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Operations Research Unit 2

Unit 2 Linear Programming


Structure:
2.1 Introduction
Objectives
2.2 Linear Programming Problem
2.3 Requirements of LPP
Basic assumptions of LPP
2.4 Mathematical Formulation of LPP
General form of LPP
Canonical forms
2.5 Case Studies of LPP
Solved problem
2.6 Applications of LPP
2.7 Advantages of LPP
2.8 Limitations of LPP
2.9 Summary
2.10 Glossary
2.11 Terminal Questions
2.12 Answers
2.13 Case Study

2.1 Introduction
In the previous unit, we dealt with operations research. We discussed the
background, scope, features, phases, types, limitations, techniques, and
tools of operations research. We also analysed the operations research
methodology and the structure of the mathematical model. In this unit, we
will deal with linear programming. Linear programming focuses on obtaining
the best possible output (or a set of outputs) from a given set of limited
resources.
Minimal time and effort and maximum benefit coupled with the best possible
output or a set of outputs is the mantra of any decision-maker. Today,
decision-makers or managements have to tackle the issue of allocating
limited and scarce resources at various levels in an organisation, in the best
possible manner. Man, money, machine, time, and technology are some of

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the common resources. The management’s task is to obtain the best


possible output (or a set of outputs) from these given resources.
The output can be measured in terms of profit, cost, social welfare, and the
overall effectiveness. In several situations, you can express the output (or a
set of outputs) as a linear relationship among several variables. The amount
of available resources can be expressed as a linear relationship among
various system variables. The management’s dilemma is to optimise
(maximise or minimise) the output or the objective function subject to the set
of constraints. Optimisation of resources in which both the objective function
and the constraints are represented in a linear form is known as Linear
Programming Problem (LPP).
Objectives:
After studying this unit, you should be able to:
 explain linear programming problem
 analyse a feasible region
 analyse the applications of LPP

2.2 Linear Programming Problem


Linear Programming (LP) is a mathematical technique designed to help
managers in their planning and decision-making. It is usually used in an
organisation that is trying to make the most effective use of its resources.
Resources typically include machinery, manpower, money, time, warehouse
space, and raw materials.
A few examples of problems in which LP has been successfully applied are:
 Developments of a production schedule that will satisfy future demands
for a firm’s product and at the same time minimise total production and
inventory costs.
 Establishment of an investment portfolio from a variety of stocks or
bonds that will maximise a company’s return on investment.
 Allocation of a limited advertising budget among radio, TV, and
newspaper spots in order to maximise advertising effectiveness.
 Determination of a distribution system that will minimise total shipping
cost from several warehouses to various market locations.

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 Selection of the product mix in a factory to make best use of machine


and man hours available while maximising the firm’s profit.

2.3 Requirements of LPP


The common requirements of LPP are as follows.
 Decision variables and their relationship
 Well-defined objective function
 Existence of alternative courses of action
 Non-negative conditions on decision variables
Let us now study the basic assumptions of LPP.
2.3.1 Basic assumptions of LPP
The basic assumptions of LPP are:
 Linearity - Both objective functions and constraints can be expressed
as linear inequalities.
 Deterministic - All co-efficients of decision variables in the objective
and constraints expressions are known and finite.
 Additivity - The value of the objective function and the total amount of
each resource used must be equal to the sum of respective individual
contributions by decision variables.
 Divisibility - The solution values of decision variables can be non-
negative values including fractions.
Self Assessment Questions
1. Both the objective function and constraints are expressed in _____
forms.
2. LPP requires existence of _______, _______, of _______.
3. Solution of decision variables can also be ____________.

2.4 Mathematical Formulation of LPP


The procedure for mathematical formulation of a linear programming
problem consists of the following major steps:

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Fig. 2.1: Procedure of mathematical formulation of a linear


programming problem

Solved problem 1:
A company has three operational departments (weaving, processing, and
packing) with a capacity to produce three different types of clothes - suits,
shirts, and woollens, yielding a profit of Rs.2, Rs.4, and Rs.3 per meter
respectively. One meter of suiting requires 3 minutes of weaving, 2 minutes
of processing, and 1 minute of packing. Similarly, one meter of shirting
requires 4 minutes of weaving, 1 minute of processing, and 3 minutes of
packing. One meter of woollen requires 3 minutes in each department. In a
week, total run time of each department is 60, 40, and 80 hours for weaving,
processing, and packing respectively.
Formulate the linear programming problem to find the product mix to
maximise the profit.

