Lecture # 2

Formulation Examples,
Graphical method ,
Exceptional cases of Graphical method
LP - problem of maximizing or minimizing a
linear function subject to linear
The constraints may be equalities or
constraints.
inequalities - maximizingprofit or
minimizing costs in business.

Developed by George B. Denting in 1947

Linear Programming is the analysis of problems in
which a Linear function of a number of variables is
to be optimized (maximized or minimized) when
whose variables are subject to a number of
constraints in the mathematical near inequalities.

From the above definitions, it is clear that:

(i) LP - is an optimization technique, where the

underlying objective is either to maximize the
profits or to minim is the Cost

(ii) It deals with the problemof allocation of

finite limited resources amongst different
competiting activities in the most optimal
manner.
(iil) It generates solutions based on the feature
and characteristics of the actual problem or
situation. Hence the scope of linear programming
is very wide as it finds application in such diverse
fields as marketing, production, finance &
personnel etc.

(iv) Linear Programming has been highly

successful in solving the following types of
problems :

(a) Product-mix problems

(b) Investment planning problems
(c) Blending strategy formulations and
(d) Marketing & Distribution management.
(v) Even though LP has wide & diverse’
applications, yet all LP problems have the
following properties in common:

(a)The objective is always thesame (i.e.; profit

maximization or cost minimization).

(b) Presence of constraints which limit the extent to

which the objective can be pursued/achieved.

(c) Availability of alternatives i.e.; different courses of

action to choose from, and

(d) The objectives and constraints can be expressed

in the form of linear relation.

(VI) Regardless of the size or complexity, all LP

problems take the same form
 Decision variables- mathematical symbols representing
levels of activity of an operation
• Objective function :
– a linear relationship reflecting the objective of business
decisions
– most frequent objective of business firms is to maximize
profit
– most frequent objective of individual operational units (such
as a production or packaging department) is to minimize
cost
Constraints:
– a linear relationship representing a restriction on decision
making
Parameters - numerical coefficients and constants used in
Let: X1, X2, X3, ………, Xn = decision variables
Z = Objective function or linear function

Requirement: Maximization of the linear function Z.

Z = c1X1 + c2X2 + c3X3 + ………+ cnXn …..Eq (1)
subject to the following constraints:

where aij, bi, and cj are given co

Simplicity and easy way of understanding.

Linear programming makes use of available

resources

To solve many diverse combination problems

LP - adaptive and more flexibility to analyze

the problems.

The better quality of decision is provided

LP - works only with the variables
that are linear.

Non linear function cannot be solved

over here.

Impossibility of solving some problem

which has than two variables in
more graphical
method.
Military Applications - selecting an air weapon system against
the enemy

Agriculture. - farm economics and farm management. – allocating

scarce resources

Environmental Protection - handling wastes and hazardous

materials

Facilities Location - location nonpublic health care facilities

Product-Mix. - the existence of various products that the

company can produce and sell.

Production. - will maximize output and minimize the costs.

Mixing or Blending. - determine the minimum cost blend or mix

Transportation & Trans-Shipment - the best possible channels of

distribution available to an organisation for its finished product sat
minimum total cost of transportation or shipping from company's
godown
Portfolio Selection - Selection of desired and specific
investments out of a large number of investment'
options

Profit Planning & Contract - to maximize the profit

margin

Traveling Salesmen Problem - problem of a

salesman to find the shortest route originating from
a particular city

Staffing - allocating the optimum employees

Job Analysis - evaluation of jobs in an organisation –

matching right job

Wages and Salary Administration-

Determination of equitable salaries and various
incentives and perks
Graphing an LP model helps provide insight
into LP models and their solutions.

While this can only be done in two

dimensions, the same properties apply to all
LP models and solutions.
FeasibleRegion: The set of points
that satisfies all constraints

Corner Point Property: Anoptimal

solution must lie at one or more corner
points

Optimal Solution: The corner point with the

best objective function value is optimal
Example of Maximization :
Example of Minimization :
Find out the Optimal solution:

• 1) ISO profit or ISO cost method (Objective function line )

• 2) extreme corner points