CHAPTER – 2

Linear Programming Models

(Resource Allocation Models)
2.1. INTRODUCTION
A model, which is used for optimum allocation of scarce or limited resources to competing
products or activities under such assumptions as certainty, linearity, fixed technology, and
constant profit per unit, is linear programming.
Linear Programming is one of the most versatile, powerful and useful techniques for making
managerial decisions. Linear programming technique may be used for solving broad range of problems
arising in business, government, industry, hospitals, libraries, etc. Whenever we want to allocate the
available limited resources for various competing activities for achieving our desired objective, the
technique that helps us is LINEAR PROGRAMMING. As a decision making tool, it has demonstrated
its value in various fields such as production, finance, marketing, research and development and
personnel management. Determination of optimal product mix (a combination of products, which
gives maximum profit), transportation schedules, Assignment problem and many more. In this chapter,
let us discuss about various types of linear programming models.

2.2. PROPERTIES OF LINEAR PROGRAMMING MODEL

Any linear programming model (problem) must have the following properties:
(a) The relationship between variables and constraints must be linear.
(b) The model must have an objective function.
(c) The model must have structural constraints.
(d) The model must have non-negativity constraint.
Let us consider a product mix problem and see the applicability of the above properties.
Example 2.1. A company manufactures two products X and Y, which require, the following
resources. The resources are the capacities machine M1, M2, and M3. The available capacities
are 50,25,and 15 hours respectively in the planning period. Product X requires 1 hour of
machine M2 and 1 hour of machine M3. Product Y requires 2 hours of machine M1, 2 hours of
machine M2 and 1 hour of machine M3. The profit contribution of products X and Y are Rs.5/-
and Rs.4/- respectively.
Linear Programming Models (Resource Allocation Models) 23

The contents of the statement of the problem can be summarized as follows:

Machines Products Availability in hours
X Y
M1 0 2 50
M2 1 2 25
M3 1 1 15
Profit in Rs. Per unit 5 4

In the above problem, Products X and Y are competing candidates or variables.

Machine capacities are available resources. Profit contribution of products X and Y are given.
Now let us formulate the model.
Let the company manufactures x units of X and y units of Y. As the profit contributions of X and
Y are Rs.5/- and Rs. 4/- respectively. The objective of the problem is to maximize the profit Z, hence
objective function is:
Maximize Z = 5x + 4y OBJECTIVE FUNCTION.
This should be done so that the utilization of machine hours by products x and y should not
exceed the available capacity. This can be shown as follows:
For Machine M1 0x + 2y ≤ 50
For Machine M2 1x + 2y ≤ 25 and LINEAR STRUCTURAL CONSTRAINTS.
For machine M3 1x + 1y ≤ 15

But the company can stop production of x and y or can manufacture any amount of x and y. It
cannot manufacture negative quantities of x and y. Hence we have write,
Both x and y are ≥ 0 . NON -NEGATIVITY CONSTRAINT.
As the problem has got objective function, structural constraints, and non-negativity constraints
and there exist a linear relationship between the variables and the constraints in the form of inequalities,
the problem satisfies the properties of the Linear Programming Problem.

2.2.1. Basic Assumptions

The following are some important assumptions made in formulating a linear programming model:
1. It is assumed that the decision maker here is completely certain (i.e., deterministic conditions)
regarding all aspects of the situation, i.e., availability of resources, profit contribution of the
products, technology, courses of action and their consequences etc.
2. It is assumed that the relationship between variables in the problem and the resources available
i.e., constraints of the problem exhibits linearity. Here the term linearity implies proportionality
and additivity. This assumption is very useful as it simplifies modeling of the problem.
3. We assume here fixed technology. Fixed technology refers to the fact that the production
requirements are fixed during the planning period and will not change in the period.
4. It is assumed that the profit contribution of a product remains constant, irrespective of level
of production and sales.
24 Operations Research

5. It is assumed that the decision variables are continuous. It means that the companies
manufacture products in fractional units. For example, company manufacture 2.5 vehicles,
3.2 barrels of oil etc. This is referred too as the assumption of divisibility.
6. It is assumed that only one decision is required for the planning period. This condition
shows that the linear programming model is a static model, which implies that the linear
programming problem is a single stage decision problem. (Note: Dynamic Programming
problem is a multistage decision problem).
7. All variables are restricted to nonnegative values (i.e., their numerical value will be ≥ 0).

