Operations

Research

OR#3

Model
Formulation

Lecturer
Gesit Thabrani Dual Degree – Management UNP
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 Learning Objectives
After completing this chapter, students will be able to:

1. Understand the basic assumptions and

properties of linear programming (LP)
2. Formulate the LP problems

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 Outline

1. What is Linear Programming?

2. Requirements of a Linear
Programming Problem
3. Formulating LP Problems

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 Linear Programming

Many management decisions involve trying to

make the most effective use of limited resources

Machinery, labor, money, time, warehouse space, raw
materials

Linear programming (LP
LP) is a widely used
mathematical modeling technique designed to
help managers in planning and decision making
relative to resource allocation

Belongs to the broader field of mathematical
programming

In this sense, programming refers to modeling and
solving a problem mathematically

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 Requirements of a Linear
Programming Problem

LP has been applied in many areas over the past
50 years

All LP problems have 4 properties in common
1. All problems seek to maximize or minimize some
quantity (the objective function)
function
2. The presence of restrictions or constraints that limit the
degree to which we can pursue our objective
3. There must be alternative courses of action to choose
from
4. The objective and constraints in problems must be
expressed in terms of linear equations or inequalities

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 LP Properties and Assumptions
PROPERTIES OF LINEAR PROGRAMS
1. One objective function
2. One or more constraints
3. Alternative courses of action
4. Objective function and constraints are linear
ASSUMPTIONS OF LP
1. Certainty
2. Proportionality
3. Additivity
4. Divisibility
5. Nonnegative variables
Table 7.1
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 Basic Assumptions of LP

We assume conditions of certainty exist and
numbers in the objective and constraints are
known with certainty and do not change during
the period being studied

We assume proportionality exists in the objective
and constraints

We assume additivity in that the total of all
activities equals the sum of the individual
activities

We assume divisibility in that solutions need not
be whole numbers

All answers or variables are nonnegative

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 Formulating LP Problems

Formulating a linear program involves developing
a mathematical model to represent the managerial
problem

The steps in formulating a linear program are
1. Completely understand the managerial
problem being faced
2. Define the decision variables
3. Identify the objective and constraints
4. Use the decision variables to write
mathematical expressions for the objective
function and the constraints

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 Formulating LP Problems

Decision variables are mathematical symbols that
represent levels of activity by the firm

For example, an electrical manufacturing firm
desires to produce x1 radios, x2 toasters, and x3
clocks, where x1, x2, and x3 are symbols
representing unknown variable quantities of each
item. The final values of x1, x2, and x3, as
determined by the firm, constitute a decision
(e.g., the equation x1 = 100 radios is a decision by
the firm to produce 100 radios).

The objective function is a linear mathematical
relationship that describes the objective of the
firm in terms of the decision variables. The
objective function always consists of either
maximizing or minimizing some value (e.g.,
maximize the profit or minimize the cost of
producing radios) Dual Degree – Management UNP
 Formulating LP Problems

The model constraints are also linear
relationships of the decision variables; they
represent the restrictions placed on the firm by
the operating environment.

The restrictions can be in the form of limited
resources or restrictive guidelines.

For example, only 40 hours of labor may be
available to produce radios during production.
The actual numeric values in the objective
function and the constraints, such as the 40
hours of available labor, are parameters

Status Function show that all the variables are
nonnegative (nonnegativity constraints)

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 Formulating LP Problems
Linear Programming Model

PROBLEMS FORMULATION

Determine objective Determine the Define status

Identify the problem
function constraints function

Maximize inequality “<=” X1 >= 0

Number of variable = 2

Number of variable >= 2 Minimize inequality “>=”

equality “=”

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 Formulating LP Problems

One of the most common LP applications is the
product mix problem

Two or more products are produced using
limited resources such as personnel, machines,
and raw materials

The profit that the firm seeks to maximize is
based on the profit contribution per unit of each
product

The company would like to determine how
many units of each product it should produce
so as to maximize overall profit given its limited
resources

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 Flair Furniture Company

The Flair Furniture Company produces
inexpensive tables and chairs

Processes are similar in that both require a certain
amount of hours of carpentry work and in the
painting and varnishing department

Each table takes 4 hours of carpentry and 2 hours
of painting and varnishing

Each chair requires 3 of carpentry and 1 hour of
painting and varnishing

There are 240 hours of carpentry time available
and 100 hours of painting and varnishing

Each table yields a profit of $70 and each chair a
profit of $50
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 Flair Furniture Company

The company wants to determine the best
combination of tables and chairs to produce to
reach the maximum profit
HOURS REQUIRED TO
PRODUCE 1 UNIT
(T) (C) AVAILABLE HOURS
DEPARTMENT TABLES CHAIRS THIS WEEK
Carpentry 4 3 240

Painting and varnishing 2 1 100

Profit per unit $70 $50

Table 7.2

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 Flair Furniture Company

The decision variables representing the actual
decisions we will make are
T = number of tables to be produced per week
C = number of chairs to be produced per week

The objective is to
Maximize profit

The constraints are
1. The hours of carpentry time used cannot
exceed 240 hours per week
2. The hours of painting and varnishing time
used cannot exceed 100 hours per week

