ADVANCED APPAREL MANUFACTURING MANAGEMENT

APPLICATION OF LINEAR PROGRAMMING

(SIMPLEX METHOD) IN KRAFTWORK COMPANY
FOR MANUFACTURING AN OPTIMAL PRODUCT MIX

Chikoti Vakya Priya | Yogesh | Diya Mohan. K

 INTRODUCTION

• The objective of this paper has been to maximise production of units produced
per day by Kraftwork company.
• For this paper primary data was collected. Simplex method of Linear
Programming Method (LPP) has been used to find out the optimal production.
• They took 4 random products - skirts, tops, dresses and pants. MS Excel Solver
was used to obtain an optimal solution and a sensitivity report was generated.
 COMPONENTS OF THE MODEL
FOLLOWED

1. Identifying the key inputs.

2. Defining objective function.
3. Defining constraints mathematically.
4. Non-negative condition.
5. Using excel solver add in to solve the model.
• Step 1: Identifying the key inputs and constraints
• The raw materials used are as follows:
1) Labour Hours: The number of labour hours available per day.
2) Machine Hours: The number of machine hours available per day.
3) The number of skirts shipped is 200.
4) The number of tops shipped is 500.
5) The number of dresses shipped is 200.
6) The number of pants shipped is 100.
• Step 2: Defining Objective function
• The function for Maximizing Profit is:

165x1 + 94.875x2 + 156.75x3 + 140.25x4

• Where, x1= the number of Skirts produced

x2= the number of Tops produced
x3= the number of Dresses produced
x4 = the number of Pants produced
• Step 3: Defining the constraints mathematically

Labour Hours 1.125𝑥1 + 1.125𝑥2 + 1.125𝑥3 + 1.125𝑥4

Machine Hours 180𝑥1 + 450𝑥2 + 180𝑥3 + 90𝑥4

Skirts 200

Tops 500

Dresses 200

Pants 100
• Step 4: Non-negative condition:
Given the fact that garments manufactured cannot be negative, 𝑥1, 𝑥2, 𝑥3, 𝑥4 >= 0

• Step 5: Using Excel solver to compute the optimal solution

Data -
1. For the calculation of profit an average value of 16.5% on selling price has used for every product. The
average selling prices of the products are:

Product Selling Price

Skirts ₹1000
Tops ₹575
Dresses ₹950
Pants ₹850

2. There are 50 machines which run 18 hours per day.

3. On an average the labours work 9 hours a day. There are 100 labours.
• The following is the solution obtained after running the simplex method of LPP:
• The following is the sensitivity report generated through MS Excel.

• The final values in the Variable cells table are the values indicating the number of units of the 4 products taken into
consideration to be manufactured.
• The Objective Coefficient in the variable cells table shows the profit earned for every 1 unit of a product manufactured.
• The reduced cost column shows the value which indicates how much the profit (in this case) would increase if 1 additional
unit of that product was produced. In this case all reduced cost values are 0, which indicates that any further manufacturing of
the given 4 products will not lead to any rise in the value of the objective function.
• the allowable increase/decrease displays the value which indicates that if everything else remains constant, the value of the
Objective Coefficient can be increased/decreased by the displayed value in the respective column for the final value to remain
the same (hence optimal profit would remain the same with increase/decrease in the objective coefficients by these limits).
• The final values in the constraints table indicate the amount of labour and machine hours used, and
the number of units of the 4 products produced.
• The shadow price column in the constraints table displays values for these binding constraints. For
example, the shadow price for machine hours is ₹23.71875. This means that if the company puts
in 1 extra machine hour (901 hours total), the profit in the objective function would increase by
₹23.71875. For 2 extra hours it would increase by ₹47.4375 and so on. In case of a skirt, if the
demand of the skirt is increased by 1 unit, the value of the objective function would increase by
₹127.05. The same applies to the shadow prices of dresses and pants.
• The constraint R.H. Side in this case shows the maximum number of labour and machine hours available and the demand to be
met. Moreover, the difference between the constraint and the final value will be the slack variable. For example, the slack variable
for Tops Demand would be: 500-45 = 455
• The binding constraints are the following (where Final value = Constraint) - Machine hours, Demand for Skirts, Demand for
Dresses, Demand for Pants.

• The allowable increase column displays a value, which means that the shadow prices generated would be valid only till the
respective constraint value is increased till that value. If the constraint value is increased beyond the allowable limit, the
calculation will need to be done again to obtain the new shadow prices. Allowable decrease, on the other hand, means that if the
constraint value is decreased beyond the allowable limit, the calculation will need to be done again to obtain the new shadow
prices.

• For example, the machine hours can only be increased by 1020 hours or decreased by 180 hours, if the shadow prices displayed in
the above report are to remain valid. If either of these limits are exceeded, the calculation will have to be done again.
 ANALYSIS

• According to the solution obtained by running the simplex method of LPP, it was found that in a day, Kraftwork
should be able to fulfil the demand for skirts, dresses and pants in a day. However, since the machine hours are not
enough, they would be able to produce only 45 tops.
• The optimum number of products to be manufactured in one hour is given below:

• The optimum production/hour column can be used to define production targets per hour. However, it might not be
practically feasible to simultaneously manufacture 4 products to achieve the optimal solution. A way to get around
this problem would be to manufacture one product at a time and achieve the optimum solution for that product
before moving on to the next product in a fixed time duration, calculated according to the labour and machine hour
requirements for each product.
• Ideally the demand for Skirts should be fulfilled first followed by demand for Dresses, Pants and finally Tops as the
profit per unit of Skirts is maximum in the objective function which is followed by Dresses, Pants and Tops.
• Given that there are 900 labour hours per day and there are 18 working hours per day,
Number of labour hours per hour = 900 labour hours
18 working hours /day
= 50 labour hours per working hour
So,
Units that can be manufactured in 1 hour = Labour hours per working hour
Labour hours needed per Product

Therefore,
Number of hours to meet demand of the product = Optimum units per day
units that can be manufactured in 1 hour
• The following table shows the calculation of all formulas used –

• The last column in the table indicates the maximum amount of time that can be allotted to
manufacture the optimum quantity of a product.
• For example, the manufacture of 200 skirts should take a maximum of 4.5 hours after which
the production of dresses should begin immediately.
• If the time restriction is not adhered to, the maximum profit for the day will not be achieved.
 CONCLUSION

• They found out that for 4 randomly chosen products to achieve maximum profit - 200 units of
skirts, 45 units of tops, 200 units of dresses and 100 units of pants should be produced per day.
• The targets can also be set by taking into consideration the maximum amount of time to
produce a given quantity of each product. For instance, the manufacture of 200 skirts should
take a maximum of 4.5 hours after which the production of dresses should begin immediately.
• There is no time gap between end of production process of the first product and the beginning
of the production process of the second product. The labour works without a break.
• In a real-world scenario, however, the maximum profit must be reduced somewhat in order to
account for the breaks in labour and the time gaps between two production processes.