OPERTIONS RESEARCH

CHAPTER I
INTRODUCTION
1.1. DEFINITION
Operations Research is defined by many authors in deferent ways
.However, following definition is proposed here.

“Operations Research is a systematic analysis of a problem through

scientific methods ,carried out by appropriate specialists, working together
as a team ,constituted at the instance of management for the purpose of
finding an optimum and the most appropriate solution ,to meet the given
objective under a given set constraints.”

Meaning of Operations Research:

From the concept and definition given above, Operations Research is:
1. The application of scientific methods, techniques and tools to the
problem to find an answer
2. A management tool in the hands of a manager to take a decision
3. A scientific approach to decision making process
4. An “applied research” aims at finding a solution for an immediate
problem facing a society, industry or a business enterprise .This is not
“fundamental research”
5. A decision-oriented research, using scientific methods, for providing
management a quantitative basis for taking decision regarding
operations under its control
6. Applied decision theory. It uses scientific, mathematical and logical
means to take decisions.

1.2. DECISION MAKING

Making appropriate decision is the most VITAL aspect in management
.Every one of us takes a number decisions every day. Some are important;
some are trivial. Some decisions initiate a set of activities; some put an
end to a certain activities. In business environment right decisions at the
right times ensure success. This shows the importance of decision making.

-Problem is any variation between what was planned and what is actually
have/produced.

1
-Problem solving can be defined as the process of identifying a difference
between some actual and some desired states of affairs and then taking
action to resolve the difference.

-Decision making requires for al human being because each of us make

decision every day in our life .Thus, decision making is universal. Decision
making is a rational selection among alternatives.

Definition
Decision making is the process of selecting or choosing based on some
criteria, the best alternative among alternatives.

The decision making process:

Steps in the process of rational decision making
1. Identify and define the problem
Problem is a necessary condition for a decision. i.e: There would be no
need for decisions if problems did not exist.
2. Determine the set of alternative solutions.
3. Determine the criteria to evaluate alternatives.
=>Identifying those characteristics that are important in making the
decision.
4. Analyze the alternatives.
==>The advantages and disadvantages of each alternative.
5. Select the best alternative
==> Select the best alternative that suits to solve our decision problem.
In selecting the best alternative, factors such as risk, timing and liiting
factors should be considered adequately
6. Impement the solution
==> Putting the decision into action
7. Establishing a control and evaluation system
==>On going actions need to be monitored
==>Following the decision
==>Evaluate the results and determine if a satisfactory solution has
been obtained.

The Decision-Making Environment

Decisions are made under three basic conditions:
• Decision under certainty
• Decision under risk

2
 • Decision under uncertainty

i. Decision making under conditions of certainty

The decision maker has perfect knowledge about the outcome.

In this situation, we are reasonably sure what will happen when we make a
decision. The information is available & is considered to be reliable & we
know the cause & effect relationships.
Example: If you decide to invest your money in saving account in the
Commercial Bank of Ethiopia, You are certain that you will earn three
percent interest.

ii. Decision making under condition of

risk
Usually, decision makers cannot have a precise knowledge about the
outcome of a decision.

Decision makers may only be able to attach a probability to the expected

outcomes of each alternative.

Under this situation, one may have factual information, but it may be
incomplete.

Example: If we gamble by tossing a fair coin, the probability that a tail will
turn up is 50%.

iii. Decision making under conditions of

uncertainty
It is a case where neither there is complete data nor probabilities can be
assigned to the surrounding condition. It is the most difficult for a
manager.

Some conditions that are uncontrollable by management include

competition, government regulations, technological advances, the overall
economy, & the social & cultural tendencies of society.

Example: A corporation that decides to expand its operation, launching a

new product, or developing of a new technology in a strong country may
know little about its culture, laws, economic environment, or politics. The

3
political situation may be so volatile that even experts cannot predict a
possible change in government.

1.3. QUNATITIATIVE ANALYSIS PROCESS

*Qualitative skill can be developed through experience. It is inherent.
The three basic quantitative analysis processes are:
1. Model development
2. Data preparation
3. Model solution

1. Model development
Model is a representation of real objects/situations

Following are types of models:

a. Physical (icon) model
This is the representation of the situation, problem or object.
It is also called Static Model. It is given in two or three dimensions. It is a representation of the
real object.
Example:
• The structure of an atom
• Model of an airplane
• Photograph of a machine
• Layout drawing of a factory
• Glob
b. Analogue Models:
These are abstract models mostly showing inter and intra relationships
between two or more parameters.
For example:
It may show the relationship between an independent variable (input) with
that of a dependent variable (output). For instance; histogram, frequency
table, cause-effect diagram, flow charts, Gantt charts, price-demand
graph, world map and others.
:Is two dimensional.

c. Mathematical models
This is also an abstract model. Here a set of relations is represented in the
form of mathematical equations, using symbols to represent various
parameters.
Example:
1. (x + y)2=x2+2xy+y2

4
2. Max.Z=3000x1 +2500x2
Subject to:
2x1+x2 < 40
x1+3x2 < 45
x1 < 12
x1, x2 > 0

x1 and x2 are decision variables

Objective Function:
A mathematical statement of the goal of an organization, stated as intent
to maximize or to minimize some important quantity such as profits or
costs.

Max.Z=3000x1 +2500x2 is the objective function

Constraint:
A restriction on the resources available to a firm (stated in the form of an
inequality or an equation.)
2 x1+x2 < 40 Resource constraints
x1+3x2 < 45 Are constraints
x1 < 12
x1, x2 > 0 x1, x2 > 0 is non-negativity constraint

2. Data presentation
Data represent the values of inputs to the model.
Max.Z=3000x1 +2500x2
Subject to:
2 x1+x2 < 40
x1+3x2 < 45
x1 < 12
x1, x2 > 0

3. Model solution
:Is optimal solution
From the above equation, x1=12, x2=11 and Max.Z= $6350

Trial and error method

In this method a certain algorithm is developed. One starting point is an
initial solution, which is the first approximation .The method of solution, is
repeated with a certain set of rules so that initial solution is gradually

5
modified at each subsequent solution; till optimal solution is reached.
There are certain criteria laid down to check whether the solution has
become an optimal solution. These trial solutions are called Iterations
and the method is called iterative process. The classical example of trial
and error method is Linear Programming
Then the next step after iteration is model testing and validation.

1.4. MANAGEMENT SCIENCE IN PRACTICE

There are various techniques used in O.R. Some of these are listed here:
o Probability theory
o Linear Programming
o Transportation algorithm
o Assignment problems
o Queuing Theory
o PERT/CPM Method etc
OR techniques are ’application specific’. Maximum benefit can be
derived from selecting most appropriate techniques for each specific area
or problem. Appropriate selection of OR is an equally important task. Each
technique has its own advantages and limitations .In all such cases, the
ability of the Manager is tested in appropriate selection of OR technique.

6
 CHAPTER II
LINEAR PROGRAMMING

Linear Programming is a mathematical process that as bee developed

to help management in decision making involving the efficient allocation of
scares resources to achieve a certain objective.

Diagrammatically,

Scares To be allocated
Resourc to:
e

Resource
constrain
Objectiv Constrain ts
es ts

Non-
negativity
Constraints
Optimization

Maximizatio Minimizatio
n n
LP is a method for choosing the best alternative from a set of feasible
alternatives
To apply LP, the following conditions must be satisfied:
a. Objective Function
:Is the goal or objective of a management, stated as an intent to maximize
or to minimize some important quantity such as profits or costs.
b. Constraints
: Are limitations or restrictions imposed by the problems. And constraints
include:
1. Resourse constraints

7
: Are restrictions that should be clearly identifiable and measurable in
quantitative terms, which arise from limitation of available resources.

Examples of limited resources:

• Plant capacity
• Raw materials availability
• Labor power
• Market demand, etc

2. Non-negativity constraints:
: Are constraints that require the decision variables not to take on negative
values
c. Linearity
The Objective Function and the constraints must be linear in nature in
order to have a Linear Programming Problems (LPP)
d. Feasible alternative
There should be a series of feasible alternative course of action available
to the decision-making determined by resource constraints. Thus, we have
to choose the best alternative
Linear Programming Problems can be solved by using:
i. The Geometric method called” Graphical Method”
ii. The Algebraic method called” Simplex Method”

2.1. FORMULATION OF LP
Decision variables are the variables whose values are unknown and are
searched

The coefficients of the variables in the Objective Function are called the
profit or cost coefficients. They express the rate at which the value of the
Objective Function increases or decreases by including in the solution one
unit of each of the decision variables.
The coefficients of the constraints’ variables are called the input- output
coefficients that indicate the rate at which the given resources are
depleted or utilized.
Example:

8
 Max.Z =50 X 1+80 X 2

St :
X 1+2 X 2≤32
X 1+2 X 2≤82
X 1 , X 2 ≥0

2.2. GRAPHICAL SOLUTION

To use the graphic method, the following steps are needed:
1. Identify the problem
i.e: The decision variables, the objective function and the constraints
2. Draw a graph including all the constraints and identify the
feasible region
3. Obtain a point on the feasible region that optimizes the
objective function-Optimal solution
4. Interprite the results

 Graphical LP is a two-dimensional model.

A Maximization Problem
==>Maximize Z with inequalities of constraints in < form
Example: Consider two models of color TV sets; Model A and B, are
produced by a company to maximize profit. The profit realized is $300
from A and $250 from set B. The limitations are
a. availability of only 40hrs of labor each day in the production
department.
b. a daily availability of only 45 hrs on machine time
c. ability to sale 12 set of model A.

How many sets of each model will be produced each day so that the total
profit will be as large as possible?

Resources used per unit

Constraints Model A Maximum Available hrs.
Model B
(X1)
(X2)
Labor hr. 2 1 40

Machine hr. 1 3 45
Marketing 1 0 12
hr.
Profit $300

9
 $250

Solution
1. Formulation of mathematical modeling of LPP
Max Z=300X1 +250X2
St:
2X1 +X2< 40
X1 +3X2< 45 LPP Model
X1 < 12
X1, X2 >0
2. Convert constraints inequalities into equalities
2X1 +X2 = 40
X1 +3X2= 45
X1 = 12
3. Draw the graph by intercepts
2X1 +X2 = 40 ==> (0, 40) and (20, 0)
X1 +3X2= 45==> (0, 15) and (45, 0)
X1 = 12==> (12, 0)
X1, X2 =0
2X1 +X2 =

X2
40

X1=
X1 +X2 = 45

40 0 X1=12

15 B

Feasibl C(12, 11)

e X2=0
4. Identify
Regionthe feasible area of the solution which satisfies all constrains.
X1
5. A
Identify the cornerD points in the feasible region
12 20 45
A (0, 0), B (0, 15), C (12, 11) and D (12, 0)
6. Identify the optimal point
7. Interprete the result

Corners Coordinates
MaxZ=300 X1 +250X2
A (0, 0) $0
B (0, 15) $3750

10
C (12, 11) $6350
D (12, 0) $3600

Interpretation:
12 units of product A and 11 units of product B should be produced so that
the total profit will be $6350.
Exercise:
A manufacturer of light weight mountain tents makes two types of tents,
REGULAR tent and SUPER tent. Each REGULAR tent requires 1 labor-
hour from the cutting department and 3labor-hours from the assembly
department. Each SUPER tent requires 2 labor-hours from the cutting
department and 4 labor-hours from the assembly department .The
maximum labor hours available per week in the cutting department and
the assembly department are 32 and 84 respectively. Moreover, the
distributor, because of demand, will not take more than 12 SUPER tents
per week. The manufacturer sales each REGULAR tents for $160 and
costs$110 per tent to make. Where as SUPER tent ales for $210 per tent
and costs $130 per tent to make.

Required:
A. Formulate the mathematical model of the problem
B. Using the graphic method, determine how many of each tent the
company should manufacture each tent the company should
manufacture each week so as to maximize its profit?
C. What is this maximum profit assuming that all the tents manufactured
in each week are sold in that week?

Solution
_____________________________________________________________________
Labor hours per tent
Department REGULAR (X 1) SUPER(X2) Maximum labor-
hours available per week
_____________________________________________________________________

Cutting department 1 2 32
Assembly department 3 4 84
Selling price per tent $160 $210
Cost per tent $110 $130
Profit per tent $50 $80

11
 *The distributor will not take more than 12 SUPER tents per week. Thus,
the manufacturer should not produce more than 12 SUPER tents per week.
Let X1 =The No of REGULAR tents produced per week.
X2 =The No of SUPER tents produced per week.
X1 and X2 are called the decision variables

Max.Z = 50 X 1+80 X 2

St :
X 1+2 X 2≤ 32
……….Cutting department constraint
LPP Model
3 X 1+4 X 2≤……….Assembly
84 department constraint
X 2 ≤12 ……….Demand constraint
X1, X 2 ≥0
……….Non-negativity constraints

Corners Coordinates MaxZ=50 X1 +800X2

A (0, 0) $0
B (0, 12) $960
C (8, 12) $1360
D (20, 6) $1480
E (28, 0) $1400

Interpretation:
The manufacturer should produce and sale 20 REGULAR tents and 6
SUPERS tents to get a maximum weekly profit of $1480.

