Introduction to

Management Science
with Spreadsheets
Stevenson and Ozgur
First Edition

Part 2 Introduction to Management Science and Forecasting

Chapter 3

Linear Programming:
Basic Concepts and
Graphical Solution
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives

After completing this chapter, you should be able to:

1. Explain what is meant by the terms constrained

optimization and linear programming.
2. List the components and the assumptions of linear
programming and briefly explain each.
3. Name and describe at least three successful
applications of linear programming.
4. Identify the type of problems that can be solved using
linear programming.
5. Formulate simple linear programming models.
6. Identify LP problems that are amenable to graphical
solutions.
Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–2
 Learning Objectives (cont’d)

After completing this chapter, you should be able to:

7. Explain these terms: optimal solution, feasible

solution space, corner point, redundant constraint
slack, and surplus.
8. Solve two-variable LP problems graphically and
interpret your answers.
9. Identify problems that have multiple solutions,
problems that have no feasible solutions,
unbounded problems, and problems with redundant
constraints.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–3
 Decisions
Decisions and
and Linear
Linear Programming
Programming
• Constrained optimization
– Finding the optimal solution to a problem given that
certain constraints must be satisfied by the solution.
– A form of decision making that involves situations in
which the set of acceptable solutions is somehow
restricted.
– Recognizes scarcity—the limitations on the availability
of physical and human resources.
– Seeks solutions that are both efficient and feasible in
the allocation of resources.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–4
 Linear
Linear Programming
Programming

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 Example
Example33––11

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 Table
Table3–1
3–1 Successful
SuccessfulApplications
ApplicationsofofLinear
LinearProgramming
ProgrammingPublished
Published
ininInterfaces
Interfaces

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–7
 Table
Table3–2
3–2 Characteristics
Characteristicsof
ofLP
LPModels
Models

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–8
 Formulating
Formulating LP
LP Models
Models
• Formulating linear programming models
involves the following steps:
1. Define the decision variables.
2. Determine the objective function.
3. Identify the constraints.
4. Determine appropriate values for parameters and
determine whether an upper limit, lower limit, or
equality is called for.
5. Use this information to build a model.
6. Validate the model.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–9
 Example
Example33––22

x1 = quantity of server model 1 to produce

x2 = quantity of server model 2 to produce
maximize Z = 60x1+50x2
Subject to:

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–10
 Graphing
Graphing the
the Model
Model
• This method can be used only to solve problems
that involve two decision variables.
• The graphical approach:
1. Plot each of the constraints.
2. Determine the region or area that contains all of the
points that satisfy the entire set of constraints.
3. Determine the optimal solution.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–11
 Key
Key Terms
Terms in
in Graphing
Graphing
• Optimal solution
• Feasible solution space
• Corner point
• Redundant constraint
• Slack
• Surplus

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–12
 Figure
Figure3–1
3–1 AAGraph
GraphShowing
Showingthe
theNonnegativity
NonnegativityConstraints
Constraints

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–13
 Figure
Figure3–2
3–2 Feasible
FeasibleRegion
RegionBased
BasedononaaPlot
Plotof
ofthe
theFirst
FirstConstraint
Constraint
(assembly
(assemblytime)
time)and
andthe
theNonnegativity
NonnegativityConstraint
Constraint

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–14
 Figure
Figure3–3
3–3 AACompleted
CompletedGraph
Graphofofthe
theServer
ServerProblem
ProblemShowing
Showingthe
the
Assembly
Assemblyand
andInspection
InspectionConstraints
Constraintsand
andthe
theFeasible
Feasible
Solution
SolutionSpace
Space

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–15
 Figure
Figure3–4
3–4 Completed
CompletedGraph
Graphofofthe
theServer
ServerProblem
ProblemShowing
ShowingAll
Allofofthe
the
Constraints
Constraintsand
andthe
theFeasible
FeasibleSolution
SolutionSpace
Space

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–16
 Finding
Finding the
the Optimal
Optimal Solution
Solution
• The extreme point approach
– Involves finding the coordinates of each corner point
that borders the feasible solution space and then
determining which corner point provides the best value
of the objective function.
– The extreme point theorem
– If a problem has an optimal solution at least one
optimal solution will occur at a corner point of the
feasible solution space.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–17
 The
The Extreme
Extreme Point
Point Approach
Approach
1. Graph the problem and identify the feasible solution
space.
2. Determine the values of the decision variables at each
corner point of the feasible solution space.
3. Substitute the values of the decision variables at each
corner point into the objective function to obtain its
value at each corner point.
4. After all corner points have been evaluated in a similar
fashion, select the one with the highest value of the
objective function (for a maximization problem) or
lowest value (for a minimization problem) as the
optimal solution.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–18
 Figure
Figure3–5
3–5 Graph
GraphofofServer
ServerProblem
Problemwith
withExtreme
ExtremePoints
Pointsofofthe
theFeasible
Feasible
Solution
SolutionSpace
SpaceIndicated
Indicated

