UNIVERSITY OF MINDANAO

College of Arts and Sciences Education

General Education - Mathematics

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)

Course/Subject: ACC 421 – Management Science

Name of Teacher: _Louie Resti S. Rellon_

Prepared by: Prof. Ronnie O. Alejan

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY.

THIS IS INTENDED ONLY FOR THE USE OF THE
STUDENTS WHO ARE OFFICIALLY ENROLLED IN THE
COURSE/SUBJECT.
NOT FOR REPRODUCTION, COMMERCIAL USE, AND
DISTRIBUTION OUTSIDE OF ITS INTENDED USE.
EXPECT REVISIONS OF THE MANUAL.
 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Course Outline: ACC 421 – Management Science

Course Coordinator: Louie Resti S. Rellon

Email: [email protected]
Student Consultation: Thru text message, BB chatroom, and email
Mobile 0919-581-1549/0905-229-5966
Phone: (082)300-5456 / 305-0647 Local 149
Effectivity Date: August 2020
Mode of Delivery: Blended (On-line with face-to-face or virtual sessions)
Time Frame: 54 Hours
Student Workload: Expected Self-Directing Learning
Requisites: None
Credit: 3 units
Attendance Requirement: A minimum of 95% attendance is required at all
scheduled Virtual sessions.

Course Outline Policy

Areas of Concern Details

Contact and Non-contact Hours This 3-unit course self-instructional manual is designed
for blended learning mode of instructional delivery with
scheduled face to face or virtual sessions. The
expected number of hours will be 54, including the face
to face or virtual sessions. The face to face sessions
shall include the summative assessment tasks (exams)
if warranted.
Assessment Task Submission Submission of assessment tasks shall be on the 3rd, 5th,
7th, and 9th weeks of the term. The assessment paper
shall be attached with a cover page indicating the title
of the assessment task (if the task is a performance),
the name of the course coordinator, date of submission,
and the name of the student. The document should be
emailed to the course coordinator. It is also expected
that you already paid your tuition and other fees before
the submission of the assessment task.
If the assessment task is done in real-time through the
features in the Blackboard Learning Management
System, the schedule shall be arranged ahead of time
by the course coordinator.

Turnitin Submission To ensure honesty and authenticity, all assessment

(if necessary) tasks are required to be submitted through Turnitin with
a maximum similarity index of 30% allowed. This means
that if your paper goes beyond 30%, the students will
either opt to redo her/his paper or explain in writing
addressed to the course coordinator the reasons for the
similarity. In addition, if the paper has reached more
than 30% similarity index, the student may be called for

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

disciplinary action following with the University’s OPM

on Intellectual and Academic
Honesty.

Please note that academic dishonesty such as cheating

and commissioning other students or people to
complete the task for you have severe punishments
(reprimand, warning, expulsion).
Penalties for Late Assignments/ The score for an assessment item submitted after the
Assessments designated time on the due date, without an approved
extension of time, will be reduced by 5% of the possible
maximum score for that assessment item for each day
or part-day that the assessment item is late.

However, if the late submission of the assessment

paper has a valid reason, a letter of explanation should
be submitted and approved by the course coordinator.
If necessary, you will also be required to present/attach
pieces of evidence.
Return of Assignments/ Assessment tasks will be returned to you two (2) weeks
Assessments after the submission. This will be returned by email or
via the Blackboard portal.
For group assessment tasks, the course coordinator will
require some or few of the students for online or virtual
sessions to ask clarificatory questions to validate the
originality of the assessment task submitted and to
ensure that all the group members are involved.
Assignment Resubmission You should request in writing addressed to the course
coordinator his/her intention to resubmit an assessment
task. The resubmission is premised on the student’s
failure to comply with the similarity index and other
reasonable grounds such as academic literacy
standards or other reasonable circumstances e.g.,
illness, accident, or financial constraints.
Re-marking of Assessment You should request in writing addressed to the program
Papers and Appeal coordinator your intention to appeal or contest the score
given to an assessment task. The letter should explicitly
explain the reasons/points to contest the grade. The
program coordinator shall communicate with the
students on the approval and disapproval of the
request.
If disapproved by the course coordinator, you can
elevate your case to the program head or the dean with
the original letter of request. The final decision will come
from the dean of the college.
Grading System All culled from BlackBoard sessions and traditional
contact
Course discussions/exercises – 40%
1st formative assessment – 15%
2nd formative assessment – 15%
All culled from off-campus/online sessions:
Final exam – 30%
Submission of the final grades shall follow the usual

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

University system and procedures.

