COURSE NOTES

RESOURCE MANAGEMENT TECHNIQUES

SUBJECT CODE: CS6704

UNIT I

LINEAR PROGRAMMING

Principal components of decision problem – Modeling phases – LP Formulation and

graphic solution – Resource allocation problems – Simplex method – Sensitivity
analysis.

Principal components of decision problem:

Principal components analysis is a method of data

reduction. Suppose that you have a dozen variables that are correlated. You might use
principal components analysis to reduce your 12 measures to a few principal components. In
this example, you may be most interested in obtaining the component scores (which are
variables that are added to your data set) and/or to look at the dimensionality of the data. For
example, if two components are extracted and those two components accounted for 68% of
the total variance, then we would say that two dimensions in the component space account for
68% of the variance. Unlike factor analysis, principal components analysis is not usually
used to identify underlying latent variables. Hence, the loadings onto the components are not
interpreted as factors in a factor analysis would be. Principal components analysis, like factor
analysis, can be performed on raw data, as shown in this example, or on a correlation or a
covariance matrix. If raw data is used, the procedure will create the original correlation
matrix or covariance matrix, as specified by the user. If the correlation matrix is used, the
variables are standardized and the total variance will equal the number of variables used in
the analysis (because each standardized variable has a variance equal to 1). If the covariance
matrix is used, the variables will remain in their original metric. However, one must take
care to use variables whose variances and scales are similar. Unlike factor analysis, which
analyzes the common variance, the original matrix in a principal components analysis
analyzes the total variance. Also, principal components analysis assumes that each original
measure is collected without measurement error.
 Modeling phases:

 Formulate the problem: This is the most important process; it is generally lengthy and
time consuming. The activities that constitute this step are visits, observations, research,
etc. With the help of such activities, the O.R. scientist gets sufficient information and
support to proceed and is better prepared to formulate the problem. This process starts
with understanding of the organizational climate, its objectives and expectations. Further,
the alternative courses of action are discovered in this step.
 Develop a model: Once a problem is formulated, the next step is to express the problem
into a mathematical model that represents systems, processes or environment in the form
of equations, relationships or formulas. We have to identify both the static and dynamic
structural elements, and device mathematical formulas to represent the interrelationships
among elements. The proposed model may be field tested and modified in order to work
under stated environmental constraints. A model may also be modified if the management
is not satisfied with the answer that it gives.
 Select appropriate data input: Garbage in and garbage out is a famous saying. No
model will work appropriately if data input is not appropriate. The purpose of this step is
to have sufficient input to operate and test the model.
 Solution of the model: After selecting the appropriate data input, the next step is to find
a solution. If the model is not behaving properly, then updating and modification is
considered at this stage.
 Validation of the model: A model is said to be valid if it can provide a reliable
prediction of the system‟s performance. A model must be applicable for a longer time and
can be updated from time to time taking into consideration the past, present and future
aspects of the problem.
 Implement the solution: The implementation of the solution involves so many
behavioral issues and the implementing authority is responsible for resolving these issues.
The gap between one who provides a solution and one who wishes to use it should be
eliminated. To achieve this, O.R. scientist as well as management should play a positive
role. A properly implemented solution obtained through O.R. techniques results in
improved working and wins the management support.
  APPLICATIONS OF OPERATIONS RESEARCH IN DECISION MAKING

Introduction
 The Operations Research may be regarded as a tool which is utilized to increase the
effectiveness of management decisions. Scientific method of OR is used to understand
and describe the phenomena of operating system. Mathematical and logical means of
Operations Research provides the executive with quantitative basis for decision making
and enhance ability to make long range plans and to solve everyday problems of industry
with greater efficiency and competence.
 Features (Characteristics) of OR
 OR is a tool employed to increase the effectiveness of managerial decisions as an
objective supplement to the subjective feeling of the decision makers. There are five
salient features of OR.
 Decision making
 Primarily OR is addressed to managerial decision making or problem solving.
 Scientific approach
 OR employs scientific methods for the purpose of solving problems. It is a formalized
process of reasoning.
 Objective
 OR attempts to locate the best or optimal solution to the problem under consideration. For
this purpose, it is necessary that a measures of effectiveness is defined which is based on
the goals of the organization. This measure is then used as the basis to compare the
alternative courses of action. The examples are profit, net returns, cost of production etc.
 Inter-disciplinary team approach
 OR is inter-disciplinary in nature and requires a team approach to a solution of the
problem. Managerial problems have economic, physical, psychological, biological,
sociological and engineering aspects. This requires a blend of people with expertise in the
areas of Mathematics, Statistics, Engineering, Economics, Management, Computer
Science and so on.
 Digital computer
 Use of a digital computer has become an integral part of the OR approach to decision
making. The computer may be required due to the complexity of the model, volume of
data required and the computations to be made.
 Modeling in Operations Research
 A model as used in OR is defined as idealized representation of a real-life system. It
shows the relationships (direct or indirect) and inter-relationships of action and reaction in
 terms of cause and effect. A model in OR is a simplified representation of an operation or
a process in which only the basic aspects or the most important features of a typical
problem under investigation are considered. The construction of a model helps in putting
the complexities and possible uncertainties in a decision making problem, into a logical
framework amenable to comprehensive analysis. With such a model we can have several
decision alternatives, their anticipated effects indicating the need for relevant data for
analyzing the alternatives that leads to informative conclusions.Models can be broadly
classified according to following characteristics:
 Classification by structure
 Iconic models
 These models are pictorial representation of real systems and have the appearance of the
real thing. They represent the system as it is by scaling it up or down (i.e., by enlarging or
reducing the size). In other words it is an image. Examples of such models are childs toy,
photograph, a schedule of operations, histogram, pictogram, cartogram, a physical model
such as small scale model of a dairy plant, an engine etc. These kinds of models are called
Iconic because they are look alike items to understand and interpret the real things. An
iconic model is said to be scaled down or scaled up according to the dimensions of the
model and are smaller or greater than those of the real item. Iconic models are easy to
observe, build and describe, but are difficult to manipulate and not very useful for the
purpose of prediction. Commonly these models represent a static event. These models can
be constructed up to three dimensions (e.g., atom, globe, small aeroplane, cube, etc.)
while it is not possible to construct them physically for higher dimensions. Further these
models do not include those aspects of the real system that are irrelevant for the analysis.
 Analogue models
 Analogue models
 These models are more abstract than the iconic ones as there is no look alike
correspondence between these models and real items. These models are the one in which
one set of properties is used to represent another set of properties. After the problem is
solved, the solution is re-interpreted in terms of the original system. For example, graphs
and maps in various colours are analogue models in which different colours correspond to
different characteristics e.g., blue representing water, brown representing land, yellow
representing production etc. Further, graphs are very simple analogues because distance is
used to represent such properties as time, number, per cent, age, weight, and many other
properties. Contour lines on the map represent the rise and fall of the heights. Demand
curves, flow charts in production control and frequency curves in statistics are analogue
models of the behaviour of events. Graphs of time series, bar diagrams, stock market
 changes are other examples of analogue models. Analogue models are less specific, less
concrete but easier to manipulate and can represent dynamic situations. These are,
generally, more useful than the iconic ones because of their vast capacity to represent the
characteristics of the real system under investigation.
 Mathematical models (Symbolic Model)
 The Symbolic or mathematical model is one which employs a set of mathematical
symbols (i.e. letters, numbers etc.) to represent the decision variables of the system. These
variables are related together by means of a mathematical equation or set of equations to
describe the behavior (or properties) of the system. These models are most general and
precise. The solution to these models is then obtained by applying well developed
mathematical techniques to the model. The symbolic model is usually the easiest to
manipulate experimentally and the most general and abstract. Its function is more often
explanatory rather than descriptive. Explanatory model is that which contains controlled
variables, while the descriptive model does not contain controlled variables.
 Classification by purpose
 Descriptive model
 It describes the some aspects of a situation based on observation, survey, questionnaire
results or other available data.
 Predictive models
 Such models can answer what iftype of questions i.e. they can make predictions regarding
certain events.
 Prescriptive models
 When a predictive model has been repeatedly successful, then it can be used to prescribe
a source of action. For example, linear programming is a prescriptive model because it
prescribes what the managers ought to do.
 Classification by nature of environment
 Deterministic model
 Such models assume conditions of complete certainty and perfect knowledge for
example; linear programming, transportation and assignment models are deterministic
models.
 Probabilistic (or Stochastic) model
 These models handle those situations in which consequences or payoff of managerial
actions cannot be predicted with certainty.
 Classification by Behavior
 Static models
 These models do not consider the impact of changes that take place during the planning
horizon i.e. they are independent of time.
 Dynamic models
 These models consider time as one of the important variables and depict the impact of
changes generated over time. In this instead of one decision, a series of independent
decisions are required during the planning horizons.
 Characteristics of a Good Model
  A good model should be capable of taking into account new formulations without
having any significant change in its frame.
  Assumptions made in the model should be as few as possible.
  It should be simple and coherent having less number of variables.
  It should be open to parametric type treatments.
 Advantages of a Model
  Through the model, the problem under consideration becomes controllable.
  It provides some logical and systematic approach to the problem.
  It indicates the limitations and scope of an activity
  Models help in incorporating useful tools that eliminate duplication of methods
applied to solve any specific problem.
  Models help in finding avenues for new research and improvements in a system.
 Methodology of Operations Research
 The major phases of an O.R. study are as follows:
 Phase I: Formulation of the Problem
 In this phase, the problem is formulated in an appropriate form. This phase should give a
statement of the problems elements that include the controllable (decision) variables, the
uncontrollable parameters, the restrictions or constraints on the variables and the
objectives for defining a good or improved solution.
 Phase II: Constructing a mathematical model
 The second phase of the investigation is concerned with the choice of proper data inputs
and the design of the appropriate information output. In this phase, both static and
dynamic structural elements and the representation of inter-relationship among the
elements in terms of mathematical formulae need to be specified. A mathematical model
should include mainly the following three basic sets of elements:
 (i) Decision Variables and Parameters
 (ii) Constraints or Restrictions
 (iii) Objective Function
 Phase III: Deriving the solution from the model
 This phase of the study deals with the mathematical calculations for obtaining the
solution to the model. A solution of the model means those values of the decision
variables that optimize one of the objectives and give permissible levels of performance
on any other of the objectives.
 Phase IV: Testing the model and its solution
 This phase of the study involves checking the validity of the model used. A model may be
said to be valid if it can give a reliable prediction of the systems performance.
 Phase V: Controlling the solution
 This phase of the study establishes control over the solution by proper feedback of the
information on variables which deviated significantly. As soon as one or more of the
controlled variables change significantly, the solution goes out of control. In such a
situation the model may accordingly be modified.
 Phase VI: Implementing the solution
 This phase of the study deals with the implementation of the tested results of the model.
This would basically involve a careful explanation of the solution to be adopted and its
relationship with the operating realities.
 General Methods of Deriving the Solution
 There are three methods to derive the solution to an OR model.
 Analytical method
 Analytical methods involve expressions of the model by graphic solutions or by
mathematical computations. For example, area indicated by mathematical function may
be evaluated through the use of integral calculus. Solutions of various inventory models
are obtained by using the analytical procedure. The analytical methods involve all the
tools of classical mathematics, such as calculus, finite differences, etc. The kind of
mathematics required for a particular OR study depends upon the nature of the model.
 Numerical or iterative method
 Numerical methods are concerned with the iterative or trial and error procedures, through
the use of numerical computations at each step. These numerical methods are used when
some analytical methods fail to derive the solution. The algorithm is started with a trial
(initial) solution and continued with the set procedure to improve the solution towards
optimality. The trial solution is then replaced by the improved one and the process is
repeated until the solution converges or no further improvement is possible. Thus the
numerical methods are hit and trial methods that end at a certain step after which no
further improvement to the solution is possible.
 Monte Carlo method
 This method is essentially a simulation technique, in which statistical distribution
functions are created by generating a series of random numbers. Various steps associated
with a Monte Carlo method are:
 (a) For appropriate model of the system, sample observations are made and then the
probability distributions for the variables of interest are determined.
 (b) Convert the probability distribution to a cumulative distribution.
 (c) Select the sequence of random numbers with the help of random number tables.
 (d) Determine the sequence of values of variables of interest with the sequence of
random numbers obtained in the previous step
 (e) Fit an appropriate mathematical function to the values obtained in step (d)
 Advantages/ Merits of OR Techniques
 Optimum use of production factors
 Linear programming techniques indicate how a manager can utilize most effectively his
inputs/ factors and by more efficiently selecting and distributing these elements.
 Improved quality of decision
 The effect on the profitability due to changes in the production pattern will be clearly
indicated in the simplex table. These tables give a clear picture of the happenings within
the basic restrictions and possibilities of behaviour of compound elements involved in the
problem.
 Preparation of future managers
 These methods substitute a means for improving the knowledge and skill of young
managers.
 Modification of mathematical solution
 OR presents a possible practical solution when one exists, but it is always a responsibility
of the manager to accept or modify the solution before its use. The effect of these
modifications may be evaluated from the computation steps and tables.
 Alternative solutions
 OR techniques suggest all the alternative solutions available for the same profit so that the
management may decide on the basis of its strategies.
 Limitations of OR
 Practical application
 Formulation of an industrial problem to an OR set programme is a difficult task.
 Reliability of the proposed solution
 A non-linear relationship is changed to linear for fitting the problem to linear
programming. This may disturb the solution.
 Money and time cost
 When the basic data is subject to frequent changes, the cost of changing programmes
manually is a costly affair.
 Combining two or more objective functions
 Very frequently maximum profit does not come from manufacturing the maximum
quantity of the most profitable product at the most convenient machine and at the
minimum cost, since this may lead to underutilization of certain lines of production.
 The aim is not to optimize individual objective function. It is, therefore, necessary to have
a single objective function which can cover several objective functions at the same time.
Despite all the above limitations, OR is a powerful tool and an analytical process that
offers the presentation of an optimal solution.