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 Flair Furniture Company

We create the LP objective function in terms of T

and C
Maximize profit = $70T + $50C

Develop mathematical relationships for the two
constraints

For carpentry, total time used is
(4 hours per table)(Number of tables produced)
+ (3 hours per chair)(Number of chairs produced)

We know that
Carpentry time used ≤ Carpentry time available
4T + 3C ≤ 240 (hours of carpentry time)

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 Flair Furniture Company

Similarly
Painting and varnishing time used
≤ Painting and varnishing time available
2 T + 1C ≤ 100 (hours of painting and varnishing time)

This means that each table produced

requires two hours of painting and
varnishing time

Both of these constraints restrict production

capacity and affect total profit

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 Flair Furniture Company

The values for T and C must be nonnegative

T ≥ 0 (number of tables produced is greater

than or equal to 0)
C ≥ 0 (number of chairs produced is greater
than or equal to 0)

The complete problem stated mathematically

Maximize profit = $70T + $50C

subject to
4T + 3C ≤ 240 (carpentry constraint)
2T + 1C ≤ 100 (painting and varnishing constraint)
T, C ≥ 0 (nonnegativity constraint)
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 Shader Electronics

The product-
product-mix problem at Shader
Electronics

Two products
1. Shader Walkman, a portable CD/DVD
player
2. Shader Watch
Watch--TV, a wristwatch-
wristwatch-size
Internet--connected color TV
Internet

Determine the mix of products that will
produce the maximum profit
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 Shader Electronics

Hours Required
to Produce 1 Unit
Walkman Watch
Watch--TVs Available Hours
Department (X1) (X2) This Week
Electronic 4 3 240
Assembly 2 1 100
Profit per unit $7 $5

Decision Variables:
X1 = number of Walkmans to be produced
X2 = number of Watch-
Watch-TVs to be produced
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 Shader Electronics

Objective Function:
Maximize Profit = $7
$7XX1 + $5
$5XX2

Or, usually we can state it as:

Max Z = 7X1 + 5X2

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 Shader Electronics
First Constraint:

is ≤
Electronic Electronic
time used time available
4X1 + 3X2 ≤ 240 (hours of electronic time)

Second Constraint:

is ≤
Assembly Assembly
time used time available
2X1 + 1X2 ≤ 100 (hours of assembly time)
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 Shader Electronics

The complete problem stated mathematically

Max Z = 7X1 + 5X2

subject to
4X1 + 3X2 ≤ 240 (hours of electronic time)
2X1 + 1X2 ≤ 100 (hours of assembly time)
X1, X2 ≥ 0 (nonnegativity constraint)

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 Minimization Case (Fertilizer)

A farmer is preparing to plant a crop in the spring and
needs to fertilize a field. There are two brands of fertilizer to
choose from, Super-gro and Crop-quick. Each brand yields
a specific amount of nitrogen and phosphate per bag, as
follows:
CHEMICAL CONTRIBUTION
BRAND PHOSPHATE
NITROGEN
(LB./BAG) (LB./BAG
Super-gro 2 4
Crop-quick 4 3

The farmer's field requires at least 16 pounds of nitrogen
and 24 pounds of phosphate. Super-gro costs $6 per bag,
and Crop-quick costs $3. The farmer wants to know how
many bags of each brand to purchase in order to minimize
the total cost of fertilizing.

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 Minimization Case (Fertilizer)
Summary of LP Model Formulation Steps

Step 1. Define the decision variables

How many bags of Super-gro and Crop-quick
to buy

Step 2. Define the objective function

Minimize cost

Step 3. Define the constraints

The field requirements for nitrogen and
phosphate

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 Minimization Case (Fertilizer)

Decision Variables

This problem contains two decision
variables, representing the number
of bags of each brand of fertilizer to
purchase:

x1 = bags of Super-gro

x2 = bags of Crop-quick

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 Minimization Case (Fertilizer)

The Objective Function

The farmer's objective is to minimize the total
cost of fertilizing.

The total cost is the sum of the individual
costs of each type of fertilizer purchased.

The objective function that represents
total cost is expressed as
minimize Z = $6x1 + $3x2
where

$6x1 = cost of bags of Super-gro

$3x2 = cost of bags of Crop-quick

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 Minimization Case (Fertilizer)

Model Constraints
Each bag of fertilizer contributes a number of
pounds of nitrogen and phosphate to the field

The constraint for nitrogen is

2x1 + 4x2 ≥ 16 lb.

The constraint for phosphate is constructed like

the constraint for nitrogen:
4x1 + 3x2 ≤ 24 lb.

Nonnegativity constraints in this problem to

indicate that negative bags of fertilizer cannot be
purchased:
x1, x2 ≥ 0
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 Minimization Case (Fertilizer)

The complete model formulation for

this minimization problem is
Min Z = 6x1 + 3x2
subject to
2x1 + 4x2 ≥ 16 lb, of nitrogen
4x1 + 3x2 ≥ 24 lb, of phosphate
x1, x2 ≥ 0 (nonnegativity constraint)

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