Learning Objectives:

At the end of the lesson, the student should be able to:

 Solve LP maximization and minimization problems using graphical solution procedure;
 Find the optimal solution using the Extreme point theorem;
 Determine the optimal solution using the Objective Function Line method; and
 Interpret the output of a linear programming solver.
 Graphical Solution of Linear Programming Problems

Linear Programming problems in two variables may be solved

using the graphical solution.
There are two ways of solving the LP problem graphically:
a) using the Method of Corners (based on the Extreme Point
Theorem

b) using the Objective Function Line Method (commonly

referred to as Isoprofit/Isocost Line Method).
To find the optimal solution (or the best feasible solution)

It is necessary to display graphically where the feasible

solutions are.
The solutions permitted by all the constraints are the feasible
solutions and the portion of the two-dimensional graph where
the feasible solutions lie is referred to as the feasible region.
Theorem 1 The Extreme Point Theorem

• If a linear programming problem has a solution then it must

occur at a vertex, or corner point, of the feasible set S
associated with the problem.
• Moreover, if the objective function 𝑍 is optimized (either
maximized or minimized) at two adjacent vertices of 𝑆, then it
is optimized at every point on the line segment joining these
vertices, in which case there are infinitely many solutions to
the LP problem.
Theorem 2 The Existence of a Solution

Suppose we are given an LP problem with a feasible set S and

the objective function 𝑍 = 𝑎𝑥 + 𝑏𝑦,
• If S is bounded, then 𝑍 has both a maximum and minimum value on 𝑆
(Figure 1-A).
• If S is unbounded and both 𝑎 and 𝑏 are nonnegative, then 𝑍 has a
minimum value on S provided that the constraints defining S include
the inequalities 𝑥 ≥ 0 and 𝑦 ≥ 0 (Figure 1-B).
• If S is the empty set, then the linear programming problem has no
solution; that is, 𝑍 has neither a maximum nor a minimum value
(Figure 1-C).
The Existence of a Solution

Figure 1-A Figure 1-B Figure 1-C

Steps in Solving LP Problems Using The Method of Corners (Based on the Extreme Point
Theorem)

• Graph the constraints (both equality and inequality).

• Shade the region of the feasible solution, S. Label all the
corner points.
• Find the coordinates of all the corner points.
Steps in Solving LP Problems Using The Method of Corners (Based on the Extreme Point Theorem)

• Evaluate the objective function 𝑍 at each corner point.

• Identify the corner point that satisfies the objective (either to
maximize or minimize).
• If there is only one such corner point, then this corner constitute a
unique solution to the LP problem.
• If two adjacent corner points satisfy the objective, then there are
several optimal solutions given by the points on the line segment
determined by the two adjacent corner points.
Formulate the LP problem and solve graphically using the Method of Corners:

Moonlife Financials has a total of P100 million earmarked for

home and auto loans. On the average, home loans have a 10%
annual rate of return while auto loans yield a 12% annual rate of
return. Management also stipulated that the total amount of
home loans should be greater than or equal to 4 times the total
amount of automobile loans. Determine the total amount of
loans of each type Moonlife Financials should extend to each
category in order to maximize its returns.
Moonlife Financials… LP Model

Objective: To maximize the annual returns, z

Let x be the amount allotted to home loans

Decision Variables:
y be the amount allotted to auto loans

Objective Function: Maximize z = 0.10x + 0.12y

Constraints: Management’s stipulation: 𝑥 ≥ 4𝑦 or 𝑥 − 4𝑦 ≥ 0

Amount earmarked for home and auto loans: 𝑥 + 𝑦 ≤ 100,000,000

Non-negativity constraint: 𝑥, 𝑦 ≥ 0
 The graph, feasible solution, 𝑆, and corner points (A, B and C) are shown:

