Anil Surendra Modi School of Commerce, NMIMS University,

Mumbai

Operations Research

Systematic Application Of Operations Research in production planning and Profit

Optimization in the textile-clothing industry for Imperial Dyeing Ltd

Submitted By :
Manan Sanghai (40)
Shailja Sultania (41)
Ashmi Sharma (42)
Abstract: This paper aims for profit optimization of a textile dyeing company – ‘Imperial
Dyeing ltd’ which is located in Surat. Developing a linear programming model and using
quantitative techniques in ‘Imperial Dyeing ltd’ is very essential for maximizing profit and
developing various factors that can be utilized for decision making. The first process involved
data gathering. Physical interviews of the concerned managers were conducted to obtain the
data. The reports given by the company was also used to obtain the necessary data. The data
collected and quantitative techniques applied here are unreservedly subjective. The data
collected is then analysed to formulate a decision making factor. An objective function is
created in terms of the concerned decision variables, i.e. the profit per meter of different
materials that are produced. Machine hours in every process that is required to produce each
material is used to formulate constraints in the model. A linear programming model for the
company is then developed for profit optimization. The model equations with sufficient
restrictions considering manufacturing impediments are comprehended using MS-Excel
solver. To conclude, some irrefutable observations have been drawn to help the company
identify its loss making products and hence maximize their profits.

Keywords: Profit optimization, linear programming model, simplex method, dyeing

industries.

India’s textiles sector is one of the oldest industries in Indian economy dating back several
centuries. It is one of the largest contributors to India’s exports with approximately 13 per cent
of total exports. The Indian Textile Industry contributes approximately 2 per cent to India’s
Gross Domestic Product (GDP). The textile industry has two broad segments. First, the
unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a
small scale and through traditional tools and methods. The second is the organised sector
consisting of spinning, apparel and garments segment which apply modern machinery and
techniques such as economies of scale (Foundation, n.d.). In our research paper we have
collected data about Imperial Dyeing Limited which is an Indian textile manufacturing and
dyeing company incorporated on 31 January 1995. It is involved in Spinning, weaving and
finishing of textiles.
It is a testing task for the manager of the company to identify the type and quantity of products
which guarantee more gross income with efficient resource utilization at a minimum cost for
the company. The problem addressed here is to determine the type and quantity of dyed fabrics
to be produced by the company for efficient resource utilization that can enhance the returns
of the company through the application of linear programming technique. Linear programming
is an operational research technique used to allocate optimally production resources for a firm’s
best practices. The linear programming problem (LPP) technique will be used to determine the
product mix that will maximize the total profit at a specified time. It is the best method for
determining an optimal solution among alternatives to meet a specified objective function
limited by various constraints and restrictions. (Gera Workie, 2016)
 The main objectives of the study are to formulate a linear programming model that would
suggest a viable product- mix to ensure optimum profit for Imperial Dyeing Ltd. and to
highlight the peculiarities of using linear programming technique. Our paper aims to encourage
the selected company to adopt the application of linear programming technique in determining
their product- mix. Bearing these objectives in mind, a post optimal analysis of the established
profit maximization model would be attempted to help the management in adjusting its
decisions in the face of increases or decreases in demand, resource prices and or availability of
raw materials. Finally, from the findings of the study, suggestions of how linear programming
method could be widely applied in business decision making in Imperial Dyeing Ltd. would be
offered.

