Operations Management

Linear Programming Module B

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B-1

Outline
REQUIREMENTS OF A LINEAR PROGRAMMING PROBLEM FORMULATING LINEAR PROGRAMMING PROBLEMS
Shader Electronics example

GRAPHICAL SOLUTION TO A LINEAR PROGRAMMING PROBLEM

Graphical representation of Constraints Iso-Profit Line Solution Method Corner-Point Solution Method
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Outline - Continued
SENSITIVITY ANALYSIS
Sensitivity Report Change in the Resources of the Right-HandSide Values Changes in the Objective Function Coefficient

SOLVING MINIMIZATION PROBLEMS LINEAR PROGRAMMING APPLICATIONS

Production Mix Example Diet Problem Example Production Scheduling Example Labor Scheduling Example
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THE SIMPLEX METHOD OF LP

B-3

Learning Objectives
When you complete this chapter, you should be able to : Identify or Define:
Objective function Constraints Feasible region Iso-profit/iso-cost methods Corner-point solution Shadow price

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B-4

Learning Objectives - Continued

When you complete this chapter, you should be able to : Describe or Explain:
How to formulate linear models Graphical method of linear programming How to interpret sensitivity analysis

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B-5

What is Linear Programming?

Mathematical technique
Not computer programming

Allocates scarce resources to achieve an objective Pioneered by George Dantzig in World War II
Developed workable solution called Simplex Method in 1947
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Examples of Successful LP Applications

Scheduling school busses to minimize total distance traveled when carrying students Allocating police patrol units to high crime areas in order to minimize response time to 911 calls Scheduling tellers at banks to that needs are met during each hour of the day while minimizing the total cost of labor
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Examples of Successful LP Applications - Continued

Picking blends of raw materials in feed mills to produce finished feed combinations at minimum costs Selecting the product mix in a factory to make best use of machine- and labor-hours available while maximizing the firms profit Allocating space for a tenant mix in a new shopping mall so as to maximize revenues to the leasing company
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Requirements of a Linear Programming Problem

1 Must seek to maximize or minimize some quantity (the objective function) 2 Presence of restrictions or constraints limits ability to achieve objective 3 Must be alternative courses of action from which to choose 4 Objectives and constraints must be expressible as linear equations or inequalities
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Formulating Linear Programming Problems

Assume:
You wish to produce two products (1) Walkman AM/FM/Cassette and (2) Watch-TV Walkman takes 4 hours of electronic work and 2 hours assembly Watch-TV takes 3 hours electronic work and 1 hour assembly There are 240 hours of electronic work time and 100 hours of assembly time available Profit on a Walkman is $7; profit on a Watch-TV $5
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B-10

Formulating Linear Programming Problems - continued

Let:
X1 = number of Walkmans X2 = number of Watch-TVs

Then:
4X1 + 3X2 240 electronics constraint

2 X1 + 1X2 100 assembly constraint 7X1 + 5X2 = profit maximize profit

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Graphical Solution Method

Draw graph with vertical & horizontal axes (1st quadrant only) Plot constraints as lines, then as planes
Use (X1,0), (0,X2) for line

Find feasible region Find optimal solution

Corner point method Iso-profit line method
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Shader Electronic Company Problem

Hours Required to Produce 1 Unit X1 X2 Walkmans Watch-TVs 4 3 2 $7 1 $5

Department Electronic Assembly Profit/unit

Available Hours This Week 240 100

Constraints: 4x1 + 3x2 240 (Hours of Electronic Time) 2x1 + 1x2 100 (Hours of Assembly Time) Objective: Maximize: 7x1 + 5x2
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Shader Electronic Company Constraints

120 Number of Watch-TVs (X2)

100
80 60

Electronics (Constraint A) Assembly (Constraint B)

40 20 0
0 10 20 30 40 50 60 70 80 Number of Walkmans (X1)

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B-14

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Shader Electronic Company Feasible Region

120

Number of Watch-TVs (X2)

100 80 60 40 20 0 0 10 20 30 40 50 60
Feasible Region

Electronics (Constraint A) Assembly (Constraint B)

70

80

Number of Walkmans (X1)