LP Formulation and graphic solution:

LINEAR PROGRAMMING:

It can be recalled from the Two Mines example that the conditions for a mathematical model
to be a linear program (LP) were:
 All variables continuous (i.e. can take fractional values)
 A single objective (minimizes or maximize)
 The objective and constraints are linear i.e. any term is either a constant or a constant
multiplied by an unknown. LP's are important -this is because:
 Many practical problems can be formulated as LP's
 There exists an algorithm (called the Simplex algorithm) which enables us to solve LP's
numerically relatively easily
We will return later to the simplex algorithm for solving LP's but for the moment we will
concentrate upon formulating LP's.

Some of the major application areas to which LP can be applied are:

Work scheduling
Production planning & Production process
Capital budgeting
Financial planning
Blending (e.g. Oil refinery management)
Farm planning
Distribution
Multi-period decision problems
O Inventory model
O Financial models
O Work scheduling
Note that the key to formulating LP's is practice. However a useful hint is that common
objectives for LP's are maximized profit/minimize cost.

There are four basic assumptions in LP:

Proportionality
O The contribution to the objective function from each decision variable is proportional to the
value of the decision variable (The contribution to the objective function from making four
soldiers (4$3=$12) is exactly four times the contribution to the objective function from
making one soldier ($3))
o The contribution of each decision variable to the LHS of each constraint is proportional to
the value of the decision variable ( It takes exactly three times as many finishing hours
(2hrs3=6hrs) to manufacture three soldiers as it takes to manufacture one soldier (2 hrs))
 Additivity
O The contribution to the objective function for any decision variable is independent of the
values of the other decision variables (No matter what the value of train (x2), the manufacture
of soldier (x1) will always contribute 3x1dollars to the objective function)
o The contribution of a decision variable to LHS of each constraint is independent of the
values of other decision variables (No matter what the value of x1, the manufacture of x2 uses
x2finishing hours and x2 carpentry hours)
1st implication: The value of objective function is the sum of the contributions from each
decision variables.
2nd implication: LHS of each constraint is the sum of the contributions from each decision
variables.
Divisibility
O Each decision variable is allowed to assume fractional values. If we actually can not
produce a fractional number of decision variables, we use IP (It is acceptable to produce 1.69
trains)
Certainty
O Each parameter is known with certainty
Linear Programming

Definition: The Linear Programming method is a technique of selecting the best alternative
out of the available set of feasible alternatives, for which the objective function and the
constraint function can be expressed as linear mathematical functions.

There are certain prerequisites for applying the linear programming technique. These are:

There should be an objective, clearly defined and measurable in quantitative terms. Such as,
maximization of sales, minimization of cost of production, etc.

The activities included should be distinctively identifiable and measurable in quantitative

terms. Such as products included in the problem of production planning.

The resources to be allocated for the attainment of the objective must be distinctively
identifiable and measurable in quantitative terms. These resources must be in limited supply.

The objective function and the constraint function must be linear in nature.

The decision maker should have a series of feasible alternative course of actions, determined
through resource constraints.

When these conditions are satisfied for a particular situation, the problem can be expressed in
the algebraic form, called Linear programming problem. First of all, the linear programming
problem is formulated and then it is solved for optimal decision.

How to formulate the Linear programming problem?

Once the prerequisite conditions for the formation of linear programming problem is
satisfied, the firm decides on which objective is to be attained, such as maximization of profit
or minimization of cost. This gives rise to two cases:

Maximization case

Minimization case.

The Linear programming is an important part of the mathematics field and is also called as
“Optimization Techniques”. It is used in the day to day operations of each business and
plays a vital role in the allocation of resources to different business operations.
 FORMULATING LPP:

Example:

Giapetto's wooden soldiers and trains. Each soldier sells for $27, uses $10 of raw materials
and takes $14 of labor & overhead costs. Each train sells for $21, uses $9 of raw materials,
and takes $10 of overhead costs. Each soldier needs 2 hours finishing and 1 hour carpentry;
each train needs 1 hour finishing and 1 hour carpentry. Raw materials are unlimited, but only
100 hours of finishing and 80 hours of carpentry are available each week. Demand for trains
is unlimited; but at most 40 soldiers can be sold each week. How many of each toy should be
made each week to maximize profits?
Answer:
Decision variables completely describe the decisions to be made (in this case, by
Giapetto). Giapetto must decide how many soldiers and trains should be manufactured each
week. With this in mind,
we define:x1= the number of soldiers produced per week
x2= the number of trains produced per week

Objective function is the function of the decision variables that the decision maker wants to
maximize (revenue or profit) or minimize (costs). Giapetto can concentrate on maximizing
the total weekly profit (z). Here profit equals to (weekly revenues) –(raw material purchase
cost)
(other variable costs). Hence Giapetto‟s objective function is: Maximize z = 3x1+ 2x2
Constraints
Show the restrictions on the values of the decision variables. Without constraints Giapetto
could make a large profit by choosing decision variables to be very large. Here there are three
constraints: Finishing time per week Carpentry time per week .Weekly demand for soldiers
Sign restrictions are added if the decision variables can only assume nonnegative values
(Giapetto can not manufacture negative number of soldiers or trains!)

All these characteristics explored above give the following

Linear Programming (LP) model
Max z= 3x1+ 2x2(The Objective function)
s.t.
2x1+ x2 100 (Finishing constraint)
x1+ x280 (Carpentry constraint)
x140 (Constraint on demand for soldiers)
x1, x2 > 0 (Sign restrictions)

A value of (x1,x2) is in the feasible region if it satisfies all the constraints and sign
restrictions.
Graphically and computationally we see the solution is (x1,x2)= (20,60) at which z = 180.
(Optimal solution)

CONCLUSION:
The maximum profit is $180 by making 20 soldiers and 60 trains each week. Profit is limited
by the carpentry and finishing labor available. Profit could be increased by buying more
labor.