B Minimization Problem
==>Minimize Z with inequalities of constraints in > form
Example:
Suppose that a machine shop has two different types of machines;
machine 1 and machine 2, which can be used to make a single product
.These
X machines vary in the amount of product produced per hr., in the
2 X
amount of labor
1 used and in the cost of operation.
21 =0
Assume that at least a certain amount of product must be produced and
that we would like to utilize at least the regular labor force. How much
should we utilize each machine in order to utilize total costs and still meets
the16requirement?
B (0, 12)
C(8,12) D (20, 6) X2 12
Feasible
Region =0
X1
A(0,0) E (28, 0) 32
 Solution
________________________________________________________________
Resource used
Machine 1 (X1) Machine (X2) Minimum required
hours
_____________________________________________________________________

Product produced/hr 20 15 100

Labor/hr 2 3 15________
Operation Cost $25
$30_____________________________

Min.Z = 25 X 1+30 X 2

St :
20 X 1+15 X 2≥100 LPP Model
2 X 1+3 X 2≥15
X1, X 2 ≥0

Constraint equation:
20X1 +15X2=100 ==> (0, 20/3) and (5, 0)
2X1+3X2=15 ==> (0, 5) and (7.5, 0)
X1 X2> 0
X2
X1
A (0, 20/3) =0

Feasible
Region
B (2.5, 3.33)
X2
=0
X1
5 C (7.5, 0)

13
______________________________________________________________________________________________
Corners Coordinates MinZ=25 X1 + 30X2
A (0, 20/3) 200

B (2.5, 3.33) 162.5

C (7.5, 0) 187.5
_______________________________________________________________
X1 =2.5
X2=3.33 and
MinZ= 162.5

Exercise:
A company owns two flour mills (A and B) which have different production
capacities for HIGH, MEDIUM and LOW grade flour. This company has
entered contract supply flour to a firm every week with 12, 8, and 24
quintals of HIGH, MEDIUM and LOW grade respectively. It costs the Co.
$1000 and $800 per day to run mill A and mill B respectively. On a day,
mill A produces 6, 2, and 4 quintals of HIGH, MEDIUM and LOW grade
flour respectively.
Mill B produces 2, 2 and 12 quintals of HIGH, MEDIUM and LOW grade
flour respectively. How many days per week should each mill be operated
in order to meet the contract order most economically standardize? Solve
graphically.
Solution:
No of days per week of
Minimum flour in
Mil A (X1) Mill B(X2) quintals
HIGH Capacity (in quintal) 6 2
12
MEDIUM Capacity (in quintal) 2 2
8
LOW Capacity (in quintal) 4 12
24
$1000 $800

Min.Z =100 X 1+800 X 2

St :
6 X 1+2 X 2≥12
2 X 1+2 X 2≥ 8
4 X 1 +12 X 2 ≥ 24
X1, X 2 ≥0
Constraint equation:

14
6 X 1+2 X 2= 12
2 X 1+2 X 2= 8 (0, 6), (2, 0)
4 X 1 + 12 X 2 = 24 (0, 4), (4, 0)
X1, X 2 = 0 (0, 2), (6, 0)

Corners MinZ=$1000 X1 +
800X2
(0, 6) $4800
(1, 3) $3400
(3, 1) $3800
(6, 0) $6000
X1 =1
X2=3 and
MinZ= $3400

X2
X1
6
=0 6X1+2 X2=12
2X1+2 X2=8
4 FR
4X1+12
(1, 3)
X2=24
(3, 1)
X2
=0 X1
2 4 6

Note:
-In maximization problems, our point of interest is looking the furthest
point from the origin.
-In minimization problems, our point of interest is looking the point nearest
to the origin.

2.3. SPECIAL CASES IN GRAPHICS METHODS

15
1. Redundant Constraint
If a constraint when plotted on a graph doesn’t form part of the
boundary making the feasible region of the problem that constraint is
said to be redundant.

Example:
A firm is engaged in producing two products A and B .Each unit of
product A requires 2Kg of raw material and 4 labor-hrs for processing.
Where as each unit of product B requires 3Kg of raw materials and 3hrs
of labor. Every unit of product A needs 4hrs to packaging and every unit
of product B needs 3.5hrs for packaging. Every week the firm has
availability of 60Kg of raw material, 96 labor-hours and 105 hrs I the
packaging department.
[

16
 1 unit of product A sold yields $40 profit and 1 unit of B sod yields $35
profit.

Required:
a. Formulate this problem as a LPP
b. Find the optimal solution

Solution
__________________________________________________________________
Products Resource
available
Resources A B per
week
_____________________________________________________________________
Raw materials (Kg) 2 3 60
Labor (hr) 4 3 96
Packaging (hr) 4 3.5 105
Profit per unit $40 $35

Let X1 =The No of units of product A produced per week

X2 =The No of units of product B produced per week
a. LPP Model

Max.Z = 40 X 1+35 X 2

St :
2 X 1+3 X 2≤ 60
4 X 1+3 X 2≤ 96
4 X 1 +3.5 X 2 ≤105
X1, X 2 ≥0

17
X2
(0, 32)

Labor: 4X1 +3X2 = 96

(0, 30)
Packaging: 4X1 +3.5X2 =
(0, 20) C (18,8)
105 Raw material: 2X1 +3X2 =
FR
60
X1
A (0, 0) D (24, 0) (26, 0) (30, 0)

 The packaging hr is redundant.

Corners Coordinates MinZ=40 X1 + 35X2

A (0, 0) 0
B (0, 20) 700
C (18, 8) 1000
D (24, 0) 960
X1 =18
X2=8 and
MinZ= 1000

Interpretation:
The company should produce and sale 18 units of product A and 8 units of
product B per week so as to get a maximum profit of 1000.
 By this production plan the entire raw material will be consumed.
 2X1 +3X2 <60
2(18) +3(8) =60
60=60==> N o idle or unused raw material
 4X1 +3X2 <96
4(18) +3(8) <96
96=96 ==>the entire labor hour will be consumed
 4X1 +3.5X2 <105
100<105==>There is to be idle or unused capacity of 5hrs in the
packaging department.
Note:
The packaging hour’s constraint does not form part of the boundary
making the feasible region. Thus, this constraint is of no consequence and

18
 is therefore, redundant. The inclusion or exclusion of a redundant
constraint does not affect the optimal solution of the problem.

2. Multiple optimal Solutions

/Alternative optimal solutions/
-This is a situation where by a LPP has more than one optimal solution.
Multiple optimal Solutions will be found if two corners give optimal
solution, then the line segment joining these points will be the solution.
==>We have unlimited number of optimal solution with out increasing or
decreasing the objective function.

Example:
The information given below is for the products A and B.
_____________________________________________________________________
Machine hours per week Maximum available
Department Product A Product B
per week
_____________________________________________________________________

Cutting 3 6 900
Assembly 1 1 200
Profit per unit $8 $16
_____________________________________________________________________
Assume that the company has a marketing constraint on selling products B
and therefore it can sale a maximum of 125units of this product.
Required:
a. Formulate the LPP of this problem
b. Find the optimal solution
Solution:
Let X1 =The No of units f product A produced per week
X2 =The No of units f product B produced per week
a. The LPP Model of the problem is:

Max.Z = 8 X 1+16 X 2

St :
X2
3 X 1+6 X 2≤ 900
(0, 200) X +X ≤ 200
1 2

X 2 ≤125
X1, X 2 ≥0
(0,150)
B (0, 125)
X1=0 D (100,100)

19

A (0, 0)
 C (50, 125) X2=125 Marketing equation

Cutting: 3X1+6X2=900

FR X2=0

X1
E (200, 0) (300,0)

Corners Coordinates MaxZ=8 X1 + 16X2

A (0, 0) 0
B (0, 125) 2000
C (50, 125) 2400
D (100, 100) 2400
E (200, 100) 1600

Interpretation:
Both C and D are optimal solutions. Any point on the line segment CD will
also lead to the same optimal solution.
==>Multiple optimal solutions provide more choices for management to
reach their objectives.

3. Infeasible Solution
A solution is called feasible if it satisfies all the constraints and the
constraints and non-negativity condition. However, it is sometimes
possible that the constraints may be inconsistent so that there is no
feasible solution to the problem. Such a situation is called infeasibility.

Example:
MaxZ=20X1+30X2
St:
2X1+X2< 40
X2 4X1+X2< 60
X1=0
X1 > 30
(0, 60) X1, X2 > 0 X1=30
Solution:
(0, 40)

20
X2=0
X1
 4X1+X2=
60

2X1+X2=
40

(15, 0) (20, 0) (30, 0)

Note:
-In the above graph, there is no common point in the shaded area.
-All constraints cannot be satisfied simultaneously and there is no feasible
solution to the problem.

4. Mix of constraints
Example:
ABC Gasoline Company has two refineries with different production
capacities. Refinery A can produce 4,000gallons per day of SUPER
UNLEADD GASOLINE, 2000 gallons per day of REGULAR UNLEADED
GASOLINE and 1000 gallons per day of LEADED GASOLINE. On the other
hand, refinery B can produce 1000 gallons per day of SUPER UNLEADED,
3000 gallons per day of REGULAR UNLEADED and 4,000 gallons per day
of LEADED.

The company has made a contract with an automobile manufacturer to

provide 24000 gasolines of SUPER UNLEADED, 42000 gallons of
REGULAR UNLEADED and 36000 gallons of LEADED .The automobile
manufacturer wants delivery in not more than 14 days.

The cost of running refinery A is $1500 per day and refinery B is $2400 per
day.

Required:
a. Formulate this problem as a LPP
b. Determine the number of days the gasoline company should operate
each refinery in order to meet the terms of the above contract most
economical.(i.e. At a minimum running cost)

21
c. Which grade of gasoline would be over produced?

Solution:
____________________________________________________________________
_
Production per day (in gallons) Contract with an automobile
manufacturer
Grade of gasoline A B
_____________________________________________________________________

SUPER UNLEADED 4000 1000 24,000

REGULAR UNLEADED 2000 3000 42,000
LEADED 1000 4000 36,000
Running cost per day $1,500 $2,400
_____________________________________________________________________

 The automobile manufacturer wants delivery in not more than 14 days.

Let X1 =The No of days refinery A should work.
X2 =The No of days refinery B should work.
a. LPP of the problem

MinZ=1500X1+2400X2
St:
4000X1+1000X2>24000
2000X1+3000X2>42000
1000X1+2000X2> 36000
X1 < 14

X2< 14
X1, X2 > 0
==>T o simplify the problem divide by 1000 the constraints

MinZ=1500X1+2400X2
St:
4X1+1X2>24
2X1+3X2>42
X1+4X2 > 36
X1 < 14
X2< 14

22
 X1, X2 > 0

24 Delivery time: X1=14

SUG: 4X1+X2 =24

A (2.5, 14) B (14, 14) Delivery time: X2=14

FR

D (12, 6) C (14, 5.5)

LG: X1+4X2=36

RUG: 2X1+3X2 =42

(6, 0) (14, 0) (21, 0) (36, 0)

Note: Point A, B, C, and D are solved by elimination-substitution method

________________________________________________________________
Corners Coordinates MaxZ=1500X1 + 2400X2
A (2.5, 4) $37350
B (14, 14) 54600
C (14, 5.5) 34200
D (12, 6) 32400
E (3, 12) 33300
_________________________________________________________________
Interpretation:
The oil company should operate refinery A for 12 days and refinery B for 6
days at a minimum operating cost of $32,400.
c. Is there any over production
SUG: 4000X1+1000X2>24000
4000(12) +1000(6)>24000
54000 > 24000
Therefore, 30,000 gallons over production

RUG: 2000X1+3000X2>42000
2000(12) +3000(6)>42000
42000 > 42000
Therefore, there is no over production of RUG

LG: 1000X1+4000X2>36000
1000(12) +1000(6)>36000
36000 > 36000

23
 There fore, No over production of LG

5. Unbounded Solution
When the value of decision variables in LP is permitted to increase
infinitely without violating the feasibility condition, then the solution is said
to be unbounded .Here, the objective function value can also be increased
infinitely. However, an unbounded feasible region may yield some definite
value of the objective function.
Example:
Use the graphical method to solve the following LPP.
1. Max.Z=3X1+4X2
St:
X1-X2<-1==> -X1+X2>1 since the quantity solution is
positive
-X1+X2<0
X1, X2 > 0
X2 X1-X2 =-
1

X1+X2
=0

1 Unbounded
Feasible Region

X1
Fig: Unbounded Solution

2. Max.Z=3X1+2X2
St:
X1-X2<1
X2 X1+X2<3
X1, X2 > 0
A(0,3) Unbounded
Feasible Region
X1-X2=1

B (2, 1)
X1+X2=3 24

X1
Note here that the two corners of the region are A(0,3) and .B(2,1).The
value of MaxZ(A)=6 and MaxZ(B)=8. But there exist number of points in
the shaded region for which the value of the objective function is more
than 8.For example, the point (10, 12) lies in the region and the function
value at this point is 70 which is more than 8.

Remark:
An unbounded solution does not mean that there is no solution to the
given LPP, but implies that there exits an infinite number of solutions.

Exercise:
Use graphical method to solve the following LPP.
1. Max.Z=7/4X1+3/2X2 2. Max.Z=3X1+2X2
St: St:
8 X1+5X2 < 320 -2X1+3X2 < 9
4X1+5X2 < 20 X1-5X2 > -20
X1 > 15 X1, X2 > 0
X2> 10
X1, X2 > 0
Answer: No feasible solution Answer: Unbounded
solution
3. Max.Z=3X1+2X2 4.Max.Z=X1+X2
St: St:
X1-X2 < 1 X1+X2 < 1
X1+X2> 3 -3X1+X2> 3
X1, X2> 2 X1, X2> 0
Answer: Unbounded solution Answer: Unbounded
solution
5. Max.Z=6X1-4X2 6.Max.Z=X1+1/2X2
St: St:

25
 2X1+4X2 < 4 3X 1+3X2 < 12
4X1+8X2> 16
5X1 < 10
X1, X2 > 0 X 1 + X2
>8
Answer: Infeasible solution -X 1 + X2 >
4
X1, X2 > 0
Answer: Infeasible
solution
Exercise
I. Solve the following LP problems using the graphical method.
1. Max.Z=15X1-10X2 2.Max.Z=2X1+X2
St: St:
4X1+6X2 < 360 X1+2X2 < 10
3X1+0X2< 180 X 1 +X2
<6
0X1+5X2< 280 X1 - X 2 < 2
X1, X2 > 0 X1 -2X2
<1
Answer: X1=60 , X2 =20 X1, X2 >0
and Max.Z=1,100 Answer: X 1=4, X2 =2
and
Max.Z=10

3. Max.Z=10X1+15X2 4.Min.Z=3X1+2X2
St: St:
2X1+X2 < 26 5X1+X2 > 10
2X1+4X2< 56
X1 +X2 > 6
-X1+X2< 5 X1 + 4 X2 > 12
X1, X2 > 0
X1, X2 >0
Answer: X1=4 , X2 =2
Answer:X1=1,X2=5 and
Max.Z=230 and Min.Z=13

5. Min.Z=-X1+2X2 6.Min.Z=20X1+10X2
St: St:

26
 -X1+3X2 < 26 X1+2X2 <40
X1 +X2 < 6 3X1 + 4 X2 > 30
X1-X2< 2 4X1+ 3X2> 60
X1, X2 > 0 X1, X2 >0
Answer:X1=2 , X2 =0 Answer:X1=6,X2=12
and Min.Z=-2 and Min.Z=240

II.A manufacturer produces two different models; X and Y, of the same

product .The raw materials r1 and r2 are required for production. At least 18
Kg of r1 and 12 Kg of r2 must be used daily. Almost at most 34 hours of
labor are to be utilized .2Kg of r1 are needed for each model X and 1Kg of
r1 for each model Y. For each model of X and Y, 1Kg of r2 is required. It
takes 3 hours to manufacture a model X and 2 hours to manufacture a
model Y. The profit realized is $50 per unit from model X and $30 per unit
from model Y. How many units of each model should be produced to
maximize the profit?
Answer: 10 units of model X, 2 units of model Y and the maximum profit is
$ 560.

