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INCORPORATED

Research Paper

Presented to the Faculty of

College of Arts and Sciences

Laguna State Polytechnic University

Main Campus

Sta. Cruz, Laguna

Requirements for the Degree of

Bachelor of Science in Mathematics

ADRIMAR A. ADRIANO

JANUARY 2016

APPROVAL SHEET

DEDICATION

parents, siblings, friends, mentors, church mates, batch mates,

relatives, and to my special someone;

above all, to our Almighty God.

AAA

ACKNOWLEDGEMENTS

The researcher would like to express his deepest thanks to all which

and who gave unselfish support, help, and guidance for the completion of this

research work:

Laguna State Polytechnic University, for offering the course of BS

Mathematics where the researcher belongs;

Nestor

M.

De

Vera

Ph.

D.,

University

President,

for

the

Roberto C. Miranda Ed. D., Campus Director, for directing the rules

and regulations of the school;

Mario C. Passion Ed. D., Vice President for Academic Affairs, for his

diligence in converting also the campus;

Celeste C. Marquez M. S. P., Research Chairman and Associate Dean

of College of Arts and Sciences, for her continuous support, guidance,

suggestions, and encouragement for preparing this research until it were

finished;

Ellaine L. Ching, Technical expert of the manuscript, for giving his

time in checking this work patiently and for his insightful comments, advice

and ideas;

Ma. Cezanne D. Dimaculangan, his English Critic, who gave time and

expertise in making his work error free in terms of grammar;

extended his knowledge in giving comments and suggestions from pre-oral to

final defense that improved this work;

Victor A. Estalilla, M.A.T. and Dr. Merilyn P. Juacalla, as the

research adviser, for sharing their knowledge about Linear Programming, for

their patience, advice, motivations and for their untiring support that became

part for the completion of this work;

Kristle May B. Cabrega, Jan Kurt F. Serrano, Phoebe Patrice C.

Suria, Mary Joy C. Ramirez, Raenie Joy R. Balderama, Rose Ann G.

Dayapera, Rubylean V. Dandan, Aivie K. Bangajo, Jed Oriel U.

Camangon, Mary Ann O. Viterbo, Glydel P. Pereja, Ella Mae D. Mardoquio

his classmates, batch mates and friends who encouraged his to continue his

journey in this thesis, kept reminding her to move forward and not to give up,

and most of all for their prayers;

BS Mathematics IV, his classmates and thesis batch mates, for their

support and giving suggestions to improve this work;

Rodolfo A. Adriano, his father, Lourdes A. Adriano, his mother

Adrian A. Adriano his brother, Jelyn A. Adriano and Adrilyn A. Adriano,

his sister and Necita Z. Aquino, his auntie, who are always there to inspire

him, for giving him financial, and moral support, , for always giving him love

that inspired him to finish this work and most especially for their prayers;

and last but definitely not the least, to the great Lord, Jesus Christ, for

guidance, and hope He gave to him.

AAA

ABSTRACT

Whole Milk 1 Liter, Non Fat Milk 1 Liter, Non Fat Milk 200ml, Choco Milk 1

Liter, Choco Milk 200ml, Yogurt Strawberry, Yogurt Blueberry, Yogurt Nata,

Yogurt Mango and Yogurt Pineapple in a month in order to maximize the net

profit subject to resources, labor and production cost constraints. This study

sought to find the answer for the following questions: 1.) What is the optimal

number of Whole Milk 1Liter to be produced within a month? 2.) What is the

optimal number of Non Fat Milk 1Liter and Non Fat Milk 200ml to be produced

within a month? 3.) What is the optimal number of Choco Milk 1Liter and

Choco Milk 200ml to be produced within a month? 4.) What is the optimal

number of Live Yogurt Strawberry, Live Yogurt Blueberry, Live Yogurt Nata,

Live Yogurt Mango, and Live Yogurt Pineapple to be produced within a

month? 5.) What is the maximum cost of income?

In the end, it was found that through the mathematical model used in

this study, the optimal number of Whole Milk 1 Liter should be, Non Fat Milk 1

Liter should be, Non Fat Milk 200ml should be, Choco Milk 1 Liter should be,

Choco Milk 200ml should be, Yogurt Strawberry should be, Yogurt Blueberry

should be, Yogurt Nata should be, Yogurt Mango should be and Yogurt

Pineapple should be, the amount of income is Php.

TABLE OF CONTENTS

Preliminaries

Page

TITLE PAGE..................................................................................................i

APPROVAL SHEET......................................................................................ii

DEDICATION...............................................................................................iii

ACKNOWLEDGEMENTS...........................................................................iv

ABSTRACT.................................................................................................vi

TABLE OF CONTENTS..............................................................................vii

LIST OF TABLES.........................................................................................x

CHAPTER

1

Introduction............................................................................................1

Background of the Study.......................................................................2

Theoretical Framework.........................................................................3

Statement of the Problem.....................................................................4

Assumptions..........................................................................................5

Significance of the Study.......................................................................5

Scope and Delimitations.......................................................................6

Definition of Terms.................................................................................6

Related Literature...................................................................................8

Related Literature...................................................................................8

METHODOLOGY

Research Design.................................................................................14

Research Procedure...........................................................................14

Research Instrument...........................................................................14

Mathematical Formulation...................................................................15

Preliminary Data..................................................................................17

The Farm Plantation............................................................................17

The Model...........................................................................................17

The Objective Function.......................................................................18

The Constraints...................................................................................18

The Complete Mathematical Model....................................................20

Summary.............................................................................................23

Findings...............................................................................................24

Conclusion...........................................................................................24

10

Recommendations..............................................................................25

BIBLIOGRAPHY

A. Books.............................................................................................26

B. Journals.........................................................................................26

C. Unpublished Materials...................................................................26

APPENDICES

A. Letter of Request...........................................................................27

B. Final Computation..........................................................................31

C. Answer Report of Final Computation.............................................32

D. Sensitivity Report of Final Computation........................................33

E. Limit Report of Final Computation.................................................33

EXECUTIVE SUMMARY.............................................................................57

CURRICULUM VITAE.................................................................................61

11

LIST OF TABLES

Table

1 Preliminary Data..............................................................................17

2 Linear Programming Matrix.............................................................19

3 Final Solution...................................................................................21

CHAPTER 1

theoretical framework, statement of the problem, assumptions, significance of

the study, scope and limitation and definition of terms.