Preferred Referencing Style Use the 7th Edition of the APA Publication Manual
Student Communication You are required to create a umindanao email account,
which is a requirement to access the BlackBoard
portal. Then, the course coordinator shall enroll the
students to have access to the materials and resources
of the course. All communication formats: chat,
submission of assessment tasks, requests, etc. shall be
through the portal and other university recognized
platforms.

You can also meet the course coordinator in person

through the scheduled face to face sessions to raise
your issues and concerns.
For students who have not created their student email,
please contact the course coordinator or program head.
Contact Details of the Dean Dr. Khristine Marie D. Concepcion
Email: [email protected]
Phone: (082)305-0647 Local 118
Contact Details of the Program Ronnie O. Alejan
Head Email: [email protected]
Phone: (082)305-0647 Local 149
Students with Special Needs Students with special needs shall communicate with the
course coordinator about the nature of his or her special
needs. Depending on the nature of the need, the course
coordinator, with the approval of the program
coordinator, may provide alternative assessment tasks
or extension of the deadline for submission of
assessment tasks. However, the alternative
assessment tasks should still be in the service of
achieving the desired course learning outcomes.
Instructional Help Desk Dr. Khristine Marie D. Concepcion
Contact Details Email: [email protected]
Phone: (082)305-0647 Local 118
Library Contact Details Brigida E. Bacani
Email: [email protected]
Phone: 09513766681
Well-being Welfare Support Held Zerdszen P. Raňises
Desk Contact Details Email: [email protected]
Phone: 09504665431

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Course Information: see/download course syllabus in the Blackboard LMS

CC’s Voice: Welcome to the course ACC 421: Management Science.

Standard mathematical techniques and problem structuring
methods are essential in managerial decision-making. As an
accounting student, you must master the use of these techniques to
help you in your future role as business leader. This course equips
you with skills on linear programming applications, solution and
sensitivity analysis using spreadsheets, distribution and network
models, project scheduling, integer linear programming, forecasting,
decision analysis, queuing models, and simulations.

CO You as a future financial specialist, are expected to discuss and

apply the main techniques and problem structuring methods used
within management science, identify the proper modeling tool for a
business problem, conduct proper analysis using the appropriate
tool, execute solutions manually or using spreadsheets and
spreadsheet add-ins to facilitate learning by doing, and develop
recommendations for the business problem. These are the ultimate
outcomes for this course.

Let us begin!

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Week 1-3: Unit Learning Outcomes (ULO):

At the end of the unit, you are expected to
a. Apply the graphical solution of linear programming in solving real-
world problems.

Big Picture in Focus

ULO-a. Apply the graphical solution of linear programming in
solving real-world problems.

Metalanguage

In this section, the essential terms relevant to the study of the nature of
Mathematics and to demonstrate ULO-a will be operationally defined to establish a
common frame of reference as to how the texts work. You will encounter these terms
as we go through the study of the nature of mathematics. Please refer to these
definitions in case you will encounter difficulty in understanding some concepts.

1. Definitions of Operations Research

Operations research (OR) is an analytical method of problem-solving and
decision-making that is useful in the management of organizations. In
operations research, problems are broken down into basic components and
then solved in defined steps by mathematical analysis.

2. The Process of Operations Research

The process of operations research can be broadly broken down into the
following steps:
1) Identifying a problem that needs to be solved.
2) Constructing a model around the problem that resembles the real world
and variables.
3) Using the model to derive solutions to the problem.
4) Testing each solution on the model and analyzing its success.
5) Implementing the solution to the actual problem.

3. Characteristics of Operations Research

There are three primary characteristics of all operations research efforts:
a) Optimization - The purpose of operations research is to achieve the best
performance under the given circumstances. Optimization also involves
comparing and narrowing down potential options.

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

b) Simulation - This involves building models or replications in order to try

out and test solutions before applying them.
c) Probability and statistics- This includes using mathematical algorithms
and data to uncover helpful insights and risks, make reliable predictions and
test possible solutions.