Formulation of Linear Programming-Maximization Case

Definition: Linear programming refers to choosing the best alternative from the available
alternatives, whose objective function and constraint function can be expressed as linear
mathematical functions.

Maximization Case: Let‟s understand the maximization case with the help of a problem.
Suppose a firm produces two products A and B. For producing the each unit of product A, 4
Kg of Raw material and 6 labor hours are required. While, for the production of each unit of
product B, 4 kg of raw material and 5 labor hours is required. The total availability of raw
material and labor hours is 60 Kg and 90 Hours respectively (per week). The unit price of
Product A is Rs 35 and of product, B is Rs 40.

This problem can be converted into linear programming problem to determine how many
units of each product should be produced per week to have the maximum profit. Firstly, the
objective function is to be formulated. Suppose x1 and x2 are units produced per week of
product A and B respectively. The sale of product A and product B yields Rs 35 and Rs 40
respectively. The total profit will be equal to
Z = 35x1+ 40x2 (objective function)

Since the raw material and labor is in limited supply the mathematical relationship that
explains this limitation is called inequality. Therefore, the inequality equations will be as
follows:

Product A requires 4 kg of raw material and product B also requires 4 Kg of Raw material;
thus, total consumption is 4x1+4x2, which cannot exceed the total availability of 60 kg. Thus,
this constraint can be expressed as:

4x1 + 4x2 ≤ 60

Similarly, the second constraint equation will be:

6x1 + 5x2 ≤ 90

Where 6 hours and 5hours of labor is required for the production of each unit of product A
and B respectively, but cannot exceed the total availability of 90 hours.

Thus, the linear programming problem will be:

Maximize Z = 35x1+ 40x2 (profit)

Subject to:

4x1 + 4x2 ≤ 60 (raw material constraint)

6x1 + 5x2 ≤ 90 (labor hours constraint)
x1, x2 ≥ 0 (Non-negativity restriction)

Note: It is to be noted that “≤ ” (less than equal to) sign is used as the profit maximizing
output may not fully utilize all the resources, and some may be left unused. And the non-
negativity condition is used since the x1 and x2 are a number of units produced and cannot
have negative values.

Formulation of Linear Programming-Minimization Case

Definition: Linear programming is a technique for selecting the best alternative from the
set of available alternatives, in situations in which the objective function and constraint
function can be expressed in quantitative terms.
Minimization Case: The minimization case can be well understood through a problem. Let‟s
say; the agricultural research institute recommended a farmer to spread out at least 5000 kg of
phosphate fertilizer and not less than 7000 kg of nitrogen fertilizer to raise the productivity of
his crops on the farm. There are two mixtures A and B, weighs 100 kg each, from which
these fertilizers can be obtained.

The cost of each Mixture A and B is Rs 40 and 25 respectively. Mixture A contains 40 kg of

phosphate and 60 kg of nitrogen while the Mixture B contains 60 kg of phosphate and 40 kg
of nitrogen. This problem can be represented as a linear programming problem to find out
how many bags of each type a farmer should buy to get the desired amount of fertilizers at
the minimum cost.

Firstly, the objective function is to be formulated. Suppose, x1 and x2 are the number of bags
of mixture A and mixture B. The cost of both the mixture is 40x1 + 25x2 and thus, the
objective function will be:

Minimize

Z = 40x1+25x2

In this problem, there are two constraints, minimum 5000 kg of phosphate and minimum
7000 kg of nitrogen is required. The Bag A contains 40 kg of phosphate while Bag B contains
60 kg of phosphate. Thus, the phosphate constraint can be expressed as:

40x1 + 60x2 ≥ 5000

Similarly, the second constraint equation can be expressed as:

60x1 + 40x2 ≥ 7000

Where, Bag A contains 60 kg of nitrogen and Bag B contains 40 kg of nitrogen, and the
minimum requirement of nitrogen is 7000 kg.

Thus, the linear programming problem is:

Minimize Z = 40x1+25x2 (cost)

Subject to:
40x1 + 60x2 ≥ 5000 (Phosphate Constraint)
60x1 + 40x2 ≥ 7000 (Nitrogen Constraint)
x1, x2 ≥ 0 (Non-negativity Restriction)

Note: It is to be noted that, “≥” (greater than equal to) sign shows the full utilization of
resources at the minimum cost. The non-negativity condition is used, since x1 and x2
represent the number of bags of both the mixture and hence cannot have the negative values.

SOLVING LPP
LP Solutions: Four Cases
When an LP is solved, one of the following four cases will occur:
1. The LP has a unique optimal solution.
2. The LP has alternative (multiple) optimal solutions. It has more than one (actually an
infinite number of) optimal solutions
3. The LP is infeasible. It has no feasible solutions (The feasible region contains no points).
4. The LP is unbounded. In the feasible region there are points with arbitrarily large (in a max
problem) objective function values.
The Graphical Solution
Any LP with only two variables can be solved graphically

Example 1. Giapetto Sincethe Giapetto LP has two variables, it may be solved graphically.

Answer
The feasible region is the set of all points satisfying the constraints.
max z= 3x1+ 2x2
s.t.
2x1+ x2≤ 100 (Finishing constraint)
x1+ x2≤ 80 (Carpentry constraint)
x1≤ 40 (Demand constraint)
x1, x2≥ 0 (Sign restrictions)
The set of points satisfying the LP is bounded by the five sided polygon DGFEH. Any point
on or in the interior of this polygon (the shade area) is in the feasible region. Having
identified the feasible region for the LP, a search can begin for the optimal solution which
will be the point in the feasible region with the largest z-value (maximization problem).
To find the optimal solution, a line on which the points have the same z-value is graphed. In a
max problem, such a line is called an is profit line while in a min problem, this is called the
iso cost line. (The figure shows the iso profit lines for z = 60, z = 100, and z = 180).
In the unique optimal solution case, isoprofit line last hits a point (vertex -corner) before
leaving the feasible region.
The optimal solution of this LP is point G where (x1, x2) = (20,60) giving z= 180.
A constraint is binding (active, tight) if the left-hand and right-hand side of the constraint are
equal when the optimal values of the decision variables are substituted into the constraint.
A constraint is nonbinding (inactive) if the left-hand side and the right-hand side of the
constraint are unequal when the optimal values of the decision variables are substituted into
the constraint.
In Giapetto LP, the finishing and carpentry constraints are binding. On the other hand
the demand constraint for wooden soldiers is nonbinding since at the optimal solution
x1< 40 (x1= 20).

MATHEMATICAL FORMULATION OF THE LINEAR PROGRAMMING

PROBLEM AND ITS GRAPHICAL SOLUTION

Introduction

A large number of business and economic situations are concerned with problems of planning
and allocation of resources to various activities. In each case there are limited resources at our
disposal and our problem is to make such a use of these resources so as to maximize
production or to derive the maximum profit, or to minimize the cost of production etc. Such
problems are referred to as the problems of constrained optimization. Linear programming
(LP) is one of the most versatile, popular and widely used quantitative techniques. Linear
Programming is a technique for determining an optimum schedule chosen from a large
number of possible decisions. The technique is applicable to problem characterized by the
presence of a number of decision variables, each of which can assume values within a certain
range and affect their decision variables. The variables represent some physical or economic
quantities which are of interest to the decision maker and whose domain are governed by a
number of practical limitations or constraints which may be due to availability of resources
like men, machine, material or money or may be due quality constraint or may arise from a
variety of other reasons. The most important feature of linear programming is presence of
linearity in the problem. The word Linear stands for indicating that all relationships involved
in a particular problem are linear. Programming is just another word for planning and refers
to the process of determining a particular plan of action from amongst several alternatives.
The problem thus reduces to maximizing or minimizing a linear function subject to a number
of linear inequalities

Definitions of Various Terms Involved in Linear Programming

Linear

The word linear is used to describe the relationship among two or more variables which are
directly proportional. For example, if the production of a product is proportionately
increased, the profit also increases proportionately, then it is a linear relationship. A linear
form is meant a mathematical expression of the type,

Programming

The term Programming refers to planning of activities in a manner that achieves some
optimal result with resource restrictions. A programme is optimal if it maximizes or
minimizes some measure or criterion of effectiveness, such as profit, cost or sales.

Decision variables and their relationship

The decision (activity) variables refer to candidates (products, services, projects etc.) that are
competing with one another for sharing the given limited resources. These variables are
usually inter-related in terms of utilisation of resources and need simultaneous solutions. The
relationship among these variables should be linear.

Objective function

The Linear Programming problem must have a well defined objective function for
optimization. For example, maximization of profits or minimization of costs or total elapsed
time of the system being studied. It should be expressed as linear function of decision
variables.

Constraints

There are always limitations on the resources which are to be allocated among various
competing activities. These resources may be production capacity, manpower, time, space or
machinery. These must be capable of being expressed as linear equalities or inequalities in
terms of decision variables.
Alternative courses of action

There must be alternative courses of action. For example, there may be many processes open
to a firm for producing a commodity and one process can be substituted for another.

Non-negativity restriction

All the variables must assume non-negative values, that is, all variables must take on values
equal to or greater than zero. Therefore, the problem should not result in negative values for
the variables.

Linearity and divisibility

All relationships (objective functions and constraints) must exhibit linearity, that is,
relationships among decision variables must be directly proportional. For example, if our
resources increase by some percentage, then it should increase the outcome by the same
percentage. Divisibility means that the variables are not limited to integers. It is assumed that
decision variables are continuous, i.e., fractional values of these variables must be
permissible in obtaining an optimal solution.

