Linear

Programming

Formulation
 Linear Programming
Linear programming deals with optimization (max or
min) of linear functions subject to linear constraints.

Three components of a decision making problem

i. Defining of the decision variables of the problem

ii. Identification of the constraints under which the decision is

to be made

iii. Constructing the objective function to be optimized –

maximizing profit or minimizing cost
 General Format of LP Model
Maximize or minimize Objective Function
Subject to:
Constraints
And non-negativity of decision variables

• Values of the decision variables that satisfy all the

constraints including non-negativity, constitute a
feasible solution.
• If the feasible solution maximizes the profit or
minimizes the cost it is an optimum feasible solution.
 Sample: Linear Programming
Example: Max z = x + y x and y are called
decision variables
Subject to: x + 2y  90
2x + y  60 (x + y) is called the
x0 Objective function
y0 The inequalities are constraints

It is called Linear programming as the functions

are linearly related.
 Problem Formulation
• Problem formulation or modeling is the process of
translating the verbal statement of a problem into a
mathematical statement.

• Formulating models is an art that can only be mastered

with practice and experience

• The accuracy and value of the conclusions arrived at

depends on how well a model represents the real
situation
 Formulation of an LPP
• Identify the Decision Variables of interest and express
them as x1, x2, x3, …

• Ascertain the Objective of the problem

• Ascertain the Cost (in case of minimization) or the Profit

(in case of maximization) per unit of each decision
variable

• On the basis of the above data, write down the

Objective Function, Z, as a linear function of the
decision variables
 LPP Formulation (contd.)
• Ascertain the Constraints representing the maximum
availability (of resources) or the minimum commitment
(demands, targets etc.) or equality

• Write the constraints in terms of decision variables as

“less than or equal to” (<=) type inequality or “greater
than or equal to” (>=) type inequality or “equal to” (=)
type equality; all constraints shall be linear

• Note that maximum availability leads to a <= type and

minimum commitment gives a >= type inequality
 Formulation (contd.)
• Add non-negativity restriction as under:
xj >= 0; j = 1, 2, … n

Non-negativity constraints are a general feature of all

LPPs
 The Mathematical Formulation
The Mathematical Formulation looks like:

Maximize (or Minimize) Z = c1x1 + c2x2 + …

Subject to constraints:
a11x1 + a12x2+ … <= b1 (Maximum availability)
a21x1 + a22x2+ … >= b2 (Minimum commitment)
a31x1 + a32x2+ … = b3 (Equality)
…
x1, x2, … >= 0 (Non-negativity restriction)
 A wide range of LP Problems
• “Product Mix” Problems (e.g. 1, 2, 3)
• “Make or Buy Decision” Problems (e.g. 4)
• “Choice of Alternatives” Problems
• “Sales Budget” Problems
• “Production Budget” Problems
• “Purchase Budget” Problems
• “Portfolio Mix” Problems (e.g. 5)
• “Advertising” Problem
 Range of LP Problems (contd.)
• “Capital Mix” Problems
• “Diet” Problems
• “Nutrition” Problems (e.g. 6)
• “Blending” Problems
• “Trim” Problems
• “Transportation” Problems
• “Assignment Problems”
• “Job Scheduling” Problems
 Example-1
A garment manufacturer has a production line making
two styles of shirts. Style I needs 200 g of cotton thread,
300 g of Dacron thread and 300 g of linen thread.
Corresponding requirements of style II are 200g, 200g
and 100g. The net contributions are Rs.19.50 for style I
and Rs.15.90 for style II. The available inventory of
cotton thread, Dacron thread and linen thread are,
respectively, 24 kg, 26 kg and 22 kg.

The manufacturer wants to determine the number of

each style to be produced with the given inventory.
Formulate the LPP model.
 Step 1: Objective Function
• Decision variables: These are the numbers of
each style to be produced:
– Number of style I shirts, say x1
– Number of style II shirts, say x2

• Objective of the decision maker: Maximize total

contribution , given that the contribution per unit
is Rs. 19.50 for x1 and Rs. 15.90 for x2
• Maximize profit
• Hence the objective function is:
Max Z = 19.50 x1 + 15.90 x2
 Step 2: Constraints
• Availability of cotton thread: Style I needs 200 g and
style II needs 200 g. 24,000 g is available. The
corresponding constraint is
200 x1 + 200 x2 <= 24,000
• Availability of dracon thread: Style I needs 300 g and
style II needs 200 g. 26,000 g is available. The
corresponding constraint is
300 x1 + 200 x2 <= 26,000
• Availability of linen thread: Style I needs 300 g and style
II needs 100 g. 22,000 g is available. The corresponding
constraint is
300 x1 + 100 x2 <= 22,000
 Step 3: Non-negativity
Since the number of shirts cannot be negative,
add the non-negativity restriction x1, x2 >= 0 and
complete the LP formulation.
--------------------------------------------------------------
Note: For the time being we ignore another restriction on
x1 and x2 that they be integers. If that restriction is also
added we write:
x1, x2 >=0 and integers. Then this becomes an
Integer LP or ILP, which we will see later.
 Solution of Example 1
Let x1 = number of style I shirts
x2 = number of style II shirts
Max Z = 19.50 x1 + 15.90 x2 (contribution)
Sub to: 200 x1 + 200 x2 <= 24,000 (cotton)
300 x1 + 200 x2 <= 26,000 (dacron)
300 x1 + 100 x2 <= 22,000 (linen)
x1, x2 >= 0 (non-negativity)
 Example 2
An animal feed company must produce 200 kg
of a mixture consisting of ingredients A and B
daily. A costs Rs. 3 per kg and B costs Rs. 8 per
kg. Not more than 80 kg of A can be used and at
least 60 kg of B must be used.

