Lecture Day 2

Mathematical Assumptions and Limitations

of Linear Programming
Solving Linear Programming Problems
Using the Graphical Method

Production/Distribution Example
Two production plants located in different parts of the
country must produce and distribute a product to three regional
warehouses. The three warehouses have demands of 500, 2,000,
and 900 units, respectively. The cost of shipping, based primarily
on distance, is shown in the following table:

From Plant
1
2

To Warehouse
1
2
3
P0.30
P0.90
P0.80
P0.70

P0.20

P0.40

The labor and power costs are less at plant 1 where

each unit is produced at a cost of P1.50. Each unit at plant 2
is produced at a cost of P2.00.
The objective in this problem is to meet all demand and
minimize the combined cost of production and distribution.
The decision to be made concerns how much should be shipped
from each plant to each warehouse.

Let: Xij = number of products to

be distributed from
plant i to warehouse j
where: i = 1, 2
j = 1, 2, 3
Min. Z = (0.3 + 1.5)X11 +
(0.9 + 1.5)X12 +
(0.8 + 1.5)X13 +
(0.7 + 2)X21 +
(0.2 + 2)X22 +
(0.4 + 2)X23
Subject to:

X11 + X21 = 500

X12 + X22 = 2,000
X13 + X23 =
Xij > 0

900

Constrained Break-Even Analysis

The Braden Co. has decided to add one new product line
and is considering the addition of two other products. Part of their
decision process is to perform a standard break-even analysis
to
determine what volume of sales is needed for revenue to equal
total fixed and variable costs.
One of the firms accountants has determined the break-even
point for product X to be 1,000 units. Meanwhile, the selling
prices and production costs for each product line are as follows:
Product
X
Y
Z

Selling Price
per unit
P20
25
15

Variable Cost
per unit
P10
12
8

Fixed Cost
P10,000
10,000
10,000

Braden currently has contracted to provide 750 units of

product X. The same customer has also requested 400 units of Z
if the product is produced. Braden management is reluctant to
produce over 300 units of product Y initially, as the market for this
product is unproven.

Let: X1 = number of product X

X2 = number of product Y
X3 = number of product Z

Min. Z = 10X1 + 12X2 + 8X3

+ 30,000
Subject to:
X1 > 750
X3 > 400
X2 < 300

20X1 + 25X2 + 15X3 = 10X1 + 12X2 + 8X3 + 30,000

10X1 + 13X2 + 7X3 = 30,000
X2 > 0

Mathematical Assumptions
and Limitations
of Linear Programming

It is tacitly assumed that there is a single goal we

can represent by a linear objective function and
that all restrictions are linear in nature.

Given these prior conditions, any LP model has two

basic properties: certainty and linearity.
Certainty requires that all parameters of the
model be known. In the realm of decisionmaking problems, LP falls into the class of
decision-making under certainty.

In other words, the objective function

coefficients, the coefficients of the
constraints, and the right-hand side values
must all be known constants.

It is tacitly assumed that there is a single goal we

can represent by a linear objective function and
that all restrictions are linear in nature.

Given these prior conditions, any LP model has two

basic properties: certainty and linearity.
Linearity denotes the stable relationship
between dependent and independent variables
that are graphically expressed by straight lines.
In a linear expression, the coefficients are
constants, all variables have an exponent of
1, and no variables are multiplied together.
The linearity assumption of LP means that it
is necessary for the objective function and
the left-hand side of every constraint to be a
linear expression.

CERTAINTY
no

yes

Stochastic
Programming

LINEARITY
no

Nonlinear
Programming

yes

SINGLE-GOAL
OBJECTIVE
no

yes

Goal Programming
FRACTIONAL
or MOLP
SOLUTION ALLOWED
no

Integer
Programming

yes

LINEAR
PROGRAMMING

Solving
Linear Programming Problems
Using the Graphical Method

 The graphical method is limited to problems

with no more than three variables, since we
cannot draw graphs in more than three
dimensions.

The graphical method of LP solution simply

involves plotting each of a problems constraints
to form a region of possible solutions. This
region is then examined to select the best
alternative.
Graphs of LP solutions would generally be
confined to the positive quadrant whenever
the non-negativity conditions apply to the
decision variables.

 A simple procedure for graphing the equation

of a line is to locate the intercepts of two variables
in the equation (since any two points determine
a line).

For equations with two variables, the intercept

of one variable is determined by setting the
other variable equal to zero.

Sample Problem
Let : X1 = number of
power amplifiers
X2 = number of
preamplifiers
Max. Z = 200X1 + 500X2

Subject to:
X2 < 40
1.2X1 + 4X2 < 240
0.5X1 + X2 < 81
X1 ,

X2 > 0

Max. Z = 200X1 + 500X2

X2

Subject to:

X1 = 0

150

X2 < 40

X2 = 40

1.2X1 + 4X2 < 240

0.5X1 + X2 < 81

100

X1 ,

X2 > 0

X2 = 40

50

50

100

150

200

X1

1.2X1 + 4X2 = 240

Max. Z = 200X1 + 500X2

Subject to:

if X2 = 0
1.2X1 = 240
1.2
1.2
X1 = 200
if X1 = 0
4X2 = 240
4
4
X2 = 60

X2 < 40
1.2X1 + 4X2 < 240
0.5X1 + X2 < 81
X1 ,

X2 > 0

Max. Z = 200X1 + 500X2

X2

Subject to:

