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Part I: Linear Programming

Model Formulation and Graphical Solution

• Model Formulation

• A Maximization Model Example

• Graphical Solutions of Linear Programming Models

• A Minimization Model Example

• Irregular Types of Linear Programming Models

• Characteristics of Linear Programming Problems

QP5013 – LINEAR PRORAMMING 1


Linear Programming - An Overview

• Objectives of business firms frequently include maximizing profit or


minimizing costs.

• Linear programming is an analysis technique in which linear algebraic


relationships represent a firm’s decisions given a business objective
and resource constraints.

• Steps in application:
1- Identify problem as solvable by linear programming.
2- Formulate a mathematical model of the unstructured problem.
3- Solve the model.

QP5013 – LINEAR PRORAMMING 2


Model Components and Formulation

• Decision variables: mathematical symbols representing


levels of activity of a firm.
• Objective function: a linear mathematical relationship
describing an objective of the firm, in terms of decision
variables, that is maximized or minimized
• Constraints: restrictions placed on the firm by the
operating environment stated in linear relationships of the
decision variables.
• Parameters: numerical coefficients and constants used in
the objective function and constraint equations.

QP5013 – LINEAR PRORAMMING 3


A Maximization Model Example (1 of 2)

Problem Definition

• Product mix problem - Beaver Creek Pottery Company


• How many bowls and mugs should be produced to
maximize profits given labor and materials constraints?
• Product resource requirements and unit profit:

Resource Requirements
Product Labor Clay Profit
(hr/unit) (lb/unit) ($/unit)
Bowl 1 4 40
Mug 2 3 50

QP5013 – LINEAR PRORAMMING 4


A Maximization Model Example (2 of 2)
Resource availability:
40 hours of labor per day
120 pounds of clay
Decision Variables:
x1=number of bowls to produce/day
x2= number of mugs to produce/day
Objective function
maximize Z = $40x1 + 50x2
where Z= profit per day
Resource Constraints:
1x1 + 2x2  40 hours of labor
4x1 + 3x2  120 pounds of clay
Non-negativity Constraints:
x10; x2  0
Complete Linear Programming Model:
maximize Z=$40x1 + 50x2
subject to
1x1 + 2x2  40
4x2 + 3x2  120
x1, x2  0

QP5013 – LINEAR PRORAMMING 5


Feasible/Infeasible Solutions
• A feasible solution does not violate any of the constraints:
Example x1= 5 bowls
x2= 10 mugs
Z = $40 x1 + 50x2= $700
Labor constraint check:
1(5) + 2(10) = 25 < 40 hours, within constraint
Clay constraint check:
4(5) + 3(10) = 70 < 120 pounds, within constraint

• An infeasible solution violates at least one of the constraints:


Example x1 = 10 bowls
x2 = 20 mugs
Z = $1400
Labor constraint check:
1(10) + 2(20) = 50 > 40 hours, violates constraint

QP5013 – LINEAR PRORAMMING 6


Graphical Solution of Linear Programming Models

• Graphical solution is limited to linear programming models


containing only two decision variables. (Can be used with
three variables but only with great difficulty.)

• Graphical methods provide visualization of how a solution


for a linear programming problem is obtained.

QP5013 – LINEAR PRORAMMING 7


Graphical Solution of a Maximization Model
Coordinate Axes

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Coordinates for graphical analysis

QP5013 – LINEAR PRORAMMING 8


Graphical Solution of a Maximization Model
Labor Constraint

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Graph of the labor constraint line

QP5013 – LINEAR PRORAMMING 9


Graphical Solution of a Maximization Model
Labor Constraint Area

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x 1, x2  0

The labor constraint area

QP5013 – LINEAR PRORAMMING 10


Graphical Solution of a Maximization Model
Clay Constraint Area

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x2 0

The constraint area for clay

QP5013 – LINEAR PRORAMMING 11


Graphical Solution of a Maximization Model
Both Constraints

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Graph of both model Constraints

