Chapter 2

Linear Programming:
Model Formulation and
Graphical Solution

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Chapter Topics
Model Formulation
A Maximization Model Example
Graphical Solutions of Linear
Programming Models
A Minimization Model Example
Irregular Types of Linear Programming
Models
Characteristics of Linear Programming
Problems
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Linear Programming
Objectives of business decisions frequently involve
maximizing profit or minimizing costs.
Linear Programming is a model that consists of linear
relationships representing a firms decision(s), given an
objective and resource constraints.
Three Steps in Applying the Linear Programming
Technique:
Identify the problem as being solvable by linear
programming
Formulate the unstructured problem as a mathematical
model
Solve the model using established mathematical
techniques
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Model Components
Decision Variables are mathematical
symbols that represent levels of activity.
Objective Function a linear relationship
that reflects the objective of an operation,
in terms of the decision variables this
function is to be maximized or minimized.
Constraint a linear relationship that
represents a restriction on decision making.
Parameters numerical values that are
included in the objective functions and
constraints.
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Model Formulation Steps

Step 1 : Clearly define the decision
variables
Step 2 : Construct the objective
function
Step 3 : Formulate the constraints
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A Maximization Model Example:

Product Mix Problem

Problem Statement:
Beaver Creek Pottery Company is a small crafts operation
run by a Native American tribal council. The company
employs skilled artisans to produce clay bowls and mugs
with authentic Native American design and colors. The two
primary resources used by the company are special pottery
clay and skilled labor. Given these limited resources, the
company desires to know how many bowls and mugs to
produce each day in order to maximize profit. Each bowl
requires 1 hour of labor and 4 lbs of clay, and sells for $40.
Each mug requires 2 hours of labor and 3 lbs of clay, and
sells for $50. There are 40 hours of labor and 120 pounds of
clay available each day for production.

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A Maximization Model Example:

Product Mix Problem

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A Maximization Model Example: Product

Mix Problem
Resource Requirements for Production
and Profit per Item Produced
Product

Bowl

Mug

Profit ($/Unit)
Labor (Hr./Unit)
Clay (Lb./Unit)
Decision Variables
:
Objective
:
Resource
:
Availability
: 120 lbs

How many bowls and mugs to produce each day

Maximize profit.
40 hrs of labor per day
of clay

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A Maximization Model Example:

Product Mix Problem

Decision
Variables:

Objective
Function:

Resource
Constraints:

Non-Negativity
Constraints*:

*Non-negativity constraints: restrict the decision variables to zero or positive v

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A Maximization Model Example:

Product Mix Problem
A feasible solution does not violate any of the
constraints:
Example x1 = 5 bowls
x2 = 10 mugs
Z=?
Labor constraint check: ?
Clay constraint check: ?

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A Maximization Model
Example:
Product Mix Problem

An infeasible violates at least one of the constraints:

Example x1 = 10 bowls
x2 = 20 mugs
Z=?
Labor constraint check: ?
Clay constraint check: ?

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Graphical Solutions of LP
Models
Graphical solutions are limited to linear programming
problems with only two decision variables.
Can be used with 3 decision variables but cumbersome.
Graphical methods provide visualization of how a solution
for a linear programming problem is obtained.
Graphs provide a clearer understanding of how the
computer and mathematical solution approaches work.

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Formula of a Line

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Labor Constraint

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Clay Constraint

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Feasible Region

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Objective Line

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Optimal Solution

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Optimal Solution
Coordinates

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Solutions at the Extreme

Points

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Changing the Objective

Z = 70 x1 + 20 x2

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Graphical Solutions of LP
Models
If the objective function coefficients are
changed, the solution may change.
If the constraint coefficients are changed,
the solution space and solution points may
change.
Sensitivity analysis is used to analyze
changes in model parameters.
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Slack Variables
A Slack Variable is
added to a
constraint to convert
it to an equation (=).
A Slack Variable
represents unused
resources.
A Slack Variable
contributes nothing
to the objective
function.

Linear Programming Model in Standard Form

(with slack variables)

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Slack Variables in Graphical

Solution

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Graphical Solution Steps

Step 1 : Plot the model constraints as equations
on the graph, then considering the inequalities of
the constraints, indicate the feasible solution
area.
Step 2 : Plot the objective function; then move
this line out from the origin to locate the optimal
solution point.
Step 3 : Solve simultaneous equation at the
solution point to find the optimal solution values
OR solve simultaneous equations at each corner
point to find the solution values at each point.
Step 4 : Substitute these values into the
objective function to find the set of values that
results in the maximum Z value.
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A Minimization Model
Example

Problem Statement:
A farmer is preparing to plant a crop in the spring and
needs to fertilize a field at a minimum possible cost. There
are two brands of fertilizer to choose from, Super-gro and
Crop-quick. Super-gro yields 2 lbs of nitrogen and 4 lbs of
phosphate per bag, which costs $6. Crop-quick yields 4 lbs
of nitrogen and 3 lbs of phosphate and costs $3. The
farmers field requires at least 16 lbs of nitrogen and at
least 24 lbs of phosphate.

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A Minimization Model
Example

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A Minimization Model Example

Chemical Contribution and Costs

Brand

Super-gro

Crop-quick

Cost ($/Bag)
Nitrogen
(Lb./Bag)
Phosphate
(Lb./Bag)
Decision Variables
: How many bags of each brand to purchase
Objective
: Minimize the total cost of fertilizing.
Field
: 16 lbs of nitrogen
Requirements: 24 lbs of phosphate
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A Minimization Model
Example

Decision
Variables:

Objective
Function:

Model
Constraints:

Non-Negativity
Constraints*:

*Non-negativity constraints: restrict the decision variables to zero or positive va

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Graphical Solution
Feasible Region

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Graphical Solution
Objective Function

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Surplus Variables
A Surplus Variable is
subtracted from a
constraint to convert
it to an equation (=).
A Surplus Variable
represents an excess
above a constraint
requirement level.
A Surplus Variable
contributes nothing to
the objective function.

Linear Programming Model in Standard For

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Graphical Solution Surplus

Variables

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Irregular Types of LP Problems

For some linear programming models,
the general rules do not always apply.
Special Types of Problems Include
Those With:
Multiple Optimal Solutions
Infeasible Solutions
Unbounded Solutions

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Multiple Optimal Solutions

maximize Z $40 x1 30 x2
subject to
x1 2 x2 40 hr. of labor
4 x1 3x2 120 lb. of clay
x1 , x2 0
where
x1 number of bowls produced
x2 number of mugs produced

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Infeasible Problem
maximize Z 5 x1 3x2
subject to
4 x1 2 x2 8
x1 4
x2 6
x1 , x2 0

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Unbounded Problem
maximize Z 4 x1 2 x2
subject to
x1 4
x2 2
x1 , x2 0

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Characteristics of LP Problems
A linear programming problem requires a
decision - a choice amongst alternative courses
of action.
The decision is represented in the model by
decision variables.
The problem encompasses a goal, expressed as
an objective function, that the decision maker
wants to achieve.
Restrictions (Constraints) exist that limit the
extent of achievement of the objective.
The objective and constraints must be definable
by linear mathematical functional relationships.
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Properties of Linear Programming

Models
Proportionality - The rate of change
(slope) of the objective function and
constraint equations is constant.
Additivity - Terms in the objective function
and constraint equations must be additive.
Divisibility -Decision variables can take on
any fractional value and are therefore
continuous as opposed to integer in
nature.
Certainty - Values of all the model
parameters are assumed to be known with
certainty (non-probabilistic).
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