LECTURE 2 - LINEAR PROGRAMMING (MODEL BUILDING AND AMPL)

2.1 Model salient features

a. The decision variables
 Controllable.
 To find the value of decision variables is to find the optimal solution to the problem.
 The number of units to be produced, the quantities of the resources to be allocated.

b. The objective function

 A linear function with a single goal.
 Maximization or Minimization; examples
o Maximize profit
o Minimize cost
o Maximize utility
o Maximize turnover
o Maximize return on investment
o Maximize NPV
o Minimize number of employees
o Minimize redundancy
o Maximize customer satisfaction
o Maximize probability of survival
o Maximize robustness of operating plan

c. The constraints
 Uncontrollable restrictions or requirements.
 Expressed as linear inequalities and/or equations.

d. Input-output coefficients
 They are coefficients of the constraints’ variables.

e. Capacities
 Expressed as some upper or lower limit.
 On the right-hand side of the constraints.

f. Non-negativity
 To express that decision variables must have non-negative values in all LP problems.

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2.2 General Formulation
Max or Min z = c1x1 + c2x2 + c3x3 +…+ cnxn
Subject to : a11x1 + a12x2 +…+ a1nxn ≤ b1
a21x1 + a22x2 +…+ a2nxn ≤ b2
… … … … … …
am1x1 + am2x2 +…+ amnxn ≤ bm
all xi ≥ 0 , i = 1, 2, 3, …, n
(non-negativity constraints)

2.3 Exercises

Ex1 The Product-Mix Problem

The two models of color TV sets produced by the ABC Corporation will be designated as A and
B. The company is in the market to make money. The profit realized is $300 from set A and $250
from set B. There are certain limitations that prevent the corporation from producing and selling
thousands of sets daily. Theses limitations are:
1) Availability of only 40 hours of labor each day in the production department.
2) A daily availability of only 45 hours of machine time.
3) Inability to sell more than 12 sets of model A each day.
Determine how many sets of each model to produce each day so that the total profit will be as
large as possible. It is known that each set of A requires 2 hours of labor and each set of B
requires 1 hour. Machine processing time for one unit of A is 1 hour and for one unit of B is 3
hours.

Ex2 The Blending Problem

In preparing Sungold paint, it is required that the paint has a brilliance rating of at least 300
degrees and a hue level of at least 250 degrees. Brilliance and hue levels are determined by 2
ingredients: Alpha and Beta.
Both Alpha and Beta contribute equally to the brilliance rating, one ounce of either producing one
degree of brilliance in one drum of paint. However, the hue is controlled entirely by the amount of
Alpha, one ounce of Alpha producing three degrees of hue in one drum of paint. The cost of
Alpha is 45 cents per ounce and the cost of Beta is 12 cents per ounce.
Find the quantity of Alpha and Beta to be included in the preparation of each drum of paint to
minimize the cost.

Ex3
A man operates a pushcart. He sells hotdogs and sodas. His cart can support 210 lbs. A hotdog
weighs 2 lbs and a soda weighs 5 lbs. He knows from experience that he must have at least 60

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sodas and at least 80 hotdogs. Given he makes $8 profit on a hotdog and $4 profit on a soda,
find how many hotdogs and sodas he must have in order to maximize profit.

Ex4
A company makes desks. The standard model requires 2 hours of the cutter’s time and 1 hour of
finisher’s time. The deluxe model requires 1 hour of the cutter’s and 2 hour of finisher’s time.
The cutter has 104 hours of time available for this work per month, while the finisher has 76
hours of time available for work. The standard model brings a profit of $6 per unit, while the
deluxe one brings a profit of $11 per unit. The company wishes to make the most profit.
Assuming the company can sell whatever is made, how many of each model should be made in
each month?

Ex5
In a manufacturing process, the final product has a requirement that it must weigh exactly 150
pounds. The two raw materials used are A, with a cost of $4 per unit and B, with a cost of $8 per
unit. At least 14 units of B and no more than 20 units of A must be used. Each unit of A weighs 5
pounds and each unit of B weighs 10 pounds. How much of each type of raw materials should be
used for each unit of final product to minimize cost?

Ex6
A manufacturing firm has discontinued the production of a certain unprofitable product line. This
act created considerable excess production capacity. Management is considering devoting this
excess capacity to one or more of three products; call them product 1, 2, and 3. The available
capacity on the machines that might limit output is summarized in the following table:

Machine Type Available Time (in Machine Hours per Week)

Milling machine 500
Lathe 350
Grinder 150

The number of machine hours required for each unit of the respective product is as follows:

Machine Type Product 1 Product 2 Product 3

Milling machine 9 3 5
Lathe 5 4 0
Grinder 3 0 2

The sales department indicates that the sales potential for product 1 and 2 exceeds the maximum
production rate and that the sales potential for product 3 is 20 units per week. The unit profit
would be $50, $20, and $25, respectively, on product 1, 2, and 3. The objective is to determine
how much of each product the firm should produce to maximize profit.

i. Formulate a LP model for this problem.

ii. Solve using simplex method

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Ex7
A television manufacturing company has to decide on the number of 27-inch and 20-inch sets to
be produced at one of its factories. Market research indicates that at most 40 of the 27-inch sets
and 10 of the 20-inch sets can be sold per month. The maximum number of work hours available
is 500 per month. A 27-inch set requires 20 work hours, and a 20-inch set requires 10 work
hours. Each 27-inch set sold produces a profit of $120, and each 20-inch set produces a profit of
$80. A wholesaler has agreed to purchase all the television sets produced if the numbers do not
exceed the maxima indicated by the market research.

i. Formulate a LP model for this problem.

ii. Solve this model graphically.
iii. Solve using simplex method

Ex8
A company produces two products requiring resources P and Q. Management wants to
determine how many units of each product to produce so as to maximize profit. For each unit of
product 1, 1 unit of resource P and 2 units of resource Q are required. For each unit of product 2,
3 units of resource P and 2 units of resource Q are required. The company has 200 units of
resource P and 300 units of resource Q. Each unit of product 1 gives a profit of US $ 1, and each
unit of product 2, up to 60 units, gives a profit of US $ 2. Any excess over 60 units of product
brings no profit, so an excess has been ruled out.
a. Formulate a linear programming model for this problem.
b. Solve this model graphically. What is resulting total profit?
c. Use a computer to solve this model by the simplex method.