Deterministic

In LP model (objective functions and constraints), it is assumed that the entire model
coefficients are completely known (deterministic), e.g. profit per unit of each product, and
amount of resources available are assumed to be fixed during the planning period.

Formulation of a Linear Programming Problem

The formulation of the Linear Programming Problem (LPP) as mathematical model involves
the following key steps:

Step 1. Identify the decision variables to be determined and express them in terms of
algebraic symbols as X1,X2, --- , Xn.

Step 2. Identify the objective which is to be optimized (maximized or minimized) and

express it as a linear function of the above defined decision variables.

Step 3. Identify all the constraints in the given problem and then express them as linear
equations or inequalities in terms of above defined decision variables.

Step 4. Non-negativity restrictions on decision variables.

The formulation of a linear programming problem can be illustrated through the following
examples:

Example 1

A milk plant manufactures two types of products A and B and sells them at a profit of Rs. 5
on type A and Rs. 3 on type B. Each product is processed on two machines G and H. Type A
requires one minute of processing time on G and two minutes on H; type B requires one
minute on G and one minute on H. The machine G is available for not more than 6 hours 40
minutes, while machine B is available for 8 hours 20 minutes during any working day;
formulate the problem as LP problem.

Solution

Let X1 be the number of products of type A and X2 the number of products of type B. Since
the profit on type A is Rs. 5 per product, 5X1 will be the profit on selling X1units of type A.
Similarly, 3X2 will be the profit on selling X2 units of type B. Therefore, total profit on
selling X1 units of A and X2 units of B is given by Z = 5X1+3X2. Since this has to be
maximized, hence the objective function can be expressed as

Max Z = 5X1+3X2 (Objective function)

Since machine G takes 1 minute time on type A and 1 minute time on type B, the total time in
minutes required on machine G is given by X1+X2. Similarly the total time in minutes
required on machine H is given by 2X1+X2. But machine G is not available for more than 6
hour 40 minutes (400 minutes), therefore

X1+X2 ≤ 400 (first constraint on machine G)

Also the machine H is available for 8 hours 20 minutes only, therefore

2X1+X2 ≤ 500 (second constraint on machine H)

Since it is not possible to produce negative quantities,

X1 ≥0, X2 ≥0 (non-negativity restrictions)

Example 2

A dairy plant packs two types of milk in pouches viz., full cream and single toned. There are
sufficient ingredients to make 20,000 pouches of full cream & 40,000 pouches of single
toned. But there are only 45,000 pouches into which either of the products can be put. Further
it takes three hours to prepare enough material to fill 1000 pouches of full cream milk & one
hour for 1000 pouches of single toned milk and there are 66 hours available for this
operation. Profit is Rs. 8 per pouch for full cream milk and Rs. 7 per pouch for single toned
milk. Formulate it as a linear programming problem.

Solution

Let number of full cream and single toned milk pouches to be packed is X1 and X2

Let profit be Z

Objective function: Max. Z = 8X1+7X2

Subject to constraints: X1 + X2 ≤ 45000

X1 ≤ 20000

X2 ≤ 40000

Non-negativity restrictions X1, X2 ≥0

Example 3

Consider two different types of food stuffs say F1 and F2. Assume that these food stuffs
contain vitamin A and B. Minimum daily requirements of vitamin A and B are 40mg and
50mg respectively. Suppose food stuff F1 contains 2mg of vitamin A and 5mg of vitamin B
while F2 contains 4mg of vitamin A and 2mg of vitamin B. Cost per unit of F1 is Rs. 3 and
that of F2 is Rs. 2.5. Formulate the minimum cost diet that would supply the body at least the
minimum requirements of each vitamin.

Solution

Let number of units needed for food stuffs F1 and F2 to meet the daily requirements of
vitamins A and B be respectively X1 and X2..
Objective function: Minimize Z =3X1+2.5X2

Subject to constraints:
2X1+4X2 ≥ 40
5X1+2X2 ≥50
 Non-negativity restrictions X1, X2 ≥ 0

Mathematical Formulation of a General Linear Programming Problem

The general formulation of LP problem can be stated as follows. If we have n-decision

variables X1, X2,.., Xn and m constraints in the problem , then we would have the following
type of mathematical formulation of LP problem

Optimize (Maximize or Minimize) the objective function:

Z = C1X1 + C2X2 + …. + CnXn

Subject to satisfaction of m- constraints:

Where the constraint may be in the form of an inequality (≤ or ≥) or even in the form of an
equality (=) and finally satisfy the non-negativity restrictions

X1, X2, … , Xn ≥ 0

where Cj (j=1, 2,…..,n); bi (i=1, 2,…,m) and aij are all constants and m<n, and the decision
variables Xj ≥0, j=1, 2,…,n. If bi is the available amount of resource i then aij is amount of
resource i that must be allocated (technical coefficient) to each unit of activity j.

NOTE: By convention, the values of RHS parameters bi (i=1, 2, 3,..,m) are restricted to non-
negative values only. If any value of bi is negative then it is to be changed to a positive value
by multiplying both sides of the constraint by -1. This not only changes the sign of all LHS
Coefficients and of RHS parameters but also changes the direction of inequality sign.

Matrix form of LP problem

The linear programming problem (3.4.1), (3.4.2) and (3.4.3) can be expressed in matrix form
as

Maximize Z = CX (objective function )

Subject to AX = b, b ≥ 0 (constraint equation )

 X≥0 (non-negativity restriction )

Where X = (X1,X2, … , Xn), C = (C1,C2, … , Cn) and b = (b1,b2, .., bm)

Graphical Solution of Linear Programming Problem

LP problems which involve only two variables can be solved graphically. Such a solution by
geometric method involving only two variables is important as it gives insight into more
general case with any number of variables.

Feasible solution

A set value of the variables of a linear programming problem which satisfies the set of
constraints and the non-negative restrictions is called feasible solution of the problem.

Feasible region

The collection of all feasible solutions is known as the feasible region. Any point which does
not lie in the feasible region cannot be a feasible solution to the LP problems. The feasible
region does not depend on the form of the objective function in any way. If we can represent
the relations of the general LP problem on an n dimensional space, we will obtain a shaded
solid figure (known as Convex-polyhedron) representing the domain of the feasible solution.

Optimal solution

A feasible solution of a linear programming problem which optimizes its objective function is
called the optimal solution of the problem. Theoretically, it can be shown that objective
function of a LP problem assumes its optimal value at one of the vertices (called extreme
points) of this solid figure.

Steps to find graphical solution of the linear programming problem

Step 1: Formulate the linear programming problem.

Step 2: Draw the constraint equations on XY-plane.
Step 3: Identify the feasible region which satisfies all the constraints simultaneously. For
less than or equal to constraints the region is generally below the lines and for greater
than or equal to constraints, the region is above the lines.
 Step 4: Locate the solution points on the feasible region. These points always occur at
the vertices of the feasible region.
Step 5: Evaluate the optimum value of the objective function.

The geometric interpretation and solution for the LP problem using graphical method is
illustrated with the help of following examples

Example 4 Find the graphical solution of problem formulated in example 1.

Max Z = 5X1+3X2

Subject to
X1+X2 ≤ 400
2X1+X2 ≤ 500
X1 ≥ 0 , X2 ≥0
Solution

Any point lying in the first quadrant has X1, X2 ≥ 0 and hence satisfies the non-negativity
restrictions. Therefore, any point which is a feasible solution must lie in the first quadrant. In
order to find the set of points in the first quadrant which satisfy the constraints, we must
interpret geometrically inequalities such as X1+X2≤ 400. If equality holds then we have the
equation X1+X2= 400 i.e., any point on the straight line satisfies the equation. Any point lying
on or below the line X1+X2= 400 satisfies the constraint X1+X2≤ 400. However, no point
lying above the line satisfies the inequality. In a similar manner, we can find the set of points
satisfying 2X1+X2 ≤ 500 and the non-negativity restrictions are all the points in the first
quadrant. The set of points satisfying the constraints and the non-negativity restrictions is the
set of points in the shaded region of the figure OABC as shown in Fig 3.1 Any point in this
region is a feasible solution, and only the points in this region are feasible solutions. To solve
the LP problem, we must find the point or points in the region of feasible solutions which
give the largest value of the objective function. Now for any fixed value of Z, Z =
5X1+3X2 is a straight line, for each different values of Z, we obtain a different line. Again,
all the lines corresponding to different values of Z are parallel; clearly our interest is to find
the line with the largest value of Z which has at least one point in common with the region of
feasible solutions. The line Z= 5X1+3X2 is drawn for various values of Z. It can be seen that
the point farthest from Z = 5X1+3X2 and yet in the feasible region is B (100, 300) and thus
point B maximizes Z while satisfying all the constraints. In other words, the corner B of the
region of feasible solutions is the optimal solution of the LP problem. Since B is the
intersection of the lines X1+X2=400 and 2X1+X2=500, it can be seen that at vertex B, X1=100
and X2=300. The maximum value of Z = 5(100)+3(300)=1400.The fact that the optimum
occurred at the vertex B of the feasible region is not a coincidence but on the other hand
represents a significant property of optimal solutions of all LP problems. To find the optimal
solution find the values of objective function at the various extreme points as shown in the
following Table .1

Table.1 Computation of maximum value of objective function

Extreme Point Coordinates Profit Function Z = 5X1+3X2

O X1=0 , X2=0 Z=5(0)+3(0)=0
A X1=0 , X2=400 Z=5(0)+3(400)=1200
B X1=100, X2=300 Z=5(100)+3(300)=1400
C X1=250, X2=0 Z=5(250)+3(0)=1250

Note: A fundamental theorem in LP states that the feasible region of any LP is a convex
polygon (that is the n dimensional version of two dimensional polygon), with a finite number
of vertices, and further for any LP problem, there is at least one vertex which provides an
optimal solution. Whenever a LP problem has more than one optimal solution, we say that
there are alternative optimal solutions. Physically, this means that the resources can be
combined in more than one way to maximize profit.
 Fig. 1 Feasible region

Example 5 Find the graphical solution of problem formulated in Example 2.

