“Application of Linear Programming in Business Decision”

Presented By
Group-A
ID: 2003016-2003054
Tirthankar Majumder
ID:2003016
REG:09613
 Introduction

 What is Linear Programming (LP)?

• A mathematical method for optimizing solutions to

constraint-based problems.

• Widely used in business for maximizing profits or minimizing

costs.
 Key Benefits of LP:

•Resource Allocation: Optimizes use of limited resources.

•Production Planning: Efficient scheduling for cost reduction and demand
satisfaction.
•Logistics: Minimizes transportation costs and delivery time.
•Finance: Portfolio optimization to balance risk and return.
•Scheduling: Enhances project timelines and workforce planning.
 Objective Function Example:

 Maximize Z=Ax+By, where (A) and (B) are the factors

to optimize.
Md. Sadman Shakib Chowdhury
ID: 2003029
Reg: 09626
 Methodolo
gy
Problem:
A clothing manufacturer produces two types of shirts: dress
shirts and casual shirts. Each dress shirt requires 2 hours of
cutting time and 3 hours of sewing time, while each casual
shirt requires 3 hours of cutting time and 1 hour of sewing
time.The marketing cost of each dress shirt and each
casual shirt is 2 taka which is not more than 90 taka. The
company has a maximum of 120 hours of cutting time and
100 hours of sewing time available per week. The profit per
dress shirt is $20, and the profit per casual shirt is $15.
 Methodolo
gy
Steps of the Graphical Method:
Formulate the Problem: Define the decision variables and formulate the
objective function. Express the constraints as linear inequalities.

Plot the Constraints: Plot each constraint on a graph as a straight line.

Determine the region that satisfies all the constraints (feasible region).
This region is typically a polygon.

Identify Corner Points: Find the coordinates of the corner points

(vertices) of the feasible region. These points represent the possible
optimal solutions.

Evaluate Objective Function: Substitute the coordinates of each corner

point into the objective function.Then determine the corner point that
gives the optimal value (maximum or minimum) of the objective
function.

Interpret the Solution: State the optimal values of the decision variables
 Methodolo
gy
The Steps of Simplex Method:
1: write the inequality constraints and objective function.

2: Convert the given inequalities to equations by adding the slack variable (S) to
each inequality expression.

3: Write the objective function at the bottom row. Here, each inequality
constraint appears in its own row. Now, we can represent the problem in the
form of an augmented matrix, which is called the initial simplex tableau.

4: Identify the greatest positive entry in the bottom row, which helps to identify
the pivot column. The greatest positive entry in the bottom row defines the
largest coefficient in the objective function, which will help us to increase the
value of the objective function as fastest as possible.
 Methodolo
gy
The Steps of Simplex Method:

5: To calculate the quotient, we need to divide the entries in the far right
column by the entries in the first column, excluding the bottom row. The
smallest quotient identifies the row. The row identified in this step and
the element identified in the step will be taken as the pivot element.

6: Carry out pivoting to make all other entries in column is zero.

7: If there are no positive entries in the bottom row, end the process.
Otherwise, start from step 4.

8: Finally, determine the solution associated with the final simplex

tableau.
 Orgho Kundu
I’d No : 2003030
REG No: 09627
Graphical Method for Linear
Programming
Application in Business Decision
Making
Problem Overview

 A clothing manufacturer produces:

 - Dress Shirts: 2 hours cutting, 3 hours sewing
 - Casual Shirts: 3 hours cutting, 1 hour sewing

 Constraints:
 - Cutting time ≤ 120 hours
 - Sewing time ≤ 100 hours
 - Marketing cost ≤ 90 Taka

 Objective: Maximize profit

 - Profit: 20 Taka/dress shirt, 15 Taka/casual shirt
Steps for Solution

 1. Define Variables:
 - x₁: Number of dress shirts
 - x₂: Number of casual shirts
 2. Objective Function:
 Z = 20x₁ + 15x₂
 3. Constraints:
 2x₁ + 3x₂ ≤ 120
 3x₁ + x₂ ≤ 100
 x₁ + x₂ ≤ 45
 x₁, x₂ ≥ 0
 Graphical Representation
C
2 120

