University of Tirana

Faculty of Economy
Department of Statistics and Applied Informatics

MATHEMATICS 1
COURSE WORK
Theme 8: Application of linear systems: production problem, Investment
problem, or agriculture problem. (Underdetermined and Overdetermined Systems)

Prepared by: Desada Lleshanaku Group: English

 Introduction

Economics is the branch of knowledge

concerned with the production,
consumption, and transfer of wealth. Many
economic relationships can be approximated
by linear equations and others can be
converted to linear relationships. So, the
analysis of many economic models reduces
to the study of systems of linear equations.
Matrices can be used for many applications,
including combining data, finding areas, and
solving systems.

The problem_Overdetermined system

Skincare factory has to produce 600 acne creams,400 hand creams,320 sun protection sprays,50
anti-aging creams,200 moisturizers,150 cleansers in a month. The company has two factories:
one in Michigan, and one in Paris: each factory is open for a maximum of 20 days per month.
The Michigan factory makes 40 acne creams, 30 hand creams ,25 sun protection spray,5 anti-
aging creams,12 moisteryers,8 cleansers per day.
The Paris factory makes 25 acne creams, 25 hand creams ,18 sun protection spray,2 anti-aging
creams,15 moisteryers,10 cleansers per day.
The cost to run the Michigan factory per day is $5,600; the cost to run the Paris factory per day is
$3,200.
How many days of the month should each factory run in order to meet the company production
objective?
 Problem formulation:
We are dealing with a production problem.
First, we construct the following table to help us visualize the combinations between the
products both factories produce.
X y Numbers of products
(days/month products (days/month products made per month
made in Michigan) made in Paris)
Acne creams 40 25 1000
Hand creams 30 25 600
Sun protection 25 18 450
Anti-aging 5 2 100
Moisturizer 12 15 600
Cleansers 8 10 400

Variables: Let’s look at what the problem is asking: how many days of the year should each
factory run? Let’s let x= the number days per year that the Michigan factory should run, and y=
the number days per year that the Paris factory should run.
We create the corresponding equations involving these variables and results:

40𝑥 + 25𝑦 = 1000

30𝑥 + 25𝑦 = 600
25𝑥 + 18𝑦 = 450
5𝑥 + 2𝑦 = 100
12𝑥 + 15𝑦 = 600
{ 8𝑥 + 10𝑦 = 400
As we can see, there are more equations than variables, so our system of linear equations is
overdetermined. We know that in this case, the system can have infinitely many or no solution at
all (when the system is inconsistent).
The left side of each of the equations contains the coefficients multiplying the respective
variables, which show the amount of produced products from both factories. Whereas, the right
side shows the total amount of products for a month time.
What the computation looks like in R:
 Interpretation of the solution:
After doing the computations using the program R, we get the following equations:
𝑥 + 0𝑦 = 0
0𝑥 + 1𝑦 = 0
0𝑥 + 0𝑦 = 1
0𝑥 + 0𝑦 = 0
0𝑥 + 0𝑦 = 0
{ 0𝑥 + 0𝑦 = 0

We noticed that our 3rd equation has an equation “0 = 1” displayed, which signals us about an
inconsistent system. We can now conclude that the system has no solution, meaning that we can
not give a specific answer to how many days of the month should each factory run in order to
meet the company production objective.

The problem_Underdetermined system

A student decides to divide a total of $16000 into five investments: a saving account paying 8%
interest, a time deposit paying 4% ,money market 7%,a mutual fund 10% and a bond paying
11%. Her total annual interest from the five investments was $2300, and the interest from the
savings account was $200 less than the total interest from the other investments. How much did
she invest at each rate?

Problem formulation:
We are dealing with an investment problem.
Let’s first define the variables.
Investment 1 ➜ Saving account= x1
Investment ➜Time deposit= x2
Investment 3 ➜Money market= x3
Investment 4 ➜Mutual fund= x4
Investment 5 ➜Bond deposit= x5
Determine the three equations that model the parameters of the investment.
Equation 1-Represents how the student’s total investment (in dollar) is the sum of five smaller
investments (in dollar).
x1+x2+x3+x4+x5=16000
Equation 2-Represents the total money the student has made on her investment as a sum of
money she has made on each individual investment.
0.08x1+0,04x2+0.07x3+0.1x4+0.11x5=2300
Equation 3-Represents the relationship between the saving account relative to the other two
investment.
0,08x1=0,04x2+0.07x3+0.1x4+0.11x5-200

𝑥1 + 𝑥2 + 𝑥3 + 𝑥4 + 𝑥5 = 16000
{0.08𝑥1 + 0,04𝑥2 + 0.07𝑥3 + 0.1𝑥4 + 0.11𝑥5 = 2300
−0.08𝑥 + 0,04𝑥2 + 0.07𝑥3 + 0.1𝑥4 + 0.11𝑥5 = 200

As we can see, there are more variables than equations, so our system of linear equations is
underdetermined. We know that in this case, the system can have infinitely many or no solution
at all (when the system is inconsistent).
The left side of each of the equations contains the coefficients multiplying the respective
variables, which show the amount of money she gets from the interests at each rate. Whereas, the
right side shows the total amount of money invested, her total annual interest, and the relation
between the interest from the savings account and other accounts.
What the computation looks like in R:
 Interpretation of the solution:

After doing the computations using the program R, we get the following equations:
𝑥1 + 0𝑥2 + 0𝑥3 + 0𝑥4 + 0𝑥5 = 13125
{0𝑥1 + 1𝑥2 + 0𝑥3 − 𝑥4 − 1.3𝑥5 = −34958.33
0𝑥 + 0𝑥2 + 𝑥3 + 2𝑥4 + 2.3𝑥5 = 37833.33

𝑥1 = 131250
𝑥2 = −34958.33 + 𝑥4 + 1.3𝑥5
𝑥3 = 37833.33 − 2𝑥4 − 2.3𝑥5
𝑥4 𝑖𝑠 𝑎 𝑓𝑟𝑒𝑒 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒
{ 𝑥5 𝑖𝑠 𝑎 𝑓𝑟𝑒𝑒 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒

We can identify our basic variables, which are x1, x2, and x3; the free variables are x4 and x5.
There is no equation such as 0=1 that would indicate an inconsistent system, so we could use
back-substitution to find a solution. Also, the solution is not unique because there are free
variables. Each different choice of x4 and x5 determines a different solution. Thus the system
has infinitely many solutions. The problem asked about how much did the student invest at each
rate, so we can give an infinitely number of combinations that would satisfy our equations.

Literature:

[1] Introduction to Linear Programming, Linear Programming Word Problems, Problem 2

https://www.shelovesmath.com/algebra/advanced-algebra/linear-
programming/#LinearProgrammingWordProblems

[2] Solving systems using matrices Lesson1.5 Page 2-3

http://mrharrishonorsalgebra2dhs.weebly.com/uploads/4/5/2/7/45271349/lesson_1.5_answer_key.pdf

[3]

https://jaredantrobus.com/teaching/2015/Summer/MA162/2.3.php