Solution

Let number of full cream and single toned milk pouches to be produced is X1and X2 and Let
profit be Z

Objective function: Max. Z = 8X1+7X2

Subject to constraints: X1 + X2 45000 (1)

X1 20000 (2)

X2 40000 (3)

3X1 + X2 66000 (4)

Non-negativity restrictions X1, X2 0

First of all draw the graphs of these inequalities (as discussed in Example 5) which is shown
in Fig. 3.2.

Fig. 2 Feasible region

To find the optimal solution find the values of objective function at the various extreme
points as shown in the following Table 2

Table 2 Computation of maximum value of objective function

Extreme Point Coordinates Profit Function Z = 8X1+7X2

O X1=0 , X2=0 Z=8(0)+7(0)=0
A X1=0 , X2=40000 Z=8(0)+7(40000)=280000
B X1=5000, X2=40000 Z=8(5000)+7(40000)=320000
C X1=10500, X2=34500 Z=8(10500)+7(34500)=325500
 D X1=20000 , X2=6000 Z=8(20000)+7(6000)=202000
E X1=20000 , X2=0 Z=8(20000)+7(0)=160000

So maximum value of Z occurs at point C (10500, 34500) so it is the optimal solution. It can
be concluded that Dairy Plant must produce 10500 pouches of full cream milk and 34500
pouches of single toned milk.

Let us consider the following example to illustrate graphical solution for minimization
problem

Special cases in linear programming

Up till now we have discussed those problems which have a unique optimal solution.
However, it is possible for LP problem to have following special cases.

Unbounded solution

A linear programming problem is considered to have an unbounded solution if it has no limits

on the constraints and further, the common feasible region is not bounded in any respect.

Example 6 Find the graphical solution of problem formulated in example 3.

Solution

Let number of units needed for food stuffs F1 and F2 to meet the daily requirements of
vitamins A and B be respectively X1 and X2..

Objective function: Minimize Z = 3X1+2.5X2

Subject to constraints: 2X1+4X2 ≥ 40

5X1+2X2 ≥50

Non-negativity restrictions: X1, X2 0

First of all draw the graphs of these inequalities (as discussed in example 5) .Since the
inequalities are of the greater than or equal to type, the feasible region is formed by
considering the area to the upper right side of each equation i.e. away from origin .The
shaded area which is shown above CBD is satisfied by the two constraints as shown in Fig.
3.3 is feasible region. The feasible region for minimization problem is unbounded and
unlimited. Since the optimal solution corresponds to one of the corner (extreme) points, we
will calculate the values of objective function for each corner point viz. D (20, 0); B (7.5,
6.25) and C (0, 25). The calculations are shown in Table 3
 Table

3 Table showing the computation of minimum value of objective function

Extreme Point Coordinates Cost Function Min. Z = 3X1+2.5X2

D X1=20 , X2=0 Z=3(20)+2.5(0)=60
B X1=7.5 , X2=6.25 Z=3(7.5)+2.5(6.25)=38.125
C X1=0, X2=25 Z=3(0)+2.5(25)=62.5

Fig. 3 Feasible region for minimization problem

The minimum cost is obtained at the corner point B(7.5,6.25) i.e. X1=7.5 and X2=6.25. Hence
to minimize the cost and to meet the daily requirements of vitamin A and B, number of units
needed of food stuffs F1 and F2 be 7.5 and 6.25 respectively.

Infeasible solution
In this there is no solution to an LP Problem that satisfies all the constraints. Graphically, it
means that no feasible solution region exists. Such a condition indicates that the LP problem
has been wrongly formulated.

Redundant constraint

In a properly formulated LP problem, each of the constraints will define a portion of the
boundary of the feasible solution region. Whenever, a constraint does not define a portion of
the boundary of the feasible solution region, it is called a redundant constraint. Let us
consider the following example to illustrate this.

Example 7 Maximize Z=1170X1+1110X2

Subject to:
9X1+5X2 ≥ 500
7X1+9X2 ≥ 300
5X1+3X2 ≤ 1500
7X1+9X2 ≤1900
2X1+4X2 ≤ 1000
X1, X2 ≥ 0

The feasible region of this LP problem is indicated in Fig.4. In this the feasible region has
been formulated by two constraints.

9X1+5X2 ≥ 500

7X1+9X2 ≤1900

X1, X2 ≥ 0
 Fig 4 Feasible Region and Redundant Constraints

The remaining three constraints, although present, is not affecting the feasible region in any
manner. Such constraints are known as redundant constraints.

Resource Allocation Problem

Statement:

The type of problem most often identified with the application of linear program is the problem of
distributing scarce resources among alternative activities. The Product Mix problem is a special
case. In this example, we consider a manufacturing facility that produces five different products
using four machines. The scarce resources are the times available on the machines and the
alternative activities are the individual production volumes. The machine requirements in hours
per unit are shown for each product in the table. With the exception of product 4 that does not
require machine 1,each product must pass through all four machines. The unit profits are also
shown in the table. Facility has four machines of type 1, five of type 2, three of type 3 and seven
of type 4. Each machine operates 40 hours per week.

The problem is to determine the optimum weekly production quantities for the products. The goal
is to maximize total profit.

In constructing a model, the first step is to define the decision variables; the next step is to write
the constraints and objective function in terms of these variables and the problem data. In the
problem statement, phrases like "at least," "no greater than," "equal to," and "less than or equal to"
imply one or more constraints.

Types of Resource Allocation

We can begin by defining resource allocation. In a broad sense, it can be defined as how
things can be distributed. This may include credit, blame, responsibility, money, time, and the
like. In the science and engineering this translates to: money, consumables, time, space, and
services. Naturally there needs to be a "fair" way to distribute these resources. This section
outlines way to distribute these resources.

Allocation by Merit

 This can be seen as a rewards system of sorts. This view suggests that rewards should
be distributed according to productivity, effort, or demonstrated ability.
 o In the work place, this can be seen as salary increases, promotions, and even
layoffs.
o In the college environment, this can be seen as the distribution of grades. As
not everyone can receive an A for classes, the grades need to be distributed
reflecting a students understanding of the subject.

In aspects where a necessity is involved, such as food, shelter, and water, this system
breaks down. In impoverished countries, for example, few would argue for denying
children food because they are not as productive as adults.

Allocation by Social Worth

 Allocation by social worth tends to take a practical view toward resources, directing
them toward those who appear most likely to contribute to the common good. This
view suggests that resources should move in directions that ultimately do the greatest
good for the largest number of people. Criteria for social worth can include age,
seniority, rank, and expertise.
o In the work place, this can be seen as layoffs. Generally speaking, a senior
worker will not be fired over a new worker.
o In the college environment, this can be seen as the distribution of money to
labs. Labs for graduate students and upperclassmen tend to be better than
freshman labs.

Allocation by social worth breaks down when the criteria for worth ignores basic
human rights. For example, wealth is sometimes used to measure social worth,
especially in countries with market economies. This attitude can cause food, energy,
education, medical attention, and social influence to "flow uphill," thereby making
severe imbalances in essential resources even worse.

Allocation by Need

 Allocation by need tends to view resources in terms of basic human rights. This view
suggests that every person has the same right to some minimal level of a given
resource. Obvious examples include food, shelter, and clothes.
o In the work place, this can be seen when a company diverts funds to a division
in that company who's equipment is outdated.
o In the college environment, this can be seen as scholarships given to students
who otherwise would not be able to attend college.
 Allocation by need breaks down when this criterion is applied so strictly that it
removes the incentive to produce. It's usually true that people work hardest when they
believe they will enjoy the fruits of their labors. This is also the same reason why
socialism doesn't work.

Allocation by Equal or Random Assignment

 Allocation by equal or random assignment takes the view that no rational, unbiased
way can be found to distribute resources. This is the default allocation method when
no other allocation method works.
o The most obvious example of this is a lottery. When there is no obvious way
to distribute resources, a simple lottery can prove to be the "fairest" way.

Allocation by random assignment breaks down when each portion of a resource is

simply to small to do any good. For example, dividing antibiotics into small doses
during an epidemic could make each dose so small that no one benefits.

No simple rules for allocation can guarantee fairness under all circumstances. The ultimate
decision depends heavily on exactly what needs to be distributed and on the specific details
of each situation. The Candy case study is a perfect example of resource allocation.

Simplex Method

Introduction

In the previous chapter we considered the formulation of linear programming problems and
the graphic method of solving them. Although the graphical approach to the solution of such
problems is an invaluable aid to understand its basic structure, the method is of limited
application in industrial problems as the number of variables occurring there is often
considerably large. The Simplex Method provides an efficient technique which can be
applied for solving linear programming problems of any magnitude-involving two or more
decision variables. The Simplex Method is the name given to the solution algorithm for
solving LP problems developed by George B. Dantzig in 1947. It is iterative procedure
having fixed computational rules that leads to a solution to the problem in a finite number of
steps. By using this one is capable of solving large LP problems efficiently.

Definition: The Simplex Method or Simplex Algorithm is used for calculating the optimal
solution to the linear programming problem. In other words, the simplex algorithm is an
iterative procedure carried systematically to determine the optimal solution from the set of
feasible solutions. Firstly, to apply the simplex method, appropriate variables are introduced
in the linear programming problem, and the primary or the decision variables are equated to
zero. The iterative process begins by assigning values to these defined variables. The value of
decision variables is taken as zero since the evaluation in terms of the graphical approach
begins with the origin. Therefore, x1 and x2 is equal to zero.

