Lpp-Simplex Method: Utility Necessary Conditions Solution of Maximisation Problem

LPP- SIMPLEX METHOD
UTILITY
NECESSARY CONDITIONS
SOLUTION OF MAXIMISATION PROBLEM
WHAT IS THE SIMPLEX ALGORITHM?
• EFFICIENT TECHNIQUE TO SOLVE LPP OF ANY
MAGNITUDE
• ESSENTIALLY INVOLVING MORE THAN TWO

DECISION VARIABLES
• OBJECTIVE FUNCTION IS USED TO DEVELOP

AND EVALUATE EACH FEASIBLE SOLUTION
WHAT IS THE SIMPLEX ALGORITHM?
• SIMPLEX METHOD IS AN ITERATIVE METHOD
• THE SIMPLEX ALGORITHM CONSIDERS ONLY

THE CONVEX POINTS, AS DETERMINED USING
THE GRAPHICAL METHOD
• IT HAS THE MERIT TO INDICATE WHETHER A

GIVEN SOLUTION IS OPTIMAL OR NOT, AND
IMPROVE THE SOLUTION IF REQUIRED
• THE R.H.S. OF EACH CONSTRAINT (bi)SHOULD BE
NON-NEGATIVE [IF NOT THE CONTSRAINT CAN BE
MULTIPLIED BY (-1) TO CONVERT]
• EXAMPLE,
6X1 + 14X2 ≥ -10
CAN BE WRITTEN AS,
-1 (6X1 + 14X2 ≥ -10)
→ - 6X1 - 14X2 ≤ 10
• NOTE THAT ALONG WITH THE SIGN OF THE TERMS ON

THE L.H.S. AND R.H.S., THE DIRECTION OF INEQUALITY
IS ALSO REVERSED
• EACH OF THE DECISION VARIABLES SHOULD BE NON
NEGATIVE (X1 ,X2 ≥ 0) [IF ANY OF THE DECISION VARIABLE IS
UNRESTRICTED IN SIGN, IT CAN BE REPLACED BY THE
DIFFERENCE OF TWO NON NEGATIVE VARIABLES]
• EXAMPLE,
MAXIMISE: Z = X1 + X2
SUBJECT TO,
3X1 + 4X2 ≥ 10
X1 + 8X2 ≤ 16
X1 ≥ 0; X2 UNRESTRICTED IN SIGN
• SUBSTITUTE X2 = X3 – X4 ; WHERE X3 ,X4 ≥ 0

SIMPLEX ALGORITHM
STEP 1: RESTATING THE LPP IN THE FORM OF
STANDARDISED WAY
STEP 2: OBTAIN AN INITIAL SOLUTION
STEP 3: TEST FOR OPTIMALITY. IF OPTIMAL, EXIT

OTHERWISE GO TO NEXT
STEP 4: OBTAIN AN IMPROVED SOLUTION AND

THEN REPEAT STEP 3
SOLUTION TO LPP MAXAIMISATION CASE
SIMPLEX METHOD
MAXIMISATION CASE
A FIRM IS ENGAGED IN PRODUCING TWO PRODUCTS, A AND
B. EACH UNIT OF PRODUCT A REQUIRES TWO KG OF RAW
MATERIAL AND FOUR LABOUR HOURS FOR PROCESSING,
WHEREAS EACH UNIT OF PRODUCT B REQUIRES THREE KG OF
RAW MATERIAL AND THREE HOURS OF LABOUR, OF THE SAME
TYPE. EVERY WEEK, THE FIRM HAS AN AVAILABILITY OF 60 KG
OF RAW MATERIAL AND 96 LABOUR HOURS. ONE UNIT OF
PRODUCT A SOLD YIELDS Rs.40 AND ONE UNIT OF PRODUCT B
SOLD YIELDS Rs.35 AS PROFIT.
FORMULATE THE ABOVE PROBLEM AS AN LPP.