QP5013 – LINEAR PRORAMMING 12


Graphical Solution of a Maximization Model
Feasible Solution Area

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x2  0

The feasible solution area constraints

QP5013 – LINEAR PRORAMMING 13


Graphical Solution of a Maximization Model
Objective Function = $800

Z= $800 = $40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Objective function line for Z 5 $800

QP5013 – LINEAR PRORAMMING 14


Graphical Solution of a Maximization Model
Alternative Objective Functions

Z=$800, $1200, $1600 = $40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Alternative objective function lines for profits, Z, of $800, $1,200, and $1,600

QP5013 – LINEAR PRORAMMING 15


Graphical Solution of a Maximization Model
Optimal Solution

Z= $800 =$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Identification of optimal solution point

QP5013 – LINEAR PRORAMMING 16


Graphical Solution of a Maximization Model
Optimal Solution Coordinates

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x2  0

Optimal solution coordinates

QP5013 – LINEAR PRORAMMING 17


Graphical Solution of a Maximization Model
Corner Point Solutions

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

Solutions at all corner points

QP5013 – LINEAR PRORAMMING 18


Graphical Solution of a Maximization Model
Optimal Solution for New Objective Function

maximize Z=$40x1 + 50x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x 2  0

The optimal solution with Z 5 70x1 1 20x2

QP5013 – LINEAR PRORAMMING 19


Slack Variables

• Standard form requires that all constraints be in the form of


equations.

• A slack variable is added to a  constraint to convert it to


an equation (=).

• A slack variable represents unused resources.

• A slack variable contributes nothing to the objective


function value.

QP5013 – LINEAR PRORAMMING 20


Complete Linear Programming Model in Standard Form

maximize Z=$40x1 + 50x2 + 0s1 + 0s2


subject to
1x1 + 2x2 + s1 = 40
4x2 + 3x2 + s2 = 120
x1,x2,s1,s2 = 0
where x1 = number of bowls
x2 = number of mugs
s1, s2 are slack variables

Solutions at points A, B, and C with slack

QP5013 – LINEAR PRORAMMING 21


A Minimization Model Example
Problem Definition
• Two brands of fertilizer available - Super-gro, Crop-quick.
• Field requires at least 16 pounds of nitrogen and 24 pounds of phosphate.
• Super-gro costs $6 per bag, Crop-quick $3 per bag.
• Problem : How much of each brand to purchase to minimize total cost of
fertilizer given following data ?

Chemical Contribution

Nitrogen Phosphate
Brand (lb/bag) (lb/bag)

Super-gro 2 4

Crop-quick 4 3

QP5013 – LINEAR PRORAMMING 22


A Minimization Model Example Model Construction

Decision variables
x1 = bags of Super-gro
x2 = bags of Crop-quick
The objective function:
minimize Z = $6x1 + 3x2
where $6x1 = cost of bags of Super-gro
3x2 = cost of bags of Crop-quick
Model constraints:
2x1 + 4x2  16 lb (nitrogen constraint)
4x1 + 3x2  24 lb (phosphate constraint)
x1, x2  0 (nonnegativity constraint)

QP5013 – LINEAR PRORAMMING 23


A Minimization Model Example
Complete Model Formulation and Constraint Graph

Complete model formulation:


minimize Z = $6x1 + 3x2
subject to
2x1 + 4x2  16 lb of nitrogen
4x1 + 3x2  24 lb of phosphate
x1, x 2  0

QP5013 – LINEAR PRORAMMING 24


A Minimization Model Example
Feasible Solution Area

minimize Z = $6x1 + 3x2


subject to
2x1 + 4x2  16 lb of nitrogen
4x1 + 3x2  24 lb of phosphate
x1, x2  0

Feasible solution area

QP5013 – LINEAR PRORAMMING 25


A Minimization Model Example
Optimal Solution Point

minimize Z = $6x1 + 3x2


subject to
2x1 + 4x2  16 lb of nitrogen
4x1 + 3x2  24 lb of phosphate
x1, x2  0

The optimal solution point

QP5013 – LINEAR PRORAMMING 26


A Minimization Model Example
Surplus Variables

• A surplus variable is subtracted from a  constraint to convert it to an


equation (=).

