More on LP Formulation

OPIM 101 Management Science

Example: Product-Mix Problem of BM

BM produces three rubber-based products using three polymers and a base. The amount (in oz) of each ingredient used per lb of each product is given in following Table.

(Note: 1 lb = 16 oz )

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Problem

For coming week, BM has commitment to produce at least 1000 lb of Airtex, 500 lb of Extendex, and 400 lb of Resistex, but BM knows it can sell more of each product. Current inventories of ingredients are 500 lb of polymer A, 425 lb of polymer B, 650 lb of polymer C, and 1100 lb of base. Each lb of Airtex nets a profit of $7, each lb of Extendex a profit of $7, and each lb of Resistex a profit of $6. As production manager, you need to determine optimal production plan for coming week.

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Decision Variables

What can you control ? What is a plan ?

-variables which requires your planning/decision

Let
A = no. of lb of Airtex to produce E = no. of lb of Extendex to produce R = no. of lb of Resistex to produce

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Objective Function

What do we mean by optimal plan ?

Profit = 7A + 7E + 6R (in $)

Want to choose decision variables such that profit is maximized.

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Constraints

In order to maximize profit we would like to choose values of our decision variables A, E, and R to be as large as possible. However, the problem has imposed some restrictions on the values which these variables can take. Such restrictions are called constraints.

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Demand Constraints:
A 1,000 E 500 R 400

Why?

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Resource Constraints:
Amount of polymer A used = 4A + 3E + 6R (oz) Amount available = 500 lb = 8,000 oz Therefore, 4A + 3E + 6R 8,000 (polymer A) Similarly, 2A + 2E + 3R 6,800 (polymer B) 4A + 2E + 5R 10,400 (polymer C) 6A + 9E + 2R 17,600 (base)

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Nonnegativity Constraints:
A, E, R, 0

May be very obvious! In this course, we will still state these constraints.

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Formulation of BMs Product-Mix Problem

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Although the nonnegativity conditions are clearly redundant here, they are often included unless unwanted. Note that the objective function and constraints are all linear in the decision variables.

Hence, we call the above a linear program (LP) or linear programming problem (LP problem).

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Other modeling examples: Scheduling/Allocation Problem

A bus company is in charge of allocating buses on a 6-hour day. Each bus shift is 4 hours and cost $100 in terms of operating cost. The demand for buses for the 6 hours are 12,20,35,20,10 and 15 respectively. Formulate a model to find the best strategy to allocate the buses?

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RECALL:

Note: By convention, constraints are written such that all the decision variables are on the LHS, while the constant is on the RHS.

So far, we have only learn how to model the problem. We will learn how to solve in the next lecture.

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