The company wants to know how much of each

ingredient should be used to minimize cost.
Formulate the LPP.
 Step 1: Objective Function
• Decision variables: Qty of each ingredient used:
– Quantity of ingredient A, say A kg
– Quantity of ingredient B, say B kg

• Objective of the decision maker: Minimize cost,

given that cost per kg is Rs. 3 for A; Rs. 8 for B.

• Hence the objective function is:

Min Z = 3A + 8B
 Step 2: Constraints
• Committed output is 200 kg of the mixture. The
corresponding constraint is
A + B = 200
• Not more than 80 kg of A can be used. The
corresponding constraint is
A <= 80
• At least 60 kg of B must be used. The
corresponding constraint is
B >= 60
 Step 3: Non-negativity
Since the decision variables cannot be
negative, add the non-negativity restriction
A, B >= 0 and complete the LP
formulation.
------------------------------------------------------

Note that we do not have any integer restrictions

on the decision variables in this case.
 Solution to Example 2
Min Z = 3A + 8B
Sub to: A + B = 200
A <= 80
B >= 60
A, B >= 0
 Example 3
A farmer has a 125 acre farm. He produces radish,
mutter and potato. Whatever he raises is fully sold. He
gets Rs.5 per kg for radish, Rs.4 per kg for mutter and
Rs.5 per kg for potato. The average yield per acre is
1500 kg for radish, 1800 kg for mutter and 1200 kg for
potato. Cost of manure per acre is Rs.187.50, Rs.225
and Rs.187.50 for radish, mutter and potato respectively.
Labour required per acre is 6 man-days each for radish
and potato and 5 man-days for mutter. A total of 500
man-days of labour is available at the rate of Rs.40 per
man-day.

Formulate this as an LPP model to maximize the profit.

 Step 1: Objective Function
• Decision variables: acreage for each produce:
 Acres for radish, say r
 Acres for mutter, say m
 Acres for potato, say p

• Objective of the decision maker: Maximize profit,

given that, profit per acre is:
(5*1500 -187.5 – 6*40) for radish
(4*1800 – 225 - 5*40) for mutter
(5*1200 – 187.5 – 6*40) for potato
E.g.: Profit per acre for Radish
• Earning per acre
Each acre yields 1500 kg. Each kg sells for Rs.5
Hence earning per acre = Rs.1500*5

• Cost per acre

Manure = Rs.187.50
Labour = 6 man-days @ Rs.40 per man-day.
Hence cost per acre is Rs.(187.50 + 6*40)

• Profit = Earning – cost = Rs.(1500*5 – 187.5 – 6*40)

 Step 2: Constraints
• Availability of land = 125 acres. The
corresponding constraint is
r + m + p <= 125

• Availability of labour = 500 man-days. The

corresponding constraint is
6r + 5m + 6p <= 500
 Step 3: Non-negativity
Since the decision variables cannot be
negative, add the non-negativity restriction
r, m, p >= 0 and complete the LP
formulation.
 Solution to Example 3
Let r, m, p be the no of acres used for radish, mutter and
potato respectively.

Max Z = (5*1500 -187.5 – 6*40) r + (4*1800 – 225 - 5*40) m

+ (5*1200 – 187.5 – 6*40)p

Sub to: r + m + p <= 125 (Land constraint)

6r + 5m + 6p <= 500 (Man-days constraint)
r, m, p >= 0 (non-negativity)
 Example 4
Jindal manufactures a Per component Sofa Table Chair
type of sofa set containing
seven components: one Rs. Rs. Rs.
sofa, two centre tables Direct Material 1,000 500 550
and four chairs.
Direct Labour
These can either be
manufactured in-house or hours 100 50 10
sub-contracted as per the Sub-contract Rs. Rs. Rs.
data given in the table:
price 2,500 1,000 750

Sales of sofa sets are 8,000 per period, each selling for Rs.7,500. A
capacity constraint of 500,000 direct labour hours obliges the
company to sub-contract some components.