Introduction

Linear programming (LP) is a tool for solving optimization problems.

George Dantzig developed an efficient method, the simplex algorithm, for

solving linear programming problems (also called LP). Since the development

of the simplex algorithm, LP has been used to solve optimization problems in

industries as diverse as banking, education, forestry, petroleum, and trucking.

In a survey of Fortune 500 firms, 85% of the respondents said they had used

linear programming. According to Kantorovich (1939) as cited by Dantzig

(1965), there are two ways of increasing the efficiency of the work of a shop,

an enterprise, or a whole branch of industry. One way is by various

improvements in technology; that is, new attachments for individual

machines, changes in technological processes, and the discovery of new,

better kinds of raw materials. The other way-thus far much less used-is

improvement in the organization of planning and production. Here are

included, for instance, such questions as the distribution of work among

individual machines of the enterprise or among mechanisms, the correct

distribution of orders among enterprises, the correct distribution of different

In a profit optimization problem, when there are a number of activities

to be performed, alternative ways of doing them, and limited resources or

facilities for performing each activity in the most effective way, the

management is faced with the problem of how best to combine these

activities and resources in an optimal manner so that the overall efficiency is

maximized. The objective function may be profit, cost, production capacity or

any other measure of effectiveness which is to be obtained in the best

possible or optimal manner. The constraints may be imposed by different

resources such as market demand, production process and equipment

storage capacity, raw material available, and so on. They further posit that

programming implies planning and by linearity is meant a mathematical

expression in which the expressions among the variables are linear.

Linear programming is a methodology within the realm of systems

analysis which can find a combination of subsystems with maximum profits or

minimum costs given a set of simultaneous equations in which some

variables are constrained. Dairy scientists commonly use this technique to

calculate least-cost nutritionally balanced dairy rations, both with and without

matrix generators. The use of a matrix generator allows one to use the

computational power of linear programming without understanding the

tableau. The interactive program developed with the dairy systems project

uses a matrix generator and specifies a farm organization which will maximize

profit for 1 yr given upper limits on barn capacities, labor, and land.

Manufacturing planning and control entails the acquisition and

allocation of limited resources to production activities so as to satisfy

customer demand over a specified time horizon. As such, planning and

control problems are inherently optimization problems, where the objective is

to develop a plan that meets demand at minimum cost or that fills the demand

that maximizes profit. The underlying optimization problem will vary due to

differences in the manufacturing and market context. In this study it focuses

on optimization models for production planning for discrete-parts, batch

manufacturing environments. It do not cover detailed scheduling or

sequencing models (e. g., Graves, 1981), nor address production planning for

continuous processes (e. g., Shapiro, 1993). We consider only discrete-time

models, and do not include continuous-time models such as developed by

Hackman and Leachman (1989).

This study intended to provide an overview of applicable optimization

models for Hacienda Macalauan; which present the most generic formulations

and briefly describe how these models are solved. There is an enormous

range of problem contexts and model formulations, as well as solution

methods. We make no effort to be exhaustive in the treatment herein. Rather,

preferences.

Hacienda Macalauan Incorporated (HMI), being a company that

produces and sell dairy products with restaurant chains, coffee shops,

schools and hotels as their primary customers, has specific production plan

for its products but they are looking for much effective production plan.

Although there is an existing production plan that determines the amount of

products to produce, there are still looking for substantial study as to where

this decision is based. The products have different shelf-lives with 6 days at

the most for the milks and 10 days at the most for the yogurt and any unsold

items at the end of the week is disposed as garbage.

Theoretical Framework

There are several ways to solve a production planning problem. The

most direct of these is extracting all possible solutions and computing the

associated cost of each.

Production planning has expanded with the aim of covering all factors

involved in the problem. As Dantzig (1965) puts it, production planning, also

known as the production smoothing problem is concerned with the problems

of scheduling its production over the number of future time periods, with the

total time span being considered called the planning horizon. The

information available to the planner consists of the following:

periods (i.e., sales forecast, customers order);

(2) Number of units of each product in inventory at the start of the first period.

(3) Additional constraints such as minimum or maximum inventory levels at

the end of any period or minimum level of production or service.

(4) Cost information on each product (i.e., unit cost, storage cost, penalty

cost)

Linear Programming

During WWII Army began to formulate certain linear optimization

problem. Their solutions were called plans or programs. Subsequently, many

other problems, particularly economic, were found to have a similar

mathematical formulation. Such problems are called linear programming

problems or linear programs.

LP problems differs from general variety in that a mathematical model

or description of the problem can be stated, using relationships which are

called straight line or linear. Mathematically, these relationships are of the

form a1x1 + a2x2 +...+ ajxj...+ anxn = a0 where ajs are the known coefficients and

xjs, the unknown variables.

The complete mathematical statement includes set of simultaneous

linear equations which represent the conditions of the problem and linear

functions which expresses the objectives of the problem.

Mathematically, LP deals with nonnegative solutions to undetermined

Every LPP has either:

1. No solutions in terms of nonnegative values of the variables.

2. A nonnegative solution that yields an infinite value to the objectives

function.

3. A nonnegative solution that yields a finite value to the objective function.

The following are the question to be answered in this research:

1. What is the optimal number of Whole Milk 1Liter to be produced within a

month?

2. What is the optimal number of Non Fat Milk 1Liter Non Fat Milk 200ml to be

produced within a month?

3. What is the optimal number of Choco Milk 1L and Choco Milk 200ml to be

produced within a month?

4. What is the optimal number Live Yogurt Strawberry to be produced within a

month?

5. What is the optimal number Live Yogurt Blueberry to be produced within a

month?

month?