4. Uses of Operations Research

Operations research can be applied to a variety of use cases, including:
 Scheduling and time management
 Urban and agricultural planning
 Enterprise resource planning (ERP) and supply chain management
(SCM)
 Inventory management
 Network optimization and engineering
 Packet routing optimization
 Risk management

5. Linear Programming
Linear programming is an optimization technique for a system of linear
constraints and a linear objective function. An objective function defines the
quantity to be optimized, and the goal of linear programming is to find the
values of the variables that maximize or minimize the objective function.

Essential Knowledge

To perform the aforesaid big picture (unit learning outcomes) for the first three
(3) weeks of the course, you need to fully understand the following essential
knowledge that will be laid down in the succeeding pages. Please note that you are
not limited to refer to these resources exclusively. Thus, you are expected to utilize
other books, research articles, and other resources that are available in the
university’s library e.g., ebrary, search.proquest.com, etc.

1. Overview of Operations Research

The first formal activities of Operations Research (OR) were initiated in
England during World War II, when a team of British scientists set out to make
scientifically based decisions regarding the best utilization of war materiel. After the
war, the ideas advanced in military operations were adapted to improve efficiency
and productivity in the civilian sector.
This unit will familiarize you with the basic terminology of operations research,
including mathematical modeling, feasible solutions, optimization, and iterative
computations. You will learn that defining the problem correctly is the most important

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

(and most difficult) phase of practicing OR. It also emphasizes that, while
mathematical modeling is a cornerstone of OR, intangible (unquantifiable) factors
(such as human behavior) must be accounted for in the final decision.

1.1 Operations Research Models

Imagine that you have a 5-week business commitment between Manila (MNL)
and Davao (DVO). You fly out of Manila on Mondays and return on Wednesdays. A
regular round-trip ticket costs P4000, but a 20% discount is granted if the dates of
the ticket span a weekend. A one-way ticket in either direction costs 75% of the
regular price. How should you buy the tickets for the 5-week period?
We can look at the situation as a decision-making problem whose solution
requires answering three questions:
1. What are the decision alternatives?
2. Under what restrictions is the decision made?
3. What is an appropriate objective criterion for evaluating the alternatives?

Three alternatives are considered:

1. Buy five regular MNL-DVO-MNL for departure on Monday and return on
Wednesday of the same week.
2. Buy one MNL-DVO, four DVO-MNL-DVO that span weekends, and one
DVO-MNL.
3. Buy one MNL-DVO-MNL to cover Monday of the first week and
Wednesday of the last week and four DVO-MNL-DVO to cover the remaining legs.
All tickets in this alternative span at least one weekend.
The restriction on these options is that you should be able to leave FYV on
Monday and return on Wednesday of the same week.
An obvious objective criterion for evaluating the proposed alternative is the
price of the tickets. The alternative that yields the smallest cost is the best.
Specifically, we have
Alternative 1 cost = 5 X 4000 = P20,000
Alternative 2 cost = .75 X 4000 + 4 X (.8 X 4000) + .75 X 4000 = P18,800
Alternative 3 cost = 5 X (.8 X 4000) = P16,000
Thus, you should choose alternative 3.

Based on the preceding two examples, the general OR model can be

organized in the following general format:

Maximize or Minimize Objective Function

subject to
Constraints

A solution of the mode is feasible if it satisfies all the constraints. It is optimal

if, in addition to being feasible, it yields the best (maximum or minimum) value of the

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

objective function. In the tickets example, the problem presents three feasible
alternatives, with the third alternative yielding the optimal solution.
Though OR models are designed to "optimize" a specific objective criterion
subject to a set of constraints, the quality of the resulting solution depends on the
completeness of the model in representing the real system. Take, for example, the
tickets model. If one is not able to identify all the dominant alternatives for purchasing
the tickets, then the resulting solution is optimum only relative to the choices
represented in the model. To be specific, if alternative 3 is left out of the model, then
the resulting "optimum" solution would call for purchasing the tickets for P1880,
which is a suboptimal solution. The conclusion is that "the" optimum solution of a
model is best only for that model. If the model happens to represent the real system
reasonably well, then its solution is optimum also for the real situation.