• A surplus variable represents an excess above a constraint requirement


level.

• Surplus variables contribute nothing to the calculated value of the


objective function.

• Subtracting slack variables in the farmer problem constraints:


2x1 + 4x2 - s1 = 16 (nitrogen)
4x1 + 3x2 - s2 = 24 (phosphate)

QP5013 – LINEAR PRORAMMING 27


A Minimization Model Example
Graphical Solutions

minimize Z = $6x1 + 3x2 + 0s1 + 0s2


subject to
2x1 + 4x2 - s1 = 16
4x1 + 3x2 - s2 = 24
x1, x2, s1, s2 = 0

Graph of the fertilizer example

QP5013 – LINEAR PRORAMMING 28


Irregular Types of Linear Programming Problems

• For some linear programming models, the general rules do


not apply.

• Special types of problems include those with:


1. Multiple optimal solutions
2. Infeasible solutions
3. Unbounded solutions

QP5013 – LINEAR PRORAMMING 29


Multiple Optimal Solutions

Objective function is parallel to a


constraint line:

maximize Z=$40x1 + 30x2


subject to
1x1 + 2x2  40 hours of labor
4x2 + 3x2  120 pounds of clay
x1, x2  0
where x1 = number of bowls
x2 = number of mugs

Graph of the Beaver Creek Pottery Company example with multiple optimal solutions

QP5013 – LINEAR PRORAMMING 30


An Infeasible Problem

Every possible solution violates


at least one constraint:

maximize Z = 5x1 + 3x2


subject to
4x1 + 2x2  8
x1  4
x2  6
x1, x2  0

Graph of an infeasible problem

QP5013 – LINEAR PRORAMMING 31


An Unbounded Problem

Value of objective function


increases indefinitely:

maximize Z = 4x1 + 2x2


subject to
x1  4
x2  2
x1, x2  0

An unbounded problem

QP5013 – LINEAR PRORAMMING 32


Characteristics of Linear Programming Problems

• A linear programming problem requires a decision - a choice amongst


alternative courses of action.
• The decision is represented in the model by decision variables.
• The problem encompasses a goal, expressed as an objective function,
that the decision maker wants to achieve.
• Constraints exist that limit the extent of achievement of the objective.
• The objective and constraints must be definable by linear mathematical
functional relationships.

QP5013 – LINEAR PRORAMMING 33


Properties of Linear Programming Models

• Proportionality - The rate of change (slope) of the


objective function and constraint equations is constant.
• Additivity - Terms in the objective function and constraint
equations must be additive.
• Divisability -Decision variables can take on any fractional
value and are therefore continuous as opposed to integer
in nature.
• Certainty - Values of all the model parameters are assumed
to be known with certainty (non-probabilistic).

QP5013 – LINEAR PRORAMMING 34


Example Problem No. 1
Problem Statement

- Hot dog mixture in 1000-pound batches.


- Two ingredients, chicken ($3/lb) and beef ($5/lb),
- Recipe requirements:
at least 500 pounds of chicken
at least 200 pounds of beef.
- Ratio of chicken to beef must be at least 2 to 1.
- Determine optimal mixture of ingredients that will minimize costs.

