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Chapter Two-A.ppt Wonde

The document discusses the importance of efficient resource allocation in organizations and introduces linear programming (LP) as a mathematical method for optimizing outcomes. It outlines the key components of LP, including objective functions, decision variables, and constraints, while emphasizing the principles of linearity, divisibility, certainty, proportionality, finite choices, and non-negativity. Additionally, it provides a step-by-step approach to formulating and solving LP problems using graphical methods.

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6 views12 pages

Chapter Two-A.ppt Wonde

The document discusses the importance of efficient resource allocation in organizations and introduces linear programming (LP) as a mathematical method for optimizing outcomes. It outlines the key components of LP, including objective functions, decision variables, and constraints, while emphasizing the principles of linearity, divisibility, certainty, proportionality, finite choices, and non-negativity. Additionally, it provides a step-by-step approach to formulating and solving LP problems using graphical methods.

Uploaded by

shebruebisa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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BY: MILLION ADAFRE (PhD

Candidate)
 All organizations have at their disposal, men, machines,
money, and materials, the supply of which may be limited

 The basic problem of any organization is how to allocate


scare resources efficiently

 The management is, therefore, find the best to allocation


of resources among the various activities so as to
optimize the measure of effectiveness

 Therefore, linear programming model is the best method


to use for such types of problems
 LP is a mathematical method for determining a way to
achieve the best outcome (such as maximum profit or
lowest cost) in a given mathematical model for some list
of requirements represented as linear relationships

• More formally, linear programming is a technique for


the optimization of a linear objective function, subject
to linear equality and linear inequality constraints
1. Objective
2. Decision variables
3. Constraints
4. Parameters
 Linearity – each decision variable has a linear impact on the
objective function and in each constraint in which it appears. There
is no squared, cubed, square root, products etc in the model

 Divisibility/continuity – non integer values are acceptable to the


potential values of decision variables if they are continuous but not
for discrete variables

 Certainty : Various parameters namely the objective function


coefficients, the coefficients of inequality/equality constraints and
the constraints (resource) values are known and constant. Hence,
linear programming is deterministic in nature
 Proportionality: there has to be proportional contribution of
the decision variables exists in the objective function and
the constraint inequalities

 Finite choices – A linear programming model also assumes


that a limited number of choices are available to the decision
maker

 Non-negativity – all the decision variables will never


assume negative values and hence we consider the first
quadrant un the x-y coordinate
Where:
• (< = >) means any of the three signs may be there
• Optimize means maximize or minimize objective function
• All constraints are equations except for non-negativity restrictions which
are inequalities
• The right hand side (RHS) of each constraints are non-negative
• Inequality constraints can be changed to equality by adding or
subtracting the LHS of each constraint by non-negative variable i.e., a
slack variable S1 is added to LHS of constraint with the sign < and a
surplus variable S2 is subtracted on the LHS of constraint with the sign
>) and also artificial variables in case of equal signs and > signs
• aij and bm are known coefficients and x j is unknown variable
 Step 1: Identify the unknown decision variables to be determined.
These should be brought into algebraic relation form

 Step 2: Clearly define all the limitations for a given situation.


These limitations or constraints also need to be expressed in
algebraic form either as linear equations or inequalities in terms of
the decision variables so identified in step 1

 Step 3: Identify the objective to be optimized and it also should be


expressed in terms of linear function of decision variables
To use the graphic method, the following steps
are needed:

 Step 1:
1 Formulate the LPM as explained before
 Step 2: Draw a graph the constraint sets on the x-y
plane
◦ Convert the inequalities in to equality
◦ Identify the x and y intercepts and draw the line that joins
them
◦ shade the feasible solution region by considering the
inequality sign
 Step 3: Identify the extreme/corner points
 Step 4: evaluate the objective function using the corner
points
 In case of maximizing objective function
Z, the corner point of feasible region
giving the maximum value of Z becomes
the value of decision variables
 Similarly in minimizing case, the point of

minimum value of Z gives the answer

Note: Graphical LPP is a two-dimensional


model (it considers only two decision
variables)

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