150

X2 < 40
1.2X1 + 4X2 < 240
0.5X1 + X2 < 81

100

X1 ,

X2 > 0

X2 = 40

50
1.2X1 + 4X2 = 240

50

100

150

200

X1

0.5X1 + X2 = 81

Max. Z = 200X1 + 500X2

Subject to:

if X2 = 0
0.5X1 = 81
0.5
0.5
X1 = 162
if X1 = 0
X2 = 81

X2 < 40
1.2X1 + 4X2 < 240
0.5X1 + X2 < 81
X1 ,

X2 > 0

Max. Z = 200X1 + 500X2

Subject to:

X2

X2 < 40

150

1.2X1 + 4X2 < 240

0.5X1 + X2 < 81
X1 ,

100

X2 > 0

0.5X1 + X2 = 81
X2 = 40

50
1.2X1 + 4X2 = 240

50

100

Feasible Region

150

200

X1

An optimal solution is a solution that is not only

feasible, but also achieves the best possible value
for the objective function.

If we are trying to increase profit, an optimal

solution is a feasible solution that maximizes
profit.
Similarly, if we are minimizing, an optimal
solution is a feasible solution that minimizes
cost.

Extreme Point Theorem

X2
150

If an optimal solution to a linear programming

problem exists, then at least one such optimal
solution must be an extreme point solution.

100
0.5X1 + X2 = 81
X2 = 40

50
A

50

100

1.2X1 + 4X2 = 240

150 D 200

X1

X2
150

The importance of the extreme point theorem

is that it restricts our search for an optimal
solution from an infinite number of possibilities
to a finite number of extreme points, no matter
how large the problem is.

100
0.5X1 + X2 = 81
X2 = 40

50
A

50

100

1.2X1 + 4X2 = 240

150 D 200

X1

X2
150

100

Techniques to Determine
Which Extreme Point
Gives the Optimal Solution
1. Use the objective function to single out the
extreme point that is the optimum.
2. Find the coordinates of the extreme points and
compute the profit associated with each
0.5X1 + X2 = 81
X2 = 40

50
A

50

100

1.2X1 + 4X2 = 240

150 D 200

X1

200X1 + 500X2 = 20,000

if X2 = 0
200X1 = 20,000
200
200
X1 = 100
if X1 = 0
500X2 = 20,000
500
500
X2 = 40

Max. Z = 200X1 + 500X2

Subject to:
X2 < 40
1.2X1 + 4X2 < 240
0.5X1 + X2 < 81
X1 ,

X2 > 0

X2
150

100
0.5X1 + X2 = 81
X2 = 40

50
A

50

100

1.2X1 + 4X2 = 240

150 D 200

X1

200X1 + 500X2 = 40,000

if X2 = 0
200X1 = 40,000
200
200
X1 = 200
if X1 = 0
500X2 = 40,000
500
500
X2 = 80

Max. Z = 200X1 + 500X2

Subject to:
X2 < 40
1.2X1 + 4X2 < 240
0.5X1 + X2 < 81
X1 ,

X2 > 0

X2
150

To determine the coordinates of a point,

first identify the lines that intersect at the
point being analyzed.

100
0.5X1 + X2 = 81
X2 = 40

50
A

50

100

1.2X1 + 4X2 = 240

150 D 200

X1

Point C:
0.5X1 + X2 = 81

X2 = 81 0.5X1

1.2X1 + 4X2 = 240

1.2X1 + 4(81 0.5X1) = 240

1.2X1 + 324 - 2X1 = 240

-0.8X1 = -84
-0.8

-0.8

X1 = 105

X2 = 81 0.5X1
= 81 0.5(105)
= 81 52.5

X2 = 28.5

Point C:
(-4)(0.5X1 + X2 = 81)
1.2X1 + 4X2 = 240

X2 = 81 0.5X1
1.2X1 + 4(81 0.5X1) = 240
1.2X1 + 324 - 2X1 = 240

-2X1 - 4X2 = -324

1.2X1 + 4X2 = 240
-0.8X1

-0.8

= -84

-0.8
X1 = 105

-0.8X1 = -84
-0.8

-0.8

X1 = 105

X2 = 81 0.5X1
= 81 0.5(105)
= 81 52.5

X2 = 28.5

Max. Z = 200X1 + 500X2

Subject to:

X2

X2 < 40

150

1.2X1 + 4X2 < 240

0.5X1 + X2 < 81
X1 ,

100

X2 > 0

0.5X1 + X2 = 81
X2 = 40

50
A

50

100

1.2X1 + 4X2 = 240

150 D 200

X1

Point C:
(-4)(0.5X1 + X2 = 81)
1.2X1 + 4X2 = 240

X2 = 81 0.5X1
1.2X1 + 4(81 0.5X1) = 240
1.2X1 + 324 - 2X1 = 240

-2X1 - 4X2 = -324

1.2X1 + 4X2 = 240
-0.8X1

= -84

-0.8

-0.8
X1 = 105

Z = 200X1 + 500X2
= 200(105) + 500(28.5)
= 21,000 + 14,250
Z = 35,250

-0.8X1 = -84
-0.8

-0.8

X1 = 105

X2 = 81 0.5X1
= 81 0.5(105)
= 81 52.5

X2 = 28.5

End of Day 2