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Shader Electronic Company Iso-Profit Lines

120 100

Number of Watch-TVs (X2)

80 60 40 20 0 0 10 20 30 40 50 60

Electronics (Constraint A) Assembly (Constraint B)

Iso-profit line

70

80

Number of Walkmans (X1)

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Shader Electronic Company Corner Point Solutions

Iso-profit line

Number of Watch-TVs (X2)

120 100 80 60 40 20 0

Electronics (Constraint A) Assembly (Constraint B) Possible Corner Point Solution

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

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Shader Electronic Company Optimal Solution

Iso-profit line

Number of Watch-TVs (X2)

120 100 80 60 40 20 0

Electronics (Constraint A) Assembly (Constraint B)

Possible Corner Point Solution Optimal solution

10

20

30

40

50

60

70

80

Number of Walkmans (X1)

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Shader Electronic Company Optimal Solution

Iso-profit line

Number of Watch-TVs (X2)

120 100 80
X1 = 30 X2 = 40

Electronics (Constraint A) Assembly (Constraint B) Possible Corner Point Solution Optimal solution

60 40
20 0

10

20

30

40

50

60

70

80

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Number of Walkmans (X1)

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Formulation of Solution
Decision variables Objective
X1 = tons of BW chemical produced X2 = tons of color chemical produced Minimize Z = 2500X1 + 3000X2 X1 30 (BW); X2 20 (Color) X1 + X2 60 (Total tonnage) X1 0; X2 0 (Non-negativity)

Constraints

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B-20

Simplex Steps for Maximization

1. Choose the variable with the greatest positive Cj- Zj to enter the solution 2. Determine the row to be replaced by selecting that one with the smallest (non-negative) quantity-to-pivot column ratio 3. Calculate the new values for the pivot row 4. Calculate the new values for the other row(s) 5. Calculate the Cj and Cj-Zj values for this tableau. If there are any Cj-Zj numbers greater than zero, return to step 1.

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B-21

Simplex Steps for Minimization

1 Choose the variable with the greatest negative Cj- Zj to enter the solution 2 Determine the row to be replaced by selecting that one with the smallest (non-negative) quantity-to-pivot column ratio 3 Calculate the new values for the pivot row 4 Calculate the new values for the other row(s) 5 Calculate the Cj and Cj-Zj values for this tableau. If there are any Cj-Zj numbers less than zero, return to step 1.

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B-22

Sensitivity Analysis
Projects how much a solution might change if there were changes in variables or input data. Shadow price (dual) - value of one additional unit of a resource

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B-23

Minimization Example
Youre an analyst for a division of Kodak, which makes BW & color chemicals. At least 30 tons of BW and at least 20 tons of color must be made each month. The total chemicals made must be at least 60 tons. How many tons of each chemical should be made to minimize costs?
BW: $2,500 manufacturing cost per month

1995 Corel Corp.

Color: $ 3,000 manufacturing cost per month

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B-24

80

X2

Graphical Solution
BW Total
Find values for X1 + X2 60.

Tons, Color Chemical (X2)

60

X1 30, X2 20.

40
X1

Feasible Region
Color X1 80
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20 0 0 20 40 60 Tons, BW Chemical (X1)

B-25

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Optimal Solution: Corner Point Method

80 Tons, Color Chemical

BW
Total

Find corner points

60
40

Feasible Region B Color

20 0 0
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A
20 40 Tons, BW Chemical
B-26

60

80
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X2
100 80 60

Assembly Constraint RHS Increased by 10

Original assembly constraint Original Solution Assembly constraint increased by 10

40 20
0

Feasible Region
0 20

Soln Soln

New Solution Electronics Constraint

40

60

X1

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B-27

X2
100 80 60

Assembly Constraint RHS Decreased by 10

New Solution Original assembly constraint Original Solution

Soln
Assembly constraint decreased by 10

40 20
0

Soln

0
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20

40

60

X1

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B-28

A Minimization Problem
60 50 40 30 20 10 0 0 10 20 30 40 50 60
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x1 + x2 = 60

Feasible region

b
X1 = 30

X2 = 20

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