7. What is the optimal number of Live Yogurt Mango to be produced within a

month?

8. What is the optimal number of Live Yogurt Pineapple to be produced within

a month?

9. What is the maximum cost of income?

Assumptions

The study aimed to:

1. formulate a mathematical model that will yield an optimal production policy

that satisfies the product demand

2. minimize the production and inventory cost and determine the optimal

production plan specifying the number of units of each product to be obtained

from each production source in each future time periods.

3. determine the optimal number of milk, cheese, yogurt and cream to be

produce within a month.

This study aimed to contribute benefits to the following:

Mr. Eduardo J. Soriano (the owner of Hacienda Macaluan, Inc.)

This study provides HMI a way to maximize its income by producing

the optimal quantity without risking the patronage and loyalty of its

consumers.

Same Business Industry

This study can also be useful to other businesses of the same type and

setup as the HMI in order to increase work efficiency and business

performance.

The Researcher

This study would give the researcher correct conclusion by the use of

the information gathered for the completion of this research.

Future Researcher

The result of this study will be very useful to the future researchers as

10

they would use the same study about making a production plan.

This study only focused on the formulation of a better mathematical

model that suits HMI. The products that were subjected to the study are just

Whole Milk, Choco Milk, Non Fat Milk, and Live Yogurt. The analysis was

based from the record of sales from June 2015-September 2015 in order to

have much accurate result. The packing types that were considered for the

Choco milk and Non Fat Milk are 200 ml pouch and 1Liter pouch and for

Whole Milk, 1Liter was considered while 90g were considered for yogurt.

It was assumed that season would not affect the yield of the farm,

outbreak of diseases and natural calamities would not occur and the model

formulated was within a month.

Definition of Terms

Constraints. A mathematical expression that combine the variables to

express limit on the possible solutions.

Linear programming. A mathematical technique for finding optimal

solutions to problems that can be expressed using linear equations and

inequalities.

Net- profit. The actual profit after working expenses not included in

11

Farm Plantation. In this study, it is a large farm and used as a subject

for this study where Linear Programming was applied to determine the

optimal allocation of its resources.

Dairyman. A man who manages or works in a dairy farm.

Chapter 2

related studies that may have some significance to the current study and offer

direction in the conductance of the study.

Related Literature

On Linear Programming

The mathematical programming as a method chooses between farm

enterprises on the basis of determined objective function considering a set of

fixed farm constraints, thus representing the preferences of the farm (Zgajnar

et al., 2007). Optimisation is commonly used approach to solve problems of

production planning in the sense of optimal resource allocation given the

12

changing conditions that farms face. Based on the type of the research

problem and basic assumptions, the models could be grouped into

deterministic and probabilistic or stochastic (Strauss et al, 2008). When all

required information is supposed to be known with certainty, the model is

deterministic supposing there is no risk (variability) and the decision-making is

done under complete certainty (Lee and Olson, 2006). Additionally, the theory

distinguishes between positive and normative models, wherein normative

models are designed to show what the optimal economic result should be

(Howitt, 2005).

Linear programming (LP) is the most often used mathematical

programming method, even due to its simplified linear and normative nature,

it shows quite accurately what the farmers do or how their behaviour changes

if the production conditions change (Hazell and Norton, 1986). The LP has

been introduced by Dantzig in 1947 (Lee and Olson, 2006) and since then it

has been successfully used in finding an optimal production plan in different

areas, most often with an objective function for maximizing the total gross

margin or net income. LP has been already proven as useful method in farm

production planning (Scarpari M.S. and Beauclair E.G.F, 2010; Alabdulkader

A.M. et al, 2012; Kebede E. and Gan J., 1999; Majewski E. and Was A.,

2005) , whereas Boehlje and Eidman (1984) stressed that this method can be

applied to all resource allocation problem the farmer is faced with. It also

proved to be more applicable for solving complex problems than other more

13

The linear programming is a mathematical procedure utilising the

simplex algorithm which aims to find the optimal combination of farm

enterprises under maximisation or minimisation of the linear objective function

(Kay et al., 2008). LP models require clear definition of farm activities,

resource requirements and specific constraints such as market and policy

constraints (Hazell and Norton, 1986). It gives solution that is combination of

activities which maximize the value of the objective function (gross margin or

net revenue) within a predetermined list of opportunities and constraints (land,

labour and capital) (Turner and Taylor, 1998).Managerial ability can be used

to explain variability amongst farms that operate in similar environments

(Rougoor, Trip, Renkema, 1998). The term managerial ability entails how a

manager uses the resources available to them to make decisions in order to

achieve their specified goals. Farm performance differences may be due to

different skills and personality traits among farm managers. Farm managers

that have a drive to succeed, are highly motivated, intelligent and have a lot of

dairy farm experience are expected to perform better than those that do not.

However, in order for a farmer with favorable personality traits and many skills

and experiences to be successful it is necessary that they are also skilled at

decision-making. There are many stochastic elements that cause uncertainty

in dairy farm performance. Thus, managers have the difficult task of making

decisions in order to achieve an outcome that is unpredictable and risky.

14

Thus, even managers with the right qualities to be successful often fail due to

uncontrollable circumstances.

Efficiency relates to the overall productivity of the dairy farm (Lund &

Hill, 1979). In order to measure efficiency, it is necessary to take into account

all inputs that determine an output. It is critical to analyze efficiency in this

manner because using a measurement that does not take into account all

inputs of production will give a biased result.

Efficient dairy farms often have lower costs of production than

inefficient dairy farms (Mosheim & Lovell, 2009). However, there have been

results in studies that show that efficiency only increases with cow numbers to

a certain point, and then increasing herd size actually leads to a decrease in

efficiency. It has also been shown that long-run average costs sometimes

portray a typical U-shaped graph (Alvarez & Arias, 2003). This means that at

a certain size, farms become less efficient and costs rise. In the past studies

have been conducted that have concluded that this inefficiency can be

overcome by an increase in managerial ability.