1.2 Solving the OR Model

In OR, we do not have a single general technique to solve all mathematical
models that can arise in practice. Instead, the type and complexity of the
mathematical model dictate the nature of the solution method. For example, the
solution of the tickets problem requires simple ranking of alternatives based on the
total purchasing price.
The most prominent OR technique is linear programming. It is designed for
models with linear objective and constraint functions. Other techniques include
integer programming (in which the variables assume integer values), dynamic
programming (in which the original model can be decomposed into more
manageable subproblems), network programming (in which the problem can be
modeled as a network), and nonlinear programming (in which functions of the model
are nonlinear). These are only a few among many available OR tools.
A peculiarity of most OR techniques is that solutions are not generally
obtained in (formula-like) closed forms. Instead, they are determined by algorithms.
An algorithm provides fixed computational rules that are applied repetitively to the
problem, with each repetition (called iteration) moving the solution closer to the
optimum. Because the computations associated with each iteration are typically
tedious and voluminous, it is imperative that these algorithms be executed on the
computer.
Some mathematical models may be so complex that it is impossible to solve
them by any of the available optimization algorithms. In such cases, it may be
necessary to abandon the search for the optimal solution and simply seek a good
solution using heuristics or rules of thumb.

1.3 Queuing and Simulation Models

Queuing and simulation deal with the study of waiting lines. They are not
optimization techniques; rather, they determine measures of performance of the
waiting lines, such as average waiting time in queue, average waiting time for
service, and utilization of service facilities.
Queuing models utilize probability and stochastic models to analyze waiting
lines, and simulation estimates the measures of performance by imitating the

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

behavior of the real system. In a way, simulation may be regarded as the next best
thing to observing a real system. The main difference between queuing and
simulation is that queuing models are purely mathematical, and hence are subject
to specific assumptions that limit their scope of application. Simulation, on the other
hand, is flexible and can be used to analyze practically any queuing situation.
The use of simulation is not without drawbacks. The process of developing
simulation models is costly in both time and resources. Moreover, the execution of
simulation models, even on the fastest computer, is usually slow.

1.4 Art of Modeling

To illustrate levels of abstraction in modeling, consider the Orobox
Manufacturing Company, where a variety of plastic containers are produced. When
a production order is issued to the production department, necessary raw materials
are acquired from the company's stocks or purchased from outside sources. Once
the production batch is completed, the sales department takes charge of distributing
the product to customers.
A logical question in the analysis of Orobox’s situation is the determination of
the size of a production batch. How can this situation be represented by a model?
Looking at the overall system, a number of variables can bear directly on the
level of production, including the following (partial) list categorized by departments.
1. Production Department: Production capacity expressed in terms of
available machine and labor hours, in-process inventory, and quality control
standards.
2. Materials Department: Available stock of raw materials, delivery
schedules from outside sources, and storage limitations.
3. Sales Department: Sales forecast, capacity of distribution facilities,
effectiveness of the advertising campaign, and effect of competition.

Each of these variables affects the level of production at Orobox. Trying to

establish explicit functional relationships between them and the level of production
is a difficult task indeed.
A first level of abstraction requires defining the boundaries of the assumed
real world. With some reflection, we can approximate the real system by two
dominant variables:
1. Production rate
2. Consumption rate
Determination of the production rate involves such variables as production capacity,
quality control standards, and availability of raw materials. The consumption rate is
determined from the variables associated with the sales department. In essence,
simplification from the real world to the assumed real world is achieved by "lumping"
several real-world variables into a single assumed-real-world variable.
It is easier now to abstract a model from the assumed real world. From the
production and consumption rates, measures of excess or shortage inventory can
be established. The abstracted model may then be constructed to balance the
conflicting costs of excess and shortage inventory-i.e., to minimize the total cost of
inventory.

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

1.5 Phases of an OR Study

An OR study is rooted in teamwork, where the OR analysts and the client
work side by side. The OR analysts' expertise in modeling must be complemented
by the experience and cooperation of the client for whom the study is being carried
out.
As a decision-making tool, OR is both a science and an art. It is a science by
virtue of the mathematical techniques it embodies, and it is an art because the
success of the phases leading to the solution of the mathematical model depends
largely on the creativity and experience of the operations research team. Willemain
(1994) advises that "effective [OR] practice requires more than analytical
competence: It also requires, among other attributes, technical judgement (e.g.,
when and how to use a given technique) and skills in communication and
organizational survival."
It is difficult to prescribe specific courses of action (similar to those dictated
by the precise theory of mathematical models) for these intangible factors. We can,
however, offer general guidelines for the implementation of OR in practice.
The principal phases for implementing OR in practice include
1. Definition of the problem
2. Construction of the model
3. Solution of the model
4. Validation of the model
5. Implementation of the solution.