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Mathematical formulation:
The data of the problem is summarised below in table 2.1:
Table 2.1: summary of the data of the problem
Departments Profit
Weaving Processing Packing (Rs. per
(in min) (in min) (in min) meter)
Suits 3 2 1 2
Shirts 4 1 3 4
Woollens 3 3 3 3
Availability (min) 60*60 40*60 80*60

Let us solve this problem according to procedure outlined in fig. 2.1


Step 1: The key decision is to determine the weekly rate of production for
the three types of clothes.
Step 2: Let us designate the weekly production of suiting, shirting, and
woollens as x1 meters, x2 meters, and x3 meters respectively.
Step 3: As it is not possible to produce negative quantities, feasible
alternatives are sets of values of x1, x2, and x3 satisfying x1, x2, and
x3 ≥ 0.
Step 4: The constraints are the limited availability of three operational
departments. One meter of suiting requires 3 minutes of weaving.
The quantity being x1 meters, the requirement for suiting alone will
be 3x1 units. Similarly, x2 meters of shirting and x3 meters of
woollen will require 4x2 and 3x3 minutes respectively. Thus, the
total requirement of weaving will be 3x1+4x2+3x3, which should not
exceed the available 3600 minutes. Therefore, the labour
constraint becomes 3x1+4x2+3x3≤ 3600.
Similarly, the constraints for the processing department and
packing departments are 2x1+x2+3x3≤ 2400 and x1+3x2+3x3≤ 4800
respectively.
Step 5: The objective is to maximise the total profit from sales. Assuming
that whatever is produced is sold in the market, the total profit is
given by the linear relation z= 2x1+4x2+3x3.

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The linear programming problem can thus be put in the following algebraic
format:
Find x1, x2, and x3 so as to maximise
Z = 2x1+4x2+3x3
Subject to constraints: 3x1+4x2+3x3≤ 3600
2x1+x2+3x3≤ 2400
3x1+3x2+3x3≤ 4800
x1, x2, and x3 ≥ 0

2.4.1 General form of LPP


The LPP is a class of mathematical programming where the functions
representing the objectives and the constraints are linear. Optimisation
refers to the maximisation or minimisation of the objective functions.
The general linear programming model can be defined as follows:
Maximise or minimise
Z = c1 x1 + c2 x2 + - - - - + cn xn
Subject to the constraints,
a11 x1 + a12 x2 + —– + a1n xn ~ b1
a21 x1 + a22 x2 + —– + a2n xn ~ b2
——————————————-
am1 x1 + am2 x2 + ——- + amn xn ~ bm
and x1 ≥ 0, x2 ≥ 0, ——————– xn ≥ 0
Where cj, bi, and aij (i = 1, 2, 3… m, j = 1, 2, 3 … n) are constants
determined from the technology of the problem and xj (j = 1, 2, 3 —- n) is the
decision variable. Here ~ is either ≤ (less than), ≥ (greater than), or =
(equal). In terms of the above formulation, the coefficients cj, bi, and aij are
interpreted physically as follows. If bi is the available amount of resources i,
where aij is the amount of resource that must be allocated to each unit of
activity j, the “worth” per unit of activity is equal to cj.

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2.4.2 Canonical forms


You can represent the general LPP mentioned above in the canonical form
as follows:
Maximise Z = c1 x1+c2 x2 + —— + cn
Subject to
a11 x1 + a12 x2 + —— + a1n xn ≤ b1
a21 x1 + a22 x2 + —— + a2n xn ≤ b2
——————————————–
am1 x1+am2 x2 + …… + amn xn ≤ bm
x1, x2, x3, … xn ≥ 0
The following are the characteristics of the canonical form.
 All decision variables are non-negative.
 All constraints are of ≤ type.
 The objective function is of the maximisation type.
Any LPP can be represented in the canonical form by using five elementary
transformations, which are as follows:
1. The minimisation of a function is mathematically equivalent to the
maximisation of the negative expression of this function. That is,
Minimise Z = c1 x1 + c2x2 + ……. + cn xn
is equivalent to
Maximise – Z = – c1x1 – c2x2 – … – cn xn.
2. Any inequality in one direction (≤ or ≥) may be changed to an inequality
in the opposite direction (≥ or ≤) by multiplying both sides of the
inequality by –1. For example,
2x1+3x2 ≤ 5 is equivalent to –2x1–3x2 ≥ –5.
3. An equation can be replaced by two inequalities in opposite direction.
For example,
2x1+3x2 = 5 can be written as 2x1+3x2 ≤ 5 and 2x1+3x2 ≥ 5 or -2x1-3x2 ≥
5 and – 2x1 – 3x2 ≤ – 5.