III.A manufacturing firm produces two machine parts P1 and P2 using

milling and grinding machines .The different machining times required for
each part, the machining times available on different machines and the
profit on each machine part are as given below:
____________________________________________________________________
Manufacturing time Maximum
time
required (min) available per
week (min)
Machine P1 P2
_____________________________________________________________________
Lathe 10 5 25,000
Milling Machine 4 10 2000
Grinding Machine 1 1.5 450
Profit per unit ($) $50 $100
_____________________________________________________________________
Determine the number of pieces of P1 and P2 to be manufactured per
week to maximize profit.
Answer:X1=375 , X2 =50 and
Max.Z=23750

27
 IV.A person requires 10, 12 and 12 units of chemicals A, B and C
respectively for his garden. A liquid product contains 5, 2 and 1 units of A,
B and C respectively per jar. A dry product contains 1, 2 and 4 units of A,
B and C per carton. If the liquid product sells for $3 per jar and the dry
product sells $2 per carton, how many of each should be purchased in
order to minimize cost and meet the requirement?
Answer: 1 Unit of liquid, 5 units of dry product and Min.Z=$13

CHAPTER III
SIMPLEX METHOD

INTRODUCTION
The graphical method to solving LPPs provides fundamental concepts for
fully understanding the LP process. However, the graphical method can
handle problems involving only two decision variables (say X1 and X2).

In 19940’s George B.Dantzig developed an algebraic approach called the

Simplex Method which is an efficient approach to solve applied problems
containing numerous constraints and involving many variables that cannot
be solved by the graphical method.

The simplex method is an ITERATIVE or “step by step” method or repetitive algebraic

approach that moves automatically from one basic feasible solution to another basic feasible
solution improving the situation each time until the optimal solution is reached at.

Note:
The simplex method starts with a corner that is in the solution space or
feasible region and moves to another corner I the solution space improving
the value of the objective function each time until optimal solution is
reached at the optimal corner.

 Matrices
Different types of matrices:
1. Row matrix
A matrix which has exactly one row
Example:
(1 2 3 4 ) ==>1x 4 matrixes
2. Column matrix

28
A matrix which has exactly one column
Example:
5
==> 3x1 Matrix
6

3. Square matrix
A matrix in which the No of rows (m) = the No of columns (n)
Example:

1 2
==> 2x2 square Matrix
3 4

4. Null or Zero Matrix

-A matrix each of whose elements is zero.
Example:

0 0
==> 3x2 Zero Matrix
0 0

0 0
5. Diagonal Matrix
The elements aij (i=j) are called diagonal elements of a square matrix.
Example:

1 2 3
The diagonal elements are: a11=1, a22=5 and
a33=9 4 5 6

7 8 9

A square matrix of every element other than diagonal elements is zero, is

called a diagonal matrix.
Example:

1 0 0 0 0 0 0
0 5 0 ; and
0 5 0 0
0 0 9

29
6. Identity Matrix
A diagonal matrix whose diagonal elements are all equal to 1(unity)
Example:
1 0
Is an identity matrix

Scope of solution of LPP by simplex method

0 1
Following types of problems are solved by simplex method:
 Maximize Z with inequalities of constraints in “< “form.

 Minimize Z with inequalities of constraints in “>“form.

 Maximize Z with inequalities of constraints in “>“form.

 Maximize Z or Minimize Z with inequalities of constraints in “< “,

“>“or “=”form.

3.1. MAXIMIZATION PROBLEMS

 Maximize Z with inequalities of constraints in “< “form

Example:
Solve the problem using the simplex approach
Max.Z=300x1 +250x2
Subject to:
2x1 + x2 < 40 (Labor )
x1+3x2 < 45 (Machine)
x1 < 12 (Marketing)
x1, x2 > 0
Solution
Step 1
Formulate LPP Model

Step 2
Standardize the problem
i.e Convert constraint inequality into equality form by introducing a
variable called Slack variable.

30
Slack Variables:
A slack variable(s) is added to the left hand side of a < constraint to covert
the constraint inequality in to equality. The value of the slack variable
shows unused resource.
A slake variable emerges when the LPP is a maximization problem.

Slack variables represent unused resource or idle capacity. Thus, they

don’t produce any product and their contribution to profit is zero.
Slack variables are added to the objective function with zero coefficients.
Let that s1, s2, and s3 are unused labor, machine and marketing hrs
respectively.

Max.Z=300x1 +250x2 + 0 s1 +0 s2+ 0 s3

St:
2 x1+x2 + s1 +0 s2+ 0 s3= 40 Standard form

x1+3x2 +0s1 + s2+ 0 s3= 45

x1 + 0s1 + 0s2+ s3= 12
x1 , x2 , s1 , s2, s3 > 0
Step 3
Obtain the initial simplex tableau
To represent the data, the simplex method uses a table called the
simplex table or the simplex matrix.
==> In constructing the initial simplex tableau, the search for of the
optimal solution begins at the origin. Indicating that nothing can be
produced;
Thus, first assumption, No production implies that x1 =0 and x2=0
==>2 x1+x2 + s1 +0 s2+ 0 s3= 40 ==> x1+3x2 +0 s1 + s2+ 0
s3= 45
2(0) +0 + s1 +0 s2+ 0 s3= 40 0 +3(0) + 0s1 + s2+ 0
s3= 45
s1= 40 – Unused labor hrs. s2= 45 – Unused
machine hrs.

==> x1+0s1 +0s2+ s3= 12

31
 0 +0s1 +0 s2+ s3= 12
s3= 12 – Unused Marketing hrs.
Therefore, Max.Z=300x1 +250x2 + 0 s1 +0 s2+ 0 s3
=300(0) +250(0) + 0(40) +0(45) + 0(12)
=0

Note:
In general, whenever there are n variables and m constraints (excluding
the non-negativity), where m is less than n (m<n), n-m variables must be
set equal to zero before the solution can be solved algebraically.
a. Basic variables are variables with non-zero solution values.
Or: basic variables are variables that are in the basic solution. Basic
variables have 0 values in the Cj-Zj row.
b. Non-basic variables are variables with zero solution values.
Or: non-basic variables are variables that are out of the solution.
==>n=5 variables (x1 , x2, s1, s2, and s3) and m=3 constraints (Labor,
machine and marketing constraints), excluding non-negativity.
[

Therefore, n-m=5-3=2 variables(x1 and x2) are set equal to zero in the 1 st
simplex tableau. These are non-basic variables. 3 Variables (s1, s2, and s3)
are basic variables (in the 1 st simplex tableau) because they have non-zero
solution values.
Step 4
Real or decision

Construct the initial simplex tableau

variable column

Initial simplex tableau

unit column

variables

Slack variables
Profit per

column
Solution
Basic or

quantity column
columns

Solution

300 250 0 0 Profit per unit

Cj row
0
X1 X2 S1 S2
SV Q
S3
2 1 1 0
0 S1 40 R1
0 Constraint
equation
R2
rows

Gross
32 Profit
row
Net Profit
row
 1 3 0 1
0 S2 45
0
1 0 0 0 R3
0 S3 12
1
0 0 0 0
Zj 0
0
Cj - 300 250 0 0
Zj 0

Step 5:
Choose the “incoming” or “entering” variables
Note:
The entering variable is the variable that has the most positive value in
the Cj - Zj row also called as indicator row. Or the entering variable is
the variable that has the highest contribution to profit per unit.
a. X1 in our case is the entering variable
b. The column associated with the entering variable is called key or
pivot column ( X1 column in our case )

Step 6
Choose the “leaving “or “outgoing” variable
==> In this step, we determine the variable that will leave the solution for
X1 (or entering variable)
Note:
• The row with the minimum or lowest positive (non-negative)
replacement ratio shows the variable to leave the solution.

Replacement Ratio (RR) = Solution Quantity (Q)

Corresponding values in pivot column

Note: RR>0
• The variable leaving the solution is called leaving variable or outgoing
variable.
• The row associated with the leaving variable is called key or pivot row
(s3 column in our case)
• The element that lies at the intersection of the pivot column and pivot
row is called pivot element(No 1 in our case)

33
Step 7
Repeat step 3-5 till optimum basic feasible solution is obtained.
Or: repeat step 3-5 till no positive value occurs in the Cj - Zj row.
Note:
• Divide each element of the pivot row by the pivot element to find new
values in the key or pivot row.
• Perform row operations to make all other entries for the pivot
column equal to zero.
2nd simplex tableau

300 250 0 0
Cj
0
X1 X2 S1 S2
SV Q
S3
0 1 1 0
0 S1 16 R’1=R1-2R3
-2
0 3 0 1
0 S2 33 R’2=R2-R3
-1
30 1 0 0 0
X1 12 R’3=R3
0 1 1
300 0 0 0
Zj 3600
300
Cj - 0 250 0 0
Zj -300
3rd simplex tableau

300 250 0 0
Cj
0
X1 X2 S1 S2
SV Q
S3
0 0 1 -1/3
0 S1 5
-5/3
25 0 1 0 1/3
X2 11
0 -1/3
30 1 0 0 0
X1 12
0 1
300 250 0 250/3
Zj 6350
650/3
Cj - 0 0 0 -250/3
Zj - 650/3

34
 R’’1=R’1-R’2

R’’2=R2/3

R’’3=R’3

Since all the Cj - Zj < 0 optimal solution is reached at.

Therefore, X1=12, X2=11, S1=5 and Max Z=6350

Exercise:
A Juice Company has available two kinds of food Juices: Orange Juice and
Grape Juice. The company produces two types of punches: Punch A and
Punch B. One bottle of punch A requires 20 liters of Orange Juice and 5
liters of Grape Juice.1 Bottle of punch B requires 10 liters of Orange Juice
and 15 liters of Grape Juice.

From each of bottle of Punch A a profit of $4 is made and from each bottle
of Punch B a profit of $3 is made .Suppose that the company has 230 liters
of Orange Juice and 120 liters of Grape Juice available

Required:
a. Formulate this problem as a LPP
b. How many bottles of Punch A and Punch B the company should produce
in order to maximize profit? (Using the simplex method)
c. What is this maximum profit?

Solution:
Juice needed for one bottle of
Juice Punch A Punch B Juice Available
_____________________________________________________________________
Orange Juice (lt) 20 10 230
Grape Juice (lt) 5 15 120
Profit per tent $4 $3
___________________________________________________________________________________

35
Let X1= the No of bottles of punch A produced.
X2= the No of bottles of punch B produced.

• LPP Model
Max Z=4X1 +3X2
St:
20X1 +10X2 < 230 Orange Constraint
5X1 +15X2 < 120 Grape Constraint
X1, X2 > 0 Non-negativity constraint
• Standard form
Max.Z=4x1 +3x2 + 0 s1 +0 s2+ 0 s3
St:
20 x1+3x2 + s1 +0 s2 = 230 Standard form
5x1+15x2 +0s1 + s2+ = 120
x1 , x2 , s1 , s2, >0
Where, s1 =Unused orange juice
s2 =Unused grape juice

Initial simplex tableau

4 3 0
Cj
0
X1 X2 S1
SV Q
S2
20 10 1
0 S1 230
0
5 15 0
0 S2 120
1
0 0 0
Zj 0
0
Cj - 4 3 0
Zj 0

36
 2nd simplex tableau

4 3 0
Cj
0
X1 X2 S1
SV Q
S2
1 1/2 1/20 11.
4 X1
0 5
0 25/2 -1/4 62.
0 S2
1 5
4 2 1/5
Zj 46
0
Cj - 0 1 -1/5
Zj 0

Optimal simplex tableau

4 3 0
Cj
0
X1 X2 S1
SV Q
S2
1 0 3/50
4 X1 9
-1/25
0 1 -1/50
0 X2 5
2/25
4 3 0.12
Zj 51 37
0.08
Cj - 0 0 - 0.12
Zj -0.08
X1= 9 bottles of punch A
X2= 5 bottles of punch B
s1 =0
s2 =0
MaxZ=$51

Exercise:
Solve the following LPPs using the simplex method
1. Max.Z=3x1 +5x2 2. Max.Z=20x1 +10x2
Subject to: Subject to:
x2 < 6 5x1+4x2 < 250
3x1+2x2 < 18 2x1+5x2 < 150
x1, x2 >0 x1 , x 2 >0
Answer: Answer:
x1=2, x2 =6, s1 =0 , s2=0 and MaxZ=$36 x1=50, x2 =0, s1 =0 ,
s2=50 and MaxZ=$1,000

3.2. MINIMIZATION PROBLEMS

 Minimize Z with inequalities of constraints in “> “form
There are two methods to solve minimization LP problems:
1. Direct method/Big M-method/
 Using artificial variables
2. Conversion method
 Minimization by maximizing the dual
 Surplus Variable (-s):
 A variable inserted in a greater than or equal to constraint to
create equality. It represents the amount of resource usage above the
minimum required usage.

38
  Surplus variable is subtracted from a > constraint in the
process of converting the constraint to standard form.
 Neither the slack nor the surplus is negative value. They must
be positive or zero.

