Course name: Optimization Methods in

Management Science-1
Module 2: Linear Programming
Problems

Q1. Explain the linear Programming Problems?

Ans.

Each and every organization aspires for optimal utilization of its limited scarce resources like
men, money, materials, machines, methods and time to reach the targets. The results are
generally measured in terms of profits, losses, return on money invested, etc. To achieve
these results, the decision-maker has to have thorough knowledge about the tasks or jobs and
the relationships among them. Among the popular techniques of Operations Research, Linear
Programming deserves mention because it is one of the widely used techniques. And it is a
deterministic model. In other words, Linear Programming is one of the important Operations
Research tools used to allocate scarce resources in an optimal way so that the allocator can
optimize the results either by maximizing the profits or minimizing the costs. The credit of
innovating this technique goes to George B. Dantzig. He innovated this technique while he
was working for U.S. Air force during World War II, 1947. Initially, this technique was used
to solve tough logistic problems like assignment and transportation but instantly the
application of this technique has spread to almost every functional area of management,
production planning and control, personnel management, advertising and promotion.

Linear Programming decisions are made obviously under certainty conditions i.e., when the
existing situation and the variables are known. The results obtained will be either optimal or
nearly optimal. It even helps in cross verification of the results obtained through the process
of mere intuition and the one arrived at with the use of Linear Programming technique while
an optimum solution is being anticipated.

The general Linear Programming Problem calls for optimizing (maximizing/ minimizing) a
linear function for variables called the ‘objective function’ subject to a set of linear equations
and/or inequalities called the ‘constraints or restrictions.’
Q2. Explain the Application of Linear Programming?

Ans.

LP is a widely used technique of OR in almost every decision of a business and management. However,
Linear Programming is exclusively used in the following areas:

1. Production Management

2. Personnel Management

3. Financial Management

4. Marketing Management

Apart from these areas it is used in agricultural operations, farm management and military problems.

Production Management: In the area of production management, Linear Programming is used in the
field of:

 Product planning

 Research and development

 Product portfolio management

 Line expansion and contraction decision

 Longevity of product life cycle.

Personnel Management: In this area, LP is used in the field of:

 Recruitment and staffing decisions

 Wage or salary management

 Job evaluation and allocation

 Employee benefits and welfare

 Overtime and related decisions.

Financial Management: In this area, LP is used in the field of:

 Portfolio decision  Profit planning

 Alternative capital investment decisions

 Investment on inventories

 Allocation of funds to developmental activities.

Marketing Management: In the area of marketing management, it is used in the field of:

 Media planning and selection

 Travelling salesman problem

 Product development

 Ad and Pro budget

 Marketing mix decisions.

Q3. Explain the Maximization Cases with Mixed Constraints?

Ans.

Example: The manager of an oil-refinery must decide on the optimal mix of 2 possible
blending processes, of which the input and output per production run are given as
follows:
 The maximum amount available of crude A and B are 200 units and 150 units
respectively. Market requirements show that at least 100 units of gasoline X and 80
units of gasoline Y must be produced. The profit per production run from process I
and process II are ` 300 and ` 400 respectively. Formulate the above problem as
LPP.
Solution:
Let
x1 represent process I
x2 represent process II

Therefore, 300 x1 represent profit on process I

400x2 represent profit on process II

Hence, the objective function is given by,

Maximize ‘Z’ = 300x1 + 400x2

constraints

5x1 + 4x2  200

3x1 +5x2  150 (Crude Oil
constraints)
5x1 5x2 100
8x1 + 4x2  80 (Gasoline
constraints)
x1, x2 0  (Non-negativity
constraints)
Example: The management of xyz corporation is currently faced with the problem of
determining its product mix for the coming period. Since, the corporation is one of the few
suppliers of transformers for laser cover units, only liberal sales ceilings are anticipated. The
corporation should not plan on selling transformers more than 200 units of A type, 100 units
of B type and 180 units of C type. Contracts call for production of at least 20 units of A type
and 70 units of C type. Within these bounds, management is free to establish units
production schedules. These are subject to the capacity of the plant to produce without
overtime.
 Q4. Explain the Graphical Solutions under Linear Programming?
Ans.

Linear programming problems with two variables can be represented and solved graphically
with ease. Though in real-life, the two variable problems are practiced very little, the
interpretation of this method will help to understand the simplex method. Following is the
portrayal of Cartesian plane.

Steps

1. Consider each inequality constraint as an equation.

2. Plot each equation on the graph as each will geometrically represent a straight
line.

3. Plot the feasible region, every point on the line will satisfy the equation on the
line.

4. If the inequality constraint corresponding to that line is less than or equal to, then
the region below the line lying in the 1st quadrant (as shown in above graph) is
shaded (due to non-negativity of variables); for the inequality constraint with
greater than or equal to sign, the region above the line in the 1st quadrant is
shaded. The points lying in common region will satisfy all the constraints
simultaneously. Hence, it is called feasible region.

Q5. Describe the Minimization Cases of LP?

Ans.

Example: A rubber company is engaged in producing 3 different kinds of tyres A, B and C. These three
different tyres are produced at the company’s 2 different plants with different production capacities. In
a normal 8 hrs working day plant 1 produces 50, 100 and 100 tyres of A, B and C respectively. Plant 2
produce 60, 60 and 200 tyres of type A, B and C respectively. The monthly demand for tyre A, B and C is
2,500, 3,000 and 7,000 units respectively. The daily cost of operation of plant 1 and 2 is ` 2,500 and `
3,500 respectively. Find the minimum number of days of operation per month at 2 different plants to
minimize the total costs while meeting the demand.
Q6. Explain the Cases of Mixed Constraints?

Ans.

Example: A firm that makes products x and y has a total production capacity of 9 tonnes per day, x and y
requiring the same production capacity. The firm has a permanent contract to supply at least 2 tonnes of
x and 3 tonnes of y per day to another company. Each one of x requires 20 machine hrs. Production time
and y requires 50 machine hrs production time. The daily maximum possible number of machine hours
available is 360. All the firm’s output can be sold, and the profit set is ` 80 per tonne of x and ` 120 per
tonne of y. You are required to determine the production schedule to maximize the firm’s profit.