Advanced Mathematics for

Business
Topic 11:
Linear Programming with Solver Routines

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LP with Solver Routines Topic 11 - 1.2

Scope and Coverage

This topic will cover:

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Multiple variable linear programmes

Solving linear programmes with Excel
Interpreting the solutions from linear programmes
Extensions to linear programmes.

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LP with Solver Routines Topic 11 - 1.3

Learning Outcomes
By the end of this topic students will be able to:
Formulate an LP for solution with a Solver
Interpret LP output
- Binding & Non-binding constraints
- Allowed increases and decreases
- Shadow price

Recognise extensions to LP e.g. integer

programming

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LP with Solver Routines Topic 11 - 1.4

Summary of Management Problem

What to produce this week to maximise profit?
Objective function
- Maximise: profit = 50A + 25B

Constraints
-

Process 1: 0.4A + 0.7B 140

Process 2: 0.2A + 0.4B 70
Demand A: A 90
Demand B: B 150
A0
B0

non-negativity constraints

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LP with Solver Routines Topic 11 - 1.5

Graph the Constraints

The Feasible Area

B 250
200
150
100
50
0

A
0

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50

100

150

200

250

300 350

400

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LP with Solver Routines Topic 11 - 1.6

Corner Solution Method

What to produce this week?
Material A (m2)

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Material B (m2)

Profit (50A + 25B)

150

3,750

50

150

6,250

90

130

7,750

90

4,500

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LP with Solver Routines Topic 11 - 1.7

More than 2 Variables?

2-variables

Supposing a solution will lie

on a corner.
If two corners take the same
value then all solutions on
the line between those two
corners will also be optimal.

3-variables

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n-variables?

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LP with Solver Routines Topic 11 - 1.8

Solving LPs with Solver Routines

We will use Excel
- Others include OpenOffice Calc, LINDO/LINGO etc.

Formulate clearly
- Objective and constraints as rows
- Variable as columns
- Group like constraints

Input to Excel (or other), solve and interpret

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LP with Solver Routines Topic 11 - 1.9

Solving LPs with Excel - 1

Profit:

50 A + 25 B

Process 1:

0.4 A + 0.7 B

140

Process 2:

0.2 A + 0.4 B

70

Demand A:

Demand B:
Non-negativity:
Non-negativity:

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90
B

150
0

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LP with Solver Routines Topic 11 - 1.10

Solving LPs with Excel - 2

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Solving LPs with Excel - 3

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Solving LPs with Excel - 4

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Solving LPs with Excel

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The Answer Report

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Sensitivity Report

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Solving LPs with Excel

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LP with Solver Routines Topic 11 - 1.22

Integer Constraints - 1
5
4
3
2
1
0
0
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For some problems

at least one
management
variable is
constrained to be an
INTEGER
Algorithms have also
been designed to
solve such problems
Simply add in and
solve

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LP with Solver Routines Topic 11 - 1.23

Integer Constraints - 2

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LP with Solver Routines Topic 11 - 1.24

Recap
By the end of this topic students will be able to:
Formulate an LP for solution with a Solver
Interpret LP output
- Binding & Non-binding constraints
- Allowed increases and decreases
- Shadow price

Recognise extensions to LP e.g. integer

programming

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LP with Solver Routines Topic 11 - 1.25

Bibliography
Hillier, F. and Lieberman. G. Introduction to
Operations Research. McGraw Hill
Keast, S. and Towler M. Rational Decision-Making
for Managers. Wiley.
Wisniewski, M. Quantitative Methods for Decision
Makers. FT Prentice Hall.

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LP with Solver Routines Topic 11 - 1.26

Topic 11 Linear Programming with Solver

Routines
Any Questions?

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LP with Solver Routines Topic 11 - 1.27

Solving LPs with Excel

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Solving LPs with Excel

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Solving LPs with Excel

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Solving LPs with Excel

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Solving LPs with Excel

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Solving LPs with Excel

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Solving LPs with Excel

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Solving LPs with Excel

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