C2
100

80

60
C3

40
A(0,40 B
) (15,30)
20
Feasible Re- C(27.5,17 C1
C(27.5,17.5
gion ).5)
D
0 ( 33.33,0)
0 10 20 30 40 50 60 70
 Solution
Profit
Point X1 X2
Z =20x1+15x2
O 0 0 0
A 0 40 600
B 15 30 750
C 27.5 17.5 812.5
D 33.33 0 666.67

 Evaluate Z = 20x₁ + 15x₂ at each corner point.

 Maximum profit = 812.5 at point C(27.5, 17.5).

 Optimal Solution:
 Produce 27.5 dress shirts and 17.5 casual shirts.
Rifat Bin Zaman
ID: 2003031
Reg:09628
 SIMPLEX
METHOD
 Standard Form:

Z = 20X1+15X2+0S1+0S2+0S3
 2X1+3X2+S1 =120
 3X1+X2+S2 =100
 X1+X2+S3 =45
 X1, X2, S1, S2, S3 ≥0
 Make Table- 1
 𝐶𝑗-Zj= Determine whether or not the current solution is optimum.
 Cj-Zj = Cj – ( ∑ Unit Profit * X1)
 When Cj = 20 then, Cj-Zj = 20 – (0*2 + 0*3 + 0*1)
 Profit = ∑ (Unit Profit * Quantity )

Cj --> 20 15 0 0 0
Unit
Profit Basis X1 X2 S1 S2 S3 Quantity Ratio
0 S1 2 3 1 0 0 120 60
0 S2 3 1 0 1 0 100 33.33
0 S3 1 1 0 0 1 45 45
Cj - Zj
--> 20 15 0 0 0 Profit= 0
 Table-2 Cj --> 20 15 0 0 0
Unit
Profit Basis X1 X2 S1 S2 S3 Quantity Ratio
0 S1 0 2.33 1 - 2/3 0 53.34 22.86
20 X1 1 1/3 0 1/3 0 33.33 100
0 S3 0 2/3 0 - 1/3 1 11.67 17.5
Cj - Zj Profit=666.6
--> 0 25/3 0 20/3 0

 we have to make the pivot element 1.

 Then, we have to make the upper and lower column of the pivot element 0
• R1(Old Row) – 2 * R2 (New Row)
• R3(Old Row) – 1 * R2 (New Row)
For example,
Row 1 (Table-2) = 2 (Table-1) – 2* 1 (Pivot element of Table-2) =0
Quanity:
Row 1 (Table-2) : 120 – 2*33.33 = 53.34
 Table-3

Cj --> 20 15 0 0 0
Unit
Profit Basis X1 X2 S1 S2 S3 Quantity Ratio
-
0 S1 0 0 1 1/2 3.50 12.50
20 X1 1 0 0 1/2 - 1/2 27.50
15 X2 0 1 0 - 1/2 1.5 17.50
Cj - Zj Profit=
--> 0 0 0 -2.5 -12.5 812.5

Since we supposed that X1 is dress shirt and X2 is casual

shirt, so we conclude that the optimum result is 27.50 pieces
dress shirt and 17.50 pieces of casual shirt should be
produced.
 FAZLA RABBY
 ID: 2003054
 REG: 09651
 CONCLUSION
•Objective Achieved:
Linear programming techniques identified the optimal production mix for dress shirts and
casual shirts.
•Key Results:
• Optimal production plan:
• 27.5 dress shirts
• 17.5 casual shirts
• Maximum weekly profit: $812.5
•Benefits of Linear Programming:
• Efficient resource allocation
• Maximized profitability within constraints
• Practical framework for decision-making
•Future Applications:
• Scenario analysis with fluctuating demand
• Introduction of new product lines
• Adaptable for other industries and business functions