A study conducted by Tauer and Mishra (2006) analyzed the factors

that account for inefficiency on dairy farms. They were interested in seeing

what role managerial ability played in reducing inefficiency on dairy farms.

The researchers hypothesized that when a farm adopts a new technology but

does not increase efficiency that it is caused by poor management. Tauer and

Mishra discovered that herd size and farmer age were associated with

15

with the belief that farms become inefficient after hitting a certain herd size

because managerial ability is fixed.

Alvarez and Arias (2003) discovered that there is a negative correlation

between managerial ability and average cost. Thus, as farms increase in size,

there will be a point when they will experience increased costs and will need

to increase managerial ability in order to combat this increase. The article

concludes that dairy farms can experience efficiency at any size as long as

there is a sufficient increase in managerial ability in order to counteract the

increasing average costs. This study confirmed the opinion that managerial

ability is related to efficiency. Successful farms have an appropriate amount of

managerial ability relative to their herd size.

Dairy farmers can improve their managerial ability by attending higher

levels of education, attending seminars to continue learning after school, and

utilizing veterinarians, nutritionists, consultants, and extension agents to help

to continue to improve their farm. Sometimes when increasing herd size, it is

necessary to add another manager. This will allow both managers to

specialize in areas they excel at causing the dairy to be run efficiently.

Related Studies

Linear Optimization Model that Maximizes the Value of Farm Products

Linear programming technique is relevant in optimization of resource

allocation and achieving efficiency in production planning particularly in

16

resources and the optimal combination of enterprises in the food sub-sector is

of paramount importance (Igwe et al, 2011).

Many studies have been conducted in different farming systems in

different countries to optimize farm plans using LP. Nedunchezhian and

Thirunavukkarasu (2007) developed an LP model to optimize farm plans in

different farming systems in Orathanadu block of the Thanjavur district in

Tamil Nadu. The income increase in the optimal plans was 223.5 per cent for

large scale farmers, 192.7 per cent for small farmers, 180.1 per cent for

marginal farmers and 116 per cent for landless households.

Ibrahim and Omotesho (2011) in their study determined an optimal

enterprise combination for vegetable production in north central Nigeria. Their

optimal plan achieved 88 per cent of the goals considered. Scarpari et al

(2010) developed an optimized planning model for sugarcane farming using

an LP tool. Their results support their planning model as a very useful tool for

sugarcane management. Mohamad and Said (2011) developed an LP crop

mix model for a finite-time planning horizon. The objective of their model was

the maximization of total returns.

Dey and Mukhopadhyay (2010) formulated an LP model to find the

optimum allocation of resources. The net return earned from the optimal plan

was found to exceed the net return obtained from existing allocation of

resources by 43 per cent. Abdelaziz et al (2010) applied LP to optimize the

17

cropping pattern in North Darfur State, Sudan. The models gave a cropping

pattern different from the farmers production plan. The solution gave a

profitable objective function while the farmers plan gained them a loss.

An LP model was formulated by Kaur et al (2010) to suggest the

optimal cropping pattern for maximizing net returns and to ensure significant

savings of groundwater use in Punjab. The optimal production plan increased

returns by 4 per percent along with groundwater savings of 26.55 per cent.

Bamiro et al (2012) actualized by LP model the optimal cassava based

combination. The resulting crop combinations resulted in increased gross

margin.

In modeling the economic aspects of the farm, we assume that the

farmer simply seeks to maximize income (Hazel & Norton, 1986). However, in

reality, the production options open to a farmer may be restricted by the need

to observe sound husbandry practices such as crop rotations (Hazel &

Norton, 1986). Crop rotations are important for pest and disease control and

maintaining soil fertility (Hazel & Norton, 1986). In this study, a linear

programming model that incorporates crop rotation requirements is developed

for a rural farmer in Bindura, Zimbabwe

18

CHAPTER 3

METHODOLOGY

research instrument, and the mathematical formulation that were used by the

researcher to finish this study.

Research Design

There was a need of forecasting the sales of each of the product in

order to determine the demand requirements for each of the product of

Hacienda Macalauan Incorporated (HMI) in Calauan, Laguna.This model will

be very useful in this kind of case.

Research Procedure

The topic for this study was approved by the panellists of the

19

department. After having approved, the researcher had found a subject where

he applied the model for his study. He was allowed by the farm owner to

gather data needed for the completion of this study. After all the data were

collected, the researcher started on modelling the problem.

Research Instrument

An interview with the plant manager will be conducted to acquire

additional information such as production sources, production schedule,

demand and sales strategy of the company, and information regarding the

clients. Each of the products has different shelf lives; therefore the analysis

for the data was defined in a daily basis.

Excel Solver

The researcher will use the Excel Solver to solve linear problems in

forecasting the probable sales of each of the product.

B.

Model Formulation

An optimization problem can be represented in the following way:

Given: a function f : A

element x0 in A such that f(x0) f(x) for all x in A ("minimization") or such that

f(x0) f(x) for all x in A ("maximization").

Typically, A is some subset of the Euclidean space Rn, often specified

by a set of constraints, equalities or inequalities that the members of A have

to satisfy. The domain A of f is called the search space or the choice set,

while the elements of A are called candidate solutions or feasible solutions.

20

or cost function (minimization), indirect utility function (minimization), a utility

function (maximization), a fitness function (maximization), or, in certain fields,

an energy function, or energy functional. A feasible solution that minimizes

(or maximizes, if that is the goal) the objective function is called an optimal

solution.

By convention, the standard form of an optimization problem is stated

in terms of minimization. Generally, unless both the objective function and

the feasible region are convex in a minimization problem, there may be

several local minima, where a local minimum x* is defined as a point for

which there exists some > 0 so that for all x such that

the expression

holds; that is to say, on some region around x * all of the function values are

greater than or equal to the value at that point. Local maxima are defined

similarly.

A large number of algorithms proposed for solving non-convex

problems including the majority of commercially available solvers are not

capable of making a distinction between local optimal solutions and rigorous

optimal solutions, and will treat the former as actual solutions to the original

21

concerned with the development of deterministic algorithms that are capable

of guaranteeing convergence in finite time to the actual optimal solution of a

non-convex problem is called global optimization.