Phase 3, dealing with model solution, is the best defined and generally the
easiest to implement in an OR study, because it deals mostly with precise
mathematical models. Implementation of the remaining phases is more an art than
a theory.
Problem definition involves defining the scope of the problem under
investigation. This function should be carried out by the entire OR team. The aim is
to identify three principal elements of the decision problem: (1) description of the
decision alternatives, (2) determination of the objective of the study, and (3)
specification of the limitations under which the modeled system operates.
Model construction entails an attempt to translate the problem definition into
mathematical relationships. If the resulting model fits one of the standard
mathematical models, such as linear programming, we can usually reach a solution
by using available algorithms. Alternatively, if the mathematical relationships are too
complex to allow the determination of an analytic solution, the OR team may opt to
simplify the model and use a heuristic approach, or they may consider the use of
simulation, if appropriate. In some cases, mathematical, simulation, and heuristic
models may be combined to solve the decision problem.
Model solution is by far the simplest of all OR phases because it entails the
use of well-defined optimization algorithms. An important aspect of the model

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

solution phase is sensitivity analysis. It deals with obtaining additional information

about the behavior of the optimum solution when the model undergoes some
parameter changes. Sensitivity analysis is particularly needed when the parameters
of the model cannot be estimated accurately. In these cases, it is important to study
the behavior of the optimum solution in the neighborhood of the estimated
parameters.
Model Validity checks whether or not the proposed model does what it
purports to do-that is, does it predict adequately the behavior of the system under
study? Initially, the OR team should be convinced that the model's output does not
include "surprises." In other words, does the solution make sense? Are the results
intuitively acceptable? On the formal side, a common method for checking the
validity of a model is to compare its output with historical output data. The model is
valid if, under similar input conditions, it reasonably duplicates past performance.
Generally, however, there is no assurance that future performance will continue to
duplicate past behavior. Also, because the model is usually based on careful
examination of past data, the proposed comparison is usually favorable. If the
proposed model represents a new (non-existing) system, no historical data would
be available. In such cases, we may use simulation as an independent tool for
verifying the output of the mathematical model.
Implementation of the solution of a validated model involves the translation of
the results into understandable operating instructions to be issued to the people who
will administer the recommended system. The burden of this task lies primarily with
the OR team.

2. Modeling with Linear Programming

Linear programming (LP) is an application of matrix algebra used to solve a
broad class of problems that can be represented by a system of linear equations. A
linear equation is an algebraic equation whose variable quantity or quantities are in
the first power only and whose graph is a straight line. LP problems are
characterized by an objective function that is to be maximized or minimized, subject
to a number of constraints. Both the objective functions and the constraints must be
formulated in terms of a linear equality or inequality. Typically, the objective function
will be to maximize profits or to minimize costs.

Properties of the LP Models

The following assumptions must be satisfied to justify the use of linear
programming:
Linearity – all functions, such as costs, prices, and technological
requirements, must be linear in nature.
Certainty – all parameters are assumed to be known with certainty.
Nonnegativity – negative values of decision variables are unacceptable.

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General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Proportionality – This property requires the contribution of each decision

variable in both the objective function and the constraints to be directly proportional
to the value of the variable.
Additivity – This property requires the total contribution of all the variables in
the objective function and in the constraints to be the direct sum of the individual
contributions of each variable

The LP model, as in any OR model, has three basic components.

1. Decision variables that we seek to determine.
2. Objective (goal) that we need to optimize (maximize or minimize).
3. Constraints that the solution must satisfy.

2.1 Graphical LP Solution

The steps in solving an LP problem graphically are introduced briefly below.

Step 1. Formulate the LP problem.