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4. An inequality constraint with its left hand side in the absolute form can
be changed into two regular inequalities. For example,
|2x1+3x2| ≤ 5 is equivalent to 2x1+3x2 ≤ 5 and 2x1+3x2 ≥ – 5 or – 2x1– 3x2 ≤ 5.
5. The variable, which is unconstrained in sign, is equivalent to the
difference between two non-negative variables. For example, if x is
unconstrained in sign then x = (x+ – x–) where x+ ≥ 0, x– ≤ 0.

Case-let
An automobile company has two units X and Y, which manufactures
three different models of cars - A, B, and C. The company has to supply
1500, 2500, and 3000 cars of type A, B, and C respectively per week
(6 days). It costs the company Rs.1,00,000 and Rs.1,20,000 per day to
run the units X and Y respectively. In a day, unit X manufactures 200,
250, and 400 cars and unit Y manufactures 180, 200, and 300 cars of A,
B, and C respectively. The operations manager has to decide on how
many days per week should each unit be operated to meet the current
demand at minimum cost.
The operations manager along with his/her team uses a LPP model to
arrive at the minimum cost solution.

2.5 Case Studies of LPP

Solved problem 1
A firm engaged in producing 2 models - model A and model B, performs
only 3 operations – painting, assembly, and testing. Table 2.1 depicts the
relevant data.
Table 2.1: Unit Sale Price and Hours Required for Each Unit
Hours required for each unit
Unit sale price
Assembly Painting Testing

Model A Rs. 50.00 1.0 0.2 0.0


Model B Rs. 80.00 1.5 0.2 0.1

Total numbers of hours available each week are as under assembly 600,
painting 100, and testing 30. The firm wishes to determine the weekly
product-mix to maximise revenue.

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Solution: Let us first write the notations as under:


Z: Total revenue
x1: Number of Units of Model A
x2: Number of Units of Model B
x1, x2: Decision variables
Since the objective (goal) of the firm is to maximise its revenue, the
model can be stated as follows. The objective function Z = 50x1 + 80x2 is
to be maximised subject to the following constraints:
1.0x1 + 1.5x2 ≤ 600, (assembly constraints)
0.2x1+0.2x2 ≤ 100, (painting constraints)
0.0x1+0.1x2 ≤ 30, (testing constraints)
x1≥0, x2≥0, (the non-negativity constraints)

Solved problem 2
A milk distributor supplies milk in bottles to houses in three areas A, B,
and C in a city. His delivery charge per bottle is 30 paise in area A, 40
paise in area B, and 50 paise in area C. He has to spend on an average,
1 minute to supply one bottle in area A, 2 minutes per bottle in area B,
and 3 minutes per bottle in area C. He can spare only 2 hours 30 minutes
for milk distribution but not more than 1 hour 30 minutes for area A and B
together. He can deliver at the most 120 bottles.
Find the number of bottles that he has to supply in each area so as to
maximise the supply. Construct a mathematical model.

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Solved problem 3
An oil company has two units A and B, which produce three different
grades of oil – super fine, medium, and low grade. The company has to
supply 12, 8, and 24 barrels of super fine, medium, and low-grade oil
respectively per week. It costs the company Rs.1000 and Rs.800 per day
to run the units A and B respectively.
In a day, unit A produces 6, 2, and 4 barrels and unit B produces 2, 2,
and 12 barrels of super fine, medium, and low grade respectively. The
manager has to decide on how many days per week should each unit be
operated in order to meet the requirement at minimum cost.
Formulate the LPP model.

Solution: Table 2.2 depicts the summary of the given data.