Example:
1. 2x1+x2 < 40 ==>is a constraint inequality
x1= 12 and x2= 11==> 2x1+x2+s = 40 ==>2(12)+11+s = 40
==> s=5 unused resource
2. 5x1+3x2 < 45
x1= 12 and x2= 11==> 5x1+3x2+s = 45 ==>5(12)+3(11)+s = 45

==> s=0 unused resource (No idle

resource)
3. 5x1+2x2 >20
x1= 4.5 and x2= 2==> 5x1+2x2- s = 20 ==>5(4.5)+2(2)-s = 20
==> s=6 unused resource
4. 2x1+x2 >40
x1= 0 and x2= 0(No production)==> 5x1+2x2- s = 20
==>5(4.5)+2(2)-s = 20
==> s=-6(This is mathematically
unaccepted)
Thus, in order to avoid the mathematical contradiction, we have to add
artificial variable (A)

 Artificial variable (A):

Artificial variable is a variable that has no meaning in a physical sense but
acts as a tool to create an initial feasible LP solution.

Note:
Type of constraint To put into standard form
< --------------------------------------------- Add a slack variable
= ---------------------------------------------Add an artificial variable
> ---------------------- Subtract a surplus variable and add artificial
variable

1. Big M-method
/Charnes Penalty Method/

39
The Big-M Method is a method which is used in removing artificial variables
from the basis .In this method; we assign coefficients to artificial variables,
undesirable from the objective function point of view. If objective function
Z is to be minimized, then a very large positive price (called penalty) is
assigned to each artificial variable. Similarly, if Z is to be maximized, then
a very large negative price (also called penalty) is assigned to each of
these variables.

Following are the characteristics of Big-M Method:

a. High penalty cost (or profit) is assumed as M
b. M is assigned to artificial variable A in the objective function Z.
c. Big-M method can be applied to minimization as well as maximization
problems with the following distinctions:
i. Minimization problems
-Assign +M as coefficient of artificial variable A in
the objective function Z
ii. Maximization problems:
-Here –M is assigned as coefficient of artificial
variable A in the objective function Z
d. Coefficient of S (slack/surplus) takes zero values in the objective
function Z
e. For minimization problem, the incoming variable corresponds to the
highest negative value of Cj-Zj.
f. Solution is optimal when there is no negative value of Cj-Zj.(For
minimization case)
Example:
1. Minimize Z=25x1 +30x2
Subject to:
20x1+15x2 > 100
2x1+ 3x2 > 15
x1, x2 >0
Solution
Step 1
Standardize the problem
Minimize Z=25x1 +30x2 +0s1+0s2 +MA1+MA2
Subject to:
20x1+15x2- s1+A1 = 100
2x1+ 3x2 –s2+A2 = 15

40
 x1, x2 , s1, s2 ,A1 ,A2 > 0

Step 2
Initial simplex tableau
The initial basic feasible solution is obtained by setting x 1= x2= s1= s2=0
No production, x1= x2= s1=0==>20(0) +15(0) - 0+A1 = 100 ==> A1 = 100
x1= x2= s2=0==>0(0)+3(0) - 0+A2 =15==> A2 = 15

Initial simplex tableau

25 30 0 0
Cj
M M
X1 X2 S1 S2 RR
SV Q
A1 A2
20 15 -1 0 1
M A1 100
0
2 3 0 -1 0 15/2=7.5
M A2 15
1
22M 18M -M -M M 115
Zj
M M
25 -22M 30- 18M M M
Cj - Zj
0 0

100/20=5

Note:
Once an artificial variable has left the basis, it has served its purpose
and can therefore be removed from the simplex tableau. An artificial
variable is never considered for re-entry into the basis.

2nd Simplex Tableau

41
 25 30 0 0
Cj
M
X1 X2 S1 S2
SV Q
A2
R’1=R1/20
1 3/4 -1/20 0
25 X1 5
0
R’2=R2-2 R’
0 3/2 1/10 -1
M A2 5
1
25 75/4+3/2M -5/4+1/10M -M 125+5
Zj
M M
0 45/4-3/2M 5/4-1/10 M M
Cj - Zj
0

3rd Simplex Tableau

25 30 0
Cj
0
X1 X2 S1
SV Q
S2
1 0 -1/10 R’’1=R’1-3/4 R’’2
25 X1 5/2
1/2
0 1 1/15 R’’2=R’2/3/2
30 X2 10/3
-2/3
25 30 -1/2
Zj 162.5
-15/2
0 0 1/2
Cj - Zj
15/2

42
Cj - Zj > 0==>Optimal solution is reached
X1=5/2
X2=10/3 and MinZ=162.5

Note:
As long as an “A” variable is available in the solution variable column, the
solution is infeasible.

2. Use the penalty (Big-M) method to solve the following LPP

Min Z=5x1 +3x2
Subject to:
2x1+4x2 < 12
2x1+ 2x2 = 10
5x1+ 2x2 > 10
x1, x2 >0
Solution
Min Z=5x1 +3x2 +0s1+0s2 +MA1+MA2
Subject to: If no production

2x1+4x2+s1 = 12 ==>x1 =x2=0==>s1=0 (Solution Value in the initial

simplex tableau) 2x1+2x2 +A1 =10
==>x1 =x2=0==>A1 =15 (Solution Value
in the initial simplex tableau)
5x1+2x2 –s2 +A1=10 ==>x1=x2=s2=0==>A2=10(Solution Value in the
x1, x2 , s1, s2 ,A1 ,A2 > 0
initial simplex tableau)

43
 Initial Simplex tableau

5 3 0 0
Cj
M M
RR
X1 X2 S1 S2 A1
SV Q
A2 6
0 S1 2 4 1 0 0 12
0 5
M A1 2 2 0 0 1 10
2
0
M A2 5 2 0 -1 0 10
1
Zj 7M 4M 0 M M 20 M
M
Cj - 5 -7M 3- 4M 0 -M
0 0
Zj

2nd simplex tableau

5 3 0 0
Cj
M
X1 X2 S1 S2
SV Q
A1
0 16/5 1 2/5
0 S1 8
0
0 6/5 0 2/5
M A1 6
1
1 2/5 0 -1/5
5 X1 2
0
5M 6/5M +2 0 2/5M -1 10+6
Zj
M M
Cj - 0 -6/5M +1 0
Zj -2/5M+1 0
44
 RR

2.5

3rd simplex tableau

5 3 0 0
Cj
M
X1 X2 S1 S2 RR
SV Q
A1
20
0 1 5/16 1/8
3 X2 2.5
0 12
0 0 -3/8 1/4
M A1 3 -
1
0 0 -1/8 -1/4
5 X1 1
0
5 3 -3/8M +5/6 M/4- 12.5+3
Zj
7/8 M M
Cj - 0 0 3/8M -5/6
Zj -M/4+7/8 0

45
 4th Simplex tableau

5 3 0
Cj
0
X1 X2 S1
SV Q
S2
0 1 1/2
3 X2 1
0
0 0 -3/2
0 S2 12
1
0 0 -1/2
5 X1 4
0
5 3 -1
Zj 23
0
Cj - 0 0 1
Zj 0

X1=4, X 2=1, S1=0, S2=12 and MinZ=23

3. Use the penalty (Big-M) method to solve the following LPP
Max Z=2x1 +x2+3x3
Subject to:
2x1+ x2 + x3 < 5
2x1+ 3x2 +4x3 = 12
x1, x2 , x3 >0

Solution

Initial Simplex tableau

46
 2 1 3 0
Cj
-M
X1 X2 X3 S1 RR
SV Q
A1
1 1 2 1 2.5
0 S1 5
0
2 3 4 0 3
-M A1 12
1
-2M -3M -4M 0
Zj -12 M
-M
Cj - 2M+2 3M+1 4M+3 0
Zj 0

2nd simplex tableau

47
Cj 2 1 3 0

SV X1 X2 X3 S1 Q
A1
3 X3 1/2 1/2 1 1 5
0
-M A1 2 3 4 0 12
1
Zj 3/2 -M +3/2 3 2M+3/2 -2M+15/2
-M
Cj - 1/22 M-1/2 0 -2M-3/2
0
Zj

RR

3rd simplex tableau

Cj 2 1 3 0

SV X1 X2 X3 S1 Q RR

6
3 X3 1/2 0 1 3/2 1.5

1 X2 0 1 0 -2 2 Not defined

Zj 3/2 1 3 5/2 13/2

Cj - 1/2 0 0
Zj -5/2

48
 4th simplex tableau

2 1 3
Cj
0
X1 X2 X3
SV Q
S1
1 0 2
3 X1 3
3
0 1 0
1 X2 2
-2
2 1 4
Zj 8
4
Cj - 0 0 -1
Zj -4

Cj - Zj < 0==>optimal solution

X1=3, X2 =2, X3=0, S1=0 and Max Z=8

Exercise
Find the optimal solution using simplex method

1. Min Z=10x1 +5x2

Subject to:
2x1 + 5x2 > 150
3x1+ x2 > 120

49
 x1, x2 >0
Ans: x1=450/13, x2 =210/13 and Min Z=$540

2. Min Z=4x1 +5x2

Subject to:
x1 + 2x2 > 80
3x1+ x2 > 75
x1, x2 >0
Ans: x1=14, x2 =33 and Min Z=$221

3. Min Z=7x1 +9x2

Subject to:
3x1 + 6x2 > 36
8x1+ 4x2 > 64
x1, x2 >0
Ans: x1=20/3, x2 =8/3 and Min Z=212/3

Note:
To get an initial feasible solution

Types of constraint Presence of variables in the initial

solution mix
1. < (Slack) Yes
2.> *(Surplus) No
*(Artificial) Yes

50
3. = (Artificial) Yes

3.3. SPECIAL CASES IN SIMPLEX METHOD

1. Mixed constraints
Example
Max Z=6x1 +8x2
Subject to:
x2 < 4
x1+ x2 = 9
6x1+ 2x2 >24
x1, x2 >0

• Standard form
Max.Z=6x1 +8x2 + 0 s1 +0 s2+ 0 s3-M A2- M A3
St:
x2 + s 1 =4
x1+ x2 + A2 =9
Standard form
6x1+2x2 - s3 + A3 =24
All Variables >0

Initial simplex tableau

51
 6 8 0 0
Cj
-M -M
X1 X2 S1 S3 A2
SV Q
A3
0 1 1 0 0
0 S1 4
0
1 1 0 0
-M A2 9
1 0
6 2 0 -1
-M A3 4
0 1
-7M -3M 0 +M
Zj 24
-M -M
7M +6 3M+8 0 -M
Cj - Z j
0 0

Ans: At the 4th tableau: X1 =5 ,X2 =4 ,S3 =14 and MaxZ=62

Note:
For the initial basis, use artificial variables for constraints that have them.
Otherwise, use a constraint slack variable. Hence, surplus variables will
not appear in an initial solution.

2. Two incoming variables

/ Or Tie for entering variables/
In order to break this tie, the selection for the key column (entering
variable) can be made arbitrary. However; the number of solution can be
minimized by adopting the following rules:
1. If there is a tie between two decision variables, then the
selection can be made arbitrary.
2. If there is a tie between a decision variable and a slack (or
surplus) variable, then select the decision variable to enter into
basis first.
3. If there is a tie between slack or surplus variable, then
selection can be made arbitrary.

52
Example:
If the equation is max Z:

Cj
X1 X2 S1
SV Q
S3

Zj
Cj - 5 2 5
Zj 0

In such a case,X1 is the entering variable

3. Infeasibility
A situation with no feasible solution may exist if the problem was
formulated improperly.

Infeasibility comes about when there is no solution that satisfies all of the
problem’s constraints.

In the simplex method, an infeasible solution is indicated by looking at the

final tableau .In it, all Cj - Zj row entries will be the proper sign to imply
optimality, but an artificial variable (A) will still be in the solution mix.

53
Example:
Minimization case

5 8 0 0
Cj
M
X1 X2 S1 S2
SV Q
A2
1 1 -2 3
5 X1 200
0
0 1 1 2
8 X2 100
0
0 0 0 -1
M A2 20
1
5 8 -2 31-M 1,800+200
Zj
M M
0 0 2 M-31
Cj - Z j
0

Even though all Cj - Zj are positive or 0(i.e the criterion for an optimal
solution in a minimization case), no feasible solution is possible because
an artificial variable (A2) remains in the solution mix.

4. Unbounded Solutions
No finite solution may exist in problems that are not bounded .This means
that a variable can be infinitely large without violating a constraint.

In the simplex method, the condition of unboundedness will be discovered

prior to reaching the final tableau. We will note the problem when trying to
decide which variable to remove from the solution mix.

54
The procedure in unbounded solution is to divide each quantity column
number by the corresponding pivot column number. The row with the
smallest positive ratio is replaced. But if the entire ratios turn out to be
negative or undefined, it indicates that the problem is unbounded.

Example:
Maximization case

6 9 0
Cj
0
X1 X2 S1 RR
SV Q
S2
30/-1=-30
-1 1 2 Unacceptable
9 X2 30
0 RRs
-2 0 -1 10/-2=-5
0 S2 10
1
-9 9 18
Zj 270
0
Cj - Z j 15 0 -18
0

Pivot Column

55
The solution in the above case is not optimal because not all Cj - Zj entries
are 0 or negative, as required in a maximization problem. The next
variable to enter the solution should be X1.To determine which variable will
leave the solution, we examine the ratios of the quantity column numbers
to their corresponding numbers in the X1 or pivot column. Since both pivot
column numbers are negative, an unbounded solution is indicated.

• No unbounded solutions, no outgoing variable will exist.

5. Degeneracy
/Tie for leaving basic variable (key row)/

If there is a tie for the smallest ratio, this is a signal tat degeneracy exists.
Degeneracy can occur right in the first (initial tableau).This normally
happens when the number of constraints is less than the number of
variables in the objective function. Problem can be overcome by trial and
error method.

5 8 2 0
Cj
0 0
X1 X2 X3 S1
SV Q
S2 S3 RR
1/4 1 1 -2
8 X2 10
10/1/4=40
0 0
4 0 1/3 -1 20/4=5 Tie for the smallest
0 S2 20
ratio
1 0 indicates degeneracy.
2 0 2 2/5 10/2=5
0 S3 10
0 1
2 8 8 16
Zj 80
0 0
Cj - Z j 3 0 -6 -16
0 0

Degeneracy could lead to a situation known as cycling, in which the

simplex algorithm alternatives back and forth between the same non-
optimal solutions, i.e, it puts a new variable in, then takes it out in the next
tableau, puts it back in ,and so on.

