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Linear Programming for Profit Maximization

The document provides an overview of Linear Programming, defining it as a method for optimizing interdependent activities within resource constraints. It outlines the steps for mathematical formulation of linear programming problems, including identifying objectives, decision variables, and constraints. Several examples of maximization and minimization problems are presented to illustrate the application of linear programming in various manufacturing scenarios.

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6 views3 pages

Linear Programming for Profit Maximization

The document provides an overview of Linear Programming, defining it as a method for optimizing interdependent activities within resource constraints. It outlines the steps for mathematical formulation of linear programming problems, including identifying objectives, decision variables, and constraints. Several examples of maximization and minimization problems are presented to illustrate the application of linear programming in various manufacturing scenarios.

Uploaded by

ssselfstudy1
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Material Decision Sciences - 2016 – 17 – Sem1

Chapter 2

Modeling with Linear Programming

Definition:

Linear Programming is a procedure for determining a best possible solution of


interdependent activities with respect to the available resources. The word Linear
shows that the relationships between the interdependent quantities are linear.
Programming is another word for “planning”.

Mathematical Formulation:

When the problems are in theoretically explained, they should be converted into a
mathematical model so that it can be solved in some way.
The following steps are to be followed for mathematical formulation:
Step 1: Identify the objective of the problem.
Step 2: Identify the decision variables involved.
Step 3: State the possible alternatives.
Step 4: Convert the constraints into linear inequalities or equalities, by using the
decision variables on LHS.
Step 5: Express the objective function as a linear function of the decision variables.
Points to Ponder:
1) The objective function can be represented as Max (or) Min Z = f(x)
2) The conditions can be represented as follows:
(a) When the objective is to maximize , Axi ≤ B
(b)When the objective is to minimize, Axi ≥ B
Where A is the value given in the problem for the corresponding decision
variables, xi ‘s are the decision variables and B is the value given in the
problem which represent the limited available resources for each activity.
3) The possible alternatives can be represented as x i ≥ 0.

B. Sriram Page 1 of 3
Material Decision Sciences - 2016 – 17 – Sem1
Maximization Problems
1) A leading manufacturer of a soap company produces two brands of soaps A and B.
Brand A contains 25 grams of chemical, 5 grams of color and 1 gram of foam. Brand
B contains 48 grams of chemical, 2 grams of color and 2 grams of foam. The
manufacturer has 16 Kilograms of chemical, 7 kilograms of color and 5 Kilograms of
foam. If the profit on Brand A is RO 0.050 and Brand B is RO 0.090, formulate the
linear programming problem to find the maximum profit.
2) An oil manufacturing company produces two types of crude oils A and B. Each crude
oil should be processed through 3 machines M1, M2, M3. Crude oil A requires 5
minutes in M1, 3 minutes in M2 and 2 minutes in M3. Crude oil B requires 8 minutes
in M1, 5 minutes in M2 and 4 minutes in M3. The machine M1 should be used
minimum of 24 hours, the machine M2 can be used maximum of 40 hours and
machine M3 can be used exactly 36 hours in a week. The profit on Oil A is 7 and Oil B
is 11. Formulate the LPP for maximum profit.
3) A manufacturer produces two types of products A and B. the products need to types
of skilled labour. Product A requires 3 minutes of processing, 5 minutes of finishing.
Product B requires 5 minutes of processing, 4 minutes of finishing. The manufacturer
has maximum of 45 hours of processing and at most 40 hours of finishing every
week. The profit on A and B are OMR 5 and OMR 7 respectively. Formulate the LPP to
maximize the profit.
4) Srishan Wood Carving inc. manufactures three types of wooden toys: cars, trains and
babies. A car sells for OMR25 and uses OMR10 worth of raw material and increases
the labour costs by OMR13. A train sells for OMR36 and uses OMR19 worth of raw
materials and increases the variable cost by OMR10. A baby toy sells for OMR42
requires OMR12 worth of raw materials and increases the labour cost by OMR20. The
manufacturer requires two types of skilled labour: Carpentry and Finishing. A car
requires 2 hours of carpentry and 1 hour of finishing. A train requires 1 hour of
carpentry and 1 hour of finishing. A baby toy requires 2 hours of carpentry and 2
hours of finishing. But the company has only 6000 carpentry minutes and 8100
finishing minutes. Formulate the LPP to obtain the maximum profit.
(Note: Profit = Selling Price – Raw Material Cost – Labour Cost)
5) A small manufacturer produces two types of goods A and B. The production costs for
A and B are OR 6, OR 3 and the corresponding selling prices OR 7, OR 4. In addition,
the transport costs are 200 Baisa, 300 Baisa. The conditions of a bank loan limit the
manufacturer to maximize weekly production costs of OR 2700 and transport costs of
OR 120. How should the manufacturer arrange production to maximize the profit?
(Note: Profit = Selling Price – Production Costs – Transport Costs)