The decision maker will enter appropriate values of the variables in the problem and find out
the variable value that contributes maximum to the objective function and removes those
values which give undesirable results. Thus, the value of the objective function gets improved
through this method. This procedure of substitution of variable value continues until any
further improvement in the value of the objective function is possible.

Following two conditions need to be met before applying the simplex method:

1. The right-hand side of each constraint inequality should be non-negative. In case, any
linear programming problem has a negative resource value, then it should be converted into
positive value by multiplying both the sides of constraint inequality by “-1”.
2. The decision variables in the linear programming problem should be non-negative.

Thus, the simplex algorithm is efficient since it considers few feasible solutions, provided by
the corner points, to determine the optimal solution to the linear programming problem.

Principle of Simplex Method

As the fundamental theorem of LP problem tells us that at least one basic feasible solution of
any LP problem must be optimal, provided the optimal solution of the LP problem exists.
Also, the number of basic feasible solutions of the LP problem is finite and at the most nCm
(where, n is number of decision variables and m is the number of constraints in the problem).
On the other hand, the feasible solution may be infinite in number. So it is rather impossible
to search for optimal solutions from amongst all feasible solutions. Furthermore, a great
labour will also be required in finding out all the basic feasible solutions and select that one
which optimizes the objective function. In order to remove this difficulty; a simple method
was developed by Dantzig (1947) which is known as Simplex Algorithm. Simplex Algorithm
is a systematic and efficient procedure for finding corner point solutions and taking them for
optimality. The evaluation of corner points always starts from the point of origin. This
solution is then tested for optimality i.e. it tests whether an improvement in the objective
function is possible by moving to adjacent corner point of the feasible function space. This
iterative search for a better corner point is repeated until an optimal solution if it exists, is
determined.

Basic Terms Involved in Simplex Procedure

The following terms relevant for solving a linear programming problem through simplex
procedure are given below:

Standard form of linear programming problem

The standard form of LP problem is to develop the procedure for solving general LP problem.
The optimal solution of the standard form of a LP problem is the same as original LP
problem. The characteristics of standard form are given in following steps:

Step 1. All the constraints should be converted to equations except for the non-
negativity restrictions which remain as inequalities (≥0).
Step 2. The right side element of each constraint should be made non-negative.
Step 3. All variables must have non-negative values.
Step 4. The objective function should be of maximization form.

Slack variables

If a constraint has less than or equal sign, then in order to make it on equality we have to add
something positive to the left hand side. The non-negative variable which is added to the left
hand side of the constraint to convert it into equation is called the slack variable. For
example, consider the constraints.

3X1 + 5X2 ≤ 2, 7X1 + 4X2 ≤ 5, X1, X2 ≥ 0

We add the slack variables S1 ≥ 0, S2 ≥ 0 on the left hand sides of above inequalities
respectively to obtain
3X1+5X2+S1 = 2
7X1+4X2+S2 = 5
X1, X2, S1, S2 ≥ 0

Surplus variables

If a constraint has greater than or equal to sign, then in order to make it an equality we have
to subtract something non-negative from its left hand side. The positive variable which is
subtracted from the left hand side of the constraint to convert it into equation is called the
surplus variable.
For example, consider the constraints.

3X1 + 5X2 ≥ 2, 2X1 + 4X2 ≥ 5, X1, X2 ≥0

We subtract the surplus variables S3 ≥0, S4 ≥ 0 on the left hand sides of above inequalities
respectively to obtain

3X1+5X2 -S3 = 2

2X1 + 4X2 -S4 = 5

X1, X2, X3, X4 ≥0

Solution to LPP

Any set X = {X1, X2, X3,…, Xn+m} of variables is called a solution to LP problem, if it
satisfies the set of constraints only.

Feasible solution (FS)

Any set X = {X1, X2, X3,…,Xn+m} of variables is called a feasible solution of L.P. problem, if
it satisfies the set of constraints as well as non-negativity restrictions.

Basic solution (BS)

For a system of m simultaneous linear equations in n variables (n>m), a solution obtained by

setting (n-m) variables equal to zero and solving for the remaining variables is called a basic
solution. Such m variables (of course, some of them may be zero) are called basic variables
and remaining (n-m) zero-valued variables are called non-basic variables.

Basic feasible solution (BFS)

A basic feasible solution is a basic solution which also satisfies the non-negativity
restrictions, that is all basic variables are non-negative. Basic solutions are of two types
(a) Non-degenerate BFS: A non-degenerate basic feasible solution is the basic feasible
solution which has exactly m positive Xj (j=1, 2,…,m). In other words, all basic m
variables are positive, and the remaining (n >m) variables will be all zero.
(b) Degenerate BFS: A basic feasible solution is called degenerate, if one or more basic
variables are zero-valued.
Optimum basic feasible solution

A basic feasible solution is said to be optimum, if it also optimizes (maximizes or minimizes)

the objective function.

Unbound solution

If the value of the objective function Z can be increased or decreased indefinitely, such
solutions are called unbounded solutions.

Computational Aspect of Simplex Method for Maximization Problem

Step 1: Formulate the linear programming model. If we have n-decision variables X1, X2, Xn
and m constraints in the problem , then mathematical formulation of L P problem is

Maximize Z=C1X1+ C2X2+….+CnXn

Subject to the constraints:

a11 X1+ a12 X2+….. +a1n Xn ≤ b1

a21 X1+ a22 X2 + …. + a2n Xn ≤ b2

am1 X1+ am2 X2 + … + amn Xn ≤ bm

X1, X2, …. Xn ≥ 0
Step 2: Express the mathematical model of LP problem in the standard form by adding slack
variables in the left-hand side of the constraints and assign zero coefficient to these variables
in the objective function. Thus we can restate the problem in terms of equations as follows:

Maximize Z=C1X1+ C2X2 +….+ CnXn +0Xn+1 +0Xn+2+…..+0Xn+

Subject to the constraints:

a11 X1+ a12 X2+ …+ a1n Xn +Xn+1 = b1

a21 X1+ a22 X2+…+ a2n Xn +Xn+2 = b2
.
am1 X1+ am2X2+…+amn Xn +Xn+m = bm

X1, X2, … ,Xn,….. Xn+1,Xn+2 ,…, Xn+m ≥0

 Cj (contribution per unit) → c1 c2 � cn 0 0 � 0
Cb Basic Value of Coefficient Matrix Identify Matrix
Minimum
Variables Basic
Ratio*
Variables
B b(=XB) X1 X2 .. Xn Xn+1 Xn+2 .. Xn+m
0 s1 b1 a11 a12 .. a1n 1 0 .. 0
0 s2 b2 a21 a22 .. a2n 0 1 .. 0
. . . . . .. .
. . . . . .. .
. . . . . .. .
0 sm bm am1 am2 .. amn 0 0 .. 1
Contribution 0 0 .. 0 0 0 .. 0
loss per unit:
Net c1 c2 .. cn 0 0 .. 0
contribution
per units:

Step 3: Design the initial feasible solution .An initial basic feasible solution is obtained by
setting X1=X2=… =Xn =0. Thus, we get Xn+1=b1, Xn+2 =b2 ,…, Xn+m =bm.

Step 4: Construct the starting (initial) simplex tableau. For computational efficiency and
simplicity, the initial basic feasible solution, the constraints of the standard LP problem as
well as the objective function can be displayed in a tabular form, called the Simplex Tableau
as shown below.

Table .1 Initial simplex tableau

* Negative ratio is not to be considered.

The interpretation of the data in the above Tableau is given as under. Other simplex tableau
will have similar interpretations.

(i) The first row, called the objective row of the simplex table indicates the values of Cj (j
subscript refer to the column number) which are the coefficients of the (m + n) variables in
the objective function. These coefficients are obtained directly from the objective function
and the value Cj would remain the same in the succeeding tables. The second row of the table
 provides the major column headings for the table and these column headings remain
unchanged in the succeeding tables of the Simplex Method.

(ii) The first column labelled CB, also known as objective column, lists the coefficient of the
current basic variables in the objective function. The second column labelled Basic variables
points out the basic variables in the basis, and in the initial simplex tableau these basic
variables are the slack variables. The third column labelled Solution values (= xB), indicates
the resources or the solution values of the basic variables.

(iii) The body matrix (under non-basic variables) in the initial simplex tableau consists of the
coefficients of the decision variables in the constraint set.

(iv)The identity matrix in the initial simplex tableau represents the coefficient of the slack
variables that have been added to the original inequalities to make them equation. The matrix
under non-basic variables in the simplex tableau is called coefficient matrix. Each simplex
tableau contains an identity matrix under the basic variables.

(v) To find an entry in the Zj row under a column, we multiply the entries of that column by the

corresponding entries of CB column and add the products, i.e., Z = .

The Zj entry under the Solution column gives the current value of the objective function.

(vi) The final row labeled ∆j = Zj - Cj called the index (or net evaluation) row, is used to determine
whether or not the current solution is optimal. The calculation of Zj - Cj row simply involves
subtracting each Zj value from the corresponding Cj value for that column, which is written at
the top of that column. Each entry in the ∆j row represents the net contribution (or net
marginal improvement) to the objective function that results by introducing one unit of each
of the respective column variables.

Step 5: Test the Solution for Optimality. Examine the index row of the above simplex
tableau. If all the elements in the index row are positive then the current solution is optimal.
If there exist some negative values, the current solution can further be improved by removing
one basic variable from the basis and replacing it by some non-basic one.

Step 6: Revision of the Current Simplex Tableau. At each iteration, the Simplex Method
moves from the current basic feasible solution to a better basic feasible solution. This
involves replacing one current basic variable (called the departing variable) by a new non-
basic variable (called the entering variable).
 (a) Determine which variable to enter into the solution-mix net. One way of doing
this is by identifying the column (and hence the variable) with the most negative
number in the ∆j row of the previous table.

