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Advanced Mathematics For Business: Topic 11: Linear Programming With Solver Routines
Advanced Mathematics For Business: Topic 11: Linear Programming With Solver Routines
Business
Topic 11:
Linear Programming with Solver Routines
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Learning Outcomes
By the end of this topic students will be able to:
Formulate an LP for solution with a Solver
Interpret LP output
- Binding & Non-binding constraints
- Allowed increases and decreases
- Shadow price
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Constraints
-
non-negativity constraints
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B 250
200
150
100
50
0
A
0
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50
100
150
200
250
300 350
400
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Material B (m2)
150
3,750
50
150
6,250
90
130
7,750
90
4,500
3-variables
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n-variables?
Formulate clearly
- Objective and constraints as rows
- Variable as columns
- Group like constraints
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50 A + 25 B
Process 1:
0.4 A + 0.7 B
140
Process 2:
0.2 A + 0.4 B
70
Demand A:
Demand B:
Non-negativity:
Non-negativity:
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90
B
150
0
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Sensitivity Report
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Integer Constraints - 1
5
4
3
2
1
0
0
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Integer Constraints - 2
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Recap
By the end of this topic students will be able to:
Formulate an LP for solution with a Solver
Interpret LP output
- Binding & Non-binding constraints
- Allowed increases and decreases
- Shadow price
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Bibliography
Hillier, F. and Lieberman. G. Introduction to
Operations Research. McGraw Hill
Keast, S. and Towler M. Rational Decision-Making
for Managers. Wiley.
Wisniewski, M. Quantitative Methods for Decision
Makers. FT Prentice Hall.
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