𝑥 + 𝑦 ≤ 100,000,000

𝑥 − 4𝑦 ≥ 0
• The coordinates of the corner points may be obtained using
solution of systems of linear equations.
• To do this, one must identify the lines that intersect at the corner
points. Hence, for corner point B, solve the system 𝑥 – 4𝑦 = 0 and
𝑥 + 𝑦 = 100𝑀 in order to obtain its coordinates.
• The values of the objective function Z are obtained after evaluating
the function at each corner point.
 We can see from the table
that the maximum for the
objective function 𝑍 =
Corner Points 𝑍 = 0.10𝑥 + 0.12𝑦
0.10𝑥 + 0.12𝑦 occurs at
A (0, 0) 𝑍𝐴 = 0.10 0 + 0.12 0 = 𝑃ℎ𝑃 0 corner point B. Thus,
Moonlife Financials should
B (80M, 20M) 𝑍𝐵 = 0.10 80𝑀 + 0.12 20𝑀
= 𝑃ℎ𝑃 10.4𝑀 extend PhP 80M to home
C (100M, 0) 𝑍𝐶 = 0.10 100𝑀 + 0.12 0𝑀 loans and PhP 20M to auto
= 𝑃ℎ𝑃 10𝑀 loans to realize a maximum
annual returns of PhP 10.4M.
Formulate the LP problem and solve graphically using the Method of Corners:

A nutritionist advises an individual who is suffering from iron

and vitamin-B deficiency to take at least 2400 mg of iron, 2100
mg of vitamin B1 and 1500 mg of vitamin B2 over a certain
period of time. Two vitamin capsules are suitable, Neuro-Iron
and Sango-Iron. Each Neuro-Iron capsule costs P6 and contains
40 mg of iron, 10 mg of vitamin B1 and 5 mg of vitamin B2.
Each Sango-Iron costs P8 and contains 10 mg or iron and 15 mg
each of vitamins B1 and B2. What combination of each brand
should the individual purchase in order to meet the minimum
iron and vitamin requirements at the lowest cost?
Neuro-Iron and Sango-Iron LP
Objective: To minimize cost, z
model

Decision Let x be the number of capsules of Neuro-Iron

Variables: y be the number of capsules of Sango-Iron
Objective
Minimize z = 6x + 8y
Function:
Constraints: Iron Requirement: 40x + 10y ≥ 2,400

B1 Requirement: 10x + 15y ≥ 2,100

B2 Requirement: 5x + 15y ≥ 1,500

NNC x, y ≥ 0
 The graph, feasible solution, 𝑆, and corner points (A, B, C and D) are shown. Notice that S is
unbounded.

40x + 10y ≥ 2,400

5x + 15y ≥ 1,500
10x + 15y ≥
2,100
The values of the objective function Z are obtained
after evaluating the function at each corner point.

 We can see from the table

Corner Points 𝑍 = 6𝑥 + 8𝑦 that the minimum for the
objective function 𝑍 =
A (0, 240) 𝑍𝐴 = 6 0 + 8 240 = 𝑃ℎ𝑃 1,920
6𝑥 + 8𝑦 occurs at corner
point B. Thus, the
B (30, 120) 𝑍𝐵 = 6 30 + 8 120 = 𝑃ℎ𝑃 1,140
individual must purchase
C (120, 60) 𝑍𝐶 = 6 120 + 8 60 = 𝑃ℎ𝑃 1,200 30 Neuro-Iron capsules and
120 Sango-Iron capsules at
D (300, 0) 𝑍𝐶 = 6 300 + 8 0 = 𝑃ℎ𝑃 1,800 a minimum cost of PhP
1,140.
Steps in Solving LP Problems using the Objective Function Line Method

An objective function line (or isoprofit/isocost line) is a line

whose points all have the same value of the objective function.
• Graph the constraints (both equality and inequality).
• Shade the region of the feasible solution, S. Label all the
corner points.
• First determine the slope of the objective function line. Draw
an objective function line. All other objective function lines
will have the same slope.
Steps in Solving LP Problems using the Objective Function Line Method

• For maximization problems, the right-most corner point

intersected by the isoprofit line is the optimal solution. Find
the coordinates of this point and evaluate the objective
function at this point.
• For minimization problems, the left-most corner point
intersected by the isocost line is the optimal solution. Find the
coordinates of this point and evaluate the objective function at
this point.
• If an objective function line coincides with the rightmost
(leftmost) line segment, not just a corner point, then there are
Solve the LP problem using the ISOPROFIT/ISOCOST line method.

ABC Furniture produces tables and chairs. Both require labor

hours for carpentry and painting jobs. Each table requires 4
hours of carpentry time and 2 hours of painting time. Each chair
requires 3 hours of carpentry and 1 hour of painting time. During
the next production period, there are 240 hours available for
carpentry and 100 hours for painting. Each table yields P100
profit and each chair, P50. Determine the best product
combination to optimize profit.
ABC Furniture LP model.