QP5013 – LINEAR PRORAMMING 35


Example Problem No. 1
Solution

Step 1: Identify decision variables.


x1 = lb of chicken
x2 = lb of beef

Step 2: Formulate the objective function.


minimize Z = $3x1 + 5x2
where Z = cost per 1,000-lb batch
$3x1 = cost of chicken
5x2 = cost of beef

QP5013 – LINEAR PRORAMMING 36


Example Problem No.1
Solution (continued)
Step 3: Establish Model Constraints
x1 + x2 = 1,000 lb
x1  500 lb of chicken
x2  200 lb of beef
x1/x2  2/1 or x1 - 2x2  0
x1,x2  0
The model: minimize Z = $3x1 + 5x2
subject to
x1 + x2 = 1,000 lb
x1  50
x2  200
x1 - 2x2  0
x1,x2  0

QP5013 – LINEAR PRORAMMING 37


Example Problem No.2

Solve the following model graphically:


maximize Z = 4x1 + 5x2
subject to
x1 + 2x2  10
6x1 + 6x2  36
x1  4
x1,x2  0
Step 1: Plot the constraint s as equations:

The constraint equations

QP5013 – LINEAR PRORAMMING 38


Example Problem No.2

maximize Z = 4x1 + 5x2


subject to
x1 + 2x2  1
6x1 + 6x2  36
x1  4
x1,x2  0
Step 2: Determine the feasible
solution area:

The feasible solution space and extreme points

QP5013 – LINEAR PRORAMMING 39


Example Problem No.2

maximize Z = 4x1 + 5x2


subject to
x1 + 2x2  10
6x1 + 6x2  36
x1  4
x1,x2  0
Steps 3 and 4:
Determine the solution points
and optimal solution.

Optimal solution point

QP5013 – LINEAR PRORAMMING 40


Part II: Linear Programming
Modeling Examples

• A Product Mix Example


• A Diet Example
• An Investment Example
• A Marketing Example
• A Transportation Example
• A Blend Example
• A Multiperiod Scheduling Example
• A Data Envelopment Analysis Example
QP5013 – LINEAR PRORAMMING 41
Product Mix Example
Problem Definition

- Four-product T-shirt/sweatshirt manufacturing company.


- Must complete production within 72 hours
- Truck capacity = 1,200 standard sized boxes.
- Standard size box holds12 T-shirts.
- One-dozen sweatshirts box is three times size of standard box.
- $25,000 available for a production run.
- 500 dozen blank T-shirts and sweatshirts in stock.
- How many dozens (boxes) of each type of shirt to produce?

QP5013 – LINEAR PRORAMMING 42


Product Mix Example
Data

Processing Cost Profit


Time (hr) ($) ($)
Per dozen per dozen per dozen

Sweatshirt - F 0.10 36 90

Sweatshirt – 0.25 48 125


B/F

T-shirt - F 0.08 25 45

T-shirt - B/F 0.21 35 65

QP5013 – LINEAR PRORAMMING 43


Product Mix Example
Model Construction
Decision variables:
x1 = sweatshirts, front printing
x2 = sweatshirts, back and front printing
x3 = T-shirts, front printing
x4 = T-shirts, back and front printing
Objective function:
maximize Z = $90x1 + 125x2 + 45x3 + 65x4
Model constraints:
0.10x1 + 0.25x2+ 0.08x3 + 0.21x4  72 hr
3x1 + 3x2 + x3 + x4  1,200 boxes
$36x1 + 48x2 + 25x3 + 35x4  $25,000
x1 + x2  500 dozen sweatshirts
x3 + x4  500 dozen T-shirts

QP5013 – LINEAR PRORAMMING 44


Product Mix Example
Computer Solution with QM for Windows
maximize Z = $90x1 + 125x2 + 45x3 + 65x4
subject to:
0.10x1 + 0.25x2+ 0.08x3 + 0.21x4  72
3x1 + 3x2 + x3 + x4  1,200 boxes
$36x1 + 48x2 + 25x3 + 35x4  $25,000
x1 + x2  500 dozed sweatshirts
x3 + x4  500 dozen T-shirts
x1, x2, x3, x4  0

