CHAPTER 02

LINEAR PROGRAMMING:
MODEL FORMULATION
AND GRAPHICAL ACC113
MANAGEMENT SCIENCE

SOLUTION 5:30 – 7:00 TTH; 7:00 – 8:30 TTH

ROSS CATHERINE P. LERO, CPA
LINEAR PROGRAMMING
¡ Objectives of business decisions frequently involve maximizing
profit or minimizing costs.
¡ A model that consists of linear relationships representing a firm’s
decisions, given an objective, and resource constraints.
¡ Steps in applying linear programming technique:
1. Identify the problem (must be solvable by linear programming);
2. Formulate the problem as a mathematical model;
3. Solve the model using mathematical techniques;
4. Implement solution.
MODEL COMPONENTS

¡ Decision variables
¡ Parameters
Z = 20X – 5X
¡ Objective function
¡ Model constraint Subject to 4X = 100
MAXIMIZATION MODEL
PRODUCT MIX PROBLEM
¡ Beaver Creek Pottery is a small crafts operation run by a
Native American tribal council. The company employs skilled
artisans to produce clay bowls and mugs with authentic
Native American designs and colors. The two primary
resources used by the company are special pottery clay and
skilled labor. There are 40 hours of labor and 120 pounds of
clay available each day of operation. To make a bowl, 1 hour
of labor and 4 pounds of clay are needed. On the other hand,
a mug needs 2 hours of labor and 3 pounds of clay to make.
The bowl brings about P40 of profit while the mug brings
P50 profit.
¡ How many bowls and mugs should Beaver Creek produce
each day to maximize profit?
LINEAR PROGRAMMING
MODEL FORMULATION STEPS

Step 1. Define the decision variables

How many bowls and mugs to produce?
Step 2. Define the objective function.
Maximize profit
Step 3. Define the constraints.
Resources available – clay and labor
 Let x = number of bowls to
produce

DECISION Let y = number of mugs to

produce
VARIABLES

Let Z = Profit
MAXIMIZATION MODEL
PRODUCT MIX PROBLEM

Labor Pounds of
hours clay Profit
needed needed

Bowl (x) x 4x 40x

Mug (y) 2y 3y 50y
Total resource
available 40 120
 Maximize Z = 40x + 50y
OBJECTIVE Where
FUNCTION Z = total profit per day
40x = profit from bowls
50y = profit from mugs
 Labor hours constraint:
x + 2y ≤ 40 hours
MODEL Pounds of clay constraint:
CONSTRAINTS
4x + 3y ≤ 120 lbs.
Nonnegativity constraint:
x, y ≥ 0
 Maximize Z = 40x + 50y
PROGRAMMING
MODEL FOR THE
Subject to
BEAVER CREEK
PRODUCT MIX
x + 2y ≤ 40
PROBLEM
4x + 3y ≤ 120
x, y ≥ 0
FEASIBLE SOLUTION
¡ Does not violate any of the constraints.
¡ Substitute (5, 10) to the linear programming model
constraints:
x + 2y ≤ 40 4x + 3y ≤ 120 x, y ≥ 0
5 + 2(10) ≤ 40 4(5) + 3(10) ≤ 120 5≥0
5 + 20 ≤ 40 20 + 30 ≤ 120 10 ≥ 0
25 ≤ 40 50 ≤ 120
INFEASIBLE SOLUTION
¡ Violates at least one of the constraints.
¡ Substitute (10, 20) to the linear programming model
constraints:
x + 2y ≤ 40 4x + 3y ≤ 120 x, y ≥ 0
10 + 2(20) ≤ 40 4(10) + 3(20) ≤ 120 10 ≥ 0
10 + 40 ≤ 40 40 + 60 ≤ 120 20 ≥ 0
50 ≰ 40 100 ≤ 120
GRAPHICAL
SOLUTIONS OF A
MAXIMIZATION
PROBLEM
GRAPHICAL SOLUTIONS

¡ Graphical solution is limited to linear programming models

containing only two decision variables (can be used with
three variables but only with great difficulty).
¡ Graphical methods provide visualization of how a solution for a
linear programming problem is obtained.
COORDINATES FOR GRAPHICAL ANALYSIS