Review of Literature
We found similar researches done by various authors which relate to our objective and
methodology of profit optimization using Linear Programming Model. A Case Study on Profit
Planning of Textile Industry Using Linear Programming Approach (Eshetie Kassegn, 2016)
studies about the development of linear programming model for Almeda Private Limited,
Ethiopian Textile Industry. The main objective of study was to maximize profit by using linear
programming technique and minimize production cost. Almeda Textile Factory faced problems
in earning the maximum possible profits because of lack of good profit planning techniques.
Solution for this problem was found by development of linear programming model for major
products of the company. A similar research was done in determining the Production Amounts
in Textile Industry with Fuzzy Linear Programming (Çağatay Teke, 2017) which discussed the
use of FLP for solving a production planning problem in a textile industry. It can be concluded
that this method introduced is a promising method for solving such problems. Because the FLP
model has fuzziness in both objective function and constraints, it was solved by using
Zimmerman approach which is one of the approaches for fuzzy linear programming. As a
result, the solution gave the amount of production for each cloth type in order to gain maximum
profit. The study illustrated how particular problems of real production systems can be treated
by the theory on fuzzy sets. Another research on Application of Linear Programming
Techniques to Determine the Type and Quantity of Textile Dyed Fabrics (Gera Workie, 2016)
solved the problem of how to determine the optimal number of textile dyed fabrics to be
produced by LPP. The strategies obtained by using LPP yield more dyed fabrics and more
gross income than strategies obtained from trial and error methods. The company could make
a production quantity and gross income differences of 703923.9654 meters dyed fabrics and
Birr 35412071.47 correspondingly if it uses LPP. The production quantity and gross income of
the company could be improved by 72.63% and 65.91% respectively.
A study by Woubante & Gera Workie on The Optimization Problem of Product Mix and
Linear Programming Applications considered an apparel industrial unit in Ethiopia as a case
study. Apparel manufacturing firms profit mainly depends on the proper allocation and usage
of available production time, material, and labour resources. The findings of the study suggest
that the profit of the company can be improved by 7.22% by applying linear programming
models. (Woubante, 2017). Another study on Profit Optimization Using Linear Programming
Model: A Case Study of Ethiopian Chemical Company aimed at profit optimization of an
Ethiopian chemical company located in Adama (Ethiopia). Linear programming model was
applied and the maximum profit Birr 107,353.17 per day for company was found. It was found
that the company was left with an idle filtration and evaporation time of 5 and 7 hours per day
respectively and un-utilizing demand for sulphuric acid of 44.52 tons per day which was
corrected after the LPP modelling was done. Thus, the optimal feasible solution was 20 tons of
aluminium sulphate per day, 6.98 tons of sulphuric acid per day. (Vishwa Nath Maurya, 2015)

Methodology
The relevant data in this research paper was gathered from a textile manufacturing and dyeing
company – ‘Imperial dyeing ltd’ which is located in Surat. The data hereon is gathered with
the objective of identifying the methods of decision making for profit maximization and
develop the model to do the same. From this case company, four types of products the company
is producing, the amount of products sold by the company, a profit per unit that can be
generated from the sale of each product and the total amount of product produced per meter
have been obtained. Relevant data regarding the daily production, annual production, annual
demand for each product, machine hour required in each process of daily production, machine
hour required per meter of cloth and total machine hour is also essential for developing the
linear programming model.

Data Collection Techniques

A physical interview was conducted with the manufacturing manager and the sales manager of
the ‘imperial dyeing ltd’ to gather the required data for developing the linear programming
model. The workers working in the factory were observed to ascertain the daily working hours
of the appointed work force. Certain secondary sources of data collection was also used to get
accurate information. Annual reports uploaded by the company was analysed and reviewed to
attain relevant data. This technique was essential as alternate strategies in gathering accessible
data for directing effective and reality based research. Facts about the sector were gathered
through accessing books related to the research.

Data Analysis Techniques

The relevant data collected was scrutinized using linear programming model. The data was
transformed into a linear programming model and solved the model (problem) using simplex
algorithm by applying MS-Excel solver in order to determine the optimal combination of the
products of the organization that can maximize its profit within the accessible rare resources.

LPP Model and its Application

Linear Programming is a mathematical technique for generating and selecting the optimal or
the best solution for a given objective function. Technically, linear programming may be
formally defined as a method of optimizing (i.e. maximizing or minimizing) a linear function
for a number of constraints stated in the form of linear inequalities. (Vishwa Nath Maurya,
2015)
Z = c1x1 + c2x2 (Objective function),
Subject to the linear constraints:

a11 x1+ a12 x2(≤ or≥) b1,a21 x1+ a22 x2(≤ or≥) b2,...... , am1 x1+ am2x2(≤ or≥)bm,x1, x2(≤ or≥) 0.

LPP OF DYEING COMPANY:

Imperial Dyeing Ltd. Manufactures and dyes four major materials – Saree material, Polyester
Dress material, Cotton Dress Material and Shirting Material which undergoes through five
processes: Bleaching, Dyeing, Print, Stentering and Packing. Material bleaching is one of the
phases in the production of materials. All raw materials, when they are in common shape, are
known as 'greige' material. The process of decolourization of greige material into a suitable
material for next processing is called bleaching. Then comes the dyeing process which is the
application of dyes or pigments on textile materials such as fibres, yarns, and fabrics with the
objective of achieving colour with desired fastness. Dyeing is regularly done in a special
arrangement containing dyes and particular compound material. After the dyeing process
printing of colour to fabric in definite patterns or designs is carried out. After this Stentering is
carried out in which heat setting is done by the stenter for Lycra fabric, synthetic and blended
fabric and the shrinkage property of the fabric is controlled. Curing treatment for resin, water
repellent fabric is done by the stenter. After completing the entire manufacturing task, apparel
is required to be packed.
According to data collection the company was dyeing 35000 metres of saree material per day
(35000*330 = 11550000 metres annually), 28000 metres of polyester dress material per day
(28000*330 = 9240000 metres annually) , 22000 metres of cotton dress material per day
(22000*330 = 7260000 metres annually) & 21000 metres of shirt material per day (21000*330
= 6930000 metres annually).
The annual demand for these four materials is 13200000 metres, 9900000 metres, 8300000
metres, 7600000 metres respectively.
The two major constrains for dyeing in the company is the demand of the materials and the
availability of the machine hours on the five processes of dyeing.
 Constraint of machine hours on 5 processes of dyeing
Products Machine Annual
Hours on Demand
(in metres)
bleaching dyeing print stenter packing
Saree material 18 22 21 24 16 13200000
(35000m/day)
Polyester dress 18 20 20 22 12 9900000
material(28000m/day)
Cotton dress 18 20 20 22 12 8300000
material(22000m/day)
Shirt 18 18 20 20 8 7600000
material(21000m/day)
7920 7920 7920 7920 7920
Total Available Time
(assuming 330 working
days per year)

