Management Science - LP Applications-1.ppt

Chapter 3 Applications of Linear and Integer Programming Models - 1 3.1 The Evolution of Linear Programming Models in Business and Government Many examples are presented that demonstrate the successful application of linear and integer programming. Our goals are to: Examine potential application areas Develop good modeling skills Illustrate the use of spreadsheets to generate results Interpret properly and analyze spreadsheet results Examples of Linear Programming Models in Business and Government An optimal portfolio Optimal scheduling of personnel An optimal blend of raw crude oils A minimized cost diet An operation and shipping pattern The optimal production levels Examples of Linear Programming Models in Business and Government The optimal assignment of fleets to flights How to best expand a communication network An efficient air-pollution control system An agricultural resource allocation plan The set of public projects to select 3.2 Building Good Linear and Integer Programming Models Three important factors may affect the successful process of building good models: Familiarity Simplicity Clarity Summation Variables / Constraints Many times the use of summation variables (representing the sum of all or of part of the decision variables) along with the summation constraints associated with them, may simplify models’ formulation. See the following example. Summation Variables / Constraints Example Three television models are to be produced. Each model uses 2, 3, and 4 pounds of plastic respectively. 7000 pounds of plastic are available. No model should exceed 40% of the total quantity produced. The profit per set is $23, $34, and $45 respectively. Find the production plan that maximizes the profit. Summation Variables / Constraints Solution Summation variables/constraints – TV production spreadsheet A checklist for building linear models A checklist for building linear models 3.4 Applications of Linear Programming Models The modeling o