Unit Three

Introduction to Linear Programming

3. 1. Introduction
Linear programming is an optimization method (maximization or minimization), which shows
ways to allocate scarce resources in the best possible way subject to more than one limiting
condition expressed in the form of inequalities and /or equations.

 Linear programming enables users to find optional solution to certain problems in which
the solution must satisfy a given set of requirements or constraints. - Optimization in linear
programming implies maximization (max) of profit, revenue, sales, market share or
minimization (min) of cost, time, distance, or a certain objective function.
 Linear programming involves linearly related multi-variety functions that are functions
with more than one independent variable. - The goal in linear programming is to find the
best solution given the constraints imposed by the problem, hence the term constrained
optimization.

3.2. Introduction to Linear Programming and its Application in Business

Linear Programming (LP) is one of the mathematical optimization techniques which attempt to
maximize or minimize some objects; for example, maximize profit or minimize cost. Linear
programming models are mathematical representation of linear programming problems. There
have been extensive applications of LP within military and petroleum industries. Although these
sections have perhaps been the heaviest users of linear programming, the service and public sectors
of the economy have also applied the method extensively. Some models have a specialized format
whereas others have a more generalized format.

Despite this, linear programming models have certain characteristics in common. Knowledge of
these characteristics enables us to recognize problems that are amenable to a solution using Linear
Programming models and to correctly formulate a Linear Programming model. The characteristics
can be grouped into two categories: Components and assumptions. The components relate to the
structure of a model, whereas the assumptions describe the conditions under which the model is
valid.

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(e.g. Product standards, work standards), or they may reflect other limits based on forecasts,
customer orders, company policies etc.

4. Parameters - are fixed values that specify the impact that one unit of each decision variable
will have on the objective and on any constraint, it pertains to as well as to the numerical value
of each constraint.
The components are the building blocks of an LP model. We can better understand their
meaning by examining a simple LP model as follows.

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 i) With respect to model parameters (i.e., the numerical values) – It in
assumed that these values are known and constant e.g. in the above example
each unit of product 1 requires 2 lab hrs. is known and remain constant, and
also the 300 lab/hrs. available is deemed to be known and constant.
ii) All the relevant constraints identified and represented in the model are as
they are.

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 Non-negativity - the non-negativity constraint is that negative values of variables are
unrealistic and, therefore, will not be considered in any potential solution; only positive values
and zero will be allowed.

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Required: Formulate the linear programming model of this problem.
3.3. Approaches to linear programming

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determined in the same way that slack can: substitute the optimal values of the decision variables
into the left side of the constraint and solve. The difference between the resulting value and the
original right-hand side amount is the amount of surplus. Surplus can potentially occur in a 
constraint.

3.4. The Simplex Algorithm/Algebraic Solution Method

The simplex method is an iterative technique that begins with a feasible solution that is not optimal,
but serves as a starting point. Through algebraic manipulation, the solution is improved until no
further improvement is possible (i.e., until the optimal solution has been identified). Each iteration
moves one step closer to the optimal solution. In each iteration, one variable that is not in the
solution is added to the solution and one variable that is in the solution is removed from the solution
in order to keep the number of variables in the basis equal to the number of constraints.
The optimal solution to a linear programming model will occur at an extreme point of the feasible
solution space. This is true even if a model involves more than two variables; optimal solutions
will occur at these points. Extreme points represent intersections of constraints. Of course, not
every solution will result is an extreme point of the feasible solution space; some will be outside
of the feasible solution space. Hence, not every solution will be a feasible solution. Solutions
which represent intersections of constraints are called basic solutions; those which also satisfy all
of the constraints, including the non-negativity constraints, are called basic feasible solutions. The
simplex method is an algebraic procedure for systematically examining basic feasible solutions. If
an optimal solution exists, the simplex method will identify it. The simplex procedure for a
maximization problem with all  constraints consist of the following steps.

Write the LPM in a standard form: when all of the constraints are written as equalities, the linear
program is said to be in standard form. We convert the LPM in to a standard form by applying the
slack variables, S, which carries a subscript that denotes which constraint it applies to. For
example, S1 refers to the amount of slack in the first constraint, S2 to the amount of slack in the
second constraint, and so on. When slack variables are introduced to the constraints, they are no
longer inequalities because the slack variable accounts for any difference between the left and
right-hand sides of an expression. Hence, once slack variables are added to the constraints, they
become qualities.

Furthermore, every variable in a model must be represented in the objective function. However,
since slack does not provide any real contribution to the objective, each slack variable is assigned
a coefficient of zero in the objective function.

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assemble and 6 minutes to package. Each type has an engine. The company has 12 hrs of assembly
time available, 75 engines, and 5hrs of packing time. Profits are Birr 70 for the self-propelled
models and Birr 45 for the push-type mower per unit. Required: 1. Formulate the linear
programming models for this problem. 2. Determined how many mowers of each type to make in
order to maximize the total profit (use the simplex procedure).

3.5. Limitations of linear programming

a) In linear programming uncertainty is not allowed, i.e., LP methods are applicable only
when values for costs, constraints, etc. are known, but in real life such factors may be
unknown.
b) According to the LP problem, the solution variables can have any value, whereas
sometimes it happens that some of the variables can have only integral values. For example,
in finding how may machines to be produced; only integral values of decision variables are
meaningful. Except when the variables have large values, rounding the solution to the
nearest integer will not yield an optimal solution. Such situations justify the use of Integer
Programming.
c) Many times, it is not possible to express both the objective function and constraints in
linear form.

Exercises:

1. A manufacture of lawn and garden equipment makes two basic types of lawn mowers; a
push type and a self-propelled model. The push type requires 9 minutes to assemble and 2
minutes to package; the self-propelled mover requires 12 minute to assemble and 6 minutes
to package. Each type has an engine. The company has 12hrs of assembly time available,
75 engines, and 5hrs of packing time profits are Birr 70 for the self-propelled model and
br 45 for the push type mower per unit.

Required: determine how many units of each type of mower to produce so as to maximize
profit
2. Chairco manufactures two types of chairs, standard and plush. Standard chairs require 2
hours to construct and finish, and plush chairs require 3 hours to construct and finish.
Upholstering takes 1 hour for standard chairs and 3 hours for plush chairs. There are 240
hours per day available for construction and finishing, and 150 hours per day are available
for upholstering. If the revenue for standard chairs is $89 and for plush chairs is $133.50,
how many of each type should be produced each day to maximize revenue?
3. A company manufactures two types of electric hedge trimmers, one of which is cordless.
The cord-type trimmer requires 2 hours to make, and the cordless model requires 4 hours.
The company has only 800 work hours to use in manufacturing each day, and the packaging
department can package only 300 trimmers per day. If the company sells the cord-type
model for $22.50 and the cordless model for $45.00, how many of each type should it
produce per day to maximize its sales?

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