Linear Programming Models in Services

Learning Objectives
Describe the features of constrained optimization models. Formulate LP models for computer solution. Solve two-variable models using graphics. Explain the nature of sensitivity analysis. Solve LP models with Excel Add-in Solver and interpret the results. Formulate a goal programming model.

Stereo Warehouse
Let x = number of receivers to stock y = number of speakers to stock Maximize 50x + 20y gross profit Subject to 2x + 4y 400 floor space 100x + 50y 8000 budget 60 sales limit x x, y 0

Diet Problem Lakeview Hospital

Let E = units of egg custard base in the shake C = units of ice cream in the shake S = units of butterscotch syrup in the shake Minimize Subject to
015 . E 025 . C 010 . S
50E 150C 90S 175

100C 50S 150 70E 10C 200

30E 80C 200S 100

E , C, S 0

cholesterol fat protein calories

Shift-Scheduling Problem Gotham City Police Patrol

Let xi = number of officers reporting at period i for i =1, 2, 3, 4, 5, 6
Minimize
x1 x2 x3 x4 x5 x6

x1 + x6 x1 + x2 x2 + x3 x3 + x4 x4 + x5 x5 + x6

6 4 14 8 12 16

period 1 period 2 period 3 period 4 period 5 period 6

Workforce-Planning Problem Last National Drive-in Bank

Let Tt = number of trainees hired at the beginning of period t for t = 1,2,3,4,5,6 At = number of tellers available at the beginning of period t for t = 1,2,3,4,5,6 6 Minimize (600 A 300T )
t 1 t t

subject to

160 A1 80T1 1500 160 A2 80T2 1800 160 A3 80T3 1600 160 A4 80T4 2000 160 A5 80T5 1800 160 A6 80T6 2200

A1 = 12
0.9 At 1 Tt 1 At 0

At , Tt

for t = 2,3,4,5,6 0 and integer for t = 1,2,3,4,5,6

Transportation Problem Lease-a-Lemon Car Rental

Let
xij = number of cars sent from city i to city j for i = 1,2,3 and j = 1,2,3,4
439x11 + 396 x12 + . . . +479x33 + 0x34 x11 + x12 + x13 + x14 x21 + x22 + x23 + x24 x11 x12 x13 x14 + x21 + x22 + x23 + x24 0 for all i , j Minimize subject to = 26 = 43 = 31 = 32 = 28 = 26 = 14

x31 + x32 + x33 + x34 + x31 + x32 + x33 + x34

xij

Z=3800 Z=3600 Z=3000 200

Graphical Solution Stereo Warehouse

Z=2000 150

100

E D Optimal solution ( x = 60, y = 40)

50

0 A 0

50 B

100

150

200

Model in Standard Form

Let s1 = square feet of floor space not used s2 = dollars of budget not allocated s3 = number of receivers that could have been sold Maximize Z = 50x + 20y subject to 2x + 4y + s1 100x + 50y + s2 x + s3 x, y, s1, s2, s3

= 400 (constraint 1) = 8000 (constraint 2) = 60 ( constraint 3) 0

Stereo Warehouse Extreme-Point Solutions

Extreme point A Nonbasic variables x, y Basic variables s1 s2 s3 s1 s2 x s1 y x s3 y x s3 y s2 Variable value 400 8000 60 280 2000 60 120 40 60 20 80 40 60 100 3000 Objective-function value Z 0

s3, y

3000

s 3, s 2

3800

s1, s2

3600

s1, x

2000

Sensitivity Analysis Objective-Function Coefficients

200
z = 50x + 20y

150
x 60

(constraint 3 )

100

2 x 4 y 400 (constraint 1) 100x 50 y 8000 (constraint 2)

C

50

50 B

100

150

200

Sensitivity Analysis Right-Hand-Side Ranging

200 150

x 60

(constraint 3 )

100
D H C

100x 50 y 8000

(constraint 2)

50

0
A

50 B I 100

150

200

Goal Programming Stereo Warehouse Example

Let x = number of receivers to stock y = number of speakers to stock
d1 1

= amount by which profit falls short of $99,999 d = amount by which profit exceeds $99,999 d2 = amount by which floor space used falls short of 400 square feet d 2 = amount by which floor space used exceeds 400 square feet d3 = amount by which budget falls short of $8000 d 3 = amount by which budget exceeds $8000 d4 = amount by which sales of receivers fall short of 60 d 4 = amount by which sales of receivers exceed 60 Pk = priority level with rank k Minimize subject to
Z Pd 1 4 P 2 ( d1 2d 3 ) P 3 ( d 21 2 d 2 )

50 x 20 y d1 d1 99,999 2 x 4 y d 2 d 2 400 100 x 50 y d 3 d 3 8000

x d 4 d 4 60

profit goal
floor-space goal budget goal sales-limit goal

x, y, d , d , d , d , d , d , d , d 0

Topics for Discussion

How can the validity of LP models be evaluated? Interpret the meaning of the opportunity cost for a nonbasic decision variable that did not appear in the LP solution. Explain graphically what has happened when a degenerate solution occurs in an LP problem. Is LP a special case of goal programming? Explain. What are some limitations to the use of LP?