According to sales department of the company the dyeing of saree material costing Rs.13/metre
is sold for Rs.15/metre. The polyester dress material costs Rs.10/metre & is sold for Rs.11
whereas the cotton dress material costs Rs.15 and is sold for Rs.17. The dyeing of shirt material
costing Rs.12/metre is sold for Rs.13.50/metre.

Mathematical Formulation of LPP for the Company

The profit maximization objective of the company is mathematically expressed as:
Zmax = 2x1 + x2 + 2x3 + 1.5x4
Decision variables are mathematical symbols that represent levels of activity.
Let,
x1 = the meters of saree material manufactured per day
x2 = the meters of polyester dress material manufactured per day
x3 = the meters of cotton dress material manufactured per day
x4 = the meters of shirt material manufactured per day
The model constraints are also linear relationships of the decision variables; they represent the
restrictions placed on the firm by the operating environment. (III) The constraints relate to the
number of hours of machine time available on five processes (bleaching, dyeing, printing,
Stentering and packing); and demand also restricts the number of tons of the items that can be
manufactured as presented below:
 Number of hours of machine time on five processes and the demand of items
Products Machine Produced/day Profit
Hours (in meters) /meter(in
per rupees)
metre
per day
bleaching dyeing print stenter packing
Saree material 0.00051 0.00063 0.0006 0.00068 0.00045 35000 2
Polyester dress 0.00051 0.00057 0.00057 0.00063 0.00034 28000 1
material
Cotton dress 0.00051 0.00057 0.00057 0.00063 0.00034 22000 2
material
Shirt material 0.00051 0.00051 0.00057 0.00057 0.00022 21000 1.50
24 24 24 24 24
Available
resource

The constraints of the company are expressed as follows:

Maximize Zmax = 2x1 + x2 + 2x3 + 1.50x4
Subject to:
0.00051x1 + 0.00051x2+ 0.00051x3+ 0.00051x4 ≤24 hrs. (machine hrs. on Bleaching),
0.00063x1 + 0.00057x2+ 0.00057x3+ 0.00051x4 ≤24 hrs. (machine hrs. on Dyeing),
0.0006x1+ 0.00057x2+ 0.00057x3+ 0.00057x4 ≤24 hrs. (machine hrs. on Printing),
0.00068x1+ 0.00063x2+ 0.00063x3+ 0.00057x4 ≤24 hrs. (machine hrs. on Stenter),
0.00045x1+ 0.00034x2+ 0.00034x3+ 0.00022x4 ≤24 hrs. (machine hrs. on Packaging)
x1≤35000 meters (production for saree material per day),
x2≤28000 meters (production for polyester dress material per day),
x3≤22000 meters (production for cotton dress material per day),
x4≤21000 meters(production for shirting material per day)

x1, x2, x3,x4≥0 (non-negativity).

Solution of the LPP Using MS-Excel Solver

To apply the MS-Excel Solver, first we translate the linear programming model into its standard
form. Thus, the above model, written in the standard form, becomes:

Zmax = 2x1 + x2 + 2x3 + 1.50x4 + 0s1 + 0s2 + 0s3 + 0s4 + 0s5 + 0s6 + 0s7 + 0s8 + 0s9
Subject to:
0.00051x1 + 0.00051x2+ 0.00051x3+ 0.00051x4 + s1 = 24 hrs.
0.00063x1 + 0.00057x2+ 0.00057x3+ 0.00051x4 + s2 = 24 hrs.
0.0006x1+ 0.00057x2+ 0.00057x3+ 0.00057x4 + s3 = 24 hrs.
0.00068x1+ 0.00063x2+ 0.00063x3+ 0.00057x4 + s4= 24 hrs.
0.00045x1+ 0.00034x2+ 0.00034x3+ 0.00022x4 + s5 =24 hrs.
x1 + s6 = 35000 meters
x2 + s7 = 28000 meters
x3 + s8 = 22000 meters
x4 + s9 = 21000 meters
x1, x2, x3,x4, s1,…..s9 ≥0 (non-negativity).