2.2.2. Terms Used in Linear Programming Problem

Linear programming is a method of obtaining an optimal solution or programme (say, product mix in a
production problem), when we have limited resources and a good number of competing candidates to
consume the limited resources in certain proportion. The term linear implies the condition of
proportionality and additivity. The programme is referred as a course of action covering a specified
period of time, say planning period. The manager has to find out the best course of action in the interest
of the organization. This best course of action is termed as optimal course of action or optimal solution
to the problem. A programme is optimal, when it maximizes or minimizes some measure or criterion of
effectiveness, such as profit, sales or costs.
The term programming refers to a systematic procedure by which a particular program or plan of
action is designed. Programming consists of a series of instructions and computational rules for solving
a problem that can be worked out manually or can fed into the computer. In solving linear programming
problem, we use a systematic method known as simplex method developed by American mathematician
George B. Dantzig in the year 1947.
The candidates or activity here refers to number of products or any such items, which need the
utilization of available resources in a certain required proportion. The available resources may be of any
nature, such as money, area of land, machine hours, and man-hours or materials. But they are limited
in availability and which are desired by the activities / products for consumption.

2.2.3. General Linear Programming Problem

A general mathematical way of representing a Linear Programming Problem (L.P.P.) is as given below:

Z = c1x1 + c2 x2 + … cn xn subjects to the conditions, OBJECTIVE FUNCTION

≥, =, ≤) b1
a11x1 + a12 x2 + a13 x3 + …+ a1j xj + …+..a1n xn ((≥
a21 x1 + a22 x2 + a23 x3 + …………. + a2j xj + ……+ a2nxn ( ≥, =, ≤) b2 Structural
……………………………………………………………………………………… Constraints
..........................................................................................................
≥, =, ≤ ) bm
am1x1 + am2x2 + am3x3 +…+ amj xj… + amn xn ((≥
and all xj are = 0 NON NEGETIVITY CONSTRINT
CONSTRINT..
Where j = 1, 2, 3, … n

Where all cj s, bi s and aij s are constants and xj s are decision variables.
To show the relationship between left hand side and right hand side the symbols ≤ , = , ≥ are
used. Any one of the signs may appear in real problems. Generally ≤ sign is used for maximization
52 Operations Research

For S3 = 0 – 0 × 23 + 0 × 32 + 1 × 0 = 0
Profit Z = 185.7 × 23 + 107.14 × 32 = Rs. 7,700
Shadow price = 1 × 2500 + 2.6 × 2000 = Rs. 2500 + 5200 = Rs. 7700/–
As all the elements of net evaluation row are either negative elements or zeros, the solution is
optimal.
Also the profit earned is equal to the shadow price.
The answer is the company has to manufacture:
185.7 units of A and 107.14 units of B and the optimal return is Z = Rs. 7,700/–

3.4. MINIMISATION CASE

Above we have discussed how to solve maximisation problem and the mechanism or simplex method
and interpretation of various elements of rows and columns. Now let us see how to solve a minimization
problem and see the mechanism of the simplex method in solving and then let us deal with some typical
examples so as to make the reader confident to be confident enough to solve problem individually.

Comparison between maximisaton case and minimisation case

S.No. Maximisation case Minimisation case

Similarities:
1. It has an objective function. This too has an objective function.
2. It has structural constraints. This too has structural constraints.
3. The relationship between variables and Here too the relationship between and variables
constraintsis linear. constraints is linear.
4. It has non-negativity constraint. This too has non-negativity constraints.
5. The coefficients of variables may be positive The coefficient of variables may be positive,
or negative or zero. Negative or zero.
6. For selecting out going variable (key row) For selecting out going variable (key row) lowest
lowest replacement ratio is selected. replacement ratio is selected.
Differences:
1. The objective function is of maximisation The objective function is of minimisation type.
type.
2. The inequalities are of ≤ type. The inequalities are of ≥ type.
3. To convert inequalities into equations, slack To convert inequalities into equations, surplus
variables are added. Variables are subtracted and artificial surplus
variables are added.
4. While selecting incoming variable, highest While slecting, incoming variable, lowest element
positive Opportunity cost is selected from in the net evaluation row is selected (highest number
net evaluation Row. with negative sign).
5. When the elements of net evaluation row are When the element of net evaluation row are either
either Negative or zeros, the solution is positive or zeros the solution is optimal.
optimal
Linear Programming Models : Solution by Simplex Method 91