56
One simple way of dealing with the issue is to select either row (S2 or S3 in
this case) arbitrary. If we are unlucky and cycling does occur, we simply go
back and select the other row.
Remark
When there is a tie between a slack and artificial variable to leave the
basis, the preference shall be given to artificial variable to leave the basis
and there is no need to apply the procedure for resolving such cases.

6. Multiple Optimal Solutions

Multiple optimal solutions exist when non-basic variable contains
zero on its Cj - Zj row.

Example:
Maximization problem

3 2 0
Cj
0
X1 X2 S1
SV Q
S2
3/2 1 1
2 X2 6
0
1 0 1/2
0 S2 3
1
3 2 2
Zj 12
0
Cj - Z j 0 0 -2
0

57
MaxZ=3X1+2X2

X1=0, X2=6, S2=3 and MaxZ=12 or: X1=3, X2=3/2 and MaxZ=12

The Cj - Zj value of the Non-basic variable (X1) is 0.Thus, there is

alternative optimal solution.

Exercise:
1. Solve the following LPP by the simplex algorithm
Min Z=6x1 +8x2
Subject to:
x1+ 2x2 > 80
3x1+ x2 > 75
x1, x2 >0
What are the values of the basic variables at each iteration?
Which are the non-basic variables at each iteration?
Ans:X1=14, X2=33, and
MinZ=221
2. At the 3rd iteration of a particular LP maximization problem, the
following tableau is established:

58
Cj
X1 X2 X3 S1
SV Q
S2 S3
0 1 1 -2
5 X3 5
0 0
1 -3 0 0
6 X1 12
0 1
0 2 0 1
0 S2 10
1 -1
6 -13 5 5
Zj 97
0 21
Cj - Z j 0 16 0 -5
0 -21

What special condition exists as you improves the profit and move to the
next iteration? Proceed to solve the problem for optimal solution
Ans: Degeneracy; X1=27, X2=5, X3=0, and
MaxZ=$177
3. Covert the following constraints and objective function into the standard
form for use in the simplex method
Min Z=4x1 +x2
Subject to:
3x1+ x2 = 3
4x1+ 3x2 > 6
x1+ 2x2 < 3
x1, x2 >0

59
 Answer:
Min.Z=4x1 +x2 + 0 s1 +0 s2+ M A1+M A3
St:
3x1+ x2 + A1 =3
4x1+ 3x2 -s1 +A2 =6
x1+ 2x2 + s2 =3
All Variables >0
4. Solve the following LPP using simplex method
MaxZ=9x1 +7x2
Subject to:
2x1+ x2 < 40
x1+ 3x2 < 30
x1, x2 >0
Ans: X1=18, X2=4, and MaxZ=$190
5. Solve the following LPP to show that it has alterative optimal solutions.
a. MaxZ=6x1 +3x2 Ans: i. X1=4, X2=0, and MaxZ=24
Subject to: ii.X1=5/2, X2=3, and MaxZ=24
2x1+ x2 < 8
3 x1+ 3x2 < 18
x2 < 3
x1, x2 >0
b MinZ=2x1 +8x2 Ans: i. X1=32/6, X2=10/6, and MinZ=24
Subject to: ii.X1=12, X2=0, and MinZ=24
5x1+ x2 > 10
2x1+ 2x2 > 14
x1+ 4x2 > 14
x1, x2 >0
6. Solve the following LPP to show that it has unbounded solution.
a. MaxZ=-2x1 +3x2
Subject to:
x1 <5
2 x1-3x2 < 6
x1, x2 >0

b. MaxZ=3x1 +6x2

60
 Subject to:
3x1+ 4x2 > 12

-2x1+ x2 < 4
x1, x2 >0
7. Solve the following LPP to show that it has no feasible solution.
a. MaxZ=-2x1 +3x2 Ans: X1=2, X2=0, A1=2 and MaxZ=4-
2M
Subject to:
x1 - x2 > 4
x1+ x2 < 6
x1 <2
x1, x2 > 0
b. MaxZ=3x1 +3x2 Ans: X1=0, X2=2, A2=2 and MaxZ=4-4M
Subject to:
2x1+ x2 < 2
3x1 + 4x2 > 12
x1, x2 >0

Assignment 1

61
1. A workshop prepared two articles A and B .The time required at
different stages and profit per unit are shown below. Formulate
the LP model

2. A farmer use his land to produce rice and wheat .Labor required
Work Profit per
Cutting Machine Packing
center product unit($)
A 2 1 1 50
B 1 2 0.5 60
Total capacity 80 100 50
per acre and profit per acre given below. Formulate the LP model

Allocated area in Labor per Profit per

Community
acres acre(hrs) acre($)

Rice X 2 100
Wheat Y 3/2 60
Total 200 300

3. A company produces two types of container K and L. Each product

has resource requirements and profit contribution as follows:

62
 In addition, because of demand, a maximum of 4 units of container
K units of be produced. Obtain the optimal solution using graphical
method.
4. Personal Mini Warehouses is planning to expand its successful Orlando
business into Tampa. In doing so, the company must determine how
many storage rooms of each size to build. Its objective and constrains
follow:

Maximize monthly earnings= 50X1 +20X2

Subject to:
2X1+4X2<400 (Advertising budget available)
100X1 +50X2<8,000(Square footage required)
X1 <60(Rental limit expected)
X1 X2>0
Where
X1=Number of large spaces developed
X2=Number of large spaces developed
(Use graphical
method)
5. Solve the following LP formulation graphically

Total resource
Resource K L
available

Material(Kg/u 1 2 10Kg
nit)
Labor(Hr/unit) 6 6 36Hr
Profit 4 5

MinZ=24X1+28X2
Subject to :
5X1+4X2<2000
X1 >80

63
 X1 + X2>3000
X2>100
X1 , X2> 0

Assignment 2
Solve the following LPP by simplex method
1. Max.Z=4X1+3X2 2. Max.Z=2X1+3X2
Subject to: Subject to:
X1+2X2<10 7X1+4X2<28
4X1 +3X2<24 7X1
+12X2<52
X1 , X2> 0 X1 ,
X2> 0

3. Max.Z=3X1+5X2
Subject to:
3X1+2X2<18
X1 <4
X1 , X2 > 0
4. Max.Z=3X1+2X2 +3X3 5. Max.Z=5X1-
2X2+3X3
Subject to: Subject to:
2X1+X2+X3<2
2X1+2X2-X3 >2

64
 3X1 +4X2-X3>8 3X2-
4X3>3
X1 , X2, X3> 0
X1+3X3<5
X1 , X2 ,X3> 0
6. Max.Z=X1+X2
Subject to:
2X1+X2>4
X1+7X2>7
X1+X2>0
X1 , X2 > 0

SUMMARY OF LP: SIMPLEX METHOD

1. The standard form of LP problem should have the following

characteristics:
I. All the constraints should be expressed as equations by slack or
surplus and/or artificial variables
II. The right hand side of each constraint should be made non-
negative; if it is not, this should be done by multiplying both
sides of the resulting constraint by -1.
Example:
2X1+3X2-4X3+X3<-50, we multiply both sides by
negative
III. Three types of additional variables, namely
a. Slack Variable(S)
b. Surplus variable (-S), and
c. Artificial variables (A)

65
 are added in the given LP problem to convert it into standard
form for two reasons:
i. to convert an inequality to have a standard form of
an LP model, and
ii. to get an initial feasible solution represented by the
columns of an identity matrix.

The summery of the extra variables needed to add in the given LP problem
to convert it into standard form is given below:

Table

Coefficient of extra variables Presence of

Types of in the objective function variables in the
Extra variables to be
constrain initial solution mix
added MaxZ
t
MinZ
< Add only slack variable 0 Yes
0
Subtract surplus variable 0 No
> and 0
Add artificial variable -M Yes
+M
= Add artificial variable -M Yes
+M

2. Test of optimality
i. If all Cj - Zj < 0, then the basic feasible solution is optimal (Maximization
case)
ii. If all Cj - Zj > 0, then the basic feasible solution is optimal (Minimization
case)
3. Variable to enter the basis
i. A variable that has the most positive value in the C j - Zj row
(Maximization case)
ii. A variable that has the highest negative value in the C j - Zj row
(Minimization case)
4. Variable to leave the basis
The row with the non-negative and minimum replacement ratio
(For both maximization and minimization cases
i.e: RR > 0

66
 CHAPTER IV
SENSATIVITY ANALYSIS AND DUALITY

4.1. SENSATIVITY ANALYSIS

Sensitivity Analysis is concerned with the study of ‘Sensitivity ‘of the
optimal solution of an LPP with discretion variables (changes) in
parameters .The degree of sensitivity of the solution due to those
variations can range from no change at all to a substantial change in the
optimal solution of the given LPP. Thus, insensitivity analysis, we
determine the range over which the LP model parameters can change with
out affecting the current optimal solution. The process of studying the
sensitivity of the optimal solution of an LPP is called post-optimal
analysis.

67
The two sensitivity analysis approaches are:
I. Trial and error approach and
II. Analytical approach

4.1.1. Analytical approach

Five types of discrete changes in the original LP model may be
investigated during the sensitivity analysis:
A. Changes of the coefficients of the objective function (cj)
B. Changes of the RHS Quantity( bj)
C. Changes of the input-output coefficient
D. Add/delete constraints
E. The addition of a new variable to the problem

A. Changes of the coefficients of the objective

function (cj)
Decision variables can be:
i. Basic (in the solution)
ii. Non-basic (out-of the solution)

Note:
Instead of resolving the entire problem as a new problem with new
parameters, we may take the original optimal solution table as an initial
solution table for the purpose of knowing ranges both lower and upper
within which a parameter may assume value.

a. Range for the coefficients of basic decision

variables
The range of optimality is the range over which a basic decision
variable coefficient in the objective function can change without
changing the optimal solution mix. However, this change will change
only the optimal value of the objective function.
Example:
Max.Z=5x1 +4.5x2 +x3
Subject to:
15 x1+15.8x2 < 150
5x1+6.4x2+15x3 < 77
2.8x2+11.8x3 < 36

68
 x1, x2 , x3 > 0

X2 S1 S2 Non-basic variables
Cj - Zj row -0.842 -0.311 -0.067
X1 row 1.053 0.067 0
Cj - Zj row
X1 row -0.8 -4.64 -∞

The optimal tableau for this solution is:

5 4.5 1 0 0
Cj
0
X1 X2 X3 S1 S2
SV Q
S3
1 1.053 0 0.067 0
5 X1 10
0
0 0.67 1 -0.022 0.067
1 X3 1.8
0
0 1.924 0 0.258 -0.773
0 S3 15.12
1
5 5.342 1 0.311 0.067
Zj 51.8
0
0 -0.842 0 -0.311
Cj - Z j
-0.067 0

Determine the range of optimality for the coefficients of the basic-

decision variables.

Solution:
Analysis of basic decision variables
The analysis will be conducted on products on X1 and X3 which are in
the basic solution. Divide each Cj - Zj row entry for variables not in the
solution (for instance, by X2, S1 and S2 values) by the associated
variable aij from X1or X3 row.

I. Analysis of X1

69
 Steps:
a. Take the Cj - Zj row of the optimal solution of the non-basic
variables
b. Take the X1 row of the non-basic variables
c. Cj - Zj row
X1 row
 Upper Limit
The smallest positive number in the Cj - Zj row tells how much the
profit X1
of X1 can be increased before the solution is changed.

Upper Limit= Cj (for X 1) +the smallest positive value of Cj - Zj

row
=5+∞=∞ X1
row
Note: Cj (for X1) =5(Look in the OF of the LP problem)

 Lower Limit
The largest negative number closest (negative amount closest to 0)

Lower Limit= Cj (for X1 )+The largest negative value of Cj - Zj

row
=5+ (-0.8)= 4.2 X1 row

Therefore, the range of optimality for the coefficient of X1 is 4.2< Cj

(for X1) < ∞ (The coefficient of X1 in the objective function can change
between 4.2 and ∞ without changing the optimal solution mix X 1=10,
X3=1.8 and S3=15.12)

II. Analysis of X2

X2 S1 S2
Cj - Zj row -0.842 -0.311 -0.067 Non-basic variables
X3 row 0.67 -0.022 0.067
Cj - Zj row
X1 row -1.26 14.13 -1

 Upper Limit= Cj (for X3 )+The smallest positive value of Cj - Zj row

70
 =1+ (14.13) =15.13 X1
row
Note: Cj (for X3) =5(Look in the OF of the LP problem)

 Lower Limit= Cj (for X3 )+The largest negative value of Cj - Zj row

=1+ (-1) = 0 X1 row

Therefore, the range of optimality for the coefficient of X3 is 0 < Cj (for X3) <
15.13 (The coefficient of X3 in the objective function can change between 0
and 15.13 without changing the optimal solution mix X 1=10, X3=1.8 and
S3=15.12).However, this change will change only the optimal value of the
objective function(i.e.MaxZ will change)

Exercise:
Max.Z=50x1 +120x2
Subject to:
2 x1+4x2 < 80
3x1+x2< 60
x1, x2 > 0

Determine the range of optimality for the coefficient of the basic variables.

Optimal Solution
Cj
X1 X2 S1
SV Q
S2
5 X1 1/2 1 1/4 20
0
5/2 0 -1/4
1 S2 40
1
60 120 30
Zj $2,400
0
$-10 $0 $-30
Cj - Zj
$0

Ans: The range of optimality for X2’s profit coefficient is: $100 < Cj
(for X2) < ∞

b. The range for the non-basic variables

If there is a variable Cj, not participating in the optimal basis, then, in
order for the variable to be included in the optimal solution, its
coefficient in the objective function will have to change from the existing
Cj to a new level Cj(new).

Cj(new)>Zj

71
The range of insignificance is the range over which Cj rates for non-
basic variables can vary without causing a change in the optimal solution
mix (variable) is called the range of insignificance.