(b) Determine the departing variable or variable to be replaced. Next we proceed to

determine which variable must be removed from the basis to pave way for the
entering variable. This is accomplished by dividing each number in the quantity
(or solution values) column by the corresponding number in the pivot column
selected in (a), i.e., we compute the respective ratios b1/a1j, b2/a2j, .., bm/amj (only
for those aij‟s; i=1,2,.., m which are strictly positive). These quotients are written
in the last column labelled Minimum Ratio of the simplex tableau. The row
corresponding to smallest of these non-negative ratios is called the pivot (or key)
row and the corresponding basic variable will leave the basis. Let the minimum of
{ b1/a1j, b2/a2j, …, bm/amj ; aij > 0} be bk/akj , then corresponding variables in the
pivot row sk will be termed as outgoing (or departing) variable in the next tableau
to be constructed just after we put an arrow → of type to right of kth row of the
simplex tableau 1.

(c) Identify the pivot number. The non-zero positive number that lies at the
intersection of the pivot column and pivot row of the given table is called the
pivot (or key) number. We place a circle around the number.

Step 7: Evaluate (update) the new solution. After identifying the entering and departing
variable, find the new basic feasible solution by constructing a new simplex tableau from the
current one by using the following steps:
(a) Compute new values for the pivot row by simply dividing every element of the
pivot row by the pivot number.
(b) New entries in the CB column and XB column are entered in the new table of the
current solution
(c) Compute new values for each of the remaining rows by using the following
formula
New row numbers=Number in old rows-{(corresponding number above or below
pivot number) x (corresponding number in the row replaced in (a))}
(d) Test for optimality. Compute the Zj and index rows as previously demonstrated in
the initial simplex tableau. If all numbers in the index row are either zero or
positive, an optimal solution has been made attained. i.e., there is no variable
 which can be introduced in the solution to cause the objective function value to
increase.

4. Revise the solution. If any of the numbers in the index (∆j = Zj - Cj) row are negative,
repeat the entire steps 5 & 6 again until an optimal solution has been obtained.

The above procedure is illustrated through the following example.

Example 1

A firm produces three products A, B, and C each of which passes through three different
departments fabrication, finishing, packaging. Each unit of product A requires 3, 4 and 2
hours respectively, B requires 5, 4 and 4 hours respectively and C requires 2, 4 and 5 hours
respectively in 3 departments respectively. Every day 60 hours are available in fabrication
department, 72 hours in finishing and 100 hours in packaging department. If unit contribution
of unit A is Rs. 5, Rs. 10 for B and Rs. 3 for C. Then determine number of units of each
product so that total contribution to cost is maximized and also determine if any capacity
would remain unutilized.

Solution:

Step 1: Formulate this as LPP. Let X1, X2 and X3 be the number of units produced of the
products A, B and C respectively.

Objective function: Max Z = 5X1 + 10X2 + 3X3

Subject to constraints: 3X1 + 5X2 + 2X3 ≤ 60

4X1 + 4X2 + 4X3 ≤ 72

2X1 + 4X2 + 5X3 ≤ 100 X1, X2, X3 ≥ 0

Step 2: Now converting into standard form of LPP

Max Z= 5X1 + 10X2 + 3X3 + 0S1 + 0S2 + 0S3

3X1 + 5X2 + 2X3 + S1 = 60

4X1 + 4X2 + 4X3 + S2 = 72

2X1 + 4X2 + 5X3 + S3 = 100 X1, X2, X3, S1, S2, S3 ≥ 0

 where S1 ,S2 and S3 are slack variables.

Step 3: Find the initial feasible solution .An initial basic feasible solution is obtained by
setting X1 =0, X2 = 0 and X3 = 0. Thus, we get S1 = 60, S2 = 72 and S3 =100.

Step 4: Construct the starting (initial) simplex tableau.

Cj → 5 10 8 0 0 0
B.V. CB XB X1 X2 X3 S1 S2 S3 Minimum
Ratio
R1 S1 0 60 3 (5) 2 1 0 0 60/5=12

R2 S2 0 72 4 4 4 0 1 0 72/4=18
R3 S3 0 100 2 4 5 0 0 1 100/4=25
Zj 0 0 0 0 0 0
−5 −10 −8 0 0 0

Step 5: The most negative value of ∆j is −10 hence X2 is the incoming variable (↑) and the
least positive minimum ratio is 12 hence S1 is the outgoing variable (⟶). The element under
column X2 and row R1 is the key element i.e. 5 so divide each element of row R1 by 5 (i.e.
). Subtract appropriate multiples of this new row from the remaining rows, so as to

obtain zeros in the remaining positions. Performing the row operations

we get the second Simplex tableau as

Cj → 5 10 8 0 0 0

B.V. CB XB X1 X2 X3 S1 S2 S3 M.R.

X2 10 12 3/5 1 2/5 1/5 0 0 12/2/5=30

S2 0 24 8/5 0 12/5 −4/5 1 0 24/12/5=10

S3 0 52 -2/5 0 17/5 −4/5 0 1 52/17/5=15.294

Zj 6 10 4 2 0 0

1 0 −4 2 0 0
Step 6: The most negative value of ∆j is -4 hence X3 is the incoming variable (↑) and the
least positive minimum ratio is 10 hence S2 is the outgoing variable (). The element under
column X2 and row

R1 is the key element i.e. 5 so divide each element of row R2b by 12/5 (i.e. Rc → Rb * 5/12).
Subtract appropriate multiples of this new row from the remaining rows, so as to obtain
zeros in the remaining positions. Performing the row operations
.

We get the third Simplex tableau as

Cj → 5 10 8 0 0 0
B.V. CB XB X1 X2 X3 S1 S2 S3
X2 10 8 1/3 1 0 1/3 −1/6 0
X3 8 10 2/3 0 1 −1/3 5/12 0
S3 0 18 −8/3 0 0 1/3 −17/12 1
Zj 26/3 10 8 2/3 5/3 0
11/3 0 0 2/3 5/3 0
j

It is apparent from this table that all ∆j =Zj − Cj are positive and therefore an optimum
solutions is reached . So X1 = 0, X2 = 8, X3 = 10

Z = 5X1 + 10X2 + 8X3 = 160

And also as S3 is coming out to be 18 so there are 18 hours unutilized in finishing

department.

In case the objective function of the given LP problem is to be minimized, then we convert it
into a problem of maximization by using

Min. Z* = − Max. (−Z). The procedure of finding optimal solution using Simplex Method is
illustrated through the following example:

Example 4.2 Minimize the objective function Z: X1 + 3X2 + 2X3

Subject to constraints 3X1 + X2 + 3 X3 ≤ 7

−2X1 + 4X2 ≤12
−4X1 + 3X2 + 8X3 ≤10
X1, X2, X3 ≥0
Solution

Converting this minimization problem into maximization problem

Objective function Max Z#: −X1 + 3X2 + 2X3 + 0S1 + 0S2 + 0S3

Constraints 3X1 - X2 + 3 X3 + S1 = 7

−2X1 + 4X2 + S2 = 12

−4X1 + 3X2 + 8X3 + S3 = 10

X1, X2, X3, S1, S2, S3 ≥0

Starting Simplex Table

Cj −1 3 −2 0 0 0
B.V. CB XB X1 X2 X3 S1 S2 S3 Min. Ratio
S1 0 7 3 −1 3 1 0 0 -
S2 0 12 −2 4 1 0 1 0 3 →
S3 0 10 −4 3 8 0 0 1 10/3
1 −3 2 0 0 0
j

Now performing the row operations

Cj −1 3 −2 0 0 0 Min.
Ratio
B.V. CB XB X1 X2 X3 S1 S2 S3
S1 0 10 5/2 0 3 1 1/4 0 4 →
X2 3 3 −1/2 1 0 0 1/4 0 -
X3 0 1 −5/2 0 8 0 −3/4 1 -
−1/2 0 2 0 3/4 0
j

Now performing the row operations

↑ Cj −1 3 −2 0 0 0
B.V. CB XB X1 X2 X3 S1 S2 S3
X1 −1 4 1 0 6/5 2/5 1/10 0
X2 3 5 0 1 3/5 1/5 3/10 0
S3 0 11 0 0 11 1 −1/2 1
∆j 0 0 13/5 1/5 4/5 0
Now all ∆j are positive. Therefore, Optimal Solution is reached

Therefore, X1 = 4, X2 = 5 & X3 = 0 & Max Z# = −1 4 + 3 5 = 11

Or

Minimum Z = −Z# = −11

Sensitivity analysis

Sensitivity analysis is the study of how the uncertainty in the output of a mathematical
model or system (numerical or otherwise) can be apportioned to different sources of
uncertainty in its inputs. A related practice is uncertainty analysis, which has a greater focus
on uncertainty quantification and propagation of uncertainty. Ideally, uncertainty and
sensitivity analysis should be run in tandem. The process of recalculating outcomes under
alternative assumptions to determine the impact of a variable under sensitivity analysis can be
useful for a range of purposes,[3] including

 Testing the robustness of the results of a model or system in the presence of

uncertainty.
 Increased understanding of the relationships between input and output variables in a
system or model.
 Uncertainty reduction: identifying model inputs that cause significant uncertainty in
the output and should therefore be the focus of attention if the robustness is to be
increased (perhaps by further research).
 Searching for errors in the model (by encountering unexpected relationships between
inputs and outputs).
 Model simplification – fixing model inputs that have no effect on the output, or
identifying and removing redundant parts of the model structure.
 Enhancing communication from modelers to decision makers (e.g. by making
recommendations more credible, understandable, compelling or persuasive).
 Finding regions in the space of input factors for which the model output is either
maximum or minimum or meets some optimum criterion (see optimization and Monte
Carlo filtering).
 In case of calibrating models with large number of parameters, a primary sensitivity
test can ease the calibration stage by focusing on the sensitive parameters. Not
knowing the sensitivity of parameters can result in time being uselessly spent on non-
sensitive ones.
QUESTIONS:

Q1. There are four basic assumptions in LP:

 Proportionality

 The contribution to the objective function from each decision variable is proportional to
the value of the decision variable (The contribution to the objective function from
making four soldiers (4×$3=$12) is exactly four times the contribution to the objective
function from making one soldier ($3))

 The contribution of each decision variable to the LHS of each constraint is proportional
to the value of the decision variable (It takes exactly three times as many finishing hours
(2hrs×3=6hrs) to manufacture three soldiers as it takes to manufacture one soldier (2
hrs))
 Additivity
 The contribution to the objective function for any decision variable is independent of
the values of the other decision variables (No matter what the value of train (x2), the
manufacture of soldier (x1) will always contribute 3x1 dollars to the objective
function)
 The contribution of a decision variable to LHS of each constraint is independent of
the values of other decision variables (No matter what the value of x1, the
manufacture of x2 uses x2 finishing hours and x2 carpentry hours)
 1st implication: The value of objective function is the sum of the contributions from
each decision variables.
 2nd implication: LHS of each constraint is the sum of the contributions from each
decision variables.
 Divisibility
 Each decision variable is allowed to assume fractional values. If we actually can not
produce a fractional number of decision variables, we use IP (It is acceptable to
produce 1.69 trains)
 Certainty
 Each parameter is known with certainty
 Q2. Write critical essay on the definition of and scope of Operation Research.

Ans: O.R. has been so far defined in various ways and it is still too young to be defined in
some authoritative way.

I. O.R. is scientific method of providing executive departments with a quantitative basis for
decision regarding the operation under their control.
II. O.R. is a scientific method of providing executive with an analytical and objective basis for
decisions.
III. O.R. is the application of scientific methods, techniques and tools to problems involving the
operations of systems so as to provide these in control of the operation with optimum
solutions to the problem. – Churchman.
IV. O.R. is the art of giving bad answers to problems to which otherwise worse answer are
given. T.L. Satly
V. O.R. is the art of winning war without actually fighting it.
VI. O.R. is an applied decision theory. It uses any scientific mathematical and logical means to
attempt to cope with the problems that confront the executive when he tries to achieve a
thorough going rationality in dealing with his decision problems.
-Miller and Starr
VII. O.R. is a scientific approach to problem solving for executive management.
– Wagner.
VIII. O.R. is the systematic method oriented study of the basic structure, characteristics, functions
and relationships of an organization to provide the executive with a sound, scientific and
qualitative basis for decision making. - Arnoff.

IX. O.R. is an experimental and applied science developed 70 observing understanding and
predicting the behaviour of purposeful man-machine systems and O.R. workers are actively
engaged in applying this knowledge to practical problems in business, government and
society. – OR society of America.
Q3. Scope of O.R.:

In its recent year of organized development, O.R has entered different areas of
research for military, government and industry. O.R. is useful in the following various
important fields.
(i) In finance: In these modern times of economic crisis every government will have to
carefully plan for the economic development of the country OR techniques can be fruitfully
applied.

a) to find profit plan for the company

b) to determine the best replacement policies, etc.
c) to maximize the capital income with minimum resource

(ii) In industry: - OR is useful to the industry direction in deciding optimum allocation of

various limited resources such as man, machines, money etc. to arrive at the optimum
decision.

(iii) In LIC:- OR approach is applicable to decide.

(a) What should be the premium rates for variable modes of policies?

(b) Profit distribution.

(iv) In Agriculture:- With population explosion and food shortage every country is fixing.

(a) Problem of optimum allocation of land

(b) Problem of optimum distribution of water.

(v) In Marketing:- With the help of OR teach, Manager can decide.

(a) ways to minimize total cost of transportation

(b) min per unit sale price

(c) size of stock

(d) selection of best advertising media.

(e) purchase of materials at min possible cost.

(vi) In personnel management:- A personal manager can use OR tech to

(a) appoint most suitable persons at min salary.

(b) to determine best age of retirement of employes.

(c) appointment of persons on full time basis

(vii) In production Management:- A production manager can use OR tech to

 (a) fined number and size of items to be produced.

(b) to select and locate the sites for the production plants etc

(c) in calculating the optimum product min

Q4. What do you mean by 2 phase method for solving a given LPP? Why is it used?

Ans: The solution of the given LP problem will be completed in 2 phase, so the method is
called „Two phase simplex method‟.
The process of eliminating artificial variables is performed in phase I of the solution,
and phase II will be used to get an optimal solution.

Linear programming problems, in which constraints may also have „‟ and „=‟ signs
after ensuring that all bi are 0, are considered. In such problems, basis matrix is not
obtained as an identity matrix in the starting simplex table; therefore we introduce a new
type of variable called the artificial variable. These variables are fictitious and cannot
have any physical meaning. The artificial variable technique is merely a device to get
the starting basic feasible solution, so that simplex procedure may be adopted as usual
until the optimal solution is obtained. Artificial variables can be eliminated from the
simplex table as and when they become zero. (Non-basic).

Q5. Explain slack and surplus variables.

Ans: All the constraints should be converted to equations except for the non-negativity
restrictions which remain as inequalities ( =0).

Constraints of the inequality type can be changed to equations by augmenting

(adding are subtracting) the left side of each such constraint by non-negative variables.
These new variables are called slack variables and are added if the constraint is () or
subtracted if the constraint is (). Since in the case of  constraint, the subtracted
variable represents the surplus of the left side over the right side, it is common to refer
to it as surplus variable.

Also, surplus is regarded as negative slack

Example:- Consider the constraints.

3x1 – 4x2  7

x1 + 2x2  3.
These constraints can be changed to equations by introducing slack & surplus variables x3 &
x4.

3x1 – 4x2 – x3 = 7, x3  0

5x1 + 2x2 + x4 = 3, x4  0

Q6. Explain the following terms with respect to LPP.

(a) Solution; (b) Feasible solution; (c) Basic solution

(d) Basic Feasible solution (e) Non- degenerate basic feasible solution

(f) Degenerate Basic feasible solution

(g) Optimum Basic feasible solution.

Ans: (a) Solution: - Any set x = { x1 , x2 , …………xn+m} of variables is called as solution to

LP problem, if it satisfies set of constraints (1) only

i.e constraints are

a11x1 + a12 x2 +…………………+a1nxn + xn+1 = b1

am1x1 + am2x2 + ………………..+amn xn + xn+m = bm ------ (1)

(b) Feasible solution:- Any set x = { x1 , x2, …………xn+m }variables is called a

feasible solution to LP problem if it satisfies set of constraints (1) as well as non-negativity
restrictions(2)non-negativity restriction is x1 , x2,x3,……….xn+m  O --------(2)

(c) Basic Solution:- A basic solution to (1), is a solution obtained by setting any n
variables (among n+m vairbale) equal to zero and solving for remaining m variables provided
the determinants of the coefficients of these m variables is non-zero . Such m variables are
called basic variables and remaining n variables are called non-basic variables.

maximum no of basic solutions =

m  n !
m!n!

(d) Basic Feasible solution:- A basic feasible solution is a basic solution which also
satisfies non-negativity restrictions (2) i.e.all m variables  0.
 (e) Non-degenerate B.F.S:- A non degenerate basic feasible solution is the basic
feasible solution which has exactly m positive i.e. all m basic variables are positive and
remaining n variables are zero.

(f) Degenerate B.F.S:- A degenerate bfs is a b.f.s. where one or more basic variables
are zero.

(g) Optimum B.F.S:- A b.f.s. is said to be optimum if it optimizes (max or min. ) the
objective function (3) objective function is given by

Max. Z = C1 x1 + c2 x2 +………….+cnxn + oxn+1 +………..+oxn+m ----------(3)

Q7. Explain the computational procedure of simplex method.

Ans: Simplex method is an iterative procedure involving the follow steps.(1) If the problem
is one of minimization, convert it to a maximization problem by considering –3, instead of Z

Min Z = - max (-z) = - max (Z1), Z1 = - 2

(2) Check up all bi for non-negativity. If some of the bi are negative, multiply the corr.
constraints through by  in order to ensure all bi  0.

(3) We change the inequalities to equations by adding slack and surplus variables if
necessary.

(4) We add artificial variables to those constraints with () or (=) sign in order to get the
identify basis matrix.

(5) We now construct the starting simplex table. From this table the initial basic feasible
solution can be read off.

(6) We obtain the values j by the formulae j = Zj – Cj = CbXj – Cj and examine values of
j . There will be three mutually exclusive and collectively exhaustive possibilities.

(a) all j  0, then b.f.s. is optimal

(b) some j <0 and atleast one Xij <0 , then the solution will be unbounded.

(c) Some j <0 and all corr Xj have Xij > 0 , then further improvement is possible.

(7) Further improvement is done by replacing one of the vectors at present in the basis matrix
by that one outside the basis we use follow for selection.
(i) incoming vector

We find such k for which k = min j then the incoming vector, will be Xk .

(ii) Outgoing vector.This vector will be r, if we determine r by min ratio rule

xBr x 
 Min  Bi , xiK  0 , for predetermined value of K
xrK i
 xiK 

(8) We now construct the next improvement tables by using the simple matrix transformation
rules.

(9) Now return to step 6 and go three steps 8 & 9, if necessary. This process is repeated till
we reach the desired conclusion.

Q7. Draw the flowchart of simplex Method.

Ans:

Put the LPP in Find the initial basic

standard form feasible solution