USING SIMPLEX METHOD DETERMINE HOW MANY UNITS OF
EACH OF THE PRODUCTS SHOULD BE PRODUCED PER WEEK SO
THAT THE FIRM CAN EARN MAXIMUM PROFIT.
MAXIMISATION CASE
MAXIMISE : Z = 40X1 + 35X2
SUBJECT TO;
2X1 + 3X2 ≤ 60
4X1 + 3X2 ≤ 96
X1 ; X2 ≥ 0
MAXIMISATION CASE
• STANDARDISATION IS BASED ON THE TYPE OF
INEQUALITY IRRESPECTIVE OF THE TYPE OF
OBJECTIVE FUNCTION
• GIVEN PROBLEM HAS TWO CONSTRAINTS BOTH
OF THE ‘LESS THAN EQUAL TO’ TYPE
• IT IMPLIES THAT L.H.S. COULD BE LESS THAN
R.H.S.
• TO BALANCE THE EQUATION ADD A ‘SLACK
VARIABLE’
• REPRESENTED AS S1 ,S2 ,S3
MAXIMISATION CASE
• STANDARDISING INVOLVES INTRODUCTION OF
SOME VARIABLES INTO THE EQUATION SYSTEM
• IN ORDER TO CONVERT THE CONSTRAINT

INEQUALITIES INTO EQUATIONS (WITH ‘=‘ SIGN)
• THIS STEP ALSO HELPS IN SETTING UP THE INITIAL

SIMPLEX TABLE
MAXIMISATION CASE
STANDARDISED FORM:
MAXIMISE : Z = 40X1 + 35X2 + 0S1 + 0S2

SUBJECT TO;
2X1 + 3X2 + S1 = 60
4X1 + 3X2 + S2 = 96
X1 ; X2 ; S1 ; S2 ≥ 0
INITIAL SOLUTION TABLE 1
CONSTRAINT
EQUATION
COEFFICIENTS
BASIS X1 X2 S1 S2 bi
B.V Cj
S1 0 2 3 1 0 60
BASIC
VARIABLES S2 0 4 3 0 1 96
Cj 40 35 0 0 OBJECTIVE
FUNCTION
Zj COEFFCIENTS
Δ j = Cj - Z j
• THE SLACK VARIABLES FORM THE BASIC VARIABLES

• THEY ALWAYS ARE THE PART OF INITIAL SOLUTION
• THE NUMBERS ARE THE CONSTRAINT EQUATION COEFFICIENTS AND ARE
WRITTEN UNDER THE RESPECTIVE VARIABLE
• OBJECTIVE FUNCTION COEFFICIENTS ARE PLACED IN THE TABLE TO
EVALUATE THE OPTIMALITY OF THE SOLUTION
IMPROVING THE INITIAL SOLUTION
TABLE 1
BASIS X1 X2 S1 S2 bi bi /X1
S1 0 2 3 1 0 60 30
S2 0 4 3 0 1 96 24
Cj 40 35 0 0
Zj 0 0 0 0
Δ j = Cj - Z j 40 35 0 0
Zj ROW IN THE TABLE IS EVALUATED AS THE VALUE OF (X1 * S1) + (X1 * S2)
THAT IS (2 x 0) + (4 x 0) = 0
ALL OTHER VALUES ARE DETERMINED SIMILARLY
EVALUATION OF Δj REVEALS THE INCOMING VARIABLE, THE VALUE 40

REPRESENTS THE CHANGE IN PROFIT IF ONE UNIT OF EACH VARIABLE IS
PRODUCED
EVALUATING THE INITIAL SOLUTION
TABLE 1
S1 0 2 3 1 0 60 30
S2 0 4 3 0 1 96 24
Cj 40 35 0 0
Zj 0 0 0 0
Δ j = Cj - Z j 40 35 0 0
• SINCE MAXIMUM INCREASE IN PROFIT IS OBSERVED UNDER X1 , IT SHOULD BE

INTRODUCED IN THE SIMPLEX TABLE
• THERE CAN BE ONLY TWO BASIC VARIABLES, SO X1 MUST REPLACE ONE OF THE
EXISTING BASIC VARIABLE
• TO DETERMINE THE OUTGOING VARIABLE, CALCULATE THE REPLACEMENT RATIO
(bi /X1) THE DENOMINATOR BEING THE RESPECTIVE OUTGOING VARIABLE COLUMN
• THE OUTGOING VARIABLE WILL BE THE ROW WITH THE LOWEST NON NEGATIVE
REPLACEMENT RATIO
• IN EFFECT X1 REPLACES S2
TABLE 1
S1 0 2 3 1 0 60 30
S2 0 4 3 0 1 96 24
Cj 40 35 0 0
Zj 0 0 0 0
Δ j = Cj - Z j 40 35 0 0
• SINCE MAXIMUM INCREASE IN PROFIT IS OBSERVED UNDER X1 , IT SHOULD BE