Table 2.2: Capacity and Requirements Details of an Oil Company
Product Capacity Requirements
Unit A Unit B
Super fine 6 2 12
Medium 2 2 8
Low grade 4 12 24
Cost Rs. 1000 Rs. 800 -

Let x1 and x2 be the number of days that unit A and B must be operated
per week respectively. Then the objective of the manager is to:
Minimise the cost function
Z = 1000 x1 + 800 x2
Subject to the constraints 6x1 + 2x2 ≥ 12 (super fine)
2x1 + 2 x2 ≥ 8 (medium)
4x1 + 12 x2 ≥ 24 (low grade)
and x1 >0, x2 ≥ 0

2.5.1 Solved problem


A toy company manufactures two types of doll, a basic version-doll A and a
deluxe version-doll B. Each doll of type B takes twice as long to produce
one doll of type A. Thus, the company would have time to make a maximum

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of 2000 types of A dolls per day. The supply of plastic is sufficient to


produce 1500 dolls per day (both A and B combined). The deluxe version
requires a fancy dress of which only 600 is available per day. If the company
makes a profit of Rs.3.00 and Rs.5.00 per doll, respectively on doll A and B,
then how many of each doll should be produced per day in order to
maximise the total profit. Formulate the problem.
Formulation
Let x1 and x2 be the number of dolls produced per day of type A and B
respectively.
Let doll A require t hrs.
So, doll B require 2t hrs.
The total time to manufacture x1 and x2 dolls should not exceed 2,000t hrs.
Therefore, tx1+2tx2 ≤ 2000t
Other constraints are simple. The linear programming problem becomes:

Maximise p= 3x1+5x2
Subject to restrictions
x1+2x2 ≤ 2000(time constraint)
x1+x2 ≤ 1500(plastic constraint)
x2 ≤ 600 (dress constraint)
and non-negativity restrictions
x1≥ 0, x2≥0

Self Assessment Questions


4. One of the characteristics of canonical form in the objective function
must be maximisation. (True/False)
5. 2x – 3y ≤ 10 can be written as -2x + 3y ≥-10. (True/False)

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2.6 Applications of LPP


Linear programming is a powerful tool for selecting alternatives in a decision
problem. Consequently, it has been applied in a wide variety of problem
settings. We will indicate a few applications covering the major functional
areas of a business organisation.
 Finance - The problem of the investor could be a portfolio-mix selection
problem. In general, the number of different portfolios can be much
larger than what the example indicates. More and different kinds of
constraints can be added. Another decision problem involves
determining the mix of funding for a number of products when more than
one method of financing is available. The objective may be to maximise
total profits, where the profit for a given product depends on the method
of financing. For example, funding may be done with internal funds,
short-term debt, or intermediate financing (amortised loans). There may
be a limitation on the availability of each of the funding options as well
as financial constraints requiring certain relationships between the
funding options so as to satisfy the terms of bank loans or intermediate
financing. There may also be limitations on the production capacity for
the products. The decision variables would be the number of units of
each product to be financed by each funding option.
 Production and operations management - Quite often, in the process
industries, a given raw material can be converted into a wide variety of
products. For example, in the oil industry, crude oil is refined into
gasoline, kerosene, home-heating oil, and various grades of engine oil.
Given the present profit margin on each product, the problem is to
determine the quantities of each product that should be produced. The
decision is subject to numerous restrictions such as limits on the
capacities of various refining operations, raw-material availability,
demands for each product, and any government-imposed policies on the
output of certain products. Similar problems also exist in the chemical
and food-processing industries.
 Human resources - Personnel planning problems can also be analysed
with linear programming. For example, in the telephone industry,
demands for the services of installer-repair personnel are seasonal. The
problem is to determine the number of installer-repair personnel and
line-repair personnel required each month as part of the work force,

