Chapter 2: An Introduction to

Linear Programming
Jonie Jumamil
Chapter Outline
Learning Objectives
• Formulate a linear programme
• Solve a two variable linear programming
problem
• Interpret the computer solution to a linear
programming problem
 Linear Programming
• One of the first types of mathematical models
developed for management science.
• A management science technique used in
many countries and by many different types of
organization – manufacturing companies,
service organizations, government agencies,
not-for-profit organizations.
Examples of Application
• A manufacturer of mobile phones is looking at the production
schedule for the next few months and trying to decide how many of
each phone model to manufacture in order to meet demand
forecasts for different sales regions. Clearly, the production
schedule will need to ensure that enough phones are produced to
meet projected demand in each sales region but at the same time
minimize production costs.
• A financial analyst must select an investment portfolio for a high-
value client from a variety of investment alternatives. The analyst
would like to establish the portfolio that maximizes the return on
investment. At the same time, though, the analyst also has to
satisfy certain client requirements in terms of the mix of
investments and the risk associated with each.
Steps:
• problem formulation / modelling where we
produce a mathematical statement of the LP
problem.
• problem solution, where we find the answer
to the decision problem we are looking
• interpretation, where we consider what the
company should do.
2.1 Maximization Problem
• GulfGolf is a small family-run company in the United Arab Emirates. It
manufactures golfing equipment aimed at the increasing demand,
primarily from tourists coming for golfing holidays in the Gulf region. The
company has decided to manufacture two new products: a medium-priced
golf bag and a more up-market, expensive golf bag. The company’s
products are priced in US$ given its international customer base. The
company’s distributor is enthusiastic about the new product line and has
agreed to buy all the golf bags the company produces over the next three
months.
• After a thorough investigation of the steps involved in manufacturing a
golf bag, management determined that each golf bag produced will
require the following four operations:
– 1 Cutting and dyeing the material needed.
– 2 Sewing.
– 3 Finishing (inserting umbrella holder, club separators, etc.).
– 4 Inspection and packaging.
2.1 Maximization Problem
• Production is constrained by the limited number of
hours available in each department. After studying
departmental workload projections, the director of
manufacturing estimates that 630 hours for cutting and
dyeing, 600 hours for sewing, 708 hours for finishing
and 135 hours for inspection and packaging will be
available for the production of golf bags during the
next three months.
• The accounting department analyzed the production
data, assigned all relevant variable costs and arrived at
prices for both bags that will result in a profit
contribution 1 of $10 for every standard bag and $9 for
every deluxe bag produced.
Step 1: Problem Formulation
• Objective in Terms of the Decision Variables
Total Profit Contribution = 10S + 9D
Max 10S + 9D
 Mathematical Equation for GulfGolf
• Max 10S + 9D
• subject to (s.t.)
• 7/10S + 1D ≤ 630 Cutting and dyeing
• 1/2S + 5/6D ≤ 600 Sewing
• 1S + 2/3D ≤ 708 Finishing
• 7/10S + 1/4D ≤ 135 Inspection & packaging
• SD≥0
 Mathematical Equation for GulfGolf
• Max 10S + 9D
• subject to (s.t.)
• 0.7S + 1D ≤ 630 Cutting and dyeing
• 0.5S + 0.8333D ≤ 600 Sewing
• 1S + 0.6667D ≤ 708 Finishing
• 0.1S + 0.25D ≤ 135 Inspection & packaging
• SD≥0
2.2 Graphical Solution Procedure
• Cutting and Dyeing Constraint
• 0.7S + 1D ≤ 630
• 0.7S + 1D = 630

– Find the two points for this linear equation:

» POINT 1 = (0, 630).
» POINT 2 = (900, 0).
 Assignment:
• Find the values of the points of the remaining
processes:
• 0.5S + 0.8333D ≤ 600 Sewing
• 1S + 0.6667D ≤ 708 Finishing
• 0.1S + 0.25D ≤ 135 Inspection &
packaging
• A closer inspection of Figures 2.5 and 2.8
shows that the optimal solution point is at the
intersection of the cutting and dyeing and the
finishing constraint lines.
• 0.7S + 1D ≤ 630 Cutting and dyeing
• 1S + 0.6667D ≤ 708 Finishing
The optimal values of S and D must satisfy above
equations simultaneously. Hence,
0.7S = 630 – 1D or S = 900 – 1.4286D
• Substitute the expression of S in solving to D.
1(900 – 1.4286D) + 0.6667D = 708
900 – 1.4286D + 0.6667D = 708
-.7619D = -192
D = 252
Using D = 252, solve for S
S = 900 – 1.4286 (252)
S = 900 – 360 = 540
Hence, our optimal solution point is
S = 540 and D = 252.
 Maximum Profit: Solution
Profit = 10S + 9D
P = 10(540) + 9(252)
P = 5400 + 2268
P = 7668