Module 3: Solving Linear Programming Models

Topic 1: Solving Linear Programming Models

Simplex Algorithm
● It is an approach for determining the optimal solution of a linear program by
hand.
● More Mechanical Method than Graphical Method of Linear Programming
● The primary aim is to maximize or minimize the objective function so that it
complies with the linear constraints within the system.
Importance of Simplex Algorithm

 Efficiency: It can effectively solve large-scale, complex linear programming

problems, providing quick and accurate results.
 Versatility: Various fields make use of the Simplex Method, including finance,
engineering, business operations, research field
 Decision-making: It provides a rational and systematic approach for effective
decision-making in various scenarios and to provide optimal solutions, improving
planning and resource allocation.

Excel Solver
● It is used to solve linear programs when the number of constraints becomes
computationally hard.
● It is also an alternative solution to graphical methods and simplex algorithms.

3 Primary Components of Excel Solver

1. Objective cell
- is the cell containing a formula that represents the objective, or goal, of the
problem.
- can be to maximize, minimize, or achieve some target value.
- “Target cell” in earlier Excel versions

2. Variable cells
- are cells that contain variable data that can be changed to achieve the
objective
- “Changing cells” or “Adjustable cells” in earlier versions
3. Constraints
- restrictions or limits of the possible solutions to the problem

Additional Source: https://www.ablebits.com/office-addins-blog/excel-solver-examples/

#:~:text=The%20Excel%20Solver%20Constrains%20are,Subject%20to%20the
%20Constraints%22%20box.
Topic 2: Sensitivity Analysis

Sensitivity Analysis - It analyze the effects of changes in input parameters such as resource
availability, employee costs, and production rates on the optimal solution and overall
performance of the organization.
Outline
● Changes in the RHS
● Changes in the Objective Function Coefficients-
● Changes in Constraint Coefficients
● Addition of a New Variable
● Addition of a New Constraint

Definition of Terms
● Optimal Solution-The values of the decision variables that either maximize or
minimize the objective function.
● Objective variable, also known as the objective function, is the function that
represents the goal or desired outcome of the optimization problem. It is the function
that the optimization algorithm aims to minimize or maximize, depending on the
specific problem being solved.
● Constraints - are limitations or restrictions on decision variables in optimization
problems, can significantly impact HR strategies and practices.
● Nonnegativity constraints are restrictions on the input variables that ensure they are
greater than or equal to zero. These constraints are commonly used in optimization
problems to represent physical, practical, or economic limitations on the variables.
● Feasibility refers to whether a solution exists that satisfies all the constraints.
(including the RHS constraints)
● Feasibility in human resources refers to whether a HR strategy or practice can be
implemented within the constraints and limitations of the organization's resources,
such as budget, talent availability, and regulatory requirements.
Changes in the right-hand side
● Occurs when there is a change in the availability of resources
● Affects the feasible region

Changes in the Objective Function Coefficients

● Occurs when there are changes in the incremental cost/reward of your variables
● Affects the objective function

Changes in Constraint Coefficients

● Occurs when there are changes in the processes involving the decision variables
● Affects both the feasible region and optimality of the current solution
Addition of a new variable
● Occurs upon the introduction of a new product or decision
● Affects both the feasible region and optimality of the current solution

Addition of a New Constraint

● Occurs when a new limiting factors arises
● Affects both the feasible region and optimality of the current solution

Topic 3: Special Cases in Linear Programming

ALTERNATIVE OPTIMA
● an alternate optimal solution or alternative optimal solution occurs when the given
problem has more than one solution, which means when the objective function is
similar to a nonredundant critical constraint.
● it simply means that there will be infinitely many solutions to the linear program.

Example in relation to HR:

CHALLENGE: EMPLOYEE RETENTION

POSSIBLE SOLUTIONS:
● Onboarding - Successful Onboarding creates loyalty and likeability among
employees for their new workplace. Make sure you have a comprehensive
Onboarding plan to make your employees feel welcomed.
● Remuneration - Offer them reasonable wages. It should be decided based on market
standards, and your employees should not feel underpaid and overworked at the same
time.
● Incentives - In the name of incentives do not give your employees free coupons to the
workplace cafeteria, do something creative there. You should sound like you actually
care.
● Culture - Work culture should be creative, independent, and comfortable. Many
people leave jobs because they do not feel they are doing an essential job. Make sure
your employees find their work and workplace encouraging.

DEGENERACY
● At least one constraint is redundant
● The redundant constraint/s may be removed from the LP without affecting the
optimal solution
Example in relation to HR:
CHALLENGE: EMPLOYEE RETENTION

POSSIBLE SOLUTIONS:
● Onboarding - Successful Onboarding creates loyalty and likeability among
employees for their new workplace. Make sure you have a comprehensive
Onboarding plan to make your employees feel welcomed.
● Remuneration - Offer them reasonable wages. It should be decided based on market
standards, and your employees should not feel underpaid and overworked at the same
time.
● Incentives - In the name of incentives do not give your employees free coupons to the
workplace cafeteria, do something creative there. You should sound like you actually
care.
● Culture - Work culture should be creative, independent, and comfortable. Many
people leave jobs because they do not feel they are doing an essential job. Make sure
your employees find their work and workplace encouraging.

[Additional source for this part: https://www.linkedin.com/pulse/10-common-hr-problems-

how-solve-them-david-ho]

INFEASIBLE LINEAR PROGRAM

● Occurs when no point can satisfy the constraints all at once
● Infeasibility implies that there are errors in the model formulation, and the model
needs to be reformulated.

UNBOUNDED SOLUTION

● Occurs when at least one variable can be increased or decreased infinitely, resulting in
an objective function value that is infinitely large or small.
● Like infeasibility, an unbounded solution implies that there are errors in the model
formulation, and the model needs to be formulated. (to remove unbounded solution)

So there are two possible changes in demand:

Increase (shift to the right) in demand
● No change in the price of the product
● No change in the supply of product
● Income of Consumer is increasing
● Demand is increasing

Decrease (shift to the left) in demand

● No change in the price of the product
● No change in the supply of product
● Income of Consumer is decreasing
● So demand for product decreasing