Linear Programming

• What is linear programming?

• The graphical solution of a 2 – variable
LP.
• Formulating LP problems: blending,
urban renewal model, loan policy model,
production planning & inventory control

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 Linear Programming
• Linear programming is an optimization method
applicable for the solution of problems in which the
objective function and the constraints appear as
linear functions of the decision variables.

• Linearity implies that the LP must satisfy basic

properties: proportionality, additivity and certainty.

• Simplex method is the most efficient and popular

method for solving general linear programming
problems.

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 Linear Programming
An LP model, as any OR model, has three
basic components:
1. Decision variables that we seek to determine.
2. Objective (goal) that we need to optimise
(maximise or minimise).
3. Constraints that the solution must satisfy.

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 Standard Form of a Linear
Programming Problem
• Scalar form
Minimize f ( x1 , x2 ,  , xn ) c1 x1  c2 x2    cn xn
subject to the constraints
a11 x1  a12 x2    a1n xn b1
a21 x1  a22 x2    a2 n xn b2

am1 x1  am 2 x2    amn xn bm
x1 0
x2 0

xn 0
where c j , b j and aij (i 1,2,  , m; j 1,2,  , n) are known constants,
and x j are the decision variables
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 Standard Form of a Linear
Programming Problem
• Matrix form
Minimize f ( X) c T X
subject to the constraints
aX b
X 0
where
 x1  b1  c1 
x  b  c 
 2  2  
X  , b  , c  2 
   
 xn  bm  cn 
 a11 a12 a13  a1n 
a a a  a 
a  21 22 23 2 n 
 
 
a
 m1 a m2 a m3  a mn 
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 Linear Programming
Example 2.1.1 (The Reddy Mikks Company)
Reddy Mikks produces both interior and exterior
paints from two raw materials, M1 and M2. A
market survey indicates that the daily demand for
interior paint cannot exceed that for exterior paint
by more than 1 tonne. Also, the maximum daily
demand for interior paint is 2 tonnes. Reddy Mikks
wants to determine the optimum product mix of
interior and exterior paints that maximises the total
daily profit.
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 Basic data of Example 2.1.1
The Reddy Mikks Company Summary Data

Tonnes of Raw material per tonne

of
Maximum
Exterior Interior availability
Paint Paint (tonnes)

Raw material (M1) 6 4 24

Raw material (M2) 1 2 6

Profit per tonne ($1000) 5 4

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Example 2.1.1 - Solution

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Example 2.1.1 – Graphical Solution
• Any values of x1 and x2 that satisfy all five
constraints constitute a feasible solution.
Otherwise, the solution is infeasible.

• The graphical procedure includes two steps:

1. Determination of the feasible solution space.
2. Determination of the optimum solution space.
– The optimum solution is always associated with the
corner point of the solution space.
– This is where 2 lines intersect (solve simultaneously)
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 Graphical Solution (maximisation)
Demonstrate the drawing of the Graph for the
maximisation problem

Conclusion:
– This calls for a daily product mix of 3 tonnes of
exterior paint and 1.5 tonnes of interior paint.
– The associated daily profit is $21 000.

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Example 2.2.2 (minimisation model)

Diet Problem
Churu farm uses at least 800kg of special feed
daily. The special feed is a mixture of corn and
soya bean meal. The dietary requirements of
the special feed are at least 30% protein and at
most 5% fiber. Churu farm wishes to
determine the daily minimum cost feed mix.

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 Example 2.2.2 (diet problem)
The special feed is a mixture of corn and soya bean meal with the following
compositions

Kg per kg of feedstuff

Feedstuff Protein Fiber Cost ($/kg)

Corn 0.09 0.02 0.30
Soya bean meal 0.60 0.06 0.90

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 Solution
• Feed mix = Corn + Soya bean meal

• Determine the decision variables

x1 = kg of corn in daily mix
x2 = kg of soya bean in daily mix

• Objective function seeks to minimise the total daily cost (in $) of the feed mix.

• Constraints
- Daily amount needed
- Protein dietary requirement constraint
- Fibre requirement constraint
- Nonnegativity constraint

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Developed LP Model

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Graphical Solution (minimisation)
Demonstrate the drawing of the Graph for the
minimisation problem
Conclusion:
– This calls for using 470.59kg of corn and 329.41kg
of soya bean meal in the daily mix.
– The associated minimum cost of the feed mix is
Z = (0.3X470.59) + (0.9X329.42) = $437.65 per
day.

