BUAD 802

INDIVIDUAL ASSIGNMENT

ON

WHAT IS LINEAR PROGRAMMING?

SUBMITTED

BY

OSITA CHINEDUM ODO

REG.NO : P24DLBA80138

TO
DR. ABDULLAHI LAWAL TUNAU

APRIL 2025
Linear Programming: A Cornerstone of Production and Operations
Management
Introduction

In the realm of Production and Operations Management (POM), the ability to optimize resource
allocation and decision-making is paramount. Among the various tools and techniques available
to managers, Linear Programming (LP) stands out as a versatile and powerful method. This
article delves into the concept of linear programming, exploring its fundamental principles,
applications within POM, and its significance in contemporary business environments.

What is Linear Programming?

Linear programming, at its core, is a mathematical technique used to achieve the best possible
outcome (such as maximizing profit or minimizing cost) in a given mathematical model where
the requirements and objectives are represented by linear relationships (Hillier & Lieberman,
2015). It is a subset of mathematical programming, focusing specifically on models where the
objective function and constraints are linear. The term "linear" signifies that all variables in the
model have a constant power of one, and "programming" refers to the process of determining a
particular program or plan of action.

More formally, as Bazaraa, Jarvis, and Sherali (2010) explain, linear programming involves the
optimization of a linear objective function, subject to a set of linear equality and inequality
constraints. The objective function represents the quantity that needs to be maximized or
minimized (e.g., profit, cost, production output), while the constraints define the limitations or
restrictions on the available resources or decision variables (e.g., labor hours, raw materials,
budget).
A Brief History of Linear Programming

The development of linear programming can be traced back to the 1930s, but it gained
significant momentum during World War II. The need to optimize the allocation of scarce
resources for military operations led to intensive research in this area. George B. Dantzig, a
mathematician working for the U.S. Air Force, is credited with developing the simplex method
in 1947, a pivotal algorithm for solving linear programming problems.

After the war, the applications of linear programming rapidly expanded into various fields,
including business, economics, and engineering. Its ability to solve complex optimization
problems made it an invaluable tool for decision-making in these areas.

Key Components of a Linear Programming Model

A standard linear programming model comprises the following key components:

●​ Decision Variables: These are the variables that represent the unknown quantities that the
decision-maker needs to determine. For instance, in a production planning problem, the
decision variables might represent the number of units of different products to produce
(Stevenson, 2018).
●​ Objective Function: This is a linear mathematical expression that defines the goal of the
problem. It is a function of the decision variables and represents the quantity to be
optimized (maximized or minimized). For example, the objective function might express
total profit, total cost, or total production.
●​ Constraints: These are linear inequalities or equalities that represent the limitations or
restrictions on the decision variables. They define the feasible region, which is the set of all
possible values of the decision variables that satisfy all the constraints. Constraints typically
arise from resource limitations, technological requirements, or policy restrictions.
●​ Non-Negativity Restrictions: In most LP problems, the decision variables must be
non-negative, meaning they cannot take on negative values. This is because, in many
real-world scenarios, it is not meaningful to have negative quantities (e.g., negative
production levels) (Anderson, Sweeney, Williams, Camm, & Cochran, 2015).
The Simplex Method

The simplex method is a fundamental algorithm for solving linear programming problems. It is
an iterative procedure that starts with an initial feasible solution and systematically moves to
better feasible solutions until an optimal solution is reached. The simplex method works by
examining the vertices of the feasible region, which is a polyhedron in n-dimensional space, and
moving from one vertex to an adjacent vertex with a better objective function value.

The algorithm involves the following steps:

1.​ Initialization: Convert the LP problem into standard form by introducing slack, surplus,
and artificial variables.
2.​ Iteration: Select an entering variable (the variable with the most negative coefficient in the
objective function row in a maximization problem) and a leaving variable (the variable that
will leave the basis).
3.​ Update: Update the tableau using elementary row operations to reflect the changes made in
the basis.
4.​ Optimality Check: Check if the current solution is optimal. If not, return to step 2.
5.​ Termination: Once the optimal solution is found, the algorithm terminates, and the optimal
values of the decision variables and the objective function are obtained.

Duality in Linear Programming

Every linear programming problem has a corresponding dual problem. The original problem is
called the primal problem, and its dual provides a different perspective on the same problem. The
dual problem has a close relationship with the primal problem, and understanding this
relationship can provide valuable insights into the original problem.

