Linear Programming: Model Formulation

and Graphical Solution

Dr. Chang-Hun Lee

Learning Objectives
2.1 Model Formulation
2.2 A Maximization Model Example
2.3 Graphical Solutions of Linear Programming Models
2.4 A Minimization Model Example
2.5 Irregular Types of Linear Programming Problems
2.6 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.
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
e.g., How many bowls and mugs to produce?
Step 2: Define the objective function
e.g., Maximize profit
Step 3: Define the constraints
e.g., The resources (clay and labor) available
LP Model Formulation 1: Profit Maximization

Resource Requirements

Labor Clay Profit

product
(Hr./Unit) (Lb./Unit) ($/Unit)
Bowl 1 4 40
Mug 2 3 50

Figure 2.1 Beaver Creek Pottery Company

• Resource Availability: 40 hrs of labor per day; 120 lbs of clay

• How many bowls and mugs should be produced to maximize profits
given labor and materials constraints?
LP Model Formulation 1: Profit Maximization

Resource Availability:
40 hrs of labor per day
120 lbs of clay
Decision Variables:
x1 = number of bowls to produce per day
x2 = number of mugs to produce per day
Objective Function:
Maximize Z = $40x1 + $50x2
Where Z = profit per day
Resource Constraints:
1x1 + 2 x2 £ 40 hours of labor
4 x1 + 3 x2 £ 120 pounds of clay
Non-Negativity Constraints:
x1 ³ 0; x2 ³ 0
LP Model Formulation 1: Profit Maximization

Complete Linear Programming Model:

Maximize Z = $40 x1 + $50 x2
subject to: 1x1 + 2 x2 £ 40
4 xX21 + 3 x2 £ 120
x1, x2 ³ 0
Feasible Solutions
A feasible solution does not violate any of the constraints:
Example: x1 = 5 bowls
x2 = 10 mugs
Z = $40 x1 + $50 x2 = $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 = $40 x1 + $50 x2 = $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 a picture of how a solution
for a linear programming problem is obtained.
Coordinate Axes

Maximize Z = $40 x1 + $50 x2

subject to: 1x1 + 2 x2 £ 40
4 x2 + 3 x2 £ 120
x1, x2 ³ 0

Figure : Coordinates for graphical analysis

Labor Constraint
Figure : Graph of labor constraint
Labor Constraint Area
Figure : Labor constraint area
Clay Constraint Area
Figure :The constraint area for clay
Both Constraints
Figure : Graph of both model constraints
Feasible Solution Area
Figure : The feasible solution area constraints
Objective Function Solution Z= $800
Figure : Objective function line for Z = $800
Alternative Objective Function Solution
Lines
Figure : Alternative objective function lines for profits, Z, of
$800, $1,200, and $1,600
Optimal Solution

The optimal solution

point is the last point
the objective function
touches as it leaves the
feasible solution area.

Figure : Identification of optimal solution point

Optimal Solution Coordinates
Figure : Optimal solution coordinates
Extreme (Corner) Point Solutions
Figure : Solutions at all corner points
Optimal Solution for New Objective
Function

Maximize Z = $70 x1 + $20 x2

subject to: 1x1 + 2 x2 £ 40
4 x2 + 3 x2 £ 120
x1, x2 ³ 0

Z = 70 x1 + 20 x2
Question
• Tracy runs bakery shop. To bake, cake requires 3 cups of flour, and
a loaf of bread requires 8 cups; Tracy only got 3 hours to bake, and
got 20 cups of flour. A cake requires 45minutes to bake, and a loaf of
bread requires 30 minutes. The price for a cake and a loaf bread for
$10 and $6 respectively. Tracy wants to decide how many cakes and
loaves of bread she should make.

1. Formulate a linear programming model for this problem.

2. Solve this model by using graphical analysis
Slack Variables
• Standard form requires that all constraints be in the form
of equations (equalities).
• A slack variable is added to a £ constraint (weak
inequality) to convert it to an equation (=).
• A slack variable typically represents an unused
resource.
• A slack variable contributes nothing to the objective
function value.
Linear Programming Model: Standard
Form
Where:
Max Z = 40 x1 + 50 x2 + s1 + s2
x1 = number of bowls
subject to: 1x1 + 2 x2 + s1 = 40 x2 = number of mugs
4 x2 + 3 x2 + s2 = 120 s1, s2 are slack variables
x1, x2 , s1, s2 ³ 0

Solution Summary with Slack

Point Solution variables Z Slack

A x1 = 0 bowls, x2 = 20 mugs $1,000 s1 = 0 hr ; s2 = 60 Ib

B x1 = 24 bowls, x2 = 8 mugs $1,360 s1 = 0 hr ; s2 = 0 Ib

C x1 = 30 bowls, x2 = 0 mugs $1,200 s1 = 10 hr ; s2 = 0 Ib

Linear Programming Model: Standard
Form
Max Z = 40 x1 + 50 x2 + s1 + s2
subject to: 1x1 + 2 x2 + s1 = 40
4 x2 + 3 x2 + s2 = 120
x1, x2 , s1, s2 ³ 0