22

Chapter 4

This chapter shows that variables were properly defined. The

objectives were identified and the constraints were set up.

Table 1

Preliminary Data

Products

Whole Milk

1Liter

Non Fat Milk

1Liter

Non Fat Milk

200ml

Choco Milk

1Liter

Choco Milk

200ml

Live Yogurt

Strawberry

Live Yogurt

Blueberry

Live Yogurt

Nata

Live Yogurt

Mango

Live Yogurt

Pineapple

Demand

Labor and

Production

Cost

Net Profit

Resources

Available

3508

378864

94716

3800

1949

194900

48725

2400

7780

178940

31120

8000

3807

380700

95175

4000

226807

5216561

907228

48000

2902

55718.4

13929.6

1900

2667

51206.4

12801.6

1700

2491

47827.2

11956.8

1500

1895

36384

9096

1400

1778

34137.6

8534.4

1200

23

The daily demands for the last four months of year 2015 were obtained

from the records of HMI. The study focused on the 10 most sold products and

records showed that the item with the highest demand from June to

September was the Chocolate Milk (200 ml pouch)

The daily demands for each product were summarized in Tables 1-10

of Appendix A. These data were used to forecast the demand sales of the

company for the whole month of February

.

THE MODEL

The decision variables are:

1= the number of Whole Milk 1 Liter

x be produceda month

x be produced a month

x be produced a month

4= the number of Choco Milk 1 Liter

x be produceda month

5= the number of Choco Milk 200 ml

x be produceda month

6= thenumber of Live Yogurt Strawberry

x be produceda month

7= thenumber of Live Yogurt Blueberry

x be produced a month

24

x be produceda month

9= thenumber ofLive Yogurt Mango

x be produceda month

10= the number ofLiveYogurt Pineapple

x be produced a month

The decision coefficient is obtained by data gathered from the existing

record of the said farm.

THE CONSTRAINTS:

RESOURCES

LABOR AND PRODUCTION COST

The current expenditures for labor and production is Php..

Labor and Production cost constraints is summarized as;

99

95

90

70

70

RHS

300

135 80

8200

Choco No. of Blueberry

Yogurt No. of Yogurt

NataNo. of Yogurt

MangoNo. ofPineapple

Yogurt No. of Yogurt

25

TABLE 2

The table above presents the initial data that had been placed in the

Subjected to:

Yogurt PineappleStorage Capacity of

130

70

280

130

Milk1LNo. of Whole

Milk 1LNo. ofMilk

Non200ml

Fat No. of NonMilk

Fat 1LNo. of Choco

26

27

Chapter 5

This chapter consists of the summary, findings, conclusion drawn

from the study and recommendation for the future researchers.

Summary

This research entitled A Profit Optimization for Hacienda Macalauan

Incorporated made use of Linear Programming model. The subject of the

study was the demand of products to be produced for cheese, milks and

yogurt for the whole month of November. The study sought to answer the

following questions: 1.) What is the optimal number of Whole Milk 1Liter to be

produced within a month? 2.) What is the optimal number of Non Fat Milk

1Liter and Non Fat Milk 200ml to be produced within a month? 3.) What is the

optimal number of Choco Milk 1Liter and Choco Milk 200ml to be produced

within a month? 4.) What is the optimal number of Live Yogurt Strawberry,

Live Yogurt Blueberry, Live Yogurt Nata, Live Yogurt Mango, and Live Yogurt

Pineapple to be produced within a month? 5.) What is the maximum cost of

income?

28

The program used for this study was the Microsoft Excel solver (2007)

and Microsoft Word (2007).

Findings

The following findings were obtained based on the data that were analyzed:

Milk 1Liter to be produced should be NUMBER pieces

2. The number of Non Fat Milk 1Liter to be produced should be NUMBER

pieces.

3. The number of Non Fat Milk 200ml to be produced should be

NUMBER pieces.

4. The number of Choco Milk 1Liter to be produced should be NUMBER

pieces.

5. The number of Choco Milk 200ml to be produced should be NUMBER

pieces.

6. The number of Live Yogurt Strawberry to be produced should be

NUMBER pieces

7. The number of Live Yogurt Blueberry to be produced should be

NUMBER pieces.

29

pieces

9. The number of Live Yogurt Mango

to be produced should be

NUMBER pieces

10. The number of Live Yogurt Pineapple to be produced should be

NUMBER pieces

11. The total amount of income is MoneyPhp.

Conclusions;

The following conclusions were obtained based on the findings of the

study:

1. Through the Mathematical model used in this study, the optimal

numbers of Whole Milk 1Liter to be produced were determined.

2. Through the mathematical model used in this study, the optimal

numbers of Non Fat Milk 1Liter and Non Fat Milk 200ml to be produced

were determined.

3. Through the mathematical model used in this study, the optimal

numbers of Choco Milk 1Liter and Choco Milk 200ml to be produced

were determined.

4. Through the mathematical model used in this study, the optimal

numbers of Live Yogurt Strawberry, Live Yogurt Blueberry, Live Yogurt

Nata, Live Yogurt Mango, and Live Yogurt Pineapple to be produced

were determined.

30

5. Through the mathematical model used in this study, the total amount of

income was determined.

Recommendations

Based on the findings and conclusions taken from the study, the

following recommendations are given:

1. A closer and better forecast can be obtained if there were more data

available in the company, if the sales from the last two months or more

years were given instead of four months.

2. The model has been more efficient and effective if all the products are

considered and maximization of the storage capacity of the plant was

included in the study.

3. Other researchers may also use another kind of software for solving

the optimal allocation of resources and determining the optimal number

of products should be sold in order to maximize the net profit.

4. As the study showed that in order to formulate the mathematical model

of the allocation of resources problem, the objectives must be

determined.

5. Future researchers should have a follow up study on determining the

additional land, labor and capital of a farm using linear programming to

make the model better.

