Example of Linear Programming.

Juan Daniel Cuellar Vargas

20171158412

Teacher:
Alfonso Manrique

Faculty of Economics and Administration.

Surcolombian University.
Garzón Huila
30/09/2019

A company of auditors specializes in preparing liquidations and audits of small companies.

They are interested in knowing how many audits and settlements they can perform monthly

to maximize their income. 800 hours of direct work and 320 hours are available for review.

An average audit requires 40 hours of direct work and 10 hours of review, also provides an

income of 300 dls. A tax settlement requires 8 hours of direct work and 5 hours of review,

producing an income of 100 dls. The maximum available monthly settlements is 60

OBJECTIVE:
Maximize total income.

DECISION VARIABLE:
Number of audits (X1).
Amount of settlements (X2).

RESTRICTIONS:
Available time of direct work
Available review time
Maximum number of settlements.

Maximize
Subject to:
The optimal solution is always found in one of the vertices of the set of feasible solutions.
These values are analyzed in the objective function. The vertex that represents the best
value of the objective function will be the optimal solution.

Optimal solution:
X1: 12 Audits.
X2: 40 Liquidations.
Z: $7.600.
CONCLUSION:
In conclusion we will give some concepts:
a) Formulation of the problem: it involves defining objectives and goals, examining internal
resources to achieve them and relevant aspects of the environment, determining alternative
action programs.
b) Development of a model to represent the problem being studied: “reduce” the problem to
a generally mathematical structure in which the objective or the explicit and underlying
objectives and constraints to achieve them are present. This may involve the formulation of
several models and their confrontation with reality, until finding the most appropriate.
c) Search for a solution to the problem: find the best or the optimal solution for achieving
the objective, within the framework of the restrictions.
d) Implement the solution: implement the solution, either as a test or definitively.
e) Establishment of controls on the solution: pay attention to changes in the situation, in
order to incorporate them into the model ⇒ feedback.
Direct formulation methodology to build linear programming models As the name implies,
the direct formulation is to move directly from the assumed system to the PL model. For
this purpose, the following order is proposed: define the objective, define the decision
variables, then the structural restrictions and finally establish the technical conditions.
• Define the Objective: It consists in defining an optimization criterion which can be
Maximization or Minimization depending on the problem that you want to solve, which is a
linear function of the different activities of the problem. Under the defined optimization
criterion it is intended to measure the contribution of the feasible solutions that can be
obtained and determine the optimum

In this example the objective is to maximize the total income of the company.

• 2. Define the decision variables: They are the unknowns of the problem basically consist
of the levels of all the Activities that can be carried out in the
problem to formulate, these can be of as many different types as necessary, and include as
many subscripts as required

Where the Decision Variables are defined as: X1 = Number of Auditors and X2 = Number
of Liquidations.
• 3. Define the restrictions: These are the different requirements that any solution must meet
to be carried out. In a way, they are the limits on the values of the levels of the different
activities (variables). The most common restrictions are of six types, which are listed
below:

Regarding the restrictions of the exercise presented, you can find 3:

1. Available time of direct work

2. Review time available.
3. Maximum number of settlements.

In conclusion, we can say that linear programming is a very useful tool, both for people
with independent companies and for large companies.
It allows you to manage in the best way the resources you have to be able to use them to the
fullest, as well as help to obtain greater profits and minimize costs.
Linear programming is a mathematical procedure or algorithm, by which an indeterminate
problem is solved.
It consists of optimizing (minimizing or maximizing) a linear function, which we call
objective function, so that this function is subject to a series of restrictions that express
through a system of linear inequalities.

Linear programming allows us to use different methods which allow us to reduce costs and
make profits.
The graphic method is used to solve problems of PL, geometrically representing the
constraints, technical conditions and the objective. The model can be solved graphically if
it has only two variables. For models with three or more variables, the graphic method is
impractical or impossible. When the axes are related to the variables of the problem, the
method is called the graphical method in activity. When technological constraints are
related, it is called a graphical method in resources.

In conclusion, it is said that the feasible solution of the audit company.

12 revisions must be made and 40 liquidated with a value of Z equal to $ 7,600