Objective: To maximize profit, z

Let x be the number of tables

Decision Variables:
y be the number of chairs
Objective
Maximize z = 150x + 75y
Function:
Constraints: Available Carpentry Time: 4𝑥 + 3𝑦 ≤ 240

Available Painting Time: 2𝑥 + 𝑦 ≤ 100

Non-negativity Constraint (NNC): 𝑥, 𝑦 ≥ 0

 The solution:

The graph, feasible solution and

corner points are shown in the graph.
From z = 150x + 75y, the slope of the
−150
objective function line is 𝑚 = 75 = −2.
After drawing the first objective function
line, a series of parallel objective
function lines may be drawn until the
right-most corner point is reached.

There are many solutions to the LP

problem, not just corner points B and C.
Observe that the rightmost objective function line coincides with segment BC.

The values of the objective function Z are obtained

after evaluating the function at points B and C. Corner Points 𝑍 = 150𝑥 + 75𝑦
Since 30 ≤ 𝑥 ≤ 50, other solutions may be obtained by
assigning values of x within the given range of values, B (30, 40) 𝑍𝐵 = 150 30 + 75 40
using the equation of segment BC, which is 2x + y = = 𝑃ℎ𝑃 7,500
100.
C (50, 0) 𝑍𝑐 = 150 50 + 0 0
Some possible optimal solutions are shown in the = 𝑃ℎ𝑃 7,500
table.
(35, 30) 𝑍 = 150 35 + 75 30
= 𝑃ℎ𝑃 7,500
(40, 20) 𝑍 = 150 40 + 75 20
= 𝑃ℎ𝑃 7,500
(45, 10) 𝑍 = 150 30 + 75 40
= 𝑃ℎ𝑃 7,500
 Maximize 𝑍 = 10𝑥 + 15𝑦

The graph, feasible solution and

 Subject to: 2𝑥 + 𝑦 ≤ 30 corner points are shown in the graph.
2𝑥 + 3𝑦 ≤ 54 From z = 10x + 15y, the slope of the
−10
objective function line is 𝑚 = 15 =
𝑥 ≤ 12
−2
𝑥, 𝑦 ≥ 0 .After drawing the first objective
3
function line, a series of parallel
objective function lines may be drawn
until the right-most corner point is
reached.
 The graph, feasible solution, 𝑆, and corner points (A, B, C and D) are shown. Notice that S is
bounded.

2𝑥 + 𝑦 ≤ 30 𝑥 ≤ 12

Optimal Objective Function Line (line

coinciding with segment BC)

2𝑥 + 3𝑦 ≤ 54
 Some possible optimal solutions
Here, the rightmost objective function are:
line coincides with segment BC, hence,
Corner Points 𝑍 = 10𝑥 + 15𝑦
there are infinitely many solutions to the
LP problem, not just corner points B and B (0, 18) 𝑍𝐵 = 10 0 + 15 18
C. The values of the objective function = 𝑃ℎ𝑃 270
C (9, 12) 𝑍𝑐 = 10 9 + 15 12
Z are obtained after evaluating the = 𝑃ℎ𝑃 270
function at points B and C. Since 0 ≤ (2, 50/3) 𝑍𝐵 = 10 2 + 15 50/3
𝑥 ≤ 9, other solutions may be obtained = 𝑃ℎ𝑃 270
(4, 46/3) 𝑍𝐵 = 10 4 + 15 46/3
by assigning values of x within the = 𝑃ℎ𝑃 270
given range of values using the equation (6, 14) 𝑍𝐵 = 10 6 + 15 14
of segment BC, 2x + 3y = 54. = 𝑃ℎ𝑃 270
 Neuro-Iron and Sango-Iron Problem
A nutritionist advises an individual who is Objective: To minimize cost, z
suffering from iron and vitamin-B deficiency
to take at least 2400 mg of iron, 2100 mg of Let x be the number of capsules of Neuro-
vitamin B1 and 1500 mg of vitamin B2 over Decision Iron
a certain period of time. Two vitamin Variables: y be the number of capsules of Sango-
capsules are suitable, Neuro-Iron and Iron
Sango-Iron. Each Neuro-Iron capsule costs Objective
P6 and contains 40 mg of iron, 10 mg of Function:
Minimize z = 6x + 8y
vitamin B1 and 5 mg of vitamin B2. Each
Sango-Iron costs P8 and contains 10 mg or Constraint
Iron Requirement: 40x + 10y ≥ 2,400
iron and 15 mg each of vitamins B1 and B2. s:
What combination of each brand should the B1 Requirement: 10x + 15y ≥ 2,100
individual purchase in order to meet the
minimum iron and vitamin requirements at B2 Requirement: 5x + 15y ≥ 1,500
the lowest cost?
NNC x, y ≥ 0
The graph, feasible
solution, 𝑆 , and corner
points (A, B, C and D) are
shown. From z = 6x + 8y, 40x + 10y ≥ 2,400
the slope of the objective
−6
function line is 𝑚 = = Optimal objective function
8 line
−3
4
. For a minimization
problem, the left-most
corner point intersected
by the objective function
line is the optimal 5x + 15y ≥ 1,500