31

Bibliography

A. Books

Dantzig, George B., Introduction to LINEAR PROGRAMMING and

Extension

Hillier F. S. and Lieberman G. S. (2005). Introduction to Operation Research

(8th Edition) New York: Mc Graw-Hill.

Johnson, L. A. and W. R. Smythe, (1996). Introduction to Linear

Programming with Application. Prentice Hall, Inc. England Cliffs, New Jersey.

Taha, H. A. (2003). Operation Research: An Inroduction (7th Edition).

Singapore Pearson Education. (Asia) Pte Ltd

Dent, J.B., S.R. Harrison and K.B. Woodford (1986). Farm Planning with

Linear Programming: Concept and Practice, Butterworths, Sydney.

Lewis, Catherine,Linear Programming: Theory and Applications.

B. Unpublished Materials

Dalangin, A. D. and M.C. Gonzalez (2007). Inventory Analysis of a Dairy

Producing Cooperative Unpublished Undergraduate Special Problem,

University of the Philippines-Los Banos, College Laguna.

32

APPENDIX A

LETTER OF REQUEST

Laguna State Polytechnic University

Main Campus

Santa Cruz, Laguna

Greetings!

I am ADRIMAR AQUINO ADRIANO a graduating student of Laguna State

Polytechnic University taking up Bachelor of Science in Mathematics. I am in

the process of preparing my thesis as a requirement for graduation. As a part

of our academic requirement, I would like to conduct a research study entitled

Profit Optimization for Hacienda Macalauan Incorporated.

In view of the above, I am requesting permission to be my client for my

research study. This is for research purposes only; therefore rest assured that

all of the information will be treated confidentially.

Hoping and praying of your esteemed consideration of this humble request.

Thank you very much, more power and God Bless.

Very truly yours,

________________

Adrimar A. Adriano

Student Researcher

Noted by:

_________________

Dr, Merilyn P. Jucalla

Thesis Adviser

33

APPENDIX B

List of

Table 1. Daily

Whole Milk

to Sept. 2015

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

19

0

39

25

29

29

45

23

23

29

24

25

43

47

34

20

22

32

26

24

30

13

27

0

62

30

35

30

18

19

JUL

35

36

13

35

32

17

28

38

29

21

33

27

11

22

42

38

34

28

38

13

27

36

24

28

47

37

15

27

67

55

AUG

29

31

0

37

30

30

35

34

131

18

33

24

36

21

16

33

17

20

28

46

0

5

53

18

20

0

31

19

34

31

SEPT

25

29

25

33

30

21

31

30

85

23

28

29

27

29

33

32

26

28

30

22

22

26

33

22

36

28

25

28

33

24

Demands

Sales for P&B

(1L) from Jun.

34

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

13

5

36

21

3

3

13

7

12

13

5

13

12

4

21

14

14

18

4

14

29

18

23

17

38

29

10

27

JUL

20

28

10

25

19

0

16

26

17

10

20

15

3

16

17

11

21

6

13

1

22

29

15

22

23

9

0

25

22

19

AUG

18

6

0

4

37

21

9

37

13

5

16

33

1

0

49

5

4

7

6

25

0

0

17

0

25

66

19

10

67

6

SEPT

15

9

37

18

23

39

3

21

13

20

16

23

11

32

13

16

43

9

13

11

16

4

8

13

15

23

15

16

16

16

Fat Milk (1L) from Jun. to Sept.

2015

35

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

50

0

90

0

10

0

80

10

50

50

250

289

116

0

20

180

20

25

80

0

280

0

280

70

160

30

0

200

JUL

150

0

150

234

174

0

30

200

60

0

150

150

0

0

235

60

0

204

125

0

100

132

0

150

100

111

0

145

152

70

AUG

50

0

0

110

30

0

0

110

50

0

0

30

110

273

100

60

0

30

50

60

0

40

50

0

0

80

20

10

84

0

SEPT

62

60

61

59

55

58

51

48

41

46

45

42

38

40

43

41

40

37

38

35

32

30

27

29

26

29

27

25

25

21

Non Fat Milk (200ml) from Jun.

to Sept. 2015

36

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

5

3

6

13

3

0

1

0

7

2

11

5

18

1

3

9

15

1

8

11

11

0

0

5

22

15

2

27

JUL

6

14

6

18

6

1

12

6

8

13

13

20

0

12

34

8

2

5

15

2

25

12

5

2405

10

3

0

22

19

16

AUG

4

1

0

0

28

15

0

21

4

4

12

0

0

0

60

6

0

3

1

20

0

0

9

0

10

25

16

8

50

1

SEPT

39

38

36

35

33

31

29

27

25

23

20

18

16

13

10

8

5

1

2

5

9

13

16

21

30

30

30

29

29

29

Choco Milk (1L) from Jun. to

Sept. 2015

37

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

70

2150

1350

1100

645

0

1230

530

3100

1200

255

3675

3100

0

1650

3985

2180

390

1750

400

3440

0

4770

2295

8470

1300

0

4640

JUL

5750

660

2550

7300

9410

0

1480

6600

1735

150

3780

3900

0

2160

6400

1020

1350

5448

1750

0

3000

2573

2360

100

610

3191

0

3140

3850

4186

AUG

515

1840

0

3710

1450

1400

803

2850

1570

0

2244

1584

2100

993

3850

850

0

2900

3668

2240

0

0

2550

0

1150

2780

3132

1050

2125

835

SEPT

1276

1314

1240

1206

1280

1411

1407

1369

1446

1419

1355

1370

1391

1328

1308

1384

1345

1311

1369

1348

1315

1321

1318

1312

1254

1204

1211

1155

1159

1182

Choco Milk (200ml) from Jun.