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considering the total costs of hiring, layoff, overtime, and regular-time


wages are minimised. The constraints set includes restrictions on the
service demands that must be satisfied, overtime usage, union
agreements, and the availability of skilled people for hire. This example
runs contrary to the assumption of divisibility. However, the work-force
levels for each month would normally be large enough that rounding off
to the closest integer in each case would not be detrimental, provided
the constraints are not violated.
 Marketing - Linear programming can be used to determine the proper
mix of media to use in an advertising campaign. Suppose that the
available media are radio, television, and newspapers. The problem is to
determine how many advertisements to place in each medium. Of
course, the cost of placing an advertisement depends on the medium
chosen. We wish to minimise the total cost of the advertising campaign,
subject to a series of constraints. Since each medium may provide a
different degree of exposure of the target population, there may be a
lower bound on the total exposure from the campaign. Also, each
medium may have a different efficiency rating in producing desirable
results. Thus there may be a lower bound on efficiency. In addition,
there may be limits on the availability of each medium for advertising.
 Distribution - Another application of linear programming is in the area of
distribution. Consider a case in which there are m factories that must
ship goods to n warehouses. A given factory could make shipments to
any number of warehouses. Given the cost to ship one unit of product
from each factory to each warehouse, the problem is to determine the
shipping pattern (number of units that each factory ships to each
warehouse) that minimises total costs. This decision is subject to the
restrictions that demand at each factory cannot be more than it has the
capacity to produce.
Self Assessment Questions
6. Personnel planning problems can also be analysed with ___________.
7. Linear programming is a powerful tool for selecting alternatives in a
_________________.
8. Linear programming can be used to determine the _______________ to
use in an advertising campaign.

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9. Quite often in the process industries, a given _________ can be made


into a wide variety of products.

2.7 Advantages of LPP


The advantages of linear programming techniques may be outlined as
follows:
 Linear programming technique helps in making the optimum utilisation of
productive resources. It also indicates how decision makers can employ
productive factors most effectively by choosing and allocating these
resources.
 The quality of decisions may also be improved by linear programming
techniques. The user of this technique becomes more objective and less
subjective.
 Linear programming technique provides practically applicable solutions
because there might be other constraints operating outside the problem.
These constraints must also be taken into consideration. Just because
so many units must be produced does not mean that all those can be
sold. So the necessary modification of its mathematical solution is
required for the sake of convenience to the decision maker.
 In production processes, high lighting of bottlenecks is the most
significant advantage of this technique. For example, when bottlenecks
occur, some machines cannot meet the demand while others remain idle
for some time.

2.8 Limitations of LPP


In spite of wide area of applications, some limitations are associated with
linear programming techniques. These are stated below:
 In some problems, objective functions and constraints are not linear.
Generally, in real life situations concerning business and industrial
problems, constraints are not linearly treated as variables
 There is no guarantee of integer valued solutions. For example, in
finding out how many men and machines would be required to perform a
particular job, rounding off the solution to the nearest integer will not give
an optimal solution. Integer programming deals with such problems.
 A linear programming model does not take into consideration the effect
of time and uncertainty. Thus the model should be defined in such a way
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that any change due to internal as well as external factors can be


incorporated.
 Sometimes, large-scale problems cannot be solved with linear
programming techniques even when the computer facility is available.
Such difficulty may be removed by breaking the main problem into
several small problems and then solving them separately.
 Parameters appearing in the model are assumed to be constant. But, in
real life situations they are neither constant nor deterministic.
 Linear programming deals with only single objective, whereas in real life
situations, problems come across with multi-objectives. Goal
programming and multi-objective programming deal with such problems.

2.9 Summary
Let us recapitulate the important concepts discussed in this unit:
 In LPP, first identify the decision variables with economic or physical
quantities whose values are of interest to the management.
 The problems must have a well-defined objective function expressed in
terms of the decision variable.
 The objective is to maximise the resources when it expresses profit or
contribution. If the objective function indicates cost, then it has to be
minimised.
 The decision variables interact with each other through some
constraints. These constraints arise due to limited resources, stipulation
on quality, technical, legal, or a variety of other reasons.

2.10 Glossary
Decision variables - set of unknown quantities in LPP
Bottleneck - A point in the production process that causes delay.

2.11 Terminal Questions


1. Explain LPP by giving two examples.
2. Write any three applications of LPP.
3. What are the advantages of LPP?
4. Explain the basic assumptions of LPP.
5. State the general form of LPP.