INTRODUCED IN THE SIMPLEX TABLE
• THERE CAN BE ONLY TWO BASIC VARIABLES, SO X1 MUST REPLACE ONE OF THE
EXISTING BASIC VARIABLE
• TO DETERMINE THE OUTGOING VARIABLE, CALCULATE THE REPLACEMENT RATIO
(bi /X1) THE DENOMINATOR BEING THE RESPECTIVE OUTGOING VARIABLE COLUMN
• THE OUTGOING VARIABLE WILL BE THE ROW WITH THE LOWEST NON NEGATIVE
REPLACEMENT RATIO
• IN EFFECT X1 REPLACES S2
TABLE 1
S1 0 2 3 1 0 60 30
S2 0 4** 3 0 1 96 24
Cj 40 35 0 0
Zj 0 0 0 0
Δ j = Cj - Z j 40 35 0 0
• THE ABOVE SOLUTION IS NOT OPTIMAL AS Δ j FOR TWO VARIABLES IS POSITIVE
• HIGHEST POSITIVE Δ j IDENTIFIES THE INCOMING VARIABLE X 1 AND THAT COLUMN IS THE KEY COLUMN
• THE S 2 ROW IDENTIFIES THE OUTGOING VARIABLE AND THAT ROW IS THE KEY ROW
• THE VALUE AT THE INTERSECTION OF THE KEY COLUMN AND KEY ROW IS THE KEY ELEMENT (MARKED
WITH **)
• IN ORDER TO IMPROVE THE SOLUTION, THE KEY ELEMENT IS USED TO EVALUATE:
• KEY ROW: DIVIDE ALL THE ELEMENTS OF THIS ROW BY THE KEY ELEMENT, IT WILL BE KNOWN AS
THE REPLACEMENT ROW
• FOR ALL OTHER ROWS:

NEW VALUE = OLD ROW ELEMENT – (ROW ELEMENT IN THE KEY COLUMN X CORRESPONDING
REPLACEMENT ROW VALUE)
REPLACEMENT ROW
TABLE 2
S1
REPLACEMENT X1 40 1 3/4 0 1/4 24
ROW
Cj 40 35 0 0
Zj
Δ j = Cj - Z j
• X1 REPLACES S2 ALONG WITH COEFFICIENT IN OBJECTIVE FUNCTION
• REPLACEMENT ROW IS EVALUATED BY DIVIDING ALL OLD

ELEMENTS(INCLUDING THE bi ) BY THE KEY ELEMENT
EVALUATING OTHER ROWS
TABLE 2
OTHER S1 0 0 3/2 1 -1/2 12

ROW
X1 40 1 3/4 0 1/4 24
Cj 40 35 0 0
Zj
Δ j = Cj - Z j
THE ELEMENTS OF THE OTHER ROW ARE CALCULATED AS:

• X1 : 2 – ( 2 X 1) = 0
• X2 : 3 – ( 2 X ¾) = 3/2
• S1 : 1 – ( 2 X 0) = 1
• S2 : 0 – ( 2 X ¼) = -1/2
• bi : 60 – ( 2 X 24) = 12
TESTING OPTIMALITY
TABLE 2
S1 0 0 3/2** 1 -1/2 12 8
X1 40 1 3/4 0 1/4 24 32
Cj 40 35 0 0
Zj 40 30 0 10
Δ j = Cj - Z j 0 5 0 -10
• THE ABOVE SOLUTION IS NOT OPTIMAL AS Δj FOR X2 IS POSITIVE

• HIGHEST POSITIVE Δj IDENTIFIES THE INCOMING VARIABLE X2 AND THAT COLUMN IS
THE KEY COLUMN
• CALCULATE THE REPLACEMENT RATIOS
• THE S1 ROW IDENTIFIES THE OUTGOING VARIABLE AND THAT ROW IS THE KEY
ROW
• THE VALUE AT THE INTERSECTION OF THE KEY COLUMN AND KEY ROW IS THE KEY
ELEMENT (MARKED WITH **)
REPLACEMENT ROW
TABLE 2
REPLACEMENT
ROW X2 35 0 1 2/3 -1/3 8
X1 40
Cj 40 35 0 0
Zj
Δ j = Cj - Z j
• X2 REPLACES S1 ALONG WITH COEFFICIENT IN OBJECTIVE FUNCTION
• REPLACEMENT ROW IS EVALUATED BY DIVIDING ALL OLD