Example:
Max.Z=5x1 +4.5x2 +x3
Subject to:
15 x1+15.8x2 < 150
5x1+6.4x2+15x3 < 77
2.8x2+11.8x3 < 36
x1, x2 , x3 > 0

The optimal tableau for this solution is:

5 4.5 1 0 0
Cj
0
X1 X2 X3 S1 S2
SV Q
S3
1 1.053 0 0.067 0
5 X1 10
0
0 0.67 1 -0.022 0.067
1 X3 1.8
0
0 1.924 0 0.258 -0.773
0 S3 15.12
1
5 5.342 1 0.311 0.067
Zj 51.8
0
0 -0.842 0 -0.311
Cj - Z j
-0.067 0

Calculate the range of insignificance for the coefficient of non-basic

variable(X2)

Solution

Cj(for X2)=4.5 and Zj( for X2) =5.342

Cj(new for X2)>5.342==> Cj(new for X2).If the profit contribution of X2 is
greater than 5.342,then X2 will be included in the solution.

72
Thus, ∞< Cj(new for X2)< 5.342 is the range of insignificance for X2.
Cj (new for X2) can vary with in the given range without causing a change
in the optimal solution mix(X1=10, X1=0, X3=1.8, S1= S2=0 and
S3=15.12).

B. Change in the Right Hand—Side Quantity (RHS)

Or
Change in the availability of resource (Capacity)
(bj)

 Shadow prices:
==>How much should a firm be willing to pay to make additional
resources available?

Shadow prices signify the change in the optimal value of the objective
function for 1 unit increases in the value of the RHS of the constraint that
represent the availability of scarce resources.

The negative of the number of Cj - Zj row in its slack variable columns

provide as with shadow prices. Or: shadow prices are found in the Zj row
of the final simplex tableau in the slack variable columns.

 RHS ranging is the range over which shadow prices remain valid.
Example:
Max.Z=3x1+4x2
Subject to:
3 x1+5x2 < 15
2x1 + x2 < 8
x2 < 2
x1, x2 > 0

The optimal tableau is given as:

3 4 0 0
Cj
0
X1 X2 S1 S2
SV Q
S3

73
 1 0 -0.143 0.714
3 X1 3.57
0
0 0 -0.286 0.428
0 S3 1.143
1
0 1 0.286 -0.428
4 X2 0.857
0

0 0 -0.714 -0.428
Cj - Zj
0

Required:
1. Determine the shadow price for each constraint
2. Determine the RHS ranges over which the shadow prices are valid

 Analysis of the 1st constraint (S1)

Q S1
Q/ S1
3.57 -0.143
-24.96
1.143 -0.286
-3.99
0.857 0.286
3.00

Lower Limit=bj-the smallest positive number in the

[
Q/ Sj column
Lower Limit=b -the smallest positive number in the Q/ S1column
1
Upper Limit=bj-the largest negative number in the
=15-3=12
Upper Limit=b1-the largest negative number in the Q/ S1 column
=15-(-3.99) =18.99
Therefore, 12< b1< 18.99 (The range of resource 1 over which the
shadow price $0.714 per unit is valid).

 Analysis of the 2nd constraint (S2)

Q S2
Q/ S2
3.57 0.714
5
1.143 0.428
2.67
0.857 -0.428
-2

74
Lower Limit=b2-the smallest positive number in the Q/ S2 column
=8-(2.67)=5.33

Upper Limit=b2-the largest negative number in the Q/ S2 column

=8-(-2) =10

Therefore, 5.33< b1< 10 (The range of resource 2 over which the shadow
price $0.428 per unit is valid).

 Analysis of the 3rd constraint (S3)

Q S3
Q/ S3
3.57 0
-
1.143 1
1.143
0.857 0
-

Lower Limit=b3-the smallest positive number in the Q/ S3

column
=2-(1.143)= 0.857

Upper Limit=b3-the largest negative number in the Q/ S3

column
=2-(-∞) =∞
Therefore, 0.857< b3< ∞ (The range of resource 3 over which the shadow
price $0 per unit is valid).

Exercise:
1. Max.Z=50x1+40x2
Subject to:
3 x1+5x2 < 150 (Assembly time)
x2 < 20 (Portable display)
8x1 + 5x2 < 300 (Warehouse space)
x1, x2 > 0

75
 The final simplex tableau is:
50 40 0 0
Cj
0
X1 X2 S1 S2
SV Q
S3
0 1 8/25 0
40 X2 12
-3/25
0 0 -8/25 1
0 S2 8
3/25
1 0 -5/25 0
50 X1 30
5/25
50 40 14/5 0
Zj 1980
26/5
0 0 -14/5 0
Cj - Zj
-26/5

Determine the shadow prices for the three constraints for the High Tech
Co.

Answer:
The Zj values for the three slack variables are 14/5, 0 and 26/5,
respectively.
Thus, the shadow price for the assembly time constraint is 14/5(i.e.1
additional assembly time over the existing 150 is $2.8)
T he shadow price for the portable display constraint is 0.
T he shadow price for the Warehouse space constraint is26.5
Therefore, we see that obtaining more warehouse space will have the
biggest positive impact on High Tech’s profit.

Note:
With a greater than or equal to constraint, the value of the shadow price
will be less than or equal to zero because a 1 unit increase in the value of
the RHS cannot be helpful; it makes it more difficult to satisfy the
constraint. As a result, for a maximization problem the optimal value of the
objective function can be expected to decrease when the RHS side of a
greater than or equal to constraint is increased.

2. Solve the following LPP using simplex method. A firm that manufactures
both lawn mowers and snow blowers:
X1 =the number of lawn mowers
X2 =the number of snow blowers

76
 Max.Z=$30x1+$80x2
Subject to:
2 x1+4x2 < 1000 Labor hours available
6x1 + 2x2 < 1,200lb of steel available
x2 < 20 snow blower engine available
x1, x2 > 0
a. What is the best product mix? What is the optimal profit?
Answer:
x1=100, x2=200 and profit =$19,000
b. What are the shadow prices? When the optimal solution has been
reached, which resource has the highest marginal value?
Answer:
The shadow price for 1 additional labor=$15
The shadow price for 1 additional pound of steel=0
The shadow price for 1 additional snow blowers engine made
available =$20
Thus, snow blower engine have the highest marginal value at the
optimal solution.
c. Over what range in each of the RHS values are these shadows valid?
Answer:
The shadow price for labor hours is valid from 800 hours to
1,066.66 hours
The shadow price for pounds of steel is valid from 1,000pounds up
to an infinite number of pounds
The shadow price for snow blower engines ranges from 180
engines up to 250 engines
d. What are the ranges over which the objective function coefficients can
vary for each of the two decision variables?
Answer:
With out changing the current solution mix, the profit coefficient
for the mowers can range from $0 to 40, while the coefficient for
the blowers can range from $60 to infinity.

4.3. DUALITY
Every LPP has another LPP associated with it, which is called its dual.
The first way of starting a linear problem is called the primal of the
problem. The second way of starting the same problem is called the
dual. The optimal solutions for the primal and the dual are equivalent,
but they are derived through alternative procedures.

77
 Note:
• The dual contains economic information useful to management, and
it may also be easier to solve, in terms of less computation, than the
primal problem.
• Corresponding to every LPP, there is another LPP.
• The given problem is called the primal.
• The related problem to the given problem is known as the dual.
• The dual of a dual is the primal
• If the primal has optimal solution ,the dual will have optimal solution
• If the primal has no optimal solution, the dual will not have optimal
solution.
• Whether we follow the dual or primal system, the optimal solution
will remain equal.

Table
Primal-Dual Relationship
Primal Dual
Objective is minimization Objective is maximization and vice
versa
> type constraints < type constraints

No of columns No of rows
No of rows No of columns
No of decision variables No of constraints
No of constraints No of decision variables
Coefficient of Object function RHS value
RHS value Coefficient of Object function

Duality Advantage
1. The dual form provides an alternative form
2. The dual reduces the computational difficulties associated with some
formulation
3. The dual provides an important economic interpretation concerning the
value of scars resources used.
Example:

78
Write the duals to the following problems
a. Max.Z=5x1+6x2
Subject to:
2x1+3x2 < 3000 (Labor constraint)
5x1 + 7x2 < 1000 (Machine constraint)
x1 + x2 < 5000 (Market constraint)
x1, x2 > 0
Solution
Represent primal in the conventional table as follows
Dual variables x1 x2 Constraints
u1 2 3 < 3000
u2 5 7 < 1000
u3 1 1 < 500
MaxZ 5 6

By referring the above table, dual for this can be stated as:

MinZ*=3000 u1 +1000 u2 +500 u3

St::

2u1+5u2 + u3> 5
3u1+7u2 + u3> 6
u1, u2 , u3> 0

Note:
1. For maximizing, all constraints must be brought to “<” form
2. For minimizing, all constraints must be brought to “>” form
3. If they are not, use multiplication factor -1
4. “=” is an intersection of “>” and “< “
b. Max.Z=60x1+50x2
Subject to:
2x1+4x2 < 80
3x1 + 2x2 < 60
x1 < 15
2x2 < 36
x1, x2 > 0
Solution
Primal is represented in the table as follows:

Dual variables x1 x2 Constraints

u1 2 4 < 80
u2 3 2 < 60

79
 u3 1 0 < 15
u4 0 2 < 36
MaxZ 60 50

The dual form is:

MinZ*=80 u1 +60u2 +15u3+36u4
St::

2u1+3u2 + u3 > 60
4u1+2u2 + u4 > 50
u1, u2 , u3, u4 >0

c. Obtain the dual problem of the following primal LPP

Min.Z=x1+2x2
Subject to:
2x1+4x2 < 160
x1 - x2 = 30
x1 > 10
x1, x 2 > 0

Solution
Rule:
1. For a maximization primal with all < type constraints there
exists a minimization dual problem with all > type
constraints and vice versa. Thus, the inequality sign is
reversed in all the constraints except the non-negativity
conditions.
2. Transform the < type constraint to a > type constraint by
multiplying the constraint by -1.
3. Write the = type constraint equivalent to two constraints of
the type > and <.
The standard primal LPP so obtained is:
Min.Z=x1+2x2
Subject to:
-2x1-4x2 > -160
x1 - x2 > 30

80
 -x1 + x2 > -30
x1 > 10
x1, x 2 > 0
Let u1, u2 , u3, and u4 be the dual variables corresponding to
the four constraints in given order, then the dual of the given primal
problem can be formulated as follows:
MaxZ*=-160 u1+30 u2-30 u3+10
St:
-2u1+ u2- u3+ u4 < 1
-4u1- u2+ u3 <2
u1, u2 , u3, u4 >0
Let u= u2-u3, then the above dual problem reduces to the form:

MaxZ*=-160 u1+30 u2-30 u3+10

St:
-2u1+ u+ u4 < 1
-4u1-u <2
u1, u4 > 0, u unrestricted in sign
Here it may be noted that the second constraint in the primal is
equality. Therefore, the corresponding dual u2 should be unrestricted in
sign.
d. Obtain the dual problem of the following primal LPP
Max.Z=x1-2x2+3x3
Subject to:
-2x1+x2 +3x3=2
2x1 + 3x2 +4x3=1
x1, x2 , x3 > 0
Solution:
Since the given constraints are both equality, both the corresponding dual
variables, u1 and u2 will be unrestricted in sign .The dual of the given
primal LPP is:
MinZ*=2 u1+ u2
St:
-2u1+ 2u2> 1
u1+ 3u2 >-1
3u1+ 4u2 >3
u1, u2 , unrestricted in sign
e. A firm manufactures two products A and B on machine I and II as shown
below:

81
 __________________________________________________________________
Machine Product Available Hours
A B
I 30 20 300
II 5 10 110
Profit/unit ($) 6 8
__________________________________________________________________
The total time available is 300hrs and 110hrs on machine I and II
respectively .Product A and B contribute $6 and $8 per unit
respectively.

i. Formulate the LPP model for the primal and determine the optimal
solution using simplex method.
ii. Formulate the LPP model for the dual and determine the optimal
solution from the final primal simplex tableau
Solution
Let X1=No of units of product A produced
X2=No of units of product B produced
Max.Z= 6X1+ 8X2
Subject to:
30 X1+ 20X2 <300
5 X1+ 10X2 <110
X1 , X2 > 0
The final simplex tableau is:

6 8 0
Cj
0
X1 X2 S1
SV Q
S2
1 0 -1/20
6 X1 4
-1/10
0 1 1/10
8 X2 9
3/20
6 8 ½
Zj 96
6/10
0 0 -1/2
Cj - Zj
-6/10
The optimal solution is:
X1=4 units of product A produced
X2=9 units of product B produced and Max.Z= $96
ii. Let u1=Cost of one hour on machine I

82
 u2=Cost of one hour on machine I
MinZ*=300 u1+ 110u2
St:
30u1+ 5u2> 6
20u1+ 5u2 >8
u1, u2 > 0
NOTE:
The value in the Cj - Zj row under columns of the slack /surplus variables
with change in sign give directly the optimal values of the dual/primal
basic variables.
Therefore,

uj=-(Cj - Zj)
Note: The column s1 corresponds to u1 and the column s2 corresponds
to u2
u1=-$(-1/2) per hr on machine I
u2=-$(-6/10) per hr on machine II
MaxZ=MinZ*=$96(Total minimum cost)
Note: The dual variables uj are also called as the shadow prices
g. Max.Z= 300X1+ 250X2
Subject to:
2 X1+ X2 <40
X1+ 3X2 <45
X1 <12
X1 , X2 > 0
The final primal solution is:
300 250 0 0
Cj
0
X1 X2 S1 S2
SV Q
S3
0 0 1 -1/3
0 S1 5
-5/3
0 1 0 1/3
250 X2 11
-1/3
1 0 0 0
300 X1 12
1
300 250 0 250/3
Zj 6350
650/3
0 0 0 -250/3
Cj - Zj
-650/3

Required:

83
I. What are the solution of the dual variables (i.e. Shadow prices) u1, u2 and
u3?
II. What is the optimal dual cost?
Solution:
I. Note: The column s1 corresponds to u1, s2 to u2 and s3 to u3.
uj=-(Cj - Zj)
Therefore, u1=0, u2 =250/3 and u3=650/3
II. Min Z*=$6350