to Sept. 2015

38

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

22

10

18

80

88

0

0

3

30

11

30

29

24

0

25

19

10

33

12

0

30

0

44

18

83

44

0

26

JUL

25

32

12

55

30

0

10

32

20

17

23

27

0

5

0

37

17

19

35

0

16

20

28

24

30

46

0

40

21

10

AUG

51

40

0

20

30

87

27

29

50

0

55

17

50

20

56

32

0

45

15

38

0

10

35

0

10

10

0

24

23

35

SEPT

26

26

25

25

25

25

26

27

27

26

26

26

26

26

26

26

26

26

26

26

26

26

25

25

25

25

25

26

26

26

Live Yogurt Strawberry from Jun.

to Sept. 2015

39

Table 7.

for P&B Live

Blueberry

Sept. 2015

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

18

9

26

80

74

0

0

3

20

11

34

25

24

0

15

19

10

34

26

0

20

0

58

21

69

20

0

16

JUL

15

38

17

55

42

0

7

27

18

17

23

31

20

15

0

37

15

25

30

0

20

30

35

10

30

40

0

40

21

0

AUG

46

20

0

20

19

54

41

28

29

25

5

25

36

0

53

25

0

20

15

28

0

0

41

10

41

10

20

9

32

0

SEPT

25

25

25

25

25

25

25

25

25

25

25

25

25

25

24

24

24

24

24

24

24

23

23

23

23

23

23

23

23

23

Daily Sales

Yogurt

from Jun. to

40

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

17

0

17

40

25

0

0

17

15

11

28

25

15

0

20

12

10

30

22

0

24

0

24

10

59

22

0

16

JUL

5

21

29

40

38

0

15

37

28

18

20

51

0

5

0

39

54

25

11

12

10

45

21

2

29

24

0

60

29

27

AUG

38

16

0

10

42

25

20

42

20

15

40

10

53

17

46

1

0

5

10

50

0

0

31

0

14

10

13

32

25

26

SEPT

25

24

24

24

24

25

25

24

25

25

24

24

25

25

24

24

24

24

24

25

24

24

24

24

24

24

23

23

24

24

Sept. 2015

Live Yogurt Nata from Jun. to

41

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

10

8

15

40

29

0

0

10

30

1

34

34

15

0

20

32

10

20

12

0

30

41

0

49

22

0

0

26

JUL

25

21

23

50

29

0

15

51

20

10

21

29

0

7

0

34

21

25

18

0

10

16

27

2

15

42

10

20

10

24

AUG

39

17

0

10

55

12

20

22

22

0

30

10

38

12

26

7

0

10

10

25

0

5

22

0

10

0

10

14

22

31

SEPT

13

13

13

12

13

13

13

13

13

13

13

12

12

12

12

12

12

12

12

12

11

11

11

11

10

10

10

10

10

9

Table 9. Daily Sales for P&B Live Yogurt Mango from Jun. to Sept. 2015

42

DAY

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

JUN

0

0

10

0

10

30

31

0

0

0

15

11

18

29

9

0

10

21

10

10

15

0

20

0

26

10

29

29

0

10

JUL

5

24

24

40

17

0

11

31

10

12

23

32

0

5

0

34

10

10

5

0

32

26

20

2

27

15

0

30

12

2

AUG

28

15

0

10

36

30

54

12

11

0

30

10

39

0

36

5

0

10

10

10

0

5

31

0

10

10

9

15

12

29

SEPT

17

17

17

17

17

17

17

17

17

17

17

17

17

17

17

17

17

17

17

16

16

16

16

16

16

16

16

16

16

16

Table 10. Daily Sales for P&B Live Yogurt Pineapple from Jun. to Sept. 2015

43

APPENDIX C

FINAL COMPUTATION

44

APPENDIX D

Answer Report of Final Computation

45

Cell

$L$

3

Name

income Total

Original

Value

Final

Value

171875

171875

Original

Value

2305.1345

97

2007.6978

74

Final

Value

2305.1345

97

2007.6978

74

0

2007.6978

74

0

2007.6978

74

0

385.47800

72

385.47800

72

385.47800

72

385.47800

72

385.47800

72

0

385.47800

72

385.47800

72

385.47800

72

385.47800

72

385.47800

72

Adjustable Cells

Cell

$B$

2

$C$

2

$D$

2

$E$

2

$F$

2

$G$

2

$H$

2

$I$

2

$J$

2

$K$

2

Name

no. of Whole Milk 1L

no. of Non Fat Milk 1L

no. of Non Fat Milk 200ml

no. of Choco Milk 1L

no. of Choco Milk 200ml

no. of Yogurt Strawberry

no. of Yogurt Blueberry

no. of Yogurt Nata

no. of Yogurt Mango

no. of Yogurt Pineapple

46

APPENDIX E

Sensitivity Report of the Final Computation

Adjustable Cells

Cell

$B$

2

$C$

2

$D$

2

$E$

2

$F$

2

$G$

2

$H$

2

Name

no. of Whole Milk 1L

no. of Non Fat Milk 1L

no. of Non Fat Milk 200ml

no. of Choco Milk 1L

no. of Choco Milk 200ml

no. of Yogurt Strawberry

no. of Yogurt Blueberry

$I$2

$J$2

$K$

2

no. of Yogurt Pineapple

Final

Value

2305.134

597

2007.697

874

0

2007.697

874

0

385.4780

072

385.4780

072

385.4780

072

385.4780

072

385.4780

072

Reduced

Gradient

0

0

1.750013

351

0

1.750013

351

0

0

0

0

0

Constraints

Final

Cell

$L$

5

$L$

7

$L$

8

$L$

Name

production and labor cost

Total

Whole Milk 1L Total

Non Fat Milk 1L Total

Non Fat Milk 200ml Total

Value

687500

2305.134

597

2007.697

874

0

Lagrange

Multiplie

r

0.25

0

0

0

47

Cell

$L$

3

Cell

$B$

2

$C$

2

$D$

2Low

er

$E$

2Limi

t

$F$

2 0

$G$

2 0

$H$

2 0

$I$

2 0

$J$

2 0

$K$

2 0

0

0

0

0

9 Target

Value

$L$ Name

Choco Milk 1L Total

10

income

$L$ Total

Choco Milk 200ml171875

Total

11

$L$

Yogurt Strawberry Total

12Adjustable

$L$

Yogurt Blueberry Total

Name

Value

13

2305.134

$L$

Yogurt Nata Total

no. of Whole Milk 1L

597

14

no. of Non Fat Milk

2007.697

$L$

Yogurt Mango Total

1L

874

15

no. of Non Fat Milk

