UPSC MainsMANAGEMENT-PAPER-II201110 Marks
Q1.

Question 1

Read the situation given below and answer the questions given at the end of it. A company is dealing with two products A and B. The company uses three resources to make the products, namely : machines, men and material. To produce the products, the total capacity available per week is as follows : machines – 180 hours, men – 150 hours and material – 200 kg. Every unit of product A requires 9 hours of machines, 7 hours of men and 4 kg of material. The corresponding figures for product B are : 5 hours of machines, 3 hours of men and 4 kg of material. The company has estimated that the cost of machine is ₹ 50 per hour, cost of men is ₹ 30 per hour and cost of material is ₹ 10 per kg, regardless of the product made. The company sells these products in the domestic market and as per the company records, the profit of the company is ₹ 40 per unit of product A and ₹ 20 per unit of product B. (kg = kilograms) (i) Formulate the following problem as Linear Programming Problem : How much of products A and B should be produced to minimise the weekly total cost of machines, men and material?

How to Approach

This question requires formulating a real-world production problem into a Linear Programming Problem (LPP). The approach involves identifying the decision variables, objective function, and constraints. Decision variables represent the quantities of products A and B to be produced. The objective function will represent the minimization of total cost. Constraints will be based on the limited availability of machines, men, and material. A clear and systematic presentation of the LPP formulation is crucial for a good score.

Model Answer

0 min read

Introduction

Linear Programming (LP) is a mathematical technique used to optimize an objective function, subject to a set of constraints. It’s a powerful tool in operations research and management science, widely applied in resource allocation, production planning, and logistics. In the context of business, LP helps determine the best possible allocation of limited resources to maximize profit or minimize cost. This problem presents a classic scenario where a company aims to optimize its production levels of two products, considering resource limitations and associated costs, to achieve cost minimization.

Formulating the Linear Programming Problem

Let's define the decision variables, objective function, and constraints for this problem.

1. Decision Variables:

  • Let x represent the number of units of product A to be produced.
  • Let y represent the number of units of product B to be produced.

2. Objective Function:

The objective is to minimize the total weekly cost of machines, men, and material. The cost per hour of machine is ₹50, per hour of men is ₹30, and per kg of material is ₹10. The total cost can be expressed as:

Minimize Z = (9x + 5y) * 50 + (7x + 3y) * 30 + (4x + 4y) * 10

Simplifying the objective function:

Minimize Z = (450 + 210 + 40)x + (250 + 90 + 40)y

Minimize Z = 700x + 380y

3. Constraints:

The production is limited by the available capacity of machines, men, and material.

  • Machine Constraint: 9x + 5y ≤ 180 (Total machine hours used cannot exceed 180)
  • Men Constraint: 7x + 3y ≤ 150 (Total men hours used cannot exceed 150)
  • Material Constraint: 4x + 4y ≤ 200 (Total material used cannot exceed 200 kg)
  • Non-Negativity Constraints: x ≥ 0, y ≥ 0 (Production quantities cannot be negative)

4. Complete Linear Programming Problem Formulation:

Minimize Z = 700x + 380y

Subject to:

  • 9x + 5y ≤ 180
  • 7x + 3y ≤ 150
  • 4x + 4y ≤ 200
  • x ≥ 0
  • y ≥ 0

This LPP can now be solved using various methods like the graphical method, simplex method, or using software like Excel Solver to determine the optimal values of x and y that minimize the total cost while satisfying all the constraints.

Graphical Representation (Conceptual)

While not explicitly asked for, understanding the graphical representation helps visualize the feasible region. Each constraint represents a line on a graph. The feasible region is the area where all constraints are satisfied simultaneously. The optimal solution lies at one of the corner points of the feasible region.

Conclusion

In conclusion, the given production problem has been successfully formulated as a Linear Programming Problem. The objective function minimizes the total cost associated with machine usage, labor, and material, while the constraints ensure that production remains within the available resource limits. Solving this LPP will provide the optimal production quantities of products A and B, leading to cost minimization for the company. This demonstrates the practical application of LP in optimizing business operations and resource allocation.

Answer Length

This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.

Additional Resources

Key Definitions

Linear Programming
A mathematical method for achieving the best outcome (such as maximum profit or lowest cost) in a mathematical model whose requirements are represented by linear relationships.
Objective Function
A mathematical expression that represents the goal of a linear programming problem, either to maximize or minimize a certain quantity.

Key Statistics

The global linear programming market was valued at USD 11.3 billion in 2023 and is expected to grow at a CAGR of 13.5% from 2024 to 2030.

Source: Grand View Research, 2024

Approximately 80% of Fortune 500 companies utilize operations research techniques, including linear programming, for decision-making.

Source: INFORMS (Institute for Operations Research and the Management Sciences) - Knowledge cutoff 2023

Examples

Airline Crew Scheduling

Airlines use LP to determine the optimal assignment of flight crews to minimize costs while adhering to regulations regarding rest periods and crew qualifications.

Frequently Asked Questions

What is the difference between maximization and minimization problems in LP?

Maximization problems aim to find the values of decision variables that yield the highest possible value for the objective function (e.g., maximizing profit), while minimization problems aim to find the values that yield the lowest possible value (e.g., minimizing cost).