solution. 10x + 15y ≥ 2,100

Corner point B is the leftmost-most corner point intersected by the objective
function line. It is the optimal solution.

Thus, the individual must purchase 30

Corner Points 𝑍 = 6𝑥 + 8𝑦Neuro-Iron capsules and 120 Sango-
Iron capsules at a minimum cost of
PhP 1,140.

𝑍𝐵 = 6 30 + 8 120
B (30, 120)
= 𝑃ℎ𝑃 1,140
Solve graphically using the Method of
Corners.

Objective
Max z = 5A + 5B
Function:

Constraint
𝐴 ≤ 100
s:
𝐵 ≤ 80

2𝐴 + 4𝐵 ≤ 400

𝐴, 𝐵 ≥ 100
Corner Points and Cost at each corner Optimal Solution:
point:
Formulate the LP problem and solve graphically
using the Objective Function Line Method.

JAM, Inc. is a small manufacturer of

Production time in hours
sports and school bags. Its distributor
believes that a market exists for both
medium-priced school bags, Product A,
and high-priced sports bags, Product B. Product
The distributor is so confident of the Cutting Inspectio
Profit per
market that, if JAM can make the bags and Sewing Finishing n and
bag
at a competitive price, the distributor dyeing Packaging
will purchase all the bags that it can
manufacture over the next three
months. A careful analysis of the Product
manufacturing requirements resulted in A 7/10 1/2 1 1/10 P200
the following table, which shows the
production time requirements for the
four required manufacturing operations Product
and the accounting department’s B 1 5/6 2/3 ¼ P180
estimate of the profit contribution per
bag:
The director of manufacturing
estimates that 630 hours of cutting
and dyeing time, 600 hours of
sewing time, 708 hours of finishing
time, and 135 hours of inspection
and packaging time will be
available for the production of
sports and school bags during the
next three months. How many
bags of each model should it
manufacture?

Optimal Solution:
Computer Solution of LP Model

Solving LP Models Using MS Excel Steps to activate excel solver.

Solutions to LP models having two a) Open a blank workbook.
or more variables can be obtained
b) Click File then scroll down to look
using MS Excel. Excel has solver that
for options.
performs the necessary computations.
c) Double click options then choose
the add ins.
d) Choose the solver add ins and wait
for the installation of excel solver
Formulate and solve using MS Excel

Tons of Raw Material Maximum

The Redy Miks Company owns a
small paint factory that produces
both interior and exterior house Exterior Interior Availability
paints for wholesale distribution. (tons)
Two basic materials, A and B, are
used to manufacture the paints. Raw 1 2 6
The maximum availability of A is 6 material
tons a day; that of B is 8 tons a A
day. The daily requirements of the
Raw 2 1 8
raw materials per ton of interior
and exterior paints are material
summarized in the following table. B
LP model of Redy Miks

A market survey has Objectiv

To maximize cost, z
established that the daily e:
demand for interior paint Decision
Let x be tons produced daily of
cannot exceed that of exterior Variable
exterior paint
paint by more than 1 ton. The s:
y be tons produced daily of
survey also shows that the interior paint
maximum demand for interior Objectiv
paint is limited to 2 tons daily. e
Maximize z = 3,000x + 2,000y
The profit contribution per ton Functio
is 3 thousand for exterior and 2 n:
thousand for interior paint. Constrai
How much exterior and interior (Raw material A): x + 2y ≤ 6
nts:
paints should the company (Raw material B): 2x + y ≤ 8
produce to maximize profit?
(Production demand): y – x ≤ 1