QP5013 – LINEAR PRORAMMING 45


Product Mix Example
Computer Solution with QM for Windows (continued)
maximize Z = $90x1 + 125x2 + 45x3 + 65x4
subject to:
0.10x1 + 0.25x2+ 0.08x3 + 0.21x4  72
3x1 + 3x2 + x3 + x4  1,200 boxes
$36x1 + 48x2 + 25x3 + 35x4  $25,000
x1 + x2  500 dozed sweatshirts
x3 + x4  500 dozen T-shirts
x1, x2, x3, x4  0

QP5013 – LINEAR PRORAMMING 46


Diet Example
Data and Problem Definition

Breakfast Fat Cholesterol Iron Calcium Protein Fiber Cost


Food Calories (g) (mg) (mg) (mg) (g) (g) ($)
1. Bran cereal (cup) 90 0 0 6 20 3 5 0.18
2. Dry cereal (cup) 110 2 0 4 48 4 2 0.22
3. Oatmeal (cup) 100 2 0 2 12 5 3 0.10
4. Oat bran (cup) 90 2 0 3 8 6 4 0.12
5. Egg 75 5 270 1 30 7 0 0.10
6. Bacon (slice) 35 3 8 0 0 2 0 0.09
7. Orange 65 0 0 1 52 1 1 0.40
8. Milk-2% (cup) 100 4 12 0 250 9 0 0.16
9. Orange juice (cup) 120 0 0 0 3 1 0 0.50
10.Wheat toast (slice) 65 1 0 1 26 3 3 0.07

Breakfast to include at least 420 calaries, 5 milligrams of iron, 400 milligrams of calcium, 20 grams of protein, 12
grams of fiber, and must have no more than 20 grams of fat and 30 milligrams of cholesterol.

QP5013 – LINEAR PRORAMMING 47


Diet Example
Model Construction: Decision Variables

x1 = cups of bran cereal


x2 = cups of dry cereal
x3 = cups of oatmeal
x4 = cups of oat bran
x5 = eggs
x6 = slices of bacon
x7 = oranges
x8 = cups of milk
x9 = cups of orange juice
x10 = slices of wheat toast

QP5013 – LINEAR PRORAMMING 48


Diet Example
Model Summary

minimize Z =0.18x1 + 0.22x2 + 0.10x3 + 0.12x4 + 0.10x5 + 0.09x6+ 0.40x7 + 0.16x8 + 0.50x9
0.07x10
subject to
90x1 + 110x2 + 100x3 + 90x4 + 75x5 + 35x6 + 65x7 + 100x8 + 120x9 + 65x10  420
2x2 + 2x3 + 2x4 + 5x5 + 3x6 + 4x8 + x10  20
270x5 + 8x6 + 12x8  30
6x1 + 4x2 + 2x3 + 3x4+ x5 + x7 + x10  5
20x1 + 48x2 + 12x3 + 8x4+ 30x5 + 52x7 + 250x8 + 3x9 + 26x10  400
3x1 + 4x2 + 5x3 + 6x4 + 7x5 + 2x6 + x7+ 9x8+ x9 + 3x10  20
5x1 + 2x2 + 3x3 + 4x4+ x7 + 3x10  12
xi  0

QP5013 – LINEAR PRORAMMING 49


An Investment Example
Model Summary
maximize Z = $0.085x1 + 0.05x2 + 0.065 x3+ 0.130x4
subject to
x1  14,000
x2 - x1 - x3- x4  0
x2 + x3  21,000
-1.2x1 + x2 + x3 - 1.2 x4  0
x1 + x2 + x3 + x4 = 70,000
x1, x2, x3 , x4  0
where
x1 = amount invested in municipal bonds ($)
x2 = amount invested in certificates of deposit ($)
x3 = amount invested in treasury bills ($)
x4 = amount invested in growth stock fund($)

QP5013 – LINEAR PRORAMMING 50


A Marketing Example
Data and Problem Definition

Exposure Cost
(people/ad or
commercial)
Television 20,000 $15,000
commercial
Radio commercial 12,000 6,000

Newspaper ad 9,000 4,000

- Budget limit $100,000


- Television time for four commercials
- Radio time for 10 commercials
- Newspaper space for 7 ads
- Resources for no more than 15 commercials and/or ads.