The dual problem is formed by transposing the coefficients of the primal problem. If the primal
problem is a maximization problem, the dual problem is a minimization problem, and vice versa.
The optimal solution of the dual problem is related to the optimal solution of the primal problem,
and the objective function values of the two problems are equal at optimality.
Duality theory has several important implications:

●​ It provides an economic interpretation of the primal problem. The dual variables can be
interpreted as the shadow prices of the resources in the primal problem, indicating how
much the objective function value would change if the availability of a particular resource
were increased or decreased.
●​ It can be used to solve the primal problem more efficiently in some cases. If the dual
problem has fewer constraints than the primal problem, it may be computationally
advantageous to solve the dual problem instead.
●​ It provides a way to check the optimality of a solution. If a feasible solution to the primal
problem and a feasible solution to the dual problem satisfy certain conditions
(complementary slackness conditions), then both solutions are optimal.

Sensitivity Analysis

Sensitivity analysis is an important aspect of linear programming that examines how the optimal
solution changes when the parameters of the model are changed. In real-world problems, the
parameters of the model, such as the objective function coefficients, the constraint coefficients,
and the right-hand-side values of the constraints, are often subject to uncertainty or change.
Sensitivity analysis helps decision-makers understand the robustness of the optimal solution and
identify the critical parameters that have the greatest impact on the solution.

The common types of sensitivity analysis include:

●​ Changes in Objective Function Coefficients: This analysis examines how the optimal
solution changes when the coefficients of the variables in the objective function are
changed. It helps determine the range of values for which the current optimal solution
remains optimal.
●​ Changes in the Right-Hand-Side Values of Constraints: This analysis examines how the
optimal solution changes when the availability of resources or the requirements of the
constraints are changed. It helps determine the shadow prices of the resources and identify
the constraints that are binding (i.e., constraints that limit the optimal solution).
 ●​ Changes in Constraint Coefficients: This analysis examines how the optimal solution
changes when the coefficients of the variables in the constraints are changed. This type of
analysis is more complex but can provide valuable information about the impact of changes
in the technological requirements or relationships between variables.

Assumptions of Linear Programming

Linear programming relies on several key assumptions:

●​ Linearity: The objective function and the constraints must be linear, meaning that the
variables have a power of one and are related by linear equations or inequalities.
●​ Divisibility: The decision variables can take on fractional values. If integer solutions are
required, integer programming techniques must be used.
●​ Certainty: The parameters of the model (objective function coefficients, constraint
coefficients, and right-hand-side values) are known with certainty and do not change over
time.
●​ Additivity: The total contribution of each variable to the objective function and the total
usage of each resource are the sum of the individual contributions and usages of each
variable.
●​ Non-negativity: The decision variables must be non-negative.
Software for Linear Programming

Several software packages are available for solving linear programming problems. These
software packages use efficient algorithms, such as the simplex method and its variants, to find
optimal solutions to large-scale LP problems. Some popular software packages include:

●​ CPLEX: A powerful commercial optimization software package that can solve linear
programming, integer programming, and other types of optimization problems.
●​ Gurobi: Another commercial optimization software package that is widely used in industry
and academia for solving large-scale optimization problems.
●​ Xpress: A commercial optimization software package that provides a comprehensive set of
tools for modeling and solving linear programming and other optimization problems.
●​ SciPy: A free and open-source scientific computing library for Python that includes a
module for linear programming (scipy.optimize.linprog).
●​ R: A free and open-source programming language and software environment for statistical
computing and graphics that includes packages for solving linear programming problems.

These software packages have made it much easier to solve complex LP problems with many
variables and constraints, enabling businesses to apply linear programming to a wider range of
decision-making situations.
Applications of Linear Programming in Production and Operations Management

Linear programming finds extensive applications in various areas of POM. Its ability to optimize
resource allocation and decision-making makes it a valuable tool for managers seeking to
improve efficiency, reduce costs, and maximize profits. Some key applications include:

●​ Production Planning and Scheduling: LP can be used to determine the optimal production
quantities of different products to meet demand while minimizing production costs or
maximizing profit. It helps in deciding how much of each product to produce, given
constraints on available resources such as labor, machine capacity, and raw materials
(Nahmias & Olsen, 2015).
●​ Resource Allocation: Organizations often face the challenge of allocating limited
resources, such as labor, capital, and equipment, to various activities or projects. LP can
help in determining the most efficient allocation of these resources to maximize overall
output or minimize costs.
●​ Inventory Management: LP can be employed to optimize inventory levels by determining
the optimal quantities of items to order or produce at different times. It can help balance the
costs of holding inventory against the costs of ordering or production, ensuring that demand
is met while minimizing total inventory costs (Taha, 2017).
●​ Supply Chain Management: LP plays a crucial role in optimizing supply chain operations,
such as transportation, distribution, and logistics. It can be used to determine the most
cost-effective way to transport goods from suppliers to customers, taking into account
factors such as transportation costs, delivery times, and capacity constraints.
●​ Facility Location: LP can assist in determining the optimal location of new facilities, such
as factories, warehouses, or distribution centers. It helps in evaluating various factors, such
as transportation costs, proximity to customers and suppliers, and operating costs, to
identify the locations that will minimize overall costs or maximize efficiency.
●​ Project Management: LP can be used in project planning and scheduling to optimize the
allocation of resources to different project activities and to determine the critical path, which
is the sequence of activities that determines the shortest possible project completion time
 (Render, Stair, & Hanna, 2018).

