Meaning of Liner 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 the common
resources. The managements 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 managements 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). Eg.
Development of a production schedule





Requirements of LPP
The common requirements of LPP are as follows.
relationship
-defined objective function

-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 nonnegative
values including fractions.

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,
Operations Research Unit 2
Sikkim Manipal University Page No. 33
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.

Advantages of LPP
The advantages of linear programming techniques may be outlined as
follows:

productive resources. It also indicates how decision makers can employ
productive factors most effectively by choosing and allocating these
resources.

techniques. The user of this technique becomes more objective and less
subjective.

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.

significant advantage of this technique. For example, when bottlenecks
occur, some machines cannot meet the demand while others remain idle
for some time.
Limitations of LPP
In spite of wide area of applications, some limitations are associated with
linear programming techniques. These are stated below:

Generally, in real life situations concerning business and industrial
problems, constraints are not linearly treated as variables
re 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.

of time and uncertainty. Thus the model should be defined in such a way
that any change due to internal as well as external factors can be
incorporated.
imes, 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.
ers appearing in the model are assumed to be constant. But, in
real life situations they are neither constant nor deterministic.

situations, problems come across with multi-objectives. Goal
programming and multi-objective programming deal with such problems.


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.







Unit Sale Price and Hours Required for Each Unit



Unit sale
price


Hours required for each unit


Assembly


Painting


Testing


Model A Rs.
50.00

Model B Rs.
80.00


1.0

1.5


0.2

0.2


0.0

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.



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)
x10, x20, (the non-negativity constraints)