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Linear Programming

This document discusses linear programming, which is a mathematical technique for determining the optimal allocation of limited resources. It can be used to maximize profit, revenue or minimize costs subject to constraints. The steps involve defining decision variables, determining the objective function, identifying constraints, graphing the feasible region, finding corner points, and evaluating the objective function at each corner point to find the optimal solution. Two examples are provided to illustrate how to formulate and solve a linear programming problem to determine the optimal product mix that maximizes profits.

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nikko.emping.20
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23 views19 pages

Linear Programming

This document discusses linear programming, which is a mathematical technique for determining the optimal allocation of limited resources. It can be used to maximize profit, revenue or minimize costs subject to constraints. The steps involve defining decision variables, determining the objective function, identifying constraints, graphing the feasible region, finding corner points, and evaluating the objective function at each corner point to find the optimal solution. Two examples are provided to illustrate how to formulate and solve a linear programming problem to determine the optimal product mix that maximizes profits.

Uploaded by

nikko.emping.20
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

LINEAR

PROGRAMMING
LINEAR
Y
PROGRAMMING

It is a mathematical technique
that permits the determination
of the best or optimum use of
available resources. Methods
may be graphical or Algebraic
approach

X
LINEAR
PROGRAMMING

This is used to maximize revenue,


contribution margin or profit function,
or to maximize a cost function subject
to constraints.
Specific applications
◦ Determination of the product mix to
maximize contribution margin.
◦ Selection of an investment mix.
◦ Determination of materials mix to minimize
costs.
◦ Assignment of jobs to machines.
STEPS OF FORMULATING LINEAR
PROGRAMMING
1. Define the decision variables.
Y 2. Determine the objective
function/quantity.
3. Identify the decision
variables/constraints.
4. Graph the inequalities.
5. Find all corners of feasible
region.
6. Test all the corners points of the
X
objective function.
Lakers Inc. manufactures 2 products, copper and
diamond. The products require 2 processes, pounding
and stirring. The contribution margin is P6 for copper and
P8 for diamond. The number of hours required to
process the 2 products are as follows:
Process/Product Copper Diamond
Pounding 10 20
Stirring 10 10

The number of hours available during the period are 400


hours for pounding and 300 hours for stirring. How many
products you have to make to maximize the profit?
Step 1. Define variables
Let x = No. of product copper to make
y = No. of product diamond to make

Step 2. Determine the objective function

Let z = 6x + 8y

Step 3. Identify decision variables or constraints

Pounding: 10x + 20y ≤ 400


Stirring: 10x + 10y ≤ 300

Step 4. Graph the inequalities


Pounding:
10x + 20y = 400 10x + 20y = 400
10x + 20(0) = 400 10(0) + 20y = 400
10x = 400 20y = 400
10 20
x = 40 y= 20

Stirring:
10x + 10y = 300 10x + 10y = 300
10x +10(0) = 300 10(0) + 10y = 300
10x = 300 10y = 300
10 10
x = 30 y= 30
Stirring

x y
Pounding 40 20
Stirring 30 30

Pounding
Step 5. Find the corners in the feasible region

Corner A

Corner B

B Corner C

A
Step 6. Test all corners point based on the
objective function: 6x + 8y
Based on the fore-
Corner X Y Z going computations,
Point Lakers Inc. must
manufacture 20 units
A 30 0 P180 of product copper
B 0 20 P160 and 10 units of
product diamond
C 20 10 P200 inorder to maximize
the profits.
Other example . . .
Gilas Company makes 2 types of computers,
namely: Asus and Acer. The company can
make a total 80 computer units per day and it
has 240 work hours available per day.

Historically, it takes 2 work hours to make Asus


and 6 work hours to make Acer. The profit on
Asus is P8,000 per unit while the profit on Acer is
P12,000 per unit.

How much of each computers should be made


to maximize profits?
Step 1. Define variables
Let x = No. of Asus (in units) to make
y = No. of Acer (in units) to make

Step 2. Determine the objective function

Let z = 8,000x + 12,000y

Step 3. Identify decision variables or constraints

Work hours available per day: 2x + 6y ≤ 240


Capacity per day : x + y ≤ 80

Step 4&5. Graph the inequalities and identify the corners within
the feasible region
Worked Hours/Day:
2x + 6y = 240 2x + 6y = 240
2x + 6(0) = 240 2(0) + 6y= 240
2x = 240 6y = 240
2 6
x = 120 y= 40

Capacity/Day:
x + y = 80 x + y = 80
x +1(0)= 80 1(0)+ y = 80
x = 80 y = 80
Acer (Y)

X Y
Corner A 0 40
Corner B 80 0
Capacity Corner C 60 20

C Hours
Feasible Available
region

B Asus (X)
Step 6. Test all corners point based on the
objective function: 8,000x + 12,000y

Based on the fore-


Corner Point X Y Z going computations,
Gilas Company must
A 0 40 P480,000 produce 60 units of
B 80 0 P640,000 Asus and 20 units of
Acer in order to
C 60 20 P720,000 maximize the profits.
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