Ex9
A farmer has listed the seven possible activities in which he might engage as follows:

1 2 3 4 5 6 7
10 1 1 2 10 5 8 hectares of land needed p.a
10 1 6 15 17 1 1 manweeks labour p.a.
1200 80 240 400 1200 200 240 Kshs. per annum net revenue

a. The farmer has 200 hectares of land, and his own and his family’s labour amounts to 150
man-weeks per annum. Which activities should the farmer engage in?
b. On inspecting the suggested ‘solution’, the farmer realizes that he has not allowed for the
100 litres of milk per day which he is under contract to supply to the Milk Marketing
Board. Assuming that all his activities have been re-expressed in terms of a unit level of
Kshs. 1200 net revenue per annum, activity 1 yields 10 litres of milk per day, activity 3,
17 litres, and activity 6, 5 litres. How does this alter the best distribution of his effort?
c. Finally it occurs to the farmer that by using the straw produced in activities 4,5,6 and 7
(5, 3.2, 10 and 26 bales per month, respectively) he could reduce costs (increase net
revenue) in activity 1 by Kshs. 110 p.a. by using 7 bales per month..

Ex10
A firm has two processes, each of which jointly produces products X and Y.

Process 1 Process 2
Labour manhours per thousand X 10 15
Machine hours per thousand X 3 2
Kilowatt hours per thousand X 25 18
Output of Y per thousand X 500 750

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There is an upper limit on the availability of labour per week of 150 manhours, and 30 hours of
machine capacity. There is no restriction on the availability of electricity or on the sales of X and
Y; wages and prices are as follows:

Wages per manhour £ 0.75

Price of electricity per kwh £ 0.01
Selling price of X per 100 £ 6.00
Selling price of Y per 1000 £ 9.00

Ex11
We want to determine the cheapest production schedule under the following conditions. Monthly
demand for a product is known for a given number of months, and this demand must be met:
production costs are linear: storage costs per unit per month are constant: changes in production
levels from one month to the next are penalized at a constant amount per unit change, and this
penalty is different for upward changes and for downward changes: the interest rate is zero: initial
inventory is given: storage space is unlimited.

Following is a small numerically example (all costs in hundred of Kshs):

The plan should cover four months; production cost is 10 per unit; storage costs are 6 per unit per
month; the penalty for changes upward is 4 per unit, and for changes downward, 3 per unit;
demand in the four months is 10, 8, 14, 20 respectively; initial inventory is zero.

Ex12
A firm of shoemakers can produce shoes for men, women and children. The output of women’s
shoes must be not less than 50% of the total. Each kind of shoe requires a certain type of
machines and skilled workers available is fixed.

Men’s shoes Women’s shoes Children’s shoes

Machine time required (hours per pair) 1.5 2 1
Skilled labour time required (hours per pair) 2.5 6 1.5
Net profit (pence per pair) 130 280 70

The firm has 20 machines and the labour to man them, and a staff of 50 skilled men. Normal
working is 40 hours per week.

What rate of production per week maximizes net profit?

Ex13
A firm produces commodities A and B jointly from the same raw material. It has available 2 plants
with produce, simultaneously, the following amounts per hour:

A B
Plant 1 5 2
Plant 2 3 6

The cost of running Plant 1 is 20 per hour, in normal time, and 30 per hour in overtime; and that
of Plant 2 is 40 per hour in normal time and 60 per hour in overtime. At any one plant, not more
than 8 hours per day can be run on normal time, and overtime is restricted to 3 hours per day. 30
units of A and 60 of B are required per day. How should the firm produce A and B if its objective
is simply to minimize the cost of producing the required quantities?

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 Ex14
A smallholder owns six hectares of land, and wishes to decide what proportion to plant with
flowers and what proportion with strawberries. He calculates the average return to be £800 per
hectare for flowers and £1000 per hectare for strawberries. However, the time he has for
cultivation and picking is somewhat limited, and the labour requirements by season are as follows
(in man-hours per hectare):

Winter Spring Summer Autumn

Flowers 10 40 0 10
Strawberries 10 20 50 10
Labour available (hours) 100 200 200 100

a. What pattern of crops would you recommend the smallholder to grow?

b. How much would you recommend that he should be willing to pay for extra labour during
each season?

Ex15
In a workshop working a 45-hour week there are one machine of type A, two machine of type B
(each operated by one unskilled man) and four skilled men. Unskilled labour costs $1 per hour,
and skilled labour costs $2 per hour. There are two possible products, I and II. I require 4 hours
on machine A and 10 on machine B per thousand items, and an additional 12 man-hours of
skilled labour. II requires 5 hours on machine A and 10 hours on machine B per thousand items,
plus an additional 30 man-hours of skilled labour. Raw material and fuel costs per thousand items
are $40 of product I and $30 of product II. Product I sell for $146 per thousand, and product II for
$275 per thousand. What is the maximum profit per week?

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