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6. Three grades of coal A, B, and C contain ash and phosphorous as


impurities. In a particular industrial process, a fuel obtained by blending
the above grades containing not more than 25% ash and 0.03%
phosphorous is required. The maximum demand of the fuel is 100 tons.
Percentage impurities and costs of the various grades of coal are shown
below. Assuming that there is an unlimited supply of each grade of coal
and there is no loss in blending, formulate the blending problem to
minimise the cost.
Coal grade Ash% Phosphorus% Cost per ton in Rs.
A 30 0.02 240
B 20 0.04 300
C 35 0.03 280
7. A firm manufactures two products. The net profit on product 1 is Rs.3
per unit and the net profit on product 2 is Rs.5 per unit. The
manufacturing process is such that each product has to be processed
in two departments D1 and D2. Each unit of product 1 requires
processing for 1 minute at D1 and 3 minutes at D2; each unit of product
2 requires processing for 2 minutes at D1 and 2 minutes at D2. Machine
time available per day is 860 minutes at D1 and 1200 minutes at D2.
How much of product 1 and product 2 should be produced every day so
that the total profit is maximum. Formulate this as a problem in LPP.

2.12 Answers
Self Assessment Questions
1. Linear
2. Alternate course of action
3. Fractions
4. True
5. True
6. Linear programming
7. Decision problem
8. Proper mix of media
9. Raw material

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Terminal Questions
1. LPP is a mathematical technique for planning and decision making.
Examples: development of production schedule and establishment of an
investment portfolio. For more information refer 2.2
2. Applications of LPP in the area of finance, productions and operations
management, human resources, marketing and distributions. For more
information refer 2.6
3. Advantages of LPP: optimum utilisation of productive resources,
improves quality of decisions, provides practically applicable solutions.
For more information refer 2.7
4. Basic assumptions of LPP: Linearity, deterministic, additivity, divisibility
etc. For more information refer 2.3 and 2.3.1
5. The general linear programming model can be defined as follows:
Maximise or minimise Z = c1 x1 + c2 x2 + - - - - + cn xn
For more information refer 2.4.1
6. [Hint: x1= tons of grade A coal, x2= tons of grade B coal & x3= tons of
grade C coal]. For more information refer 2.4 and 2.5.
7. Maximise 3x1 + 5x2, subject to x1 + 2x2 ≥ 800 (minutes)
3x1 + 2x2 ≥ 1200 (minutes) x1, x2 ≥ 0 For more information refer 2.4
and 2.5.

2.12 Case Study


Airport Taxi Service
A transport company situated in New Delhi finds great demand for transport
services from the airport. Though there is taxi service from the airport, there
is yet heavy demand for more transport. Hence, the company is considering
the purchase of new vehicles for transportation between Delhi airport and
hotels in the city. After studying the different types of vehicles available,
there were three vehicles under consideration – station wagons, mini buses,
and large buses. The purchase price would be Rs. 2,45,000 for each station
wagon, Rs. 3,50,000 for a mini bus, and Rs. 5,00,000 for a large bus. The
Board of Directors have authorised a maximum amount of Rs. 50,00,000 for
these purchases. Because of the heavy air travel involved, the new vehicles
would be utilised at maximum capacity, regardless of the type of vehicles

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purchased. The expected net annual profit would be Rs. 15,000 for the
station wagon, Rs. 35,000 for the mini bus, and Rs. 45,000 for the large bus.
The company has hired 30 new drivers for the new vehicles. They are
qualified drivers for all the three types of vehicles.
The maintenance department has the capacity to handle an additional 80
station wagons. A mini bus is equivalent to 5/3 station wagons and each
large bus is equivalent to two station wagons in terms of their use of the
maintenance department.
Discussion Questions:
1. Formulate a linear programming model, which would help to determine
the optimum number of each type of vehicle to be purchased in order to
maximise profit.
[Hint: x1= no. of station wagons to purchase, x2= no. of minibus to
purchase & x3= no. of large buses to purchase].

References :

 Kapoor V. K. (2005). Operations Research. Sultan Chand and Sons.


 Sharma J. K. (2006). Operations Research. Macmillan India Limited.
 Taha H. Operations Research. Prentice Hall.
 Kanti Swarup & Gupta P. K., & Hira D. S., & Manmohan (2004). Operation
Research. Sultan Chand and Sons.
E-References:
 Linear Optimization.
http://www.mirrorservice.org/sites/home.ubalt.edu/ntsbarsh/Business-
stat/opre/partVIII.htm.

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