Formulation refers to translating the real-world problem into a format of
mathematical equations that represent the objective function and the constraint set.
Often, data gathering, problem definition, and problem formulation are the most
important (and the most difficult, time consuming, and expensive) steps when using
any OR tool.
A thorough understanding of the problem is necessary in order to formulate it
correctly. During the formulation stage, an OR specialist may discover new insights
into the problem that may change the scope of the original problem. For this reason,
it’s very important to obtain the help of those who work most closely with the system
being studied. They can help the OR specialist collect the necessary data and
correctly define the problem so that he or she can create a valid model. In formulating
an LP problem, it often helps to put all of the relevant information into a table.
Step 2. Construct a graph and plot the constraint lines.
Constraint lines represent the limitations on available resources. Usually,
constraint lines are drawn by connecting the horizontal and vertical intercepts found
from each constraint equation.
Step 3. Determine the valid side of each constraint line.
The simplest way to start is to plug in the coordinates of the origin (0,0) and
see whether this point satisfies the constraint. If it does, then all points on the origin
side of the line are feasible (valid), and all points on the other side of the line are
infeasible (invalid). If (0,0) does not satisfy the constraint, then all points on the other
side and away from the origin are feasible (valid), and all points on the origin side of
the constraint line are infeasible (invalid).
Step 4. Identify the feasible solution region.
The feasible solution region represents the area on the graph that is valid for
all constraints. Choosing any point in this area will result in a valid solution.

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General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Step 5. Plot two objective function lines to determine the direction of

improvement.
Improvement is in the direction of greater value when the objective is to
maximize the objective function, and is in the direction of lesser value when the
objective is to minimize the objective function. The objective function lines do not
have to include any of the feasible region to determine the desirable direction to
move.
Step 6. Find the most attractive corner.
Optimal solutions always occur at corners. The most attractive corner is the
last point in the feasible solution region touched by a line that is parallel to the two
objective function lines drawn in step 5 above. When more than one corner
corresponds to an optimal solution, each corner and all points along the line
connecting the corners correspond to optimal solutions.
Step 7. Determine the optimal solution by algebraically calculating
coordinates of the most attractive corner.

Step 8. Determine the value of the objective function for the optimal
solution.

Example.
The company uses wood and labor to produce tables and chairs. Recall that
unit profit for tables is ₱6, and unit profit for chairs is ₱8. There are 300 board feet
(bf) of wood available, and 110 hours of labor available. It takes 30 bf and 5 hours to
make a table, and 20 bf and 10 hours to make a chair. Table 1 contains the
information for the LP problem. We will go through the step-by-step process of
solving this problem graphically.

Resource Table (X1) Chair (X2) Available

Wood (bf) 30 20 300
Labor (hr) 5 10 110
Unit Profit 6 8

Solution.
Step 1. Formulate the LP problem.
Table 1 will help us formulate the problem. The bottom row is used to formulate
the objective function. Objective functions are developed in such a way as to be
either maximized or minimized. In this case, the company’s management wishes to
maximize unit profit. The wood and labor rows are used to formulate the constraint
set. Finally, the nonnegativity conditions are stated.
Maximize: Z = 6X1 + 8X2 (objective function)
Subject to:
30X1 + 20X2 < 300 (wood constraint: 300 bf available)

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General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

5X1 + 10X2 < 110 (labor constraint: 110 hours available)

X1, X2 > 0 (nonnegativity conditions)
Since only two variables (wood and labor) exist in this problem, it can be solved
graphically. If there were more than two variables, the graph would have to be more
than two dimensions.

Step 2. Construct the graph and plot constraint lines.

Draw the graph with the x axis representing the number of tables and the y axis
representing the number of chairs. Plot the two constraint lines by finding the x and
y intercepts for the two constraint equations in the following manner.
First, rewrite the constraint inequalities as equalities and solve to obtain the
intercepts:
Wood: Labor:
30 X1  20 X 2  300 5 X1  10 X 2  110
Set X2 = 0 and solve for X1: Set X2 = 0 and solve for X1:
30 X1  300 5 X1  110
X1  10 tables X1  22 tables
Next, set X1 = 0 and solve for X2: Next, set X1 = 0 and solve for X2:
20 X 2  300 10 X 2  110
X 2  15 chairs X 2  11 chairs

Now plot the wood constraint line, using the intercepts X1 = 10 and X2 = 15.
Plot the labor constraint line, using the intercepts X1 = 22 and X2 = 11. See Figure
below.

Step 3. Determine the valid side of each constraint line.