Where:
x1 = number of bowls
x2 = number of mugs
s1, s2 are slack variables
Summary of the Graphical Solution Steps
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.
LP: Model Formulation 2: Cost Minimization
• Two brands of fertilizer Figure 2.15 Fertilizing farmer’s field
available – Super-gro,
Crop-quick.
• Field requires at least 16
pounds of nitrogen and 24
pounds of phosphate.
• Super-gro costs $6 per bag,
Crop-quick $3 per bag.
• Problem: How much of
Chemical Contribution
each brand to purchase to
minimize total cost of Brand Nitrogen Phosphate
fertilizer given following (lb./bag) (lb./bag)
data ? Super-gro 2 4
Crop-quick 4 3
LP: Model Formulation 2: Cost Minimization
Step1: Define the decision variables: How many bags of…?
x1 = bags of Super-gro
x2 = bags of Crop-quick
Step 2: Define the objective function: Minimize cost
Minimize Z = $6x1 + 3x2
Where: $6x1 = cost of bags of Super-Gro
$3x2 = cost of bags of Crop-Quick
Step 3: Define the model Constraints: the field requirements for
nitrogen and phosphate
2 x1 + 4 x2 ³ 16 lb ( nitrogen constraint )
4 x1 + 3 x2 ³ 24 lb ( phosphate constraint )
x1, x2 ³ 0 ( non - negativity constraint )
Constraint Graph

Minimize Z = $6 x1 + $3 x2
subject to: 2 x1 + 4 x2 ³ 16
4 x2 + 3 x2 ³ 24
x1, x2 ³ 0
Feasible Region
Optimal Solution Point

The optimal solution of a

minimization problem is
at the extreme point
closest to the origin.
Surplus Variables
• A surplus variable is subtracted from a ³ constraint to
convert it to an equation (=).
• A surplus variable represents an excess above a
constraint requirement level.
• A surplus variable contributes nothing to the calculated
value of the objective function.
• Subtracting surplus variables in the farmer problem
constraints:
2 x1 + 4 x2 - s1 = 16 ( nitrogen )
4 x1 + 3 x2 - s2 = 24 ( phosphate )
Graphical Solutions

Minimize Z = $6 x1 + $3 x2 + 0s1 + 0s2

subject to: 2 x1 + 4 x2 – s1 = 16
4 x2 + 3 x2 – s2 = 24
x1, x2 , s1, s2 ³ 0
Question
• The munchies Cereal Company makes a cereal from several ingredients. Two of the
ingredients, oats and rice, provide vitamin A and B. The company wants to know how
many ounces of oats and rice it should included in each box of cereal to meet the
minimum requirements of 48 milligrams of vitamin A and 12 milligram of vitamin B
while minimizing cost. An ounce of oats contributes 8 milligrams of vitamin A and 1
milligram of vitamin B, whereas an ounce of rice contributes 6 milligrams of A and 2
milligrams of B. An ounce of oats costs $0.05, and an ounce of rice costs $0.03.

• A. Formulate a linear programming model for this problem.

• B. Solve this model by using graphical analysis

Irregular Types of Linear Programming
Problems
For some linear programming models, the general rules do
not apply.

Special types of problems include those with:

• Multiple optimal solutions

• Infeasible solutions
• Unbounded solutions
Question: Profit Maximization for Beaver
Creek Pottery (multiple options)

Where:
Maximize Z = $40 x1 + 30 x2 x1 = number of bowls
subject to: 1x1 + 2 x2 £ 40 x2 = number of mugs
4 x2 + 3 x2 £ 120
x1, x2 ³ 0

How many bowls and mugs to be produced for profit

maximization?
Multiple Optimal Solutions Beaver Creek
Pottery
The objective function is
parallel to a constraint line.
Maximize Z = $40 x1 + 30 x2
subject to: 1x1 + 2 x2 £ 40
4 x2 + 3 x2 £ 120
x1, x2 ³ 0

Where:
x1 = number of bowls
x2 = number of mugs
Question: Profit Maximization for Beaver
Creek Pottery (infeasible problem)

Maximize Z = 5x1 + 3x2

Where:
subject to: 4 x1 + 2 x2 £ 8
x1 = number of bowls
x1 ³ 4
x2 = number of mugs
x2 ³ 6
x1, x2 ³ 0

How many bowls and mugs to be produced for profit

maximization?
An Infeasible Problem
Every possible solution
violates at least one
constraint:
Maximize Z = 5x1 + 3x2
subject to: 4 x1 + 2 x2 £ 8
x1 ³ 4
x2 ³ 6
x1, x2 ³ 0
Question: Profit Maximization for Beaver
Creek Pottery (unbounded problem)
Value of the objective
function increases
indefinitely:
Maximize Z = 4x1 + 2x2
subject to: x1 ³ 4
x2 £ 2
x1, x2 ³ 0
Characteristics of Linear Programming
Problems
• A decision among alternative courses of action is required. The
decision is represented in the model by (1) decision variables. (e.g.,
several different products to produce)

• The problem encompasses a goal, expressed as an (2) objective

function, that the decision maker wants to achieve. (e.g., minimum
cost or maximum profit)

• (3) 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.
Properties of Linear Programming Models
• Proportionality - The rate of change (slope) of the
objective function and constraint equations is constant.
• Additivity - Terms in the objective function and
constraint equations must be additive.
• Divisibility - Decision variables can take on any
fractional value and are therefore continuous as opposed
to integer in nature.
• Certainty - Values of all the model parameters are
assumed to be known with certainty (non-probabilistic).