As all the net evaluation row elements are negative or zeros, the solution is optimal.
a = 5/4, c = 3/5, and minimum Z = Rs. 75/8.
The Disadvantages of Big M method over Two–phase method:
1. Big M method can be used to find the existence of feasible solution. But it is difficult
and many a time one gets confused during computation because of manipulation of
constant M. In two–phase method big M is eliminated and calculations will become
easy.
2. The existence of big M avoids the use of digital computer for calculations.

3.11. DEGENERACY IN LINEAR PROGRAMMING PROBLEMS

The degeneracy in linear programming problems and the methods of solving degeneracy, if it exists,
are discussed earlier in the chapter. To recollect the same a brief discussion is given below:
While improving the basic feasible solution to achieve optimal solution, we have to find the key
column and key row. While doing so, we may come across two situations. One is Tie and the other is
Degeneracy.
The tie occurs when two or more net evaluation row elements of variables are equal. In maximization
problem, we select the highest positive element to indicate incoming variable and in minimization we
select lowest element to indicate incoming variable (or highest numerical value with negative sign).
When two or more net evaluation row elements are same, to break the tie, we select any one of them
to indicate incoming variable and in the next iteration the problem of tie will be solved.
To select the out going variable, we have to select the lowest ratio or limiting ratio in the replacement
ratio column. Here also, some times during the phases of solution, the ratios may be equal. This
situation in linear programming problem is known as degeneracy. To solve degeneracy, the following
methods are used:
1. Select any one row as you please. If you are lucky, you may get optimal solution, otherwise
the problem cycles.
OR
2. Identify the rows, which are having same ratios. Say for example, S1 and S3 rows having
equal ratio. In such case select the row, which contains the variable with smaller subscript.
That is select row containing S1 as the key row. Suppose the rows of variable x and z are
having same ratio, then select the row-containing x as the key row.
3. (a) Divide the elements of unit matrix by corresponding elements of key column. Verify the
ratios column-wise in unit matrix starting from left to right. Once the ratios are unequal, the
degeneracy is solved. Select the minimum ratio and the row containing that element is the
key row. (This should be done to the rows that are in tie).
(b) If the degeneracy is not solved by 3 (a), then divide the elements of the main matrix by the
corresponding element in the key column, and verify the ratios. Once the ratios are unequal,
select the lowest ratios. (This should be done only to rows that are in tie).
Problem 3.21: A company manufactures two product A and B. These are machined on machines
X and Y. A takes one hour on machine X and one hour on Machine Y. Similarly product B takes 4 hours
on Machine X and 2 hours on Machine Y. Machine X and Y have 8 hours and 4 hours as idle capacity.
Linear Programming Models : Solution by Simplex Method 105

Table: III. x = 11/2, y = 9/2, z = 0, S1 = 0, S2 = 31/2, A = 0, Z = Rs. 45/2 + 44/2 = 89/2 =

Rs. 44.50.

