Chap - 2A Linear Programming Using The Excel Solver

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McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved 1-1


Chapter 2A

Linear Programming Using the


Excel Solver

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OBJECTIVES

• Linear Programming Basics

• A Maximization Problem

• A Minimization Problem

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Linear Programming Essential Conditions

• Is used in problems where we have


limited resources or constrained
resources that we wish to allocate
• The model must have an explicit
objective (function)
– Generally maximizing profit or
minimizing costs subject to resource-
based, or other, constraints

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Linear Programming Essential Conditions (Continued)

• Limited Resources to allocate


• Linearity is a requirement of the model
in both objective function and
constraints
• Homogeneity of products produced
(i.e., products must be identical) and all
hours of labor used are assumed
equally productive
• Divisibility assumes products and
resources divisible (i.e., permit
fractional values if need be)

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Common Applications

• Aggregate sales and operations planning


• Service/manufacturing productivity analysis
• Product planning
• Product routing
• Vehicle/crew scheduling
• Process control
• Inventory control

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Objective Function

Maximize (or Minimize) Z = C1X1 + C2X2 + ... + CnXn

• Cj is a constant that describes the


rate of contribution to costs or
profit of (Xj) units being produced

• Z is the total cost or profit from


the given number of units being
produced
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Constraints

A11X1 + A12X2 + ... + A1nXn  B1


A21X1 + A22X2 + ... + A2nXn  B2
:
:
AM1X1 + AM2X2 + ... + AMnXn = BM

• Aij are resource requirements for each of


the related (Xj) decision variables
• Bi are the available resource
requirements
• Note that the direction of the inequalities
can be all or a combination of , , or =
linear mathematical expressions
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Non-Negativity Requirement

X1,X2, …, Xn  0

• All linear programming model


formulations require their decision
variables to be non-negative
• While these non-negativity
requirements take the form of a
constraint, they are considered a
mathematical requirement to
complete the formulation of an LP
model
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An Example of a Maximization Problem

LawnGrow Manufacturing Company must determine the unit


mix of its commercial riding mower products to be
produced next year. The company produces two product
lines, the Max and the Multimax. The average profit is $400
for each Max and $800 for each Multimax. Fabrication hours
and assembly hours are limited resources. There is a
maximum of 5,000 hours of fabrication capacity available
per month (each Max requires 3 hours and each Multimax
requires 5 hours). There is a maximum of 3,000 hours of
assembly capacity available per month (each Max requires 1
hour and each Multimax requires 4 hours). Question: How
many units of each riding mower should be produced each
month in order to maximize profit?

Now let’s formula this problem as an LP model…


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The Objective Function

If we define the Max and Multimax products as the two


decision variables X1 and X2, and since we want to
maximize profit, we can state the objective function as
follows:
Maximize Z = 400X1 + 800 X 2

Where
Z = the monthly profit from Max and Multimax
X1 = the number of Max produced each month
X 2 = the number of Multimax produced each month
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Constraints

Given the resource information below from the problem:


Max (X1) Multimax (X2)
Required Time/Unit Required Time/Unit Available Time/Month
3 5 5,000 Fab
1 4 3,000 Assy
We can now state the constraints and non-negativity
requirements as:
3X1 + 5X 2  5,000 (Fab.)
X1 + 4X 2  3,000 (Assy.)
X1 , X 2 0 (Non - negativity )
Note that the inequalities are less-than-or-equal since
the time resources represent the total available
resources for production
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Solution

Produce 715 Max and 571 Multimax per month


for a profit of $742,800

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The Excel Solver Formulation

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An Example of a Minimization Problem

HiTech Metal Company is developing a plan for buying


scrap metal for its operations. HiTech receives scrap
metal from two sources, Hasbeen Industries and
Gentro Scrap in daily shipments using large trucks.
Each truckload of scrap from Hasbeen yields 1.5 tons
of zinc and 1 ton of lead at a cost of $15,000. Each
truckload of scrap from Gentro yields 1 ton of zinc and
3 tons of lead at a cost of $18,000. HiTech requires at
least 6 tons of zinc and at least 10 tons of lead per day.
Question: How many truckloads of scrap should be
purchased per day from each source in order to
minimize scrap metal costs to HiTech?

Now let’s formula this problem as an LP model…


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The Objective Function

If we define the Hasbeen truckloads and the Gentro


truckloads as the two decision variables X1 and X2, and
since we want to minimize cost, we can state the
objective function as follows:

Minimize Z = 15,000 X1 + 18,000 X2


Where
Z= daily scrap cost
X1 = truckloads from Hasbeen
X2 = truckloads from Gentro

Hasbeen
Gentro
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Constraints

Given the demand information below from the problem:


Hasbeen (X1) Gentro (X2)
Tons Tons Min Tons
1.5 1 6 Zinc
1 3 10 Lead

We can now state the constraints and non-negativity


requirements as: Note that the
inequalities are
greater-than-or-
1.5X1 + X2 > 6(Zinc/tons)
equal since the
demand information
X1 + 3X2 > 10(Lead/tons)
represents the
minimum necessary
X1, X2 > 0(Non-negativity)
for production.
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Solution

Order 2.29 truckloads from Hasbeen and 2.57


truckloads from Gentro for daily delivery. The daily
cost will be $80,610.

Note: Do you see why in this solution that


“integer” linear programming methodologies
can have useful applications in industry?

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The Excel Solver solution

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End of Chapter 2A

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