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 Table
Table3–3
3–3 Extreme
ExtremePoint
PointSolutions
Solutionsfor
forthe
theServer
ServerProblem
Problem

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–20
 The
The Objective
Objective Function
Function
(Iso-Profit
(Iso-Profit Line)
Line) Approach
Approach

• This approach directly identifies the optimal

corner point, so only the coordinates of the
optimal point need to be determined.
– Accomplishes this by adding the objective function to
the graph and then using it to determine which point is
optimal.
– Avoids the need to determine the coordinates of all of
the corner points of the feasible solution space.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–21
 Figure
Figure3–6
3–6 The
TheServer
ServerProblem
Problemwith
withProfit
ProfitLines
Linesofof$300,
$300,$600,
$600,and
and$900
$900

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–22
 Figure
Figure3–7
3–7 Finding
Findingthe
theOptimal
OptimalSolution
Solutiontotothe
theServer
ServerProblem
Problem

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 Graphing
Graphing——Objective
Objective Function
Function Approach
Approach
1. Graph the constraints.
2. Identify the feasible solution space.
3. Set the objective function equal to some amount that is
divisible by each of the objective function coefficients.
4. After identifying the optimal point, determine which two
constraints intersect there.
5. Substitute the values obtained in the previous step into
the objective function to determine the value of the
objective function at the optimum.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–24
 Figure
Figure3–8
3–8 AAComparison
ComparisonofofMaximization
Maximizationand
andMinimization
MinimizationProblems
Problems

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–25
 Example
Example3-3
3-3 Minimization
Minimization

Determine the values of decision variables x1 and x2 that will

yield the minimum cost in the following problem. Solve using
the objective function approach.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–26
 Figure
Figure3–9
3–9 Graphing
GraphingthetheFeasible
FeasibleRegion
Regionand
andUsing
Usingthe
theObjective
Objective
Function
FunctiontotoFind
Findthe
theOptimum
Optimumfor
forExample
Example3-33-3

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–27
 Example
Example3-4
3-4

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–28
 Table
Table3–3
3–3 Summary
SummaryofofExtreme
ExtremePoint
PointAnalysis
Analysisfor
forExample
Example3-4
3-4

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–29
 Table
Table3–5
3–5 Computing
Computingthe
theAmount
AmountofofSlack
Slackfor
forthe
theOptimal
OptimalSolution
Solutiontoto
the
theServer
ServerProblem
Problem

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–30
 Some
Some Special
Special Issues
Issues
• No Feasible Solutions
– Occurs in problems where to satisfy one of the constraints,
another constraint must be violated.
• Unbounded Problems
– Exists when the value of the objective function can be increased
without limit.
• Redundant Constraints
– A constraint that does not form a unique boundary of the feasible
solution space; its removal would not alter the feasible solution
space.
• Multiple Optimal Solutions
– Problems in which different combinations of values of the
decision variables yield the same optimal value.

Copyright © 2007 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 3–31
 Figure
Figure3–10
3–10 Infeasible
InfeasibleSolution:
Solution:No
NoCombination
Combinationofofx1
x1and
andx2,
x2,Can
Can
Simultaneously
SimultaneouslySatisfy
SatisfyBoth
BothConstraints
Constraints

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 Figure
Figure3–11
3–11 An
AnUnbounded
UnboundedSolution
SolutionSpace
Space

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 Figure
Figure3–12
3–12 Examples
ExamplesofofRedundant
RedundantConstraints
Constraints

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 Figure
Figure3–13
3–13 Multiple
MultipleOptimal
OptimalSolutions
Solutions

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 Figure
Figure3–14
3–14 Constraints
Constraintsand
andFeasible
FeasibleSolution
SolutionSpace
Spacefor
for
Solved
SolvedProblem
Problem22

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 Figure
Figure3–15
3–15 AAGraph
Graphfor
forSolved
SolvedProblem
Problem33

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 Figure
Figure3–16
3–16 Graph
Graphfor
forSolved
SolvedProblem
Problem44

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