$L$

Yogurt Pineapple

Target

Upper Total

Targ0

200ml

16

et

2007.697

Limit

Resu

no.Result

of Choco Milk 1L

874

lt

no. of Choco Milk

109636.3

2305.134

1718

200ml

0

659

597

75

no. of Yogurt

385.4780

121682.5

2007.697 1718

Strawberry

072

531

874

75

no. of Yogurt

385.4780

171875

0

1718

Blueberry

072

75

385.4780

121682.5

2007.697

1718

no. of Yogurt Nata

072

531

874

75

385.4780

171875

0 1718

no. of

Yogurt Mango

072

75

no. of Yogurt

385.4780

170024.7

385.4780

1718

Pineapple

072

056

072

75

170024.7

385.4780 1718

056

072

75

170024.7

385.4780 1718

056

072

75

170024.7

385.4780 1718

056

072

75

170024.7

385.4780 1718

056

072

75

2007.697

874

0

346.9302

065

346.9302

065

346.9302

065

346.9302

065

346.9302

065

0

0

0

0

0

0

0

APPENDIX F

Limit Report of Final

Computation

48

EXECUTIVE SUMMARY

49

Linear

Programming

1)

What is the optimal

number of Whole

Milk 1 Liter to be

produced?

Problem

Treatment

Trough the

mathematical model

used, the optimal

number of Whole Milk 1

Liter is pieces.

Findings

-tionsRecommenda

Through the

Other researchers

Mathematical model

may also use

used in this study, the

another kind of

optimal numbers of

software for solving

Whole Milk 1Liter to be

the optimal

produced were

allocation of

determined.

resources and

determining the

optimal number of

products should be

sold in order to

maximize the net

profit.

Conclusions

50

Conclusions

Findings

that in order to

formulate the

mathematical model

of the allocation of

resources problem,

the objectives must

be determined.

-tionsRecommenda

Conclusions-tionsRecommenda

Trough the

Through

Trough

the the

Future

researchers

Through

the

mathematical model mathematical

mathematical

model

model

should

have

amodel

follow

mathematical

1)

2)

used, the optimal

usedthe

in this

study, the

used,

optimal

study

on the

used up

in this

study,

What are the

What are thenumber of Choco Milk

number

of Choco

Milk

number

of Non

Fat Milk

determining

theMilk

number

of

Non

Fat

optimal numbers of optimal numbers

of and Choco Milk1Liter

1Liter

1Liter

and

Choco Milk

to be

produced

additional

1Liter andland,

Non labor

Fat

Choco Milk 1Liter

Non Fat Milk 1Liter

200 ml is pieces. should

200 be

ml to

be produced

pieces

and

and

capital

of

a

farm

200ml

to

be

produced

and Chcoco Mik

and Non Fat Milk

determined.

for Nonwere

Fat Milk

200 ml

using

linear

was

determined.

200 ml to be

200ml to be

is pieces.

programming

to

produced?

produced?

make the model

better.

Linear

Linear

Programming

Programming

Statement of the Mathematical

Findings

Problem

Treatment

Problem

Treatment

51

Conclusions

Statement of the

Problem

Mathematical

Treatment

Linear

Programming

idle part of the land

2)

of a farm plantation What are the optimal

in maximizing the numbers of Yogurt

income of a farm, Strawberry, Yogurt

other ways of

Blueberry, Yogurt

maximizing the

Nata, Yogurt Mango

indicated objectives

and Yogurt

may be used in

Pineapple to be

future studies

produced?

-tionsRecommenda

Conclusions

Trough the

Through the

mathematical model

mathematical model

used the optimal

used in this study, the

number of Yogurt

number of Yogurt

Strawberry, Yogurt

Strawberry, Yogurt

Blueberry, Yogurt Nata,

Blueberry, Yogurt Nata,

Yogurt Mango and

Yogurt Mango and

Yogurt Pineapple is

Yogurt Pineapple to be

pieces.

produced were

determined.

Findings

Future researchers

should have a follow

up study on

determining the

additional land, labor

and capital of a farm

using linear

programming to

make the model

better.

-tionsRecommenda

52

53

CURRICULUM VITAE

Address: Brgy. San Isidro,Pagsanjan,Laguna

Contact number: 0916-854-3503

Email Address: adrimaraquino@yahoo.com

Personal Information

Date of birth:

Place of birth:

Age:

Sex:

Citizenship:

Civil Status:

Pagsanjan, Laguna

20

Male

Filipino

Single

Educational Background

Tertiary Level:

Laguna State Polytechnic University

Sta. Cruz Main Campus, Sta. Cruz, Laguna

A.Y. 2013-present

BACHELOR OF SCIENCE IN MATHEMATICS

Southern Luzon State University

Lucban, Quezon Province

A.Y. 2012-2013

Secondary Level:

Pagsanjan, Laguna

S.Y. 2008 2012

Elementary Level:

Pagsanjan, Laguna

S.Y. 2002-2008

54

Participant:

Southern Luzon State University

Main Campus, Lucban, Quezon

October 02, 2013

Participant:

World: Its Opportunities, Challenges and

Constructive Adaptation

Riceland Pagsanjan Resort and

Restaurant, Pagsanjan, Laguna

September 04, 2014

Participant:

Laguna State Polytechnic University

Main Campus, Santa Cruz, Laguna

September 16, 2014

Participant:

Laguna State Polytechnic University

Main Campus, Santa Cruz, Laguna

September 24, 2014

Trainee:

On-the-Job Training

LandBank of the Philippines-Sta Cruz Capitol Branch

P. Guevarra St., Brgy. I, Sta. Cruz, Laguna

April 6-May 13, 2014

55

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