Exercise
Write the dual of the following primal LP problems
1. Min.Z=3x1-2x2 +4x3
St: 5. Min.Z=8x1+3x2
3x1+5x2 +4x3> 7 St:
6x1 + x2 +3x3> 4 x1-6x2 > 2
7x1 -2x2 - x3 < 10 5x1 + 7x2 =-4
4x1 +7x2 - 2x3> 2 x1, x2 > 0
6. Min.Z=3x1+x2 +x3-x4
x1, x2 ,x3 > 0
St:
2x1-x2 +3x3 +x4 =1
2. Max.Z= 2x1+5x2 +6x3
x1 + x2 -x3 +x4 =3
St:
x1, x2 ,x3 ,x4 > 0
5x1+6x2 -x3 < 3
-2x1 + x2 +4x3< 4
x1 -5 x2 +3x3< 1
-3x1 -2x2 +7x3 < 6
x1, x2 ,x3 > 0

3. Min.Z=7x1+3x2 +8x3
St:
8x1+2x2 +x3> 3
3x1 + 6x2 +4x3> 4
4x1 +x2 + 5x3 > 1
x1 +5x2 +2x3 > 7
x1, x2 ,x3 > 0
4. Max.Z= 2x1+3x2 +x3
St:
4x1+3x2 +x3 = 6
x1+2x2 +5x3=4
x1, x2 ,x3 > 0

84
ASSIGNMENT III
1. A manufacturer of toys makes two types of toys: A and B. Processing
of these two toys is done on two machines X and Y. The toy A requires
two hours on machine X and six hours on machine Y. Toy B requires
fours on machine X and five hours on machine Y. here are sixteen hours
of time per day available on machine X and thirty hours on machine Y.
The profit obtained on both the toys is same, i.e. $5 per toy.
a. What should be the daily production of each of the two toys?
b. Formulate the primal and the dual LPP model
c. Find the optimal solution for the dual LPP
d. Relate the dual optimal solution to the primal optimal solution
e. Give the proper interpretation to the primal and the dual solutions.
2. A company produces P, Q and R from three raw materials A, B and
C. One unit of P requires 2 units of A and 3 of B .Product Q requires 2
units of B and 5 of C. one unit of R requires 3 units of A, 2 units of B and
4 units of C. Company has 8 units of material A, 10 units of material B
and 15 units of material C available to it. Profit per unit of products P, Q
and R are $3, $5 and $4 respectively.
a. Formulate the problem mathematically
b. How many units of each product should be produced to maximize
profit?
c. Write the DUAL problem

85
3. The 3rd and final simplex tableau for the LPP is:
Max.Z= 200x1+200x2
St:
2x1+x2 < 8
x1+3x2 <9
x 1, x2 > 0
$200 $200 $0
Cj
$0
X1 X2 S1
SV Q
S2
$200 X1 1 0 3/5 3
-1/5
0 1 -1/5
250 X2 2
2/5
$200 $200 $80
Zj $1,000
$40
0 0 -$80
Cj - Zj
-$40
What are the solutions of the dual variables, u1, u2 and u3? What is the
optimal dual cost?

CHAPTER V
DISTRIBUTION MODELS
One important application of linear programming has been in the area of
the physical distribution (transportation) of resources, from one place to
another, to meet a specific set of requirement.

This chapter describes two special –purpose algorithms: the

transportation model and the assignment model. Model formulation
and manual solution are covered for each of these classes of problems.

Both transportation and assignment problems are members of a

category of linear programming techniques called network flow
problems.

5.1. TRANSPORTATION PROBLEMS

Transportation problem deals with the distribution of goods from several
points of supplies (sources) to a number of points of demands
(destinations).

86
Consider a corporation engaged in the manufacture of products. Most of
such big corporations are of “multiple-product” and “multi-unit”
organizations having production units situated at different places. Items
are produced for sales. Sales take place at different markets which are,
again located at different places. It is not feasible to co-locate production
and market. Markets are located away from the manufacturing places.
Hence products are sent to factory warehouses set up near market outlets.
Cost of product consists of production cost and distribution cost.

Cost of product = production cost +

distribution cost
Distribution cost consists of mainly the transportation cost of items
from its production (manufacturing) center to the warehouses.
Transportation techniques are designed to minimize the distribution costs.
In order to identify products, it is necessary to work out per unit
distribution cost of each product. We also know the production capacity of
each product in each factory is not fixed. The holding capacity of a
warehouse or potential sales in each marketing center is again a fixed
quality which cannot be exceeded.

The characteristics of transportation problem are as follows:

1. A limited supply of one commodity is available at certain sources or
origins.
2. There is a demand for the commodity at several destinations
3. The quantities of supply at each source and the demand at each
destination are constant.
4. The shipping or transportation costs per unit from each source to each
destination are assumed to be constant.
5. No shipments are allowed between sources or between destinations. All
supply and demand quantities are given in whole number or integers.
6. The problem is to determine how many units shipped from each source
to each destination so that all demands are satisfied at the minimum
total shipping costs.

 Uses of transportation techniques:

1. Reduce distribution or transportation cost
2. Improve competitiveness of product
3. Assist proper location of warehouses
3. Assist proper location of new factories or plants being planned.

87
 4. Close down warehouses which are found costly and uneconomical .

 The objective of transportation problem is:

1. To identify the optimal shipping routes-minimum cost route
2. To identify the maximum amount that can be shipped over the
optimum route
3. To determine the total transformation cost or the profit of
transportation

5.1.1. The Transportation Method

The solution algorithm to a transportation problem may be summarized
into the following steps:

Step 1:
Formulate the problem and set up in the matrix form
The formulation of the problem is similar to the linear programming. Here
the objective function is the total transportation cost and the constraints
are the supply and demand available at each source and destination
respectively.

Step 2:
Obtain an initial basic feasible solution

There are 3 methods to find the initial feasible solution.

1. North-West Corner Method (NWCM)

2. Least Cost Method (LCM)
3. Vogel’s Approximation Method (VAM)
The initial solution obtained by any of the three methods must satisfy the
following condition:

i. The solution must be feasible

i.e.: It must satisfy all the supply and demand constraints

ii. The number of positive allocations must equal to m+n-1,

where m=the number of rows (or origins or supply centers) and n= the
number of columns(or destination centers or demand centers)
Example:

88
m=3 origins and n=4 destinations ==>m+n-1=3+4 -1=6 (i.e. the
transportation model should have 6 occupied cells).

Note:
The number of occupied cells < m+n-1==> degenerate solution

Step 3:
Test the initial solution for optimality
If the current solution is optimal, then stop. Otherwise, determine the new
improved solution.
Step 4:
Repeat step 3 until an optimal solution is reached

5.1.2. Linear programming formulation of the

transportation problem

Example
Suppose that a firm has three factories /sources of supply/ & four
warehouses
/point of demand/. The firm's production capacity at the three factories,
the demand for the four distribution centers located at various regions &
the cost of shipping each unit from the factories to the warehouses
through each route is given as follows:

Destinations (dd) =j

Origin Factory
(Supply) W1 W2 W3 W4 Capacity =i
Br.3 7 6
F1 2 5000
7 2 3 6000
F2 5

2 4 5
F3 5 2500
Requirements of
the 400
Warehouses 6000 2000 1500 13500
0
( Units of demand)

Using all the above information

89
i. Express the following transportation problem as an LPP
Solution
Let xij =The amount of commodity to be transported form source i (i
=1,2,3 ) to destination j( j= 1,2,3,4).
Then the objective function of the problem (minimization of the total
transportation cost) can be formulated as:

MinZ = 3x11 +2x12 + 7x13 +6 x14 +

7x21 +5x22 +2x23 + 3x24 +
2x31+5x32 +4x33+5x34
Subject to the constraints
a. Supply constraints:
x11 +x12 +x13 +x 14 =5000 F1 supply constraint
x21 + x22 + x23 +x24 =6000 F2 supply constraint
x31 +x32 +x33+x34 = 2500 F3 supply constraint
b. Demand constraints:
x11 + x21 + x31 = 6000 W1 demand constraint
x12 + x22 + x32 = 4000 W2 demand constraint
x13 + x23 +x33 = 2000 W3 demand constraint
x14 +x24 + x34 = 1500 W4 demand constraint
xij > 0 for all i& j
In the above LPP, there are m x n = 3x4 =12 decision variables & m + n =
3+4 =7 constraints. Thus, if this problem is solved by the simplex method,
then it may take considerable computational time.
ii. The network representation of the transportation LPP is called Net work
flow

Origin
Destination centers
(Sources of Supply) (Point of
demand centers)

3
F1 50000 W1 6000
2
6 7
7
5
F2 6000 W2 4000
2
3

90
 2 5 W3 2000
4
5
F3 2500 W4 1500

This LPP has 12 shipping routes. The objective is to identify the minimum
cost route (Least cost route).

5.2. METHODS OF FINDING INITIAL FEASIBLE

SOLUTION
There are several methods available to obtain an initial feasible solution.
Here we shall discuss only three different methods to obtain the initial
feasible solution:

A. NORTH- WEST CORNER METHOD (NWCM)

This method does not take into account the cost of transportation on
any route of transportation.

The NWCM gets its name because the starting point for the allocation
process is the Upper Left-hand (Northwest) corner of the transportation
table. Therefore, allocate to the Northwest corner as many units as
possible.

Northwest corner rule

The following set of principles guides the allocation:
1. Begin with the upper left hand cell (Left, upper most in the table), &
allocate as many units as possible to that cell. This will be the
smaller amount of either the row supply or the column demand. Adjust
the row & column quantities to reflect the allocation.

2. Subtract from the row supply & from the column demand the amount
allocated
3. If the column demand is now zero, move to the cell next to the right, if
the row supply is zero, move down to the cell in the next row.
If both are zero, move first to the next cell on the right then down one
cell.
4. Once a cell is identified as per step (3), it becomes a northwest cell.
Allocate to it an amount as per step (1)
5. Repeat, the above steps (1) - (4) until all the remaining supply and
demand is gone.

91
Example:
1) Consider the following transportation problem:

To Store
Store 1 Store 2 Store 3 Supply
From 4
Plant 1 19 30 50 10
7
70 30 40 60
Plant 2 9
40 8 70 20
Plant 3 18

5 8 7 14 34
Demand

a. Develop an initial feasible solution using the NWCM

b. Compute the total cost for this solution.
Solution
a. Table: Initial feasible solution
To
Store
Store 1 Store 2 Store 3 Supply
From 4
Plant 1 19 30 50 10
5 2 7
70 30 40 60
Plant 2 6 3 9
40 8 70 20
Plant 3 4 14 18

5 8 7 14 34
Demand

Check that the solution is feasible or not:

==>m + n-1; m=3 and n=4 ⇒ 3+4-1= 6 cells occupied (Feasible solution)

The total transportation cost of the initial feasible solution derived by the
NWCM is:

92
 Route Unit Per unit Total
From To Shipped X cost ( $) = Cost ( $)
Plant 1 Store 1 5 19 95
plant 1 Store 2 2 30 60
Plant 2 Store 3 6 30 180
Plant 2 Store 4 3 40 120
Plant 3 Store 4 4 70 280
Plant 3 Store 4 14 20 280
Total Cost= $ 1015

Note: NWCM does not consider the cost factor for allocation.

Exercise:
1. Determine an initial basic feasible solution to the following
transportation problem using NWCM. Compute the total cost for this
solution

Destination
A B C Supply
S1 2 7 14 5
S2
3 3 1 8

S3 5 4 7 7
S4 1 6 2 14
Deman 7 9 18
d

Answer: X11=5, X21=2, X22=6, X32=3, X33=4, X43=4, and Total cost =$102

Note:
1. Total Supply= Total demand ===> Balanced TP
2. Total Supply ≠ total demand ===> Unbalanced TP
3. Convert the unbalanced TP into a balanced TP by using dummy
destination/dummy source.
* If total Supply > Total demand, then create a fictitious or artificial
destination called dummy destination
i.e: total Supply > Total demand===> Add dummy column

* Excess demand (Supply < demand)

- Add a dummy source

93
 - Add a dummy row
Note: the cost of “shipments” to the dummy is usually set at zero ==>
No real cost

Example
Develop an initial feasible solution using NWCM
Table: Unbalanced transportation table
R S T Supply
A 1 2 3 100
4 1 5 110
B
Deman 80 120 60 210
260
d

Solution:
R S T Supply
1 2 3
A 100
80 20
4 1 5
B 110
100 10
Dumm 0 0 0
50 50
y
Deman
80 120 60 260
d

Answer:X11=80, X12=20, X22=100, X23=10, X33=50 Total cost =$270

Assignment

94
Consider that Harley's Sand & Gravel Pit has contracted to provide
topsoil for three residential housing developments. Topsoil can be supplied
form three different “farms" as follows:
_______________________________________________________________
Weekly Capacity
Farm (Cubic Yards)
A 100
B 200
C 200
_____________________________________________________________
____

Demand for the topsoil generated by the construction projects is:

_____________________________________________________________
Weekly Demand
Project (Cubic Yards)
1 50
2 150
3 300
_______________________________________________________________
The manager of the sand & gravel pit has estimated the cost per cubic
yard to ship over each of the possible routes:
_______________________________________________________________
Costs per cubic yard to
From Project # 1 Project #2 Project #3
Farm A $4 $2 $8
Farm B 5 1 9
Farm C 7 6 3

_______________________________________________________________

Required
Develop the initial feasible solution using NWCM & compute the total cost
for this solution.

B. THE LEAST- COST METHOD (LCM) or

(LARGEST- PROFIT) METHOD
LCM is the method used a minimum cost in the allocation.

95
It begins a solution by sequentially assigning to the ratios or cells with the
minimum cost as many units as possible. The first allocation be made
to the cell with the lowest cost (the highest profit in a maximization
case)
The Least- Cost Method yields not only an initial feasible solution but
also one that is close to optimal in small problems.

