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Linear Programming: Cost Minimization

Linear programming is a mathematical method used to determine the optimal outcome given certain parameters by minimizing or maximizing an objective function subject to constraints, and was originally developed for military logistics planning; the basic components of a linear programming problem include decision variables, an objective function, constraints, and data; an example problem minimizes fertilizer costs by determining the optimal quantities of two fertilizer brands to purchase to meet minimum daily requirements of nitrogen and phosphate at lowest total cost.

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Jasmine Aluciman
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31 views

Linear Programming: Cost Minimization

Linear programming is a mathematical method used to determine the optimal outcome given certain parameters by minimizing or maximizing an objective function subject to constraints, and was originally developed for military logistics planning; the basic components of a linear programming problem include decision variables, an objective function, constraints, and data; an example problem minimizes fertilizer costs by determining the optimal quantities of two fertilizer brands to purchase to meet minimum daily requirements of nitrogen and phosphate at lowest total cost.

Uploaded by

Jasmine Aluciman
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Linear

Programming
COST MINIMIZATION
What is LINEAR PROGRAMMING?
• A MATHEMATICAL METHOD THAT IS USED TO
DETERMINE THE BEST POSSIBLE OUTCOME
OR SOLUTION FROM A GIVEN SET OF
PARAMETERS.
• IT WAS A METHOD USED TO PLAN
EXPENDITURES AND RETURNS IN A WAY THAT
REDUCED COSTS FOR THE MILITARY AND
POSSIBLY CAUSED THE OPPOSITE FOR THE
ENEMY.
• BECAUSE OF ITS NATURE, LINEAR
BASIC COMPONENTS

Decision variables
Objective function 
Constraints
Data
Formulation of the
Cost Minimization
Linear Programming
• Two brands of fertilisers available: SuperGro & CropQuick

• Field requires at least 16kgs of nitrogen and 24kgs of phosphate

• SuperGro cost $6 per bag and CopQuick costs $3 per bag

• SuperGro has 2kgs of nitrogen and 4kgs of phosphate

• CropQuick has 4kgs of nitrogen and 3kgs of phosphate

Problem: How much each brand to buy to minimize total cost of


fertiliser
Nitrogen Phosphat Minimum daily
e requirement

SuperGro 2kgs 4kgs 16kgs

CropQuick 4kgs 3kgs 24kgs

Cost per bag $6 $3


Points Z

A (0,8) 24 So, 8kgs of CropQuick should


be bought to minimise the
B (4.8,1.6) 33.6
cost of fertiliser

C (8,0) 48
Case Study 8-3
COMPARISON OF DISTRIBUTION SYSTEM IN
EFFECT WITH OPTIMAL DISTRIBUTION
SYSTEM
Characteristics Old system Optimal System

Total Variable Cost (in millions) $3458 $3054

Mean Service Distance (miles) 174 100

Number of warehouse 13 34
Assume that the manager of a college dining hall is
required to prepare meals that satisfy the minimum
daily requirement of protein (P) minerals (M) and
vitamins (V) suppose that the minimum daily
requirement have been established at 14P 10m 6V.
The manager can use two basic foods (say meat and
fish) in the preparation of meals. Meat (food x)
contain 1P, 1M, 1V per pound. Fish (food y) contains
2P, 1M, 0.5V per pound. The price x is $2 per pound
while the price y is $3 per pound. The manager wants
to provide meals that fulfil the minimum daily
requirement of protein, mineral, vitamins at the
lowest possible cost per student.

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