¡ Plot the constraint lines as

equations on the graph.
COORDINATES FOR GRAPHICAL ANALYSIS
¡ For the labor constraint:
Substitute x=0 in x + 2y ≤ 40
0 + 2y = 40
2y = 40 (30,40)
y = 20 Point (0, 20)
Substitute y=0 in x + 2y ≤ 40 x + 2y ≤ 40
(10,10)
x + 2(0) = 40
x = 40 Point (40, 0)
COORDINATES FOR GRAPHICAL ANALYSIS
¡ For the clay constraint:
Substitute x=0 in 4x + 3y ≤ 120
4(0) + 3y = 120
3y = 120
4x + 3y ≤ 120
y = 40 Point (0, 40)
Substitute y=0 4x + 3y ≤ 120
4x + 3(0) = 120
4x = 120
x = 30 Point (30, 0)
FEASIBLE AREA FOR GRAPHICAL ANALYSIS
¡ The feasible solution area
is an area on the graph that
is bounded by the constraint
4x + 3y ≤ 120
equations.
¡ All the points within this area
satisfy both constraints.
¡ Some point within this area will x + 2y ≤ 40
result to a maximum profit.
 OPTIMAL SOLUTION FOR GRAPHICAL ANALYSIS

¡ Extreme points are corner

points on the boundary of 4x + 3y ≤ 120

the feasible solution area.

¡ The optimal solution will always
occur at an extreme point.
¡ The Extreme points in this solution are:
x + 2y ≤ 40
A (0, 20) B (24, 8) C (30, 0)
OPTIMAL SOLUTION FOR GRAPHICAL ANALYSIS
¡ Find the optimal solution by substituting the extreme points to
the objective function: Maximize Z = 40x + 50y
Point A (0, 20) Point B (24, 8) Point C (30, 0)
Max Z = 40x + 50y Max Z = 40x + 50y Max Z = 40x + 50y
Z = 40(0) + 50(20) Z = 40(24) + 50(8) Z = 40(30) + 50(0)
Z = 1000 Z = 1360 Z = 1200

¡ Our optimal solution is to make 24 bowls and 8 mugs each day

for maximum profit of P1,360
EXERCISE 1
A company produces two products that are processed on two
assembly lines. Assembly line 1 has 100 available hours, and
assembly line 2 has 42 available hours. Each product requires 10
hours of processing time on line 1, while on line 2 product 1
requires 7 hours and product 2 requires 3 hours. The profit for
product 1 is P60 per unit, and the profit for product 2 is P40
per unit.
1.Formulate a linear programming model for this problem.
2.Solve this model by using graphical analysis.
EXERCISE 2
The Pinewood Furniture Company produces chairs and tables from
two resources—labor and wood. The company has 80 hours of labor
and 36 board-ft. of wood available each day. Demand for chairs is
limited to 6 per day. Each chair requires 8 hours of labor and 2 board-
ft. of wood, whereas a table requires 10 hours of labor and 6 board-ft.
of wood. The profit derived from each chair is P400 and from each
table, P100. The company wants to determine the number of chairs
and tables to produce each day in order to maximize profit.
1.Formulate a linear programming model for this problem.
2.Solve this model by using graphical analysis.
GRAPHICAL
SOLUTIONS OF A
MINIMIZATION
PROBLEM
EXERCISE 3
The Munchies Cereal Company makes a cereal from several
ingredients. Two of the ingredients, oats and rice, provide vitamins A
and B. The company wants to know how many ounces of oats and
rice it should include in each box of cereal to meet the minimum
requirements of 48 milligrams of vitamin A and 12 milligrams of
vitamin B while minimizing cost. An ounce of oats contributes 8
milligrams of vitamin A and 1 milligram of vitamin B, whereas an
ounce of rice contributes 6 milligrams of A and 2 milligrams of B. An
ounce of oats costs P0.05, and an ounce of rice costs P0.03.
1.Formulate a linear programming model for this problem.
2.Solve this model by using graphical analysis.
END OF CHAPTER 2…