Submitted To:

Dr. Muhammad Shafiq

Submitted By:
Ali Ahmed 14-IE-12
Muhammad Waqar 14-IE-43
Adnan Khan 14-IE-46
INDUSTRIAL ENGG. DEPARTMENT
UET,TAXILA

OPTIMIZATION OF PROFIT AND COST IN STAR

TEXTILE MILL FAISALABAD
06-11-2016
 STAR TEXTILE PVT LTD
Title
Minimize the transportation cost & Maximize the profit of STAR Textiles Mills Faisalabad.
Introduction
We chose the STAR Textiles Mills Faisalabad that is located near Bawa chak Faisalabad.
OUTLINE
Objective
Introduction to industry
Problem statements
Solutions on different Soft wares
Introduction to Industry:

Star Textile Mills Limited started production in

1952 producing finest quality polyester, cotton and blended yarn for domestic and international
markets. It has installed capacity of 45000 spindle units, utilizing state of the art machinery
imported from countries like Japan, China,Italy and Switzerland.

Certificates:
The management of star Textile Mills Limited has
taken ISO 9001:2000 as a first step towards Total
Quality Management.

Sense Of Duty Towards Environment:

We strictly believe that our planet is our home and
we are doing our best efforts to make sure that our
home remains clean and pollution free. At star
Textile Mills, the management is well aware of
this global hazard and has taken substantial
initiatives for the preservation of the environment.

Sense Of Duty Towards Employees:

Star Textile Mills Limited believes in admirable
work environment. The management/staff
relationship, which exists within star Textile Mills
Limited, bears witness to this principle. Various
social welfare schemes and programs like social
security, provident fund, free services,easy loan
and regular and performance bonuses facilities
have been implemented for the benefit of the
employees. Our employees are our biggest assets and we believe that by taking care of our
employee we are ensuring a better future for our mills.

Combination of state of the art Chinese/Japanese/Swiss Machinery installed at Star textile

Mills Limited

Type of Machinery Unit # of Units Date of Purchase Make

Blowroom No. 1 line 3 scutcher 1993 Shanghai China
Cardings No. 28 1993 Shanghai China
Drawings Set 5 1993 DYH-500 C
Simplex No. 5 1993 Toyoda FL-16
Right Frames No. 34 1993 Shanghai China
Murata 7-11 Mach
Auto Coners No. 8 1993
Splicer
PROBLEM Statements
There are two kind of problems that we optimize in this industry
Transportation problems
Optimization problems
Transportation problems:-
Star Textile Ltd produce different varieties of clothes and distribute them in different cities of
Pakistan. The Industry has two facilities to provide the cloths. One is direct from the industry
with supply capacity of 400000 and other is Mandir Gali that is 8 km away from it with supply
capacity of 200000.
The company has to distribute its cloth to Karachi, Rawalpindi, Lahore, Multan and Gujranwala.
The cost related to each option and demand of each city is in table as following.
we have to minimize the transportation cost:
Rawalpindi Karachi Lahore Multan Gujranwala Supply

Industry 308 1052 184 234 158 400000

0.3542 1.2098 0.2110 0.2691 0.1817
Mandir 316 1044 192 226 166 200000
Gali 0.3634 1.2006 0.2208 0.2599 0.1909

Demand 25000 45000 40000 30000 28000

 Solution of the Transportation Problem
LP modeling:
Minimization the transportation cost
Objective function
Min=0.3542*x11+1.2098*x12+0.2110*x13+0.2691*x14+0.1817*x15+0.3634*x21+1.2006*x22
+ 0.2208*x23+0.2599*x24+0.1909*x25
Constarints:
X11+x12+x13+x14+x15<=400000
X21+x22+x23+x24+x25<=200000
X11+x21=25000
X12+x22=45000
X13+x23=40000
X14+x24=30000
X15+x25=28000
Non-negativity contrains:
X11,x12,x13,x14,x15,X21,x22,x23,x24,x25>=0
Solving on Lingo Software:
The value of objective Function=84206.60

OPTIMIZATION PROBLEM:
Statement:
Star Textile Manufactures 3 varieties of cloths(Lawn, Cotton, Polyester). Lawn, Cotton and
Polyester take color 72,90 & 76 grams/bundle respectively.
Maximum color available is 88889 grams. The minimum production of Lawn, Cotton &
Polyester is 500,389 & 222 bundles/day. And the Maximum bundles of all 3 varieties should not
exceed 1112 bundles/day.It is Estimated that One Bundle of Each gives a profit of 90,180 & 120
PKR respectively. Solve this LP
problem to maximize the profit.

