QUESTION: Discuss Linear Programming Model with examples

Linear Programming Model

Optimization is the way of life. We all have finite resources and time and we want to make

the most of them. From using your time productively to solving supply chain problems for

your company – everything uses optimization. Linear programming (LP) is one of the

simplest ways to perform optimization. It helps you solve some very complex optimization

problems by making a few simplifying assumptions. As a manager, you are bound to come

across applications and problems to be solved by Linear Programming.

Linear programming is a simple technique where we depict complex relationships through

linear functions and then find the optimum points. The important word in the previous

sentence is depicted. The real relationships might be much more complex – but we can

simplify them to linear relationships.

Applications of linear programming are everywhere around you. You use linear programming

at personal and professional fronts. You are using linear programming when you are driving

from home to work and want to take the shortest route. Or when you have a project delivery

you make strategies to make your team work efficiently for on-time delivery.

Example of a linear programming problem

Let’s say a FedEx delivery man has 6 packages to deliver in a day. The warehouse is located

at point A. The 6 delivery destinations are given by U, V, W, X, Y, and Z. The numbers on

the lines indicate the distance between the cities. To save on fuel and time the delivery person

wants to take the shortest route.

then come up with the shortest route. This technique of choosing the shortest route is called

linear programming.

In this case, the objective of the delivery person is to deliver the parcel on time at all 6

destinations. The process of choosing the best route is called Operation Research. Operation

research is an approach to decision-making, which involves a set of methods to operate a

system.

Linear programming is used for obtaining the most optimal solution for a problem with given

constraints. In linear programming, we formulate our real-life problem into a mathematical

model. It involves an objective function, linear inequalities with subject to constraints.

Is the linear representation of the 6 points above representative of the real-world? Yes and

No. It is an oversimplification as the real route would not be a straight line. It would likely

have multiple turns, U-turns, signals and traffic jams. But with a simple assumption, we have

reduced the complexity of the problem drastically and are creating a solution that should

work in most scenarios.

Linear programming is used in various industries. The manufacturing and service industry

uses linear programming on a regular basis. Below are the various applications of Linear

programming.

1. Manufacturing industries use linear programming for analysing their supply chain

operations. Their motive is to maximize efficiency with minimum operation cost.

2. Linear programming is also used in organized retail for shelf space optimization.

Since the number of products in the market has increased in leaps and bounds, it is

important to understand what does the customer want.

3. Optimization is also used for optimizing Delivery Routes. This is an extension of the

popular traveling salesman problem. The service industry uses optimization for

finding the best route for multiple salesmen traveling to multiple cities.

4. Optimizations are also used in Machine Learning. Supervised Learning works on the

fundamental of linear programming. A system is trained to fit on a mathematical

model of a function from the labelled input data that can predict values from an

unknown test data

References

George B. Dantzig. (2002) Linear Programming. Operations Research 50(1):42-47. Institute

for Operations Research and the Management Sciences (INFORMS) INFORMS is

located in Maryland, USAhttps://doi.org/10.1287/ opre.50.1.42.17798

at https://www.analyticsvidhya.com/blog/2017/02/lintroductory-guide-on-linear-programming-

explained-in-simple-english/

Example

Maria has an online shop where she sells handmade paintings and cards. She sells the
painting for $50 and the card for $20. It takes her 2 hours to complete 1 painting and 45
minutes to make a single card. She also has a day job and makes paintings and cards in her
free time. She cannot spend more than 15 hours a week to make paintings and cards.
Additionally, she should make not more than 10 paintings and cards per week.

She makes a profit of $25 on painting and $15 on each card. How many paintings and cards
should she make each week to maximize her profit?

Solution

Follow these steps to solve the above problem.

Step 1 - Identify the decision variables

x = number of paintings

y = number of cards

Step 2 - Write the objective function

Since she makes $25 profit in each sold painting and $15 on each sold card, therefore the
objective function is:

 
Step 3 - Identify the set of constraints

It takes her 2 hours to complete a painting and 45 minutes to make a card. She cannot spend
more than 15 hours a week in making cards and painting.

She should make at most 10 paintings and cards a week.

We also have two other constraints:

And

Step 4 - Choose the method for solving the problem

We will use the graphical method to solve this problem.

Step 5 - Construct the graph

Use the coordinates of the vertices and substitute them in the objective function to yield the
maximum point.

       Maximum 

The above calculations show that Maria can make the maximum profit of $210 a week by
making 6 paintings and 4 cards.