QP5013 – LINEAR PRORAMMING 51


Transportation Example
Problem Definition and Data

Warehouse supply of televisions sets: Retail store demand for television sets:
1- Cinncinnati 300 A. - New York 150
2- Atlanta 200 B. - Dallas 250
3- Pittsburgh 200 C. - Detroit 200
total 700 total 600

From To Store
Warehouse
A B C
1 $16 $18 $11
2 14 12 13
3 13 15 17

QP5013 – LINEAR PRORAMMING 52


A Blend Example
Problem Definition and Data
Determine the optimal mix of the three components in each grade of motor oil that will maximize
profit. Company wants to produce at least 3,000 barrels of each grade of motor oil.

Maximum Barrels
Component Cost/barrel
Available/day

1 4,500 $12

2 2,700 10

3 3,500 14

Grade Component Specifications Selling Price ($/bbl)

Super At least 50% of 1 $23


Not more than 30% of 2

Premium At least 40% of 1 20


Not more than 25% of 3

Extra At least 60% of 1 18


At least 10% of 2

QP5013 – LINEAR PRORAMMING 53


A Blend Example
Decision Variables and Model Summary
Decision variables: The quantity of each of the three components used in each grade of
gasoline (9 decision variables); xij = barrels of component i used in motor oil grade j per day,
where i = 1, 2, 3 and j = s (super), p(premium), and e(extra).
Model Summary: maximize Z = 11x1s + 13x2s + 9x3s + 8x1p + 10x2p + 6x3p + 6x1e + 8x2e + 4x3e
subject to
x1s + x1p + x1e  4,500
x2s + x2p + x2e  2,700
x3s + x3p + x3e  3,500
0.50x1s - 0.50x2s - 0.50x3s  0
0.70x2s - 0.30x1s - 0.30x3s  0
0.60x1p - 0.40x2p - 0.40x3p  0
0.75x3p - 0.25x1p - 0.25x2p  0
0.40x1e- 0.60x2e- - 0.60x3e  0
0.90x2e - 0.10x1e - 0.10x3e  0
x1s + x2s + x3s  3,000
x1p+ x2p + x3p  3,000
x1e+ x2e + x3e  3,000
xij  0

QP5013 – LINEAR PRORAMMING 54


A Multiperiod Scheduling Example
Problem Definition and Data
Production capacity : 160 computers per week
Additional 50 computers with overtime
Assembly costs: $190/comp. regular time; $260/comp. overtime
Inventory cost: $10/comp. per week
Order schedule: Week Computer Orders
1 105
2 170
3 230
4 180
5 150
6 250

QP5013 – LINEAR PRORAMMING 55


A Multiperiod Scheduling Example
Decision Variables and Model Summary
Decision variables:
rj = regular production of computers per week j (j = 1, 2, 3, 4, 5, 6)
oj = overtime production of computers per week j (j = 1, 2, 3, 4, 5, 6)
ij = extra computers carried over as inventory in week j (j = 1, 2, 3, 4, 5)

Model summary:
minimize Z = $190(r1 + r2 + r3 + r4 + r5 + r6) + $260(o1 + o2 + o3 + o4 + o5 +o6) + 10(i1, + i2 + i3 + i4 + i5)
subject to rj  160 (j = 1, 2, 3, 4, 5, 6)
oj  150 (j = 1, 2, 3, 4, 5, 6)
r1 + o1 - i1  105
r2 + o2 + i1 - i2  170
r3 + o3 + i2 - i3  230
r4 + o4 + i3 - i4  180
r5 + o5 + i4 - i5  150
r6 + o6 + i5  250
rj, oj, ij  0

