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Ops Management Notes

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16 views2 pages

Ops Management Notes

Uploaded by

adiazfcb
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1/23/24

Linear Programming (LP) Overview (2D)


● Objectives of business decisions frequently involving maximizing profit or minimizing
costs
● Linear programming uses linear algebraic relationships to represent a firm’s decision,
given a business objective and resource constraints
● Observing and Defining a problem 2 most difficult aspects of problem solving
Model Components
● Decision variables - unknown things we want to figure out (can be more than 1)
○ For now, 2 at most unknown variables. Enough to find objective function (finding
max profit or min costs)
● Objective functions - linear mathematical relation 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 and constraints
Summary of Model Formulation Steps
1. Define the decision variables. Find them and what are they
2. Define the objective function.
a. Maximize profit/minimize costs? How to get there
3. Define the constraints
Example
● Making bowls and mugs
Product Labor (hr/unit) Clay (lb/unit) Profit ($/unit)

Bowl 1 4 40

Mug 2 3 50
● 40 hrs of labor and 120 lbs of clay
1. Define variables
a. b = # bowls; m = # mugs
2. Define objective functions
a. Max Profit = 40b + 50m
3. Define constraints
a. Max Profit = 40b + 50m such that
1b + 2m <= 40; 4b + 3m <= 120; b and m >= 0
4. Test out points
a. Try using intercepts
0+2m=40 → m=20 (0,20) b+0=40 → b=40 (40,0)
0+0<=40, technically correct so shade under the line to get all possible answers
b. Now use other equation
0 + 3m=120 → m=40 (0,40) 4b+0=120 → b=30 (30,0)
0+0<=120, technically correct so shade under the line to get all possible answers
c. On graph, “feasible region” is where the two equations for constraints intersect.
“Infinite” number of feasible solutions for the points to satisfy the constrains and
get u the maximum profit
i. Among feasible region, 3 corner points (2 of which are intercepts) that
satisfy the solution
d. Intersection:
e. Max Profit: Maxz = 40b + 50m
1/25/24
Slack Variables
● Ex. 40hrs, assume optimal point u use 30hrs. How many hours left? 10. The 10 hours left
is the slack variable
● Slack variable - leftover material
○ Contributes nothing to the objective function value
○ Added to a weak inequality (less than or equal to, etc.) to convert it to an equation
1/30/24
Surplus Variables
● Variables subtracted from an inequality to convert it into an equation
● Represents excess above a constraint requirement level
● Contributes nothing to the calculated value of the objective function

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