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Linear Programming (2) (2)

The document provides an overview of linear programming, focusing on maximizing or minimizing a linear objective function subject to constraints. It includes a practical example involving a manufacturing unit producing three products, detailing the objective function, decision variables, and constraints necessary for maximizing profit. Additionally, it outlines the setup for solving the problem using Excel's solver tool.

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0 views

Linear Programming (2) (2)

The document provides an overview of linear programming, focusing on maximizing or minimizing a linear objective function subject to constraints. It includes a practical example involving a manufacturing unit producing three products, detailing the objective function, decision variables, and constraints necessary for maximizing profit. Additionally, it outlines the setup for solving the problem using Excel's solver tool.

Uploaded by

lankapallidevanandprasad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Linear Programming

Ujjal Kumar Mukherjee


Linear Programming – Basic Concepts

 A linear objective function that is maximized or minimized by a decision maker.

Example. Maximize Profit, Minimize Cost, Minimize Risk.

 A set of linear constraints.

Example. Capacity constraints, service level constraints, etc.


An Example
(10,10)
Increasing profit

𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒𝑥,𝑦 2𝑥 + 5𝑦

(5,5)
𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜.
𝑥 + 𝑦 ≤ 10 Solution space

2𝑥 − 𝑦 ≤ 5
𝑥, 𝑦 ≥ 0

(0,0) (5/2,0) (10,10)


Linear Programming Formulation
A manufacturing unit produces three products A, B and C. The price of the three products are USD 25, 27
and 32 respectively and the costs are 20, 24, and 26 respectively. All three products uses three machines
M1, M2 and M3. The processing hours required for the three machines are given below.

Machines A B C
M1 20 32 25
M2 22 26 21
M3 18 28 36

What are the quantities that the firm should produce for the three products to maximize their
profit? Assume all products that get made is sold. Each of the machines can run for 350 hours in a
month.
Step 1. Identify the objective of the decision problem.
Maximize the total profit for the firm.
Step 2. What are the decision variables?
𝑋1 : Quantity of product A that is produced.
𝑋2 : Quantity of product B that is produced.
𝑋3 : Quantity of product C that is produced.
Step 3. Identify the constraints.
1. Capacity constraints on the machine, the number of hours of usage of each machine for all three
products combined need to be less than or equal to the total number of available hours on the
machines.
2. The number of each product can be zero or more.
Step 4: Formulate the objective function
1. Unit profit of product A is 25-20 = 5 USD. Therefore, making 𝑋1 of product A will give you a profit of 5𝑋1 .
2. Unit profit of product B is 27-24 = 3 USD. Therefore, making 𝑋2 of product B will give you a profit of 3𝑋2 .
3. Unit profit of product C is 32-26 = 6 USD. Therefore, making 𝑋3 of product C will give you a profit of 6𝑋3 .

Total profit:
𝑚𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑥1,𝑥2,𝑥3 𝑃 𝑋1 , 𝑋2 , 𝑋3 = 5𝑋1 + 3𝑋2 + 6𝑋3
Step 5: Formulate the constraints for the decision problem.
𝑀1 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡 : 20𝑋1 + 32𝑋2 + 25𝑋3 ≤ 350
𝑀2 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡 : 22𝑋1 + 26𝑋2 + 21𝑋3 ≤ 350
𝑀3 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡 : 18𝑋1 + 28𝑋2 + 36𝑋3 ≤ 350
𝑁𝑜𝑛 − 𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑐𝑜𝑛𝑡𝑟𝑎𝑖𝑛𝑡 : 𝑋1 , 𝑋2 , 𝑋3 ≥ 0
Complete Problem Formulation

Decision variables:
X1: Units of product A produced.
X2: Units of product B produced.
X3: Units of product C produced.

Objective function:
Maximize Total profit:
We will use excel solver to solve
𝑚𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑥1 ,𝑥2 ,𝑥3 𝑃 𝑋1 , 𝑋2 , 𝑋3 = 5𝑋1 + 3𝑋2 + 6𝑋3
this problem.
Subject to the following constraints:
𝑀1 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡 : 20𝑋1 + 32𝑋2 + 25𝑋3 ≤ 350
𝑀2 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡 : 22𝑋1 + 26𝑋2 + 21𝑋3 ≤ 350
𝑀3 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡 : 18𝑋1 + 28𝑋2 + 36𝑋3 ≤ 350
𝑁𝑜𝑛 − 𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑐𝑜𝑛𝑡𝑟𝑎𝑖𝑛𝑡 : 𝑋1 , 𝑋2 , 𝑋3 ≥ 0
Problem setup in excel

Variable values that we need to decide on


to achieve the objective

Coefficients of the variables in the


objective function.

The objective function. Enter formula.


Example: G10 = D10*D9 + E10 * E9 + F10 * F9
OR: G10 = SUMPRODUCT(D10:F10, D9:F9)
Coefficients of the Individual constraints.

Left Hand Side (LHS) of the constraints.


Enter formula. Example:
G14 = SUMPRODUCT(D14:F14, D9:F9)
G15 = SUMPRODUCT(D15:F15, D9:F9)
G16 = SUMPRODUCT(D16:F16, D9:F9)
Right Hand Side (RHS) of the constraints.
Solver setup in excel
Solver setup in excel
Solver report

Optimal value of the objective function.

Optimal choice of the variables.


In Class Exercise

𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒𝑥,𝑦 𝑥 + 𝑦

𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜.
2𝑥 + 3𝑦 ≤ 10
−𝑥 + 2𝑦 ≤ 5
𝑥, 𝑦 ≥ 0

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