Example
1.Suppose that a firm has three factories / sources of supply /& four
warehouses/point of demand/ .The firm's production capacity at the three
factories, the demand for the four destination centers located at various
regions & the cost of shipping each unit from the factories to the
warehouses through each route is given as follows:
Destinations
Factory
W1 W2 W3 W4 Capacity
F1 3 2 7 6 5000
F2 7 5 2 3 6000
F3 2 5 4 5 2500
Demand 6000 4000 2000 1500 13500

Required:
a. Develop an initial feasible solution using NWCM & Compute the total
cost
b. Develop an initial feasible solution using least-cost method & compute
the total cost.

Solution:
Initial feasible solution
Factory
W1 W2 W3 W4 Capacity
3 2 7 6
F1 5000
5000
Factory 7 5 2 3
F2 1000 4000 1000 6000
2 5 4 5
F3 2500
1000 1500
Demand 6000 4000 2000 1500 13500

96
m= 3, n =4 ==> 3+4 -1 =6 occupied cells (Feasible)

Routes Units Unit Total

From Shipped Cost =Cost
To X 3 $ 15000
F1 5000 7 7000
W1 1000 5 20000
F2 4000 2 2000
W1 1000 4 4000
F2 1000 5 7500
W2 1500 Total transportation =$55,500
F2 cost
W3
F3
W3
F3
W4

b.
Factory
W1 W2 W3 W4 Capacity
3 2 7 6
F1 1000 4000 5000
7 5 2 3
F2 2500 2000 1500 6000
2 5 4 5
F3 2500
2500
Demand 6000 4000 2000 1500 13500

97
 Routes Units Unit Total
From Shipped Cost =Cost
To X 3 $ 3000
F1 1000 2 8000
W1 4000 7 17500
F1 2500 2 4000
W2 2000 3 45000
F2 1500 2 5000
W1 2500 Total transportation =$42,000
F2 cost
W3
F2
W4
F3
W1

m= 3, n=4 ==> 3+4-1 =6 occupied calls (Feasible)

Least- Cost method is better than the NWCM because it considers cost
factories.

2. Develop the initial feasible solution for the following TP using the least-
cost method (LCM)

Destination
Source D E F G Supply
A 1 5 3 4 100
B 4 2 2 5 60
C 3 1 2 4 120
deman
70 50 100 60 280
d

Solution
The 1st allocation be made to the cell with the least-cost. Cells AD & CD
both have the lowest cost f $1. Cell AD is selected 1 st because more units
can be allocated to it (70) than to cell CE (50).

98
Cell CF is filled in 1st since a larger quantity (120-50-70) can be placed
there. Then, the remaining requirement of 30 for column F is allocated to
cell BF & source B's supply is reduced to 30.

The initial solution by the least -cost method

Source
D E F G Supply
A Destination 1 5 3 4 100
70
B 4 2 2 5 60
30 30
C 3 1 2 4 120
50 70
dema
70 50 100 60 280
nd

m=3, n=4 ==> 3+4-1 = 6 occupied cells (feasible)

Routes Units Unit Total

From Shipped Cost =Cost
To X 1 $ 70
A D 70 2 60
B F 30 5 150
B G 30 1 50
C E 50 2 140
C F 70 Total transportation =$470
cost

3. Develop an initial feasible solution using LCM

R S T Suppl
y
A 1 2 3 100
B 4 1 5 110
Deman 80 120 60
d

Solution

99
 R S T Suppl
y
A 1 2 3 100
80 10 10
B 4 1 5 110
110
Dummy 0 0 0 50
50
Deman 80 120 60
d

Total transportation cost=80x1+10x2+10x3+110x1+50x0=$240

Exercise
Three garment plants are available for monthly education of four styles of
men's shirts. The capacities of the three plants are 45,000, 93,000 and
60,000 shirts. The number of shirts required in style "a" through "d" are
28,000, 65,000, 35,000 & 70,000, respectively. The profits, in $ per shirt,
at each plant for each style are shown below.
Table: The garment plants' profit.
STYLE a b c d
PLANT
1 8 12 -2 6

2 13 4 3 10

3 0 7 11 8

How many shirts of each type to produce in each plant so that profit is
maximized?

Answers: Total profit= $2,119,000

(Hint: Select the largest per unit profit, first & use largest-profit method)

2. Determine an initial feasible solution to the following transportation

problem
using LCM

100
 A B C D Supply
S1 1 5 3 3 34
S2 3 3 1 2 15
S3 0 2 2 4 12
S4 2 7 2 4 19
deman 21 25 17 17
d

Source

C. VOGEL'S APPROXIMATION METHOD (VAM)

or
PENALTY METHOD
VAM is preferred to the other two methods described above. In this
method each allocation is made on the basis of the opportunity (or
penalty or extra) cost that would have incurred if allocation in certain
cells with minimum unit transportation cost were missed.

In this method allocation are made so that the penalty cost is minimized.
The advantage of this method is that it gives an initial solution which is
nearer to an optimal solution or is the optimal solution itself.

VAM determines the penalty for not using the minimum cost routes,
where the objective is to avoid large penalties so that the penalty from
not using the routes is minimized.
The steps in VAM are as follows:
1. Calculate penalties for each row (column) by taking the smallest &
the next smallest unit transportation cost in the same row (column)
This difference indicates the penalty or extra cost which has to be
paid if one fails to allocate to the cell with the minimum unit transportation
cost

101
2. Select the row or column with the largest penalty & allocate as much
unit as possible in the cell having the least cost in the selected row or
column satisfying the conditions.
If there is a tie in the values of penalties, then t can be broken by
selecting the cell where maximum allocation can be made.
3. Adjust the supply & demand & cross out the satisfied row or column
If a row or column is satisfied simultaneously, only one of them is
crossed out & the remaining row (column) is assigned a zero supply
(demand) .Any row or column with zero supply or demand should not be
used in computing future penalties.
4. Repeat step 1 to 3 until the entire available supply at various sources &
demand at various destinations are satisfied.

Example:
1. Determine an initial basic feasible solution to the following
transportation problem using VAM.

Warehouse
Row difference or Row penalty
A B C D Suppl or opportunity cost
y 2 0 - - -
Factory F1 2 2 0 4
5 20 25
2 2 2 2 5
F2 5 9 8 3
25
15 5 5 1 2 2 - -
F3 6 4 3 2
10
10
Deman 20 15 20 5 60
d
Column difference 3 2 3
1
or Column penalty
or opportunity cost 3 2 -
1

1 5 -
1

5
m= 3, n=4- ==> 3+4-1 =6 Occupied 9 (feasible)
cells -

The transportation cost associated with this solution is:

Total cost= 5x2 + 20x0+15x5x9 =+95x3+10x4= $185

102
2. A dairy firm has three plants located in different regions. The daily milk
production at each plant is as follows:
Plant 1: 6 million liters.
Plant 2: 1 million liters, &
Plant 3: 10 million liters
Each day the firm must fulfill the needs of its four distribution centers.
Minimum requirement at each center is as follows.
Distribution center 1: 7 million liters
" " 2: 5 " "
" " 3: 3 " "
" " 4: 2 " "

Cost of shipping one million liters form each plant to each distribution
center is given in the following table in hundreds of dollar.
Distribution Center

D1 D2 D3 D4
P1 2 3 11 7
P2 1 0 6 1
P3 5 8 15 9

Plant

Find the initial basic feasible solution by:

a. North-west corners method
b. LCM
c. VAM if the object is to minimize the total transportation cost
Answer:
a. Total cost = $11, 600
b. Total cost= $11,200
c.
D1 D2 D3 D4 Supply Row Penalty
2 3 11 7 6 1 1 5
P1
-
1 0 6 1 1 1 - -
P2
-
5 8 15 9 10 3 3 4
P3
4
Demand 7 5 3 2

Column
Penalty
7 5 3 2

103
 1 3 5 6
3 5 4 2
3 - 4 2
5 - 15 9

m+n -1 +3+4-1 =6 ==>the solution is non-degenerate.

The total transportation cost=$(1x2+5x3+1x1+6x5+3x15+1x9) x100 = $
10,200

Assignment
1. Determine an initial basic feasible solution to the following
transportation problem by VAM
Destination
D1 D2 D3 D4 Suppl
y
S1 21 16 15 3 11
Sourc S2 17 18 14 13 13
e S3 32 27 18 41 19
Deman 6 10 12 15
d

104
2. Determine an initial feasible solution to the following transportation
problem using
a. NWCM
b. LCM, &
c. VAM
Destination
D1 D2 D3 D4 Suppl
y
A 11 13 17 14 250
Sourc B 16 18 14 10 300
e C 21 24 13 10 400
Dema 200 225 275 250
nd

5.3. OPTIMALITY TESTS

Once an initial solution is available, the next step is to check its optimality.
An optimal solution is one in which there is no opportunity cost. That is,
there is no other set of transportation routes (allocations) that will reduce
the total opportunity cost. Thus we have to evaluate each unoccupied cell
(represents unused route) in the transportation table in terms of
opportunity cost.
The purpose of the optimality test is to see if the proposed solution just
generated can be improved or not. The solution to be checked for

105
optimality must be non-degenerate i.e the no of occupied cells must be
m+n-1.
The Procedure for testing optimality is analogous to that of the simplex
method. A distinction is made between basic variables, those associated
with occupied cells & non-basic variables, those associated with the
empty cells.
For each empty cell, the effect of changing it to an occupied cell is
examined. If any of these changes are favorable, the solution is not
optimal & a new solution must be designed. A favorable change means an
increase in the value of the objective function in maximization problems or
a decrease in minimization problems.

Optimum solution to a TP can be obtained by following two methods.

These methods are much simpler compared to simplex method of an LPP.
A. Stepping stone Method
B. Modified Distribution method (MODI Method)

A. Stepping-stone method
The Stepping-stone method is an iterative technique for moving from
an initial feasible solution to an optimal solution in transportation
problems.

For the stopping- stone method to be applied to a transportation

problem, one rule about the n o of shipping routes being used must be
observed. The rule is:

“The No of occupied routes (or squares) must always be equal to

one less than the sum of the no of rows plus the no of columns."
i.e Occupied shipping routes ( squares) = N o of rows + No of
columns - Non degenerate solution.

Rules for drawing each closed loop:

1. Select an unused square (cell) to be evaluates.
2.Beginning at this cell, trace a closed loop going clockwise draw an
arrow to an occupied cell in the same row ( or column).

3. Move vertically or horizontally (but never diagonally) to another

occupied cell “stepping –over” unoccupied or occupied cells (if
necessary) without changing them. Follow the same procedure to other
occupied cells until returning to the original empty cell.

106
4. Begin with a plus (+) sign at the unused cell, place alternative (-) signs
and plus signs on each corner square of the closed path just traced.
i.e At each turn of the loop ( the loop may cross over itself at
times), plus and minus signs are alternately placed in the cells, starting
with a + sign in an empty cell.

5. There must be exactly one cell with a + sign and exactly one cell
with a - sign in any row or column in which the loop turns.
6. An even no of at least four cells must participate in a loop and the
occupied cells can be visited once and only once.
7. Repeat steps 1 to 4 until an improvement index has been calculated for
all unused squares (cells). If all indices computed are greater than or
equal to zero, an optimal solution has been reached. If not, it is possible
to improve the current solution and decrease total shipping costs.

Note:
In a non-degenerate problem, there is only one possible way of drawing
the loop for each empty cell.

How to find the value of a cell evaluator

The value of a cell evaluator is the sum of the per unit shipping costs in the
gaining cells less the sum of the per unit shipping costs in the losing cells
of the closed loop. This evaluation process must be extended to all
unoccupied cells.

1. The test of optimality for a minimization (cost) problem:

If one or more of the cell evaluators is negative, the existing solution is
not optimal.
i.e: For minimization (cost) problems, all the cell evaluators must be
positive for optimality.

• Analysis of test:
Check all the empty cells and select for improvement the one
with the largest improvement potential.

• If the solution is not optimal, the next step in the transportation

method is to find a better solution. The operations in this step are:
a. Identify the “incoming" cell (the empty cell to be
occupied)

107
 In a minimization case, the incoming cell is located by
identifying the most negative cell evaluator.

b. Design an improved solution

-By shifting units form cell to cell

2. The test of optimality for a maximization (profit) case:

: Is the reversed of minimization case
-If one or more of the cell evaluators is positive, the existing
solution is not optimal.
i.e: for a maximization (profit) case, all the cell evaluators must be
negative for optimality. If any cell evaluation is positive, the solution is
not optimal.

Note:
• A cell evaluator of 0 indicates the existence of another solution just
as good as the current solution. Thus, in the final solution, if cell
evaluators of 0 exist, this indicates the existence of multiple
optimal solutions.
• If two or more cells have the same value, then either may be
selected.
• If two or more of the "losing" cells contain the same no of units,
both will become empty simultaneously and a “degenerate"
solution will result.
• For the minimization case; when one or more cell evaluators are
negatives, the cell with the largest negative should be brought
into solution because that route has the largest potential for
improvement per unit.
• The loop starts and ends at the selected unoccupied cell. Every
corner element of the loop must be an occupied cell.

Example:
1. Use NWCM to find initial feasible solution and test the solution for
optimality.
Proje Proje Proje ss
Farm

ct ct ct
A B C
F 4 2 8 10
1
0
F 5 1 9 20
2

108
 0
F 7 6 3 20
3
0
d 50 150 300 50
d
0

Solution
Initial feasible solution

Project Project Project ss

A B C
F1 4 2 8 100
50 50
F2 5 1 9 200
100 100
F3 7 6 3 200
200
dd 50 150 300 500

m=3, n=3==> 3+3-1=5(Non-degenerate solution)

Total transportation cost = $[50x4+50x2+100x1+100x9+200x3] = $1900

Evaluation path for the unoccupied cells

109
 Table: Test of optimality
Unoccupied cells Cell evaluators
(F2 ,A) +5-4+2-1=+2
(F1 ,C) +8-9+1-2=-2
(F3 ,A) +7-4+2-1+9-3=+10
(F3 ,B) +6-1+9-3=+11

The negative value for cell (F1, C) indicates an improved solution is

possible. For each unit we can shift into that cell, the total cost will
decrease by $2. The next question is how many units can be reallocated
into that cell