝑥1 + 2𝑥2 + 𝑠1 = 40 ℎ𝑜𝑢𝑟𝑠 𝑜𝑓 𝑙𝑎𝑏𝑜𝑟
4𝑥1 + 3𝑥2 + 𝑠2 = 120 𝑝𝑜𝑢𝑛𝑑𝑠 𝑜𝑓 𝑐𝑙𝑎𝑦
𝑥1 , 𝑥2 , 𝑠1 , 𝑠2 ≥ 0
Summary of the Graphical Solution Steps
The steps for solving a graphical linear programming model are summarized here:

1. Plot the model constraints as equations on the graph; then, considering the inequalities of the
constraints, indicate the feasible solution area.

2. Plot the objective function; then, move this line out from the origin to locate the optimal solution point.

3. Solve simultaneous equations at the solution point to find the optimal solution values.

Or

2. Solve simultaneous equations at each corner point to find the solution values at each point.

3. Substitute these values into the objective function to find the set of values that results in the maximum
Z value.