Chapter- 3

Introduction to
Linear Programming
Linear Programming (LP)
It is a mathematical optimization technique which shows how to allocate
scarce resources (financial, human and material resources).
It is an optimization method which shows how to allocate scarce
resources in the best possible way subject to more than one limiting
condition.
Optimization in linear programming implies maximization (max) Profit,
revenue, sales, market share or minimization (min) Cost, time, distance, or
a certain objective function.
 Characteristics of Linear Programming Model (LPM)
 The characteristics of the model can be grouped into two categories:
Components and assumptions.
 The components relate to the structure of a model
 the assumptions describe the conditions under which the model is valid.
Objective Function: it is the mathematical/ quantitative expression of the
objective of the company/ model.
 N.B:- the objective will be either maximization or minimization,
but not both at a time.
 Decision Variable: defines unknown of a problem which are suppose to be
solved. These decision variables may represent:-
 The number of units of different products to be sold.
 The amounts of birr to invest in various projects.
 The number of advertising to place with different media.
 Constraints (Restrictions):are restrictions which define or limit the
attainability (achievability) feasibility of a proposed course of action.
• N.B:-A typical restriction embodies scarce resources (such as labor supply, raw
materials, production capacity, machine time, storage space), legal or
contractual requirements (Product standards, work standards).
 Parameter: are fixed values that specify the impact that one unit of each decision
variable will have on the objective function and on any constraint it pertains.
Assumptions of Linear Programming Model (LPM)
 Linearity: Each decision variables have a linear impact on objective
function.
 Certainty: it refers to parameters that should be remaining constant at
any level.
 Divisibility: the values of decision variable need to be non-integer.
 Non- Negativity: the decision variables need to be non-negative.
Formulation of Linear Programming Models
Steps in formulating Linear Programming Model (LPM)
1) Define the problem/ problems definition
2) Identity the decision variables or represent unknown quantities.
3) Determine the objective function:
4).Identify the constraints
system constraints- more than one variable
individual constraints- one variable
non-negativity constraints
5) Summarize the model.
Solution Approaches to Linear Programming Problem
There are two approach of solving linear programming models. These are
 Graphic Approach
 Algebraic (Simplex) Approach
 Graphic Approach
 It’s a relatively straight forward method for determining the optimal solution to certain
linear programming problems.
 This method can be used only to solve problems that involve two decision variables.
Steps in graphic solution.
 Step1: Formulate Linear Programming Model.
 Step2: Draw the graph and identify corners.
 Step3: Identify the feasible solution space/region. It is the shaded region that
simultaneously satisfy all the constraints.
 Step 4: Identify the feasible region points that satisfy the constraints simultaneously in
LPM.
 Step 5: Evaluate the objective function against the feasible solutions.
 Step 6: Find the optimum solution
 The maximum value in the case of maximization
 The minimum value in the case of minimization.
Formulating the Maximization Problem
E.g.3.1 (Product Mix Problem)
Assume that Philips Company produces two types of TV set called Model A and Model B. The
Company objective is to maximize profit. The profit realized from set A&B are Br. 300 per unit
and Br. 250 per unit respectively. The Company wants to produce and sell thousands of sets
weekly but this is not possible due to some limitations. These limitations are;
1. There are only 40 hours of labor available in the production department each week.
2. There are only 45 hours of machine time each week.
3. No more than 12 sets of model A can be sold each week.
 It is known that each set of model “A” being in higher quality requires 2 hours of
labor hour and each set of model “B” only require one hour of labor to be produced.
 Machine processing time for one unit of model “A” & “B” is one hour and 3 hours
respectively.
Required:
a) Describe the problem situation with a linear programming model (LPM)
b) How many set of model A & B should be produced each week using graphic method?
Algebraic (Simplex) Approach
Simplex Method: step by step ways of getting an optimum solution to linear
progrmming
Step1: Write the linear programming model in standard form
 When all constraints are written as equalities, the linear programming model is
said to be in standard form.
 LPM is changed in to in standard form by applying slack variables (variables
representing unused scarce resources)
 The coefficient of slack variables is zero in the objective function and one in the
constraints.
Step2: Develop initial tableau
a. List the variables across the top of the table and write the objective function
coefficient of each variable above it.
b. There should be one row in the body of the table for each constraint. List the
slack variables in the basic column.
c. Compute values for Zj row. The row Zj values are determined by Row by Row
and it obtained by sum of multiplication of the coefficient of basis by respective
row numbers.
d. Compute values for row Cj-Zj. These values can be determined by subtracting Zj
from Cj rows.
N.B
 Basic Variables are variables which have in solution (slack basic variables for initial
tableau)
 Non basic variables: are variables which are not in the solution (decision variables are
non basic variables at initial tableau)
 The values in the bottom row (Cj-Zj) indicate any potential improvement.
 General Rule: a Simplex solution in maximization problem is optimal if Cj –Zj row
consists initially zero and negative numbers (if there are no positive numbers in the
bottom row.
Step3:- Develop the subsequent tableau
Develop the second tableau
a) Identify the entering variable:- it is a variable that has the largest positive value in
the Cj-Zj row.
b) Identify the leaving variable:- it is the one which has the smallest non-negative
ratio of Right Hand Said (RHS) value divided by the coefficients in the entering variable
column.
 The top row of the objective function is unchanged but to develop the next tableau, we
must compute three sets of values.
1. Revised constraint coefficient
2. Revised for Zj row
3. Revised for Cj-Zj row.
a) Find unit vector for the new basic variables using row operations. Then change pivot
element in to one and using this number change the other pivot column in to zeros. Repeat
the above steps until you reach the optimal point.