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 Developing LP Models
• Urban Renewal Model

• Loan Policy Model

• Production Planning and Inventory

Control

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 EXAMPLE 2.3.1 – URBAN RENEWAL MODEL
The City of Harare is faced with a severe budget shortage. Seeking a long term solution, the city
council votes to improve the tax base by condemning an inner city housing area and replacing it
with a modern development.
The project involves two phases: (1) Demolishing substandard houses to provide land for the new
development, and (2) building the new development. The following is a summary of the situation.
1. As many as 300 substandard houses can be demolished. Each house occupies a 0.25 acre lot.
The cost of demolishing a condemned house is $2000.
2. Lot sizes for new single-, double-, triple- quadruple –family homes (units) are 0.18, 0.28, 0.4 and
0.5 acre, respectively. Streets, open space, and utility easements account for 15% of available
acreage.
3. In the new development the triple and quadruple units account for at least 25% of the total.
Single units must be at least 20% of all units and double units at least 10%.
4. The tax levied per unit for single-, double-, triple- and quadruple units is $1000, $1900, $2700
and $3400 respectively.
5. The construction cost per unit for single-, double-, triple- and quadruple-family homes is $50,000,
$70,000, $130,000 and $160,000, respectively. Financing through a local bank can amount to a
maximum of $15 million.

How many units of each type should be constructed to maximise tax collection?

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 EXAMPLE 2.3.3 – LOAN POLICY MODEL

• CBZ Bank is in the process of devising a loan policy that involves

a maximum of $12 million.

• Bad debts are unrecoverable and produce no interest revenue.

• Competition with other financial institutions requires that the

bank allocate at least 40% of the funds to farm and commercial
loans. To assist the housing industry in the region, home loans
must equal at least 50% of the personal, car, and home loans.
The bank also has a stated policy of not allowing the overall ratio
of bed debts on all loans to exceed 4%. The objective of CBZ is
to maximise the net return, develop an LP model for this data.
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 Data: Available types of loans

BAD-DEBT
TYPE OF LOAN INTEREST RATE RATIO
PERSONAL 0.140 0.10
CAR 0.130 0.07
HOME 0.120 0.03
FARM 0.125 0.05
COMMERCIAL 0.100 0.02

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 EXAMPLE 2.3.4 – PRODUCTION PLANNING AND
INVENTORY CONTROL

In preparation for the winter season, a clothing

company is manufacturing parka and goose
overcoats, insulated pants, and gloves. All
products are manufactured in four different
departments: cutting, insulating, sewing, and
packaging. The company has received firm
orders for its products. The contract stipulates a
penalty for undelivered items. The following
table provides the pertinent data for the
situation.
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 EXAMPLE 2.3.4: Data

TIME PER UNITS (hr)

Capacity
DEPARTMENT Parka Goose Pants Gloves (hr)
Cutting 0.30 0.30 0.25 0.15 1000
Insulating 0.25 0.35 0.30 0.10 1000
Sewing 0.45 0.50 0.40 0.22 1000

Packaging 0.15 0.15 0.10 0.05 1000

Demand 800 750 600 500
Unit Profit $30 $40 $20 $10
Unit penalty $15 $20 $10 $8

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Devise an optimal production plan for
the company.

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 Exercises
Question 1.
Furniture Co. manufactures desks and chairs. Each
desk uses 4 units of wood and each chair uses 3. A
desk contributes $40 to profit and a chair
contributes $25. Marketing restrictions require that
the number of chairs produced be at least twice
the number of desks produced. Twenty units of
wood are available. Formulate and solve the Linear
Programming problem (LP) which will maximize
Furniture Co.’s profit.
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 Question 2
A manufacturing firm produces two machine parts using
lathes, milling machines, and grinding machines. The different
machining times required for each part, the machining times
available for different machines, and the profit on each
machine part are given in the following table. Determine the
number of parts I and II to be manufactured per week to
maximize the profit.
Type of machine Machine time Machine time Maximum time
required (min) required (min) available per week
Machine Part I Machine Part II (min)
Lathes 10 5 2500
Milling machines 4 10 2000
Grinding machines 1 1.5 450
Profit per unit $50 $100
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THE END

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