Linear Programming:

Model Formulation
and
Graphical Solution

2-1
 Topics
■ Model Formulation
■ A Maximization Model Example
■ Graphical Solutions of Linear Programming Models
■ A Minimization Model Example
■ Characteristics of Linear Programming Problems
 Linear Programming: An Overview
■ Objectives of business decisions frequently involve
maximizing profit or minimizing costs.
■ Linear programming uses linear algebraic relationships
to represent a firm’s decisions, given a business objective,
and resource constraints.
■ Steps in application:
1. Identify problem as solvable by linear programming.
2. Formulate a mathematical model of the
unstructured problem.
3. Solve the model.
4. Implementation
 Model Components
• Decision variables - mathematical symbols
representing levels of activity by the firm.
• Objective function - a linear mathematical
relationship describing an objective of the firm, in
terms of decision variables - this function is to be
maximized or minimized.
• Constraints – requirements or restrictions placed
on the firm by the operating environment, stated in
linear relationships of the decision variables.
• Parameters - numerical coefficients and constants
used in the objective function and constraints.
Summary of Model Formulation Steps

Step 1 : Define the decision variables

Step 2 : Define the objective function

Step 3 : Define the constraints

 LP Model Formulation
A Maximization Example

Beaver Creek Pottery Company is a small crafts operation

run by a Native American tribal council. The company
employs skilled artisans to produce clay bowls and mugs
with authentic Native American designs and colors. The
two primary resources used by the company are special
pottery clay and skilled labor. Skilled labors are available
40 hours per day, and special pottery clay is available 120
lbs per day. Given these limited resources, the company
desires to know how many bowls and mugs to produce
each day in order to maximize profit?
Example: Beaver Creek Company

Resource Requirements

Labor Clay Profit

Product
(Hr./Unit) (Lb./Unit) ($/Unit)

Bowl 1 4 40
Mug 2 3 50
 Example: Beaver Creek Company

Step 1 : Define the decision variables

• x1 = number of bowls to produce per day
• x2 = number of mugs to produce per day

Step 2 : Define the objective function

• Maximize Z = $40x 1 + $50x 2, Where Z = profit per day

Step 3 : Define the constraints

• Resource Constraints: 1x 1 + 2x2 ≤ 40 hours of labor
4x1 + 3x 2 ≤ 120 pounds of clay
• Non-Negativity Constraints: x1 ≥ 0; x2 ≥ 0
 Example: Beaver Creek Company

Complete Linear Programming Model:

MaximizeZ = $40x 1 + $50x 2

subject to: 1x1 + 2x 2 ≤ 40

4x2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Feasible Solutions
A feasible solution does not violate any of the constraints:

Example: x1 = 5 bowls
x2 = 10 mugs
Z = $40x 1 + $50x 2 = $700

Labor constraint check: 1(5) + 2(10) = 25 ≤ 40 hours

Clay constraint check: 4(5) + 3(10) = 70 ≤ 120 pounds
 Infeasible Solutions
An infeasible solution violates at least one of the
constraints:

Example: x1 = 10 bowls
x2 = 20 mugs
Z = $40x 1 + $50x 2 = $1400

Labor constraint check: 1(10) + 2(20) = 50 > 40 hours

 Graphical Solution of LP Models

• Graphical solution is limited to linear programming

models containing only two decision variables (can be
used with three variables but only with great difficulty).

• Graphical methods provide visualization of how a

solution for a liner programming problem is obtained.
 Example: Beaver Creek Company

X2 is mugs

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0

X1 is bowls
 Example: Beaver Creek Company

Graph of labor constraint

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Example: Beaver Creek Company

Labor constraint area

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Example: Beaver Creek Company

The constraint area for clay

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Example: Beaver Creek Company

Graph of both
model constraints

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
Feasible Solution Area: Beaver Creek Company

The feasible solution

area constraints

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Beaver Creek Company
Objective Function Solution = $800
Objective function line
for Z = $800