We will use the origin (0,0) to check the valid side for both constraint lines.
30(0) + 20(0) < 300 is valid, so we know the side toward the origin (0,0) is the valid
side of the wood constraint line. 5(0) + 10(0) < 110 also is valid, so we know the side
toward the origin (0,0) is the valid side of the labor constraint line. We can draw
arrows indicating the valid side of each constraint line. See figure below.
We could have chosen any point to test for the valid side of the line. For
example, setting X1 = 20 and X2 = 10 (clearly on the other side, away from the origin)

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Phone No.: (082)300-5456/305-0647 Local 134

for the wood constraint line, we get 30(20) + 20(10) < 300, which is not valid. In other
words, there simply isn’t enough wood to make 20 tables and 10 chairs.

Step 4. Identify the feasible region.

The feasible region is the area on the valid side of both constraint lines. Any
point located on the invalid side of a constraint line is infeasible. Because of the
nonnegativity conditions, the feasible region is restricted to the positive quadrant.
See figure above.
Step 5. Plot two objective function lines to determine the direction of
improvement.
First, we’ll arbitrarily set profit, Z = 48, and then set profit, Z = 72. We’ll find the
x and y intercepts when Z = 48 and when Z = 72, and plot the two lines.
Set Z = 48, Set Z = 72,
Set X2 = 0 and solve for X1: Set X2 = 0 and solve for X1:
48  6  X1  72  6  X1 
X1  8 X1  12
Next, set X1 = 0 and solve for X2: Next, set X1 = 0 and solve for X2:
48  8 X 2 72  8 X 2
X2  6 X2  9

Now plot the objective function lines when Z = 48 and Z = 72. See figure below.
We can see from the two objective function lines that as we move away from the
origin (0,0), Z increases.

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2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Step 6. Find the most attractive corner.

Since we want to maximize Z, we will draw a line parallel to the objective
function lines that touches the last point in the feasible region while moving away
from the origin. This identifies the most attractive corner, which gives us the amounts
of wood and labor that will result in the maximum profit (maximize Z). Thus, it
represents the optimal solution to the problem (see figure below).

Step 7. Determine the optimal solution by algebraically calculating

coordinates of the most attractive corner.
The most attractive corner lies at the intersection of the wood and labor
constraint lines. Therefore, coordinates for the most attractive corner can be found
by simultaneously solving the constraint equations (wood and labor):
30X1 + 20X2 = 300 (wood)
5X1 + 10X2 = 110 (labor)

To do so, multiply the labor equation by -2 and add it to the wood equation so
the X2 variable becomes zero and we can solve for X1.
30 X1  20 X 2  300 (wood)
2  5 X1  10 X 2  110  (labor)
20 X1  0  80
X1  4 tables

Next, substitute the number of tables calculated above into either of the
constraint equations to find the number of chairs. For this example, we will substitute
into both equations to illustrate that the same value is found.
Wood constraint: Labor constraint:
30  4   20 X 2  300 5  4   10 X 2  110
120  20 X 2  300 20  10 X 2  110
20 X 2  300  120 10 X 2  110  20
X 2  9 chairs X 2  9 chairs

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General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Thus, the company’s optimal solution is to make four tables and nine chairs. In this
case, you could read this solution off the graph by finding the values on the x and y
axes corresponding to the most attractive corner. However, when the most attractive
corner corresponds to an optimal solution with fractions, it is not possible to read
directly from the graph. For example, the optimal solution to this problem might have
been 3.8 tables and 9.2 chairs, which we probably would not be able to read
accurately from the graph.

Step 8. Determine the value of the objective function for the optimal
solution. Plug in the number of tables and chairs and solve for Z:
Z = ₱6(4) + ₱8(9) = ₱96
Thus, we find that maximum profit of ₱96 can be obtained by producing four tables
and nine chairs.

1) Taha, H. (2012). Operations research: an introduction. Pearson Education.

2) Kolluri, B., Panik, M. J., & Singamsetti, R. N. (2016). Introduction to quantitative

methods in business: With applications using microsoft office excel.
Retrieved from https://ebookcentral.proquest.com

3) Baker, K. R. (2015). Optimization modeling with spreadsheets. Retrieved from

https://ebookcentral.proquest.com

4) Ramamurthy, P. (2000). Operations research. Retrieved from

https://ebookcentral.proquest.com

5) Guiasu, S. (2009). Probablistic models in operations research. Retrieved from

https://ebookcentral.proquest.com

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Activity 1. Now that you know the most essential concepts operations research. Let
us try to check your understanding of these concepts by answering the
following questions.