QP5013 – LINEAR PRORAMMING 56


A Data Envelopment Analysis (DEA) Example
Problem Definition and Data
DEA compares a number of service units of the same type based on their inputs (resources) and
outputs. The result indicates if a particular unit is less productive, or efficient, than other units.
Elementary school comparison:
input 1 = teacher to student ratio output 1 = average reading SOL score
input 2 = supplementary $/student output 2 = average math SOL score

input 3 = parent education level output 3 = average history SOL score

Inputs Outputs

School 1 2 3 1 2 3

Alton .06 $260 11.3 86 75 71

Beeks .05 320 10.5 82 72 67

Carey .08 340 12.0 81 79 80

Delancey .06 460 13.1 81 73 69

QP5013 – LINEAR PRORAMMING 57


A Data Envelopment Analysis (DEA) Example
Decision Variables and Model Summary
Decision variables:
xi = a price per unit of each output where i = 1, 2, 3
yi = a price per unit of each input where i = 1, 2, 3
Model summary:
maximize Z = 81x1 + 73x2 + 69x3
subject to
.06 y1 + 460y2 + 13.1y3 = 1
86x1 + 75x2 + 71x3 .06y1 + 260y2 + 11.3y3
82x1 + 72x2 + 67x3  .05y1 + 320y2 + 10.5y3
81x1 + 79x2 + 80x3  .08y1 + 340y2 + 12.0y3
81x1 + 73x2 + 69x3  .06y1 + 460y2 + 13.1y3
xi, yi  0

QP5013 – LINEAR PRORAMMING 58


Example Problem Solution
Problem Statement and Data

- Canned catfood, Meow Chow; dogfood, Bow Chow.


- Ingredients/week: 600lb horse meat; 800 lb fish; 1000 lb cereal.
- Recipe requirement: Meow Chow at least half fish; Bow Chow at least
half horse meat.
- 2,250 sixteen-ounce cans available each week.
-Profit /can: Meow Chow $0.80; Bow Chow$0.96.
- How many cans of Bow Chow and Meow Chow should be produced
each week in order to maximize profit?

QP5013 – LINEAR PRORAMMING 59


Example Problem Solution
Model Formulation
Step 1: Define the Decision Variables
xij = ounces of ingredient i in pet food j per week, where i = h (horse meat), f (fish) and
c (cereal), and j = m (Meow chow) and b (Bow Chow).
Step 2: Formulate the Objective Function
maximize Z = $0.05(xhm + xfm + xcm) + 0.06(xhb + xfb + xcb)
Step 3: Formulate the Model Constraints
Amount of each ingredient available each week:
xhm + xhb  9,600 ounces of horse meat
xfm + xfb  12,800 ounces of fish
xcm + xcb  16,000 ounces of cereal additive
Recipe requirements:
Meow Chow xfm/(xhm + xfm + xcm)  1/2, or, - xhm + xfm- xcm  0
Bow Chow xhb/(xhb + xfb + xcb)  1/2, or, xhb- xfb - xcb  0
Can content constraint: xhm + xfm + xcm + xhb + xfb+ xcb  36,000 ounces

QP5013 – LINEAR PRORAMMING 60


Example Problem Solution
Model Summary and Solution with QM for Windows
Step 4: Model Summary
maximize Z = $0.05 xhm + 0.05 xfm + 0.05 xcm + 0.06 xhb + 0.06 xfb + 0.06 x
subject to xhm + xhb  9,600 ounces of horse meat
xfm + xfb  12,800 ounces of fish
xcm + xcb  16,000 ounces of cereal additive
- xhm + xfm- xcm  0
xhb- xfb - xcb  0
xhm + xfm + xcm + xhb + xfb+ xcb  36,000 ounces
xij  0

QP5013 – LINEAR PRORAMMING 61


Additional Exercises
• Chap 2 - No 36 & 38; page 62;
• Chap 3 – No 8, 9, 10, 17, 19; pg 92;
• Chap 4 - 20, 21; pg 146
• Group assignment: Case Problem “Summer
Sports Camp at State University”

Please try these questions & we will discuss it


during our class.
QP5013 – LINEAR PRORAMMING 62