Products Profit Color

lawn 90 72
Cotton 180 96
Polyester 126 72
LP model:
= 901+ 1802+ 1263
Subject to:
721+ 902+ 763 88889 (Color constraints)
1 500 (Demand constraints for Lawn)
2 389 (Demand constraints for Cotton)
3 222 (Demand constraints for Polyester)
1+2+ 3 1112 (Total production capacity constraints)
Solving on Tora:
Results:
The value of Objective Function =145006
Solution of the Optimization Problem on DOS Box:

Result:
Scope/Limitation:
1. Scientific Approach to Problem Solving.
Linear Programming is the application of scientific approach to problem solving. Hence
it results in a better and true picture of the problems-which can then be minutely analysed
and solutions ascertained.
2. Evaluation of All Possible Alternatives.
Most of the problems faced by the present organisations are highly complicated - which
can not be solved by the traditional approach to decision making. The technique of
Linear Programming ensures thatll possible solutions are generated - out of which the
optimal solution can be selected.
3. Helps in Re-Evaluation.
Linear Programming can also be used in .reevaluation of a basic plan for changing
conditions. Should the conditions change while the plan is carried out only partially,
these conditions can be accurately determined with the help of Linear Programming so as
to adjust the remainder of the plan for best results.
4. Quality of Decision.Linear Programming provides practical and better quality of decisions
that reflect very precisely the limitations of the system i.e.; the various restrictions under which
the system must operate for the solution to be optimal. If it becomes necessary to deviate from
the optimal path, Linear Programming can quite easily evaluate the associated costs or penalty.
5. Focus on Grey-Areas.
Highlighting of grey areas or bottlenecks in the production process is the most significant merit
of Linear Programming. During the periods of bottlenecks, imbalances occur in the production
department. Some of the machines remain idle for long periods of time, while the other machines
are unable toffee the demand even at the peak performance level.
6. Maximum optimal Utilization of Factors of Production.
Linear Programming helps in optimal utilization of various existing factors of production such
as installed capacity,. labour and raw materials etc.

Limitations of Linear Programming.

Some of the important-limitations in the application of Linear Programming
are as follows:
1. Linear Relationship.
Linear Programming models can be successfully applied only in those situations where a given
problem can clearly be represented in the form of linear relationship between different decision
variables. Hence it is based on the implicit assumption that the objective as well as all the
constraints or the limiting factors can be stated in term of linear expressions - which may not
always hold good in real life situations. In practical business problems, many objective function
& constraints can not be expressed linearly. Most of \he business problems can be expressed
quite easily in the form of a quadratic equation (having a power2) rather than in the terms of
linear equation. Linear Programming fails to operate and provide optimal solutions in all such
cases. e.g. A problem capable of being expressed in the form of: ax2+bx+c = 0 where a # 0 can
not be solved with the help of Linear Programming techniques.
2. Constant Value of objective & Constraint Equations.
Before a Linear Programming technique could be applied to a given situation, the values or the
coefficients of the objective function as well as the constraint equations must be completely
known. Further, Linear Programming assumes these values to be constant over a period of time.
In other words, if the values were to change during the period of study, the technique of LP
would loose its effectiveness and may fail to provide optimal solutions to the problem. However,
in real life practical situationsoften it is not possible to determine the coefficients of objective
function and the constraints equations with absolute certainty. These variables in fact may, lie on
a probabilitydistribution curve and hence at best, only the Iikelil1ood of their occurrence can be
predicted. Mover over, often the values change due to extremely as well as internal factors
during the period of study. Due to this, the actual applicability of Linear Programming tools may
be restricted.
3. No Scope for Fractional Value Solutions.
There is absolutely no certainty that the solution to a LP problem can always be quantified as an
integer quite often, Linear Programming may give fractional-varied answers, which are rounded
off to the next integer. Hence, the solution would not be the optimal one. For example, in finding
out 'the pamper of men and machines required to perform a particular job, a fractional Larson-
integer solution would be meaningless.
4. Degree Complexity.
Many large-scale real life practical problems can not be solved by employing Linear
Programming techniques evenwith the help of a computer due to highly complex and Lengthy
calculations. Assumptions and approximations are required to be made so that $e, given problem
can be broken down into several smaller problems and, then solve separately. Hence, the validity
ofthe final result, in all such cases, may be doubtful:
5. Flexibility.
Once a problemhas been properly quantified in terms of objective function and the constraint
equations and the tools of Linear Programming are applied to it, it becomes very difficult to
incorporate any changes in the systemarising on account of any change in the decision
parameter. Hence, it lacks the desired operational flexibility.
Conclusion:-
By using the LP Modeling we find the problem of solution that how to maximize the profit and
minimize the cost in Star Textile Mill Faisalabad. LP modeling is the technique in which we
maximize the profit or minimize the cost of the given problems and we use different software to
optimize the profit of industry .

Scope:-
It is a type of linear programming problem that may be solved using a simplified version of the
simplex technique called transportation method. Because of its major application in solving
problems involving several product sources and several destinations of products, this type of
problem is frequently called the transportation problem. The transportation problem is only a
special topic of the linear programming problems. It would be a rare instance when a linear
programming problem would actually be solved by hand.
With the help of transportation problem we can
(1) Minimize the cost of shipping m units to n destinations.
(2) Maximize the profit of shipping m units to n destinations.

Limitations:-
With its scope transportation problem has its limitations as well as
First we have to find feasible solution and then optimal solution
Different methods for balanced and unbalanced problems
And in unbalanced problems there are two types one is when demand is greater then
supply and when supply is greater then demand
Degenracy of Basic feasible solution.