Minimization Problems
B. Sriram Page 2 of 3
Material Decision Sciences - 2016 – 17 – Sem1
1) My diet requires that all the food I eat come from one of the basic four groups.
At present, the following four foods are available: brownies, ice cream, cola,
and cheesecakes. Each brownie costs 50 cents, each ice cream costs 20
cents, each bottle of cola costs 30 cents and each cheese cakes costs 80
cents. Each day, I must ingest atleast 500 calories, 6 oz of chocolate, 10 oz of
sugar, and 8 oz of fat. The nutritional content per unit of each food is shown in
the table. Formulate a LPP model to minimize the cost.
Calorie Chocolat Suga Fat
s e r

Brownie 400 3 2 2

Ice cream 200 2 2 4

Cola 150 0 4 1

Cheese 500 0 4 5
cake

Homework 1 (a)
A manufacturer produces two types of products A and B. The products need to be
processed in 3 machines M1, M2, M3. Product A requires 3 minutes in Machine M1, 5
minutes in M2 and 6 minutes in M3. Product B requires 5 minutes in M1, 4 minutes
in M2 and 7 minutes in M3. Machine M1 can be used maximum 50 hours a week,
Machine M2 should be used at least 42 hours a week and Machine M3 can be used
exactly 45 hours a week. The profit on A and B are OMR 5 and OMR 7 respectively.
Formulate the LPP for maximizing the profit.

B. Sriram Page 3 of 3

Common questions

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Linear programming optimizes a diet by minimizing cost while satisfying nutritional requirements through constraints representing calorie, chocolate, sugar, and fat intakes. Each food's cost is balanced against its nutritional value, and the LP model selects the combination of brownies, ice cream, cola, and cheesecakes that meets or exceeds daily dietary constraints at the lowest possible expenditure .

Formulating both maximization and minimization problems in linear programming is vital as they address differing goals: maximization aims at optimizing benefits (e.g., profit), while minimization focuses on reducing costs or resource usage. Their objectives differ by whether the goal is to surpass a threshold (maximize) or fall below a limit (minimize), guiding distinct operational strategies based on available data and constraints .

Constraints in linear programming models represent real-world limitations such as resources, time, and capacity. For example, in the production of crude oils A and B, constraints include machine usage limits: M1 must be at least 24 hours, M2 up to 40 hours, and M3 exactly 36 hours per week. These constraints are mathematically expressed as linear inequalities that must be satisfied while maximizing the profit objective function .

Mathematical formulation of linear programming problems converts qualitative decision-making factors into quantitative models by defining objective functions and constraints, allowing for clear analysis and optimization. For instance, by expressing resources and profits in terms of equations and inequalities, complex interdependent activities across industrial operations can be optimized systematically .

Solving an LP problem with constraints like transportation and production costs mirrors real-world scenarios where business operations are limited by budgetary constraints. For the manufacturer strategizing weekly production under OR 2700 for costs and OR 120 for transport, LP models identify the optimal balance between spending on production and constraints influenced by loans and market demands, optimizing profit while adhering to imposed financial limits .

Linear programming aids production planning by optimizing resource allocation within constraints, ensuring maximal efficiency. For example, in the production of wooden toys requiring carpentry and finishing labor, LP models resolve conflicts between resources like carpentry (6000 minutes) and finishing (8100 minutes) to achieve maximum profit based on the selling prices, raw material, and labor costs specified .

LP constraints express priorities and trade-offs by quantifying resource limitations and usage priorities. For example, in toy production, constraints like carpentry time and finishing result in trade-offs where increasing one product's output directly impacts another’s due to the finite resource pool, revealing operational priorities driven by potential profit margins and available resources .

Defining objective functions and constraints affects LP model success by establishing a clear optimization goal within realistic limitations, aligning business objectives with operational capacities. For example, objective functions for maximizing profit from products must integrate constraints like machine hours or labor availability to ensure solutions are valid and applicable, ensuring efficient real-world implementation .

Decision variables in linear programming quantify controllable aspects of a problem, reflecting choices such as production quantities. Correct specification ensures accurate representation of potential solutions within given constraints, directly impacting the feasibility and accuracy of the LP model’s solutions, such as maximizing profits or minimizing costs .

To formulate a linear programming problem for maximizing profit, identify decision variables x and y representing units of soaps A and B, respectively. The constraints are derived from resource limitations: \( 25x + 48y \leq 16000 \) for chemicals, \( 5x + 2y \leq 7000 \) for color, and \( x + 2y \leq 5000 \) for foam. The objective function is maximize \( 0.050x + 0.090y \). Additionally, non-negativity constraints \( x, y \geq 0 \) should be included .

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