(Maximum demand): y ≤ 2
Steps to use Solver

Not obvious from the figure is the

need to enter a formula for each
cell where there is zero. The
formulas are for the value of the
objective function and the left-
hand side constraints.
Encode the objective function in cell C1.
C1 = 3000*C3+2000*D3
Left-hand side constraints:
for A8 = C3+2*D3
for A9 = 2*C3+D3
for A10 = D3 – C3
For A11 = D3
After successfully encoding the problem in a worksheet.
Click Data at the top of the worksheet and at the rightmost
click solver. A new window will pop.
Set Objective: choose cell “C1”.
To: Choose “Max”
Subject to the Constraints: Click “Add”.

o choose cell “A8”, inequality ≤ , C8; click “Add”.

o choose cell A9, inequality ≤ , C9; click “Add”.
o choose cell A10, inequality ≤ , C10; click “Add”.
o choose cell A11, inequality ≤, C11; click “Ok”.

Check the box before “Make unconstrained variables

non-negative.:
For the solving method, choose “Simplex LP”.
Click “Solve”.
 Once this dialog box appears, click
“Keep solver solution.”, Choose
Answer (under Reports) then click
“OK”.
Excel Solver Output of Redy Miks

Redy Miks must produce 3.33 tons of

exterior paints(x) and 1.33 tons of
interior paints (y) to have a maximum
profit of 12,666.67.
Sensitivity Analysis

Sensitivity/Post Optimality Analysis  The types of potential changes

 Analysis of the effect of change in a) Objective Function Coefficients
one or more parameters defining a
b) Right-hand values of constraints
linear programming model.
c) Constraint coefficients
 Considered as the most important
aspect of linear programming.
Changes in the Objective Function Right-Hand-Side Ranging
Coefficients
The process of finding the range of
The range over which the objective applicability of the shadow price
function coefficient of a basic variable (opportunity cost or marginal
may vary without affecting the contribution) of a resource is referred
optimum solution is called the range as right-hand-side ranging.
of optimality (or range of profitability)
for that coefficient.
Changes in the Constraint Range for the Non basic Variables.
coefficients
When the variable associated with a
The changes in the constraint particular product is not in the
coefficients will cause changes in the optimal solution, we know that the
optimal solution. A non basic variable variable is non basic and therefore,
can become part of the optimal the product is not profitable.
solution by slightly changing the
coefficients of the constraints to
increase profit or decrease cost.
Sensitivity Report on Objective Function Coefficients and Right-hand values
of constraints

The first table (variable Cells)

shows:
Numerical coefficient of the variable x in the
objective function can range from 1000 to 4000
while coefficient of variable y can range from
1500 to 6000 and still the solution is optimal.
The second table (Constraints)
shows:
One unit increase in raw material A contributes
333.33 and one unit increase in raw material B
contributes 1333.33. The shadow price of raw
material A is 333.33 while that of material B is
1333.33
The range of applicability of the shadow price of
raw material A is 4 to 7 tons while that of raw
material B is 6 to 12 tons.
Answer Report on Objective Function Coefficients and
Right-hand values of constraints

Objective Cell table indicates that

the maximum profit is 12,666.67.
Variable Cells table shows x = 3.33
and y = 1.33
Constraints table reports the binding
constraints which are raw material A
and raw material B. These are the
two constraints which gave the
answers for decision variables. It
also shows that all the raw material
A and raw material B are all used
up. The other two constraints have
3 and 0.67 slack resources.
Practice set

Solve the previously formulated LP models using excel solver.

Generate the solution, sensitivity report and answer report.
Summary of the impact of changes within their
respective ranges Stevenson (2018)

Changes to objective function Changes to RHS values of constraints

coefficients that are within the range that are within the range of
of optimality feasibility
Component Result Component Result
Value of Decision No change Value of the No change
Variables shadow price
Value of Objective Will change List of basic No change
Function variables
Values of basic Will change
variables
Value of the Will change
objective function
 References

Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., &

Cochran, J. J. (2019). An introduction to Management Science:
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Hillier, F.S., Hillier M.S. (2018) Introduction to Management
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Spreadsheets, 6th Edition. McGraw-Hill Education
Stevenson, W.J. (2018). Operations Management, 13th Edition.
McGraw-Hill Education
Tan, S. T. (2017). Finite Mathematics for the Managerial, Life and
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