1. Determine the feasible space for each of the following independent constraints,
given that X1, X2 ≥ 0.

a) –3X1 + X2 ≤ 6
b) X1 – 2X2 ≥ 5
c) 2X1 – 3X2 ≤ 12
d) X1 – X2 ≤ 0
e) –X1 + X2 ≥ 0

2. Identify the direction of increase in z in each of the following cases:

a) Maximize Z = X1 – X2
b) Maximize Z = –5X1 – 6X2
c) Maximize Z = –X1 + 2X2
d) Maximize z = –3X1+ X2

3. Amy, Jim, John, and Kelly are standing on the east bank of a river and wish to
cross to the west side using a canoe. The canoe can hold at most two people at
a time. Amy, being the most athletic, can row across the river in 1 minute. Jim,
John, and Kelly would take 2, 5, and 10 minutes, respectively. If two people are
in the canoe, the slower person dictates the crossing time. The objective is for all
four people to be on the other side of the river in the shortest time possible.
a) Identify at least two feasible plans for crossing the river (remember, the canoe
is the only mode of transportation and it cannot be shuttled empty).
b) Define the criterion for evaluating the alternatives.
c) What is the smallest time for moving all four people to the other side of the
river?

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Activity 1. Getting acquainted with the essential terms and concepts of

operations research, what also matters is you should also be able to
apply these concepts in solving problems. Solve the following
problems graphically.

1. Royal Co. manufactures aluminum sheets and aluminum bars. The maximum
production capacity is estimated at either 800 sheets or 600 bars per day. The
maximum daily demand is 550 sheets and 580 bars. The profit per ton is ₱40 per
sheet and ₱35 per bar. Determine the optimal daily production mix.

2. In the Save Mart grocery store, shelf space is limited and must be used effectively
to increase profit. Two cereal items, Oatie and Wheatie, compete for a total shelf
space of 60 ft2. A box of Oatie occupies 0.2 ft2 and a box of Wheatie needs
0.4 ft2. The maximum daily demands of Oatie and Wheatie are 200 and 120
boxes, respectively. A box of Oatie nets ₱1.00 in profit and a box of Wheatie
₱1.35. Save Mart thinks that because the unit profit of Wheatie is 35% higher
than that of Oatie, Wheatie should be allocated 35% more space than Grano,
which amounts to allocating about 57% to Wheatie and 43% to Oatie. What do
you think?

3. Fuji Motorcycles can advertise its products on local radio and television (TV).
The advertising budget is limited to ₱10,000 a month. Each minute of radio
advertising costs ₱15 and each minute of TV commercials ₱300. Show & Sell
likes to advertise on radio at least twice as much as on TV. In the meantime, it is
not practical to use more than 400 minutes of radio advertising a month. From
past experience, advertising on TV is estimated to be 25 times as effective as on
radio. Determine the optimum allocation of the budget to radio and TV
advertising.

4. A furniture company manufactures desks and chairs. The sawing department

cuts the lumber for both products, which is then sent to separate assembly
departments. Assembled items are sent for finishing to the painting department.
The daily capacity of the sawing department is 200 chairs or 80 desks. The chair
assembly department can produce 120 chairs daily and the desk assembly
department 60 desks daily. The paint department has a daily capacity of either
150 chairs or 110 desks. Given that the profit per chair is ₱50 and that of a desk
is ₱100, determine the optimal production mix for the company.

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 College of Arts and Sciences Education
General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Activity 1. Based from the definition of the most essential terms and concepts in
the study of sets and the learning exercises that you have done,
please feel free to write your arguments or lessons learned below.

1.

2.

3.

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General Education - Mathematics
2nd Floor, DPT Building, Matina Campus, Davao City
Phone No.: (082)300-5456/305-0647 Local 134

Do you have any question for clarification?

Questions / Issues Answers

1.

2.

3.

4.

5.

Operations Research Linear Programming Objective Function

Constraints Maximize Minimize
Graphical solution Feasible region Coordinate axes
Corner points Optimal solution Linearity
Certainty Non-negativity Decision variables

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