ELEMENTS(INCLUDING THE bi ) BY THE KEY ELEMENT
EVALUATING OTHER ROWS
TABLE 2
X2 35 0 1 2/3 -1/3 8
OTHER
ROW X1 40 1 0 -1/2 1/2 18
Cj 40 35 0 0
Zj
Δ j = Cj - Z j
THE ELEMENTS OF THE OTHER ROW ARE CALCULATED AS:

• X1 : 1 – ( ¾ X 0) = 1
• X2 : 3/4 – ( ¾ X 1) = 0
• S1 : 0 – ( ¾ X 2/3) = -1/2
• S2 : 1/4 – ( ¾ X -1/3) = 1/2
• bi : 24 – ( ¾ X 8) = 18
TESTING OPTIMALITY
TABLE 2
X2 35 0 1 2/3 -1/3 8
OTHER
ROW X1 40 1 0 -1/2 1/2 18
Cj 40 35 0 0
Zj 40 35 10/3 25/3
Δ j = Cj - Z j 0 0 -10/3 -25/3
• THE ABOVE SOLUTION IS OPTIMAL AS ALL Δj VALUES ARE EITHER

NEGATIVE OR ZERO
• THE SOLUTION CAN BE READ AS FOLLOWS:
• OPTIMAL VALUE OF X2 = 8, X1 = 18
• OPTIMAL VALUE OF Z = 40(18) +35(8) = 1,000
• THIS IS THE SAME SOLUTION AS WAS OBTAINED USING GRAPHICAL
METHOD

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LPP- SIMPLEX METHOD

• ESSENTIALLY INVOLVING MORE THAN TWO

• OBJECTIVE FUNCTION IS USED TO DEVELOP

• THE SIMPLEX ALGORITHM CONSIDERS ONLY

• IT HAS THE MERIT TO INDICATE WHETHER A

• NOTE THAT ALONG WITH THE SIGN OF THE TERMS ON

• SUBSTITUTE X2 = X3 – X4 ; WHERE X3 ,X4 ≥ 0

STEP 2: OBTAIN AN INITIAL SOLUTION

STEP 3: TEST FOR OPTIMALITY. IF OPTIMAL, EXIT

STEP 4: OBTAIN AN IMPROVED SOLUTION AND

FORMULATE THE ABOVE PROBLEM AS AN LPP.

• IN ORDER TO CONVERT THE CONSTRAINT

• THIS STEP ALSO HELPS IN SETTING UP THE INITIAL

MAXIMISE : Z = 40X1 + 35X2 + 0S1 + 0S2

• THE SLACK VARIABLES FORM THE BASIC VARIABLES

EVALUATION OF Δj REVEALS THE INCOMING VARIABLE, THE VALUE 40

• SINCE MAXIMUM INCREASE IN PROFIT IS OBSERVED UNDER X1 , IT SHOULD BE

• SINCE MAXIMUM INCREASE IN PROFIT IS OBSERVED UNDER X1 , IT SHOULD BE

• FOR ALL OTHER ROWS:

• X1 REPLACES S2 ALONG WITH COEFFICIENT IN OBJECTIVE FUNCTION

• REPLACEMENT ROW IS EVALUATED BY DIVIDING ALL OLD

OTHER S1 0 0 3/2 1 -1/2 12

THE ELEMENTS OF THE OTHER ROW ARE CALCULATED AS:

• THE ABOVE SOLUTION IS NOT OPTIMAL AS Δj FOR X2 IS POSITIVE

• X2 REPLACES S1 ALONG WITH COEFFICIENT IN OBJECTIVE FUNCTION

• REPLACEMENT ROW IS EVALUATED BY DIVIDING ALL OLD

THE ELEMENTS OF THE OTHER ROW ARE CALCULATED AS:

• THE ABOVE SOLUTION IS OPTIMAL AS ALL Δj VALUES ARE EITHER

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