Microsoft Excel 15.0 Sensitivity Report

Worksheet: [or.xlsx]Sheet1

Report Created: 10/5/2018 9:42:04 AM

Variable Cells

Final Reduced Objective Allowable Allowable

Cell Name Value Cost Coefficient Increase Decrease

$B$4 Values X1 14911.76471 0 2 0.158730159 0.210526316

$C$4 Values X2 0 -0.852941176 1 0.852941176 1E+30

$D$4 Values X3 22000 0 2 1E+30 0.147058824

$E$4 Values X4 0 -0.176470588 1.5 0.176470588 1E+30

$F$4 Values s1 5.175 0 0 3921.568627 2139.037433

$G$4 Values s2 2.065588235 0 0 3174.603175 10752.68817

$H$4 Values s3 2.512941176 0 0 3333.333333 2631.578947

$I$4 Values s4 0 -2941.176471 0 2941.176471 1E+30

$J$4 Values s5 9.809705882 0 0 1122.544434 1912.045889

$K$4 Values s6 20088.23529 0 0 0.210526316 0.158730159

$L$4 Values s7 28000 0 0 1E+30 0.852941176

$M$4 Values s8 0 -0.147058824 0 0.147058824 1E+30

$N$4 Values s9 21000 0 0 1E+30 0.176470588

Constraints

Final Shadow Constraint Allowable Allowable

Cell Name Value Price R.H. Side Increase Decrease

$O$10 c4 24 2941.176471 24 2.22952381 10.14

$O$11 c5 24 0 24 1E+30 9.809705882

$O$12 c6 35000 0 35000 1E+30 20088.23529

$O$13 c7 28000 0 28000 1E+30 28000

$O$14 c8 22000 0.147058824 22000 16095.2381 21682.53968

$O$15 c9 21000 0 21000 1E+30 21000

$O$7 c1 24 0 24 1E+30 5.175

$O$8 c2 24 0 24 1E+30 2.065588235

$O$9 c3 24 0 24 1E+30 2.512941176

Result Analysis
Company produces 14911.765 meters of Saree material per day (14911.765 x 330 working
days = 4920882.45 meters/annum) and 22000 meters of cotton dress material per day (22000
x 330 days = 7260000 meters/annum) in order to get a maximum daily profit of Rs. 73823.529
per day. In this way the company is left with an ideal bleaching, dyeing , print and packaging
times of 5.17 hours, 2.06 hours, 2.51 hours and 9.80 hours respectively. The unutilized demand
for Saree material is 20088.235 meters, 28000 meters for dress material polyester and 21000
meters for shirting material.

Conclusion
1) Linear programming model is applied for profit optimization of ‘imperial dyeing ltd’ and
the maximum profit of Rs. 73823.53 per day was found.
2) The company is left with an ideal bleaching, dyeing, print and packaging times of 5.17
hours, 2.06 hours, 2.51 hours and 9.80 hours respectively.
3) The production value for polyester dress material and shirt material is nil. So it is advised
to the firm that the production for these materials should be stopped after they break even.
4) The unutilized demand for Saree material is 20088.235 meters, 28000 meters for dress
material polyester and 21000 meters for shirting material.

References
Çağatay Teke, C. O. (2017, April). Determining the Production Amounts in Textile Industry with Fuzzy
Linear Programming. INTERNATIONAL JOURNAL OF ENGINEERING AND TECHNOLOGY
RESEARCH.

Eshetie Kassegn, D. A. (2016, April 6). Case Study on Profit Planning of Textile Industry Using Linear
Programming Approach. REST Journal on Emerging trends in Modelling and Manufacturing.

Foundation, I. B. (n.d.). Textile Industry & Market Growth in India. Retrieved from www.ibef.org:
https://www.ibef.org/archives/detail/b3ZlcnZpZXcmMzc3NDEmMTEy

Gera Workie, A. B. (2016, August 10). Application of Linear Programming Techniques to Determine
the Type and Quantity of Textile Dyed Fabrics. Research Journal aof Science and IT
Management.

III, B. W. (n.d.). Introduction to management science . In B. W. III, Linear Programming : Model

Formulation and Graphical Solution.

Vishwa Nath Maurya, R. B. (2015, September ). Profit Optimization Using Linear Programming
Model: A Case Study of Ethiopian Chemical Company. American Journal of Biological and
Environmental Statistics, 1(2), 51-57.

Woubante, G. W. (2017, June). The Optimization Problem of Product Mix and Linear Programming
Applications: Case Study in the Apparel Industry. Open Science Journal.