Example of Linear Programming in Production Planning

Consider a manufacturing company that produces two products: Product A and Product B. Each
product requires a certain amount of labor hours and machine hours, and the company has
limited amounts of both resources. The company wants to determine the optimal production
quantities of Product A and Product B that will maximize its total profit, given the resource
constraints. This problem can be formulated as a linear programming model, where the decision
variables are the production quantities of Product A and Product B, the objective function is the
total profit, and the constraints are the limitations on labor hours and machine hours. By solving
this model, the company can determine the production plan that will maximize its profit while
satisfying the resource constraints.

Let:

●​ x1 = the number of units of Product A to produce

●​ x2 = the number of units of Product B to produce
●​ P = the total profit

Assume the profit per unit of Product A is $10, and the profit per unit of Product B is $15. Also,
assume that each unit of Product A requires 2 labor hours and 1 machine hour, and each unit of
Product B requires 3 labor hours and 2 machine hours. The company has 100 labor hours and 80
machine hours available.

The linear programming model can be formulated as follows:

Maximize: P = 10x1 + 15x2 (Objective Function: Maximize total profit)

Subject to:

●​ 2x1 + 3x2 ≤ 100 (Labor hours constraint)

●​ x1 + 2x2 ≤ 80 (Machine hours constraint)
●​ x1, x2 ≥ 0 (Non-negativity constraints)
This model can be solved using the simplex method or a linear programming software package
to determine the optimal values of x1 and x2 that maximize the total profit P, while satisfying the
labor and machine hour constraints.

Significance of Linear Programming in Contemporary Business

In today's complex and competitive business environment, linear programming is more relevant
than ever. Several factors contribute to its significance:

●​ Increasing Complexity of Business Operations: Businesses are facing increasingly

complex operations, with numerous variables and constraints to consider. LP provides a
structured and systematic approach to decision-making in such complex environments.
●​ Growing Emphasis on Optimization: Organizations are constantly seeking ways to
improve efficiency, reduce costs, and maximize profits. LP offers a powerful tool for
achieving these objectives by identifying optimal solutions to various problems.
●​ Availability of Powerful Computing Tools: The development of powerful computing tools
and software has made it easier to solve large-scale LP problems with many variables and
constraints. This has significantly expanded the applicability of LP in real-world business
settings.
●​ Data-Driven Decision Making: Businesses are increasingly relying on data to drive
decision-making. LP models can incorporate large amounts of data to provide more accurate
and reliable solutions.
●​ Supply Chain Optimization: In globalized markets, businesses face complex supply chain
challenges. LP helps optimize logistics, transportation, and inventory management across
the supply chain.
●​ Sustainable Operations: LP can be used to optimize resource usage and minimize waste,
supporting businesses in their efforts to achieve sustainability goals.
●​ Risk Management: LP can be applied to model various scenarios and assess the potential
impact of different decisions, aiding in risk management and mitigation.
Conclusion

Linear programming is a fundamental tool in Production and Operations Management, providing

a systematic and quantitative approach to optimizing resource allocation and decision-making.
Its applications span a wide range of areas, including production planning, resource allocation,
inventory management, supply chain management, facility location, and project management.
The development of the simplex method and the availability of powerful computing tools have
further enhanced its applicability in solving complex, real-world problems. In today's complex
and data-driven business environment, linear programming is more relevant than ever, offering
organizations a powerful means to enhance efficiency, reduce costs, and achieve their strategic
objectives. As businesses continue to face increasing complexity and competition, the
importance of linear programming as a decision-making tool will only continue to grow.
References

Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, G. W. (2015). An
introduction to management science: Quantitative approaches to decision making. Cengage
Learning.

Bazaraa, M. S., Jarvis, J. J., & Sherali, H. D. (2010). Linear programming and network flows.
John Wiley & Sons.

Hillier, F. S., & Lieberman, G. J. (2015). Introduction to operations research. McGraw-Hill

Education.

Nahmias, S., & Olsen, T. L. (2015). Production and operations analysis. Waveland Press.

Render, B., Stair, R. M., & Hanna, M. E. (2018). Quantitative analysis for management. Pearson
Education Limited.

Stevenson, W. J. (2018). Operations management. McGraw-Hill Education.

Taha, H. A. (2017). Operations research: An introduction. Pearson Education.