Problem Cost Cj 4 5 –3 0 –M 0 Replacement

variable Rs. Capacity units x y z S1 A S2 ratio

y 5 9/2 0 1 1/2 1/2 0

x 4 11/2 1 0 1/2 – 1/2 0

S2 0 31/2 0 0 – 3/2 – 1/2 1

Net evaluation 0 0 – 15/2 – 1/2 0

As all the net evaluation row elements are either negative or zeros, the solution is optimal.
x = 11/2, y = 9/2 and Z = Rs. 44.50.
Problem 3.31: Maximize Z = 4x + 5y – 3z + 50 s.t
1x + 1y + 1z = 10,
1x – 1y ≥ 1
2x + 3y + 1z ≤ 40
x, y, z all ≥ 0.
Note: If any constant is included in the objective function, it should be deleted in the
beginning and finally adjusted in optimum value of Z and if there is equality in the constraints,
then one variable can be eliminated from the inequalities with ≥ or ≤ sign. In this example
constant 50 presents in the objective function. Also one equality is present in the constraints.
As done earlier, variable ‘z’ is eliminated from third constraint and is considered as slack
variable in first equality.
The problem 3.30 and 3.31 are one and the same except a constant present in the objective
function of problem 3.31.
The solution for the problem 3.30 is x = 11/2, y = 9/2 and Z = 89/2.
While solving the problem 3.31, neglect 50 from the objective function, and after getting the final
solution, add 50 to that solution to get the answer. That is the solution for the problem 3.31 is Z = Rs.
89/2 + 50 = Rs. 189/2.

3.13. DUALITY IN LINEAR PROGRAMMING PROBLEMS

Most important finding in the development of Linear Programming Problems is the existence of duality
in linear programming problems. Linear programming problems exist in pairs. That is in linear
programming problem, every maximization problem is associated with a minimization problem.
Conversely, associated with every minimization problem is a maximization problem. Once we have a
problem with its objective function as maximization, we can write by using duality relationship of linear
programming problems, its minimization version. The original linear programming problem is known
as primal problem, and the derived problem is known as dual problem.
The concept of the dual problem is important for several reasons. Most important are (i) the
variables of dual problem can convey important information to managers in terms of formulating their
future plans and (ii) in some cases the dual problem can be instrumental in arriving at the optimal
solution to the original problem in many fewer iterations, which reduces the labour of computation.
106 Operations Research

Whenever, we solve the primal problem, may be maximization or minimization, we get the solution
for the dual automatically. That is, the solution of the dual can be read from the final table of the primal
and vice versa. Let us try to understand the concept of dual problem by means of an example. Let us
consider the diet problem, which we have discussed while discussing the minimization case of the
linear programming problem.
Example: The doctor advises a patient visited him that the patient is weak in his health due to shortage
of two vitamins, i.e., vitamin X and vitamin Y. He advises him to take at least 40 units of vitamin X and
50 units of Vitamin Y everyday. He also advises that these vitamins are available in two tonics A and B.
Each unit of tonic A consists of 2 units of vitamin X and 3 units of vitamin Y. Each unit of tonic B
consists of 4 units of vitamin X and 2 units of vitamin Y. Tonic A and B are available in the medical shop
at a cost of Rs. 3 per unit of A and Rs. 2,50 per unit of B. The patient has to fulfill the need of vitamin
by consuming A and B at a minimum cost.
The problem of patient is the primal problem. His problem is to minimize the cost. The tonics
are available in the medical shop. The medical shop man wants to maximize the sales of vitamins A and
B; hence he wants to maximize his returns by fixing the competitive prices to vitamins. The problem of
medical shop person is the dual problem. Note that the primal problem is minimization problem
and the dual problem is the maximization problem.
If we solve and get the solution of the primal problem, we can read the answer of dual problem
from the primal solution.
Primal problem: Dual Problem:
Minimize Z = 3a + 2.5b. s.t. Maximize Z = 40x + 50y s.t.
2a + 4b ≥ 40 2x + 3y ≤ 3
3a + 2b ≥ 50 4x + 2y ≤ 2.50
both a and b are ≥ 0. both x and y are ≥ 0.
Solution to Primal: (Minimization problem i.e., patient’s problem)
Problem Cost Cj 3 2.50 0 0 M M
variable Rs. Requirement a b p q A1 A2
b 2.50 5/2 0 1 –3/8 1/4 3/8 –1/4
a 3 15 1 0 1/4 –1/2 –1/4 1/2
Net evaluations 0 0 3/16 7/8 M – 3/16 M – 7/8

Answer: a = 15 units, b = 2.5 units and total minimum cost is Rs. 51.25
Solution to Dual: (Maximization problem i.e medical shop man’s problem)
Problem Profit Cj 40 50 0 0
variable Rs. Capacity units x y S1 S2
y 50 7/8 0 1 1/2 –1/4
x 40 3/16 1 0 –1/4 3/8
Net evaluation 0 0 –15 –5/8