The variable overheads vary with direct labour hours at Rs. 2 per
hour. Fixed costs are Rs. 1,750,000 per period and labour costs Rs.
5.50 per hour.
Formulate LPP to minimize costs.
• Decision variables:
The nos of sofas, tables, chairs made / bought:
sm, sb, tm, tb, cm, cb.
• The table on the next slide calculates the cost per
unit of each decision variable (objective function
coefficients)
• Hence the objective function is:
Min 1750 sm +2500 sb + 875 tm + 1000 tb + 625 cm + 750 cb + FC

• Constraints:
– Demand for sofas: sm + sb = 8000
– Demand for tables: tm + tb = 16,000
– Demand for chairs: cm + cb = 32,000
– Direct labour hours: 100 sm + 50 tm + 10 cm <= 500,000

• Non-negativity: sm, sb, tm, tb, cm, cb >= 0

 Solution to example 4
Sofa Table Chair
DM cost 1000 500 550
DL cost 550 275 55
Var O/H 200 100 20
Cost of "make" 1750 875 625
Cost of Buy 2500 1000 750

Min Z = 1750 sm + 2500 sb + 875 tm + 1000 tb + 625 cm + 750 cb + FC

Subject to: sm + sb = 8000 (demand for sofas)
tm + tb = 16,000 (demand for table)
cm + cb = 32,000 (demand for chairs)
100 sm + 50 tm + 10 cm <= 500,000 (direct labour available)
sm, sb, tm, tb, cm, cb >= 0 (non-negativity)
 Example 5
A mutual fund has Rs. 2 Return Risk factor
million available for Investment % (0- 100)
investment in Government
bonds, blue chip stocks, Bonds 14 12
speculative stocks and short- Blue Chip 19 24
term bank deposits. The
annual expected return and Speculative 23 48
the risk factor are as shown: Short-term 12 6

The fund is required to keep at least Rs. 200,000 in short-term

deposits and not to exceed an average risk factor of 42.
Speculative stocks must not exceed 20% of the money invested.
Formulate the LPP maximizing expected annual return.
• Decision variables:
Amounts invested in Government bonds, blue chip
stocks, speculative stocks and short-term bank
deposits :
x1, x2, x3 and x4.
• Objective: Maximize returns given that the return per
Re. for the investments are 0.14, 0.19, 0.23, 0.12
• Hence the objective function is:
Max 0.14 x1 + 0.19 x2 + 0.23 x3 + 0.12 x4

• Constraints: (See next slide for calculations)

– Amount available: x1 + x2 + x3 + x4.<= 2,000,000
– At least 200,000 in STD: x4 >= 200,000
– Average risk factor: 30x1+18x2- 6x3+36x40
– Limit on speculative stock: 0.2 x1 + 0.2 x2 – 0.8 x3 + 0.2 x4  0

• Non-negativity: x1, x2, x3, x4 >= 0

 Solution to Example 5
Let x1, x2, x3, x4 be the amounts invested.
Average risk factor =
(12 x1+24 x2 + 48 x3 + 6 x4)/(x1+ x2+ x3+ x4)  42.
This gives 30x1+18x2-6x3+36x40.
Also x3  0.2 (x1+ x2+ x3+ x4) ---- Maximum limit on speculative stock
This gives: 0.2 x1 + 0.2 x2 – 0.8 x3 + 0.2 x4  0

Hence the LPP formulation is as follows:

Max Z = 0.14 x1+ 0.19 x2+ 0.23 x3+ 0.12 x4
s.t: 30x1+18x2- 6x3+36x40 (Avg Risk factor)
0.2 x1 + 0.2 x2 – 0.8 x3 + 0.2 x4  0 (limit on speculative stock)
x1 + x2+ x3 + x4  2,000,000
x4  200,000
x1, x2, x3, x4  0 (Non-negativity)
 Example 6
The vitamins V and W are found in two different
foods, F1 and F2. The respective prices per unit
of each food are Rs. 3 and Rs. 2.5. One unit of
F1 contains 2 units of vitamin V and 3 units of
vitamin W. One unit of F2 contains 4 units of
vitamin V and 2 units of vitamin W. The daily
requirements of V and W are at least 60 units
and 75 units respectively.

Formulate an LPP to meet the daily requirement of

the vitamins at minimum cost
• Decision variables:
Quantity of foods F1 and F2 required be x1 and x2.
• Objective: Minimize cost given that the costs per
unit of F1 and F2 are Rs. 3 and Rs. 2.5
respectively
• Hence the objective function is:
Min Z = 3 x1 + 2.5 x2

• Constraints:
– Requirement of V: 2x1 + 4 x2  60
– Requirement of W: 3x1 + 2 x2  75

• Non-negativity: x1, x2 >= 0

 Solution to Example 6
Let x1 and x2 be the quantities of F1 and F2.
Minimise: 3x1 + 2.5 x2
s.t: 2x1 + 4 x2  60 (Min requirement of V)
3x1 + 2x2  75 (Min requirement of W)
x1 , x2  0