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Alternative Objective Function Solution Lines
Beaver Creek Company
Alternative objective
function lines for profits,
Z, of $800, $1,200, and
$1,600

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Optimal Solution
Beaver Creek Company
Identification of
optimal solution point

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Optimal Solution Coordinates
Beaver Creek Company
Optimal solution coordinates

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 Extreme (Corner) Point Solutions
Beaver Creek Company
Solutions at all corner points

Maximize Z = $40x 1 + $50x 2

subject to: 1x 1 + 2x 2 ≤ 40
4x 2 + 3x 2 ≤ 120
x 1, x 2 ≥ 0
 LP Model Formulation
A Minimization Example
A farmer is preparing to plant a crop in the spring and needs to
fertilize a field. There are two brands of fertilizer to choose from,
Super-gro and Crop-quick. Each brand yields a specific amount of
nitrogen and phosphate per bag, as follows:

The farmer’s field requires at least 16 pounds of nitrogen and at

least 24 pounds of phos- phate. Super-gro costs $6 per bag, and
Crop-quick costs $3. The farmer wants to know how many bags of
each brand to purchase in order to minimize the total cost of
fertilizing.
 Example: Farmer’s Field
Decision Variables: x1
= bags of Super-gro
x2 = bags of Crop-quick

The Objective Function:

Minimize Z = $6x1 + 3x 2
Where: $6x1 = cost of bags of Super-Gro
$3x2 = cost of bags of Crop-Quick

Model Constraints:
2x1 + 4x 2 ≥ 16 lb (nitrogen constraint)
4x1 + 3x 2 ≥ 24 lb (phosphate constraint)
x1, x2 ≥ 0 (non-negativity constraint)
Constraint Graph – Farmer’s Field
Constraint lines
for fertilizer model

Minimize Z = $6x 1 + $3x 2

subject to: 2x 1 + 4x 2 ≥ 16
4x 2 + 3x 2 ≥ 24
x 1, x 2 ≥ 0
 Feasible Region– Farmer’s Field

Feasible solution area

Minimize Z = $6x 1 + $3x 2

subject to: 2x 1 + 4x 2 ≥ 16
4x 2 + 3x 2 ≥ 24
x 1, x 2 ≥ 0
Optimal Solution Point – Farmer’s Field

Minimize Z = $6x 1 + $3x 2

subject to: 2x 1 + 4x 2 ≥ 16
4x 2 + 3x 2 ≥ 24
x 1, x 2 ≥ 0

The optimal solution of

a minimization problem
is at the extreme point
closest to the origin.
The optimal solution point
 Characteristics of
Linear Programming Problems
• A decision among alternative courses of action is
required.
• The decision is represented in the model by
decision variables.
• The problem encompasses a goal, expressed as an
objective function, that the decision maker wants
to achieve.
• Restrictions (represented by constraints) exist that
limit the extent of achievement of the objective.
• The objective and constraints must be definable by
linear mathematical functional relationships.
 HOMEWORK
1. A jewelry store makes necklaces and bracelets from gold and platinum.
The store has 18 ounces of gold and 20 ounces of platinum. Each
necklace requires 3 ounces of gold and 2 ounces of plat- inum,
whereas each bracelet requires 2 ounces of gold and 4 ounces of
platinum. The demand for bracelets is no more than four. A necklace
earns $300 in profit and a bracelet, $400. The store wants to
determine the number of necklaces and bracelets to make in order to
maximize profit. a. Formulate a linear programming model for this
problem. b. Solve this model by using graphical analysis.
2. Explain the effect on the optimal solution of increasing the profit on
a bracelet from $400 to $600. What will be the effect of changing the
platinum requirement for a necklace from 2 ounces to 3 ounces?
3. The maximum demand for bracelets is 4. If the store produces the
optimal number of brace- lets and necklaces, will the maximum
demand for bracelets be met? If not, by how much will it be missed?
4. What profit for a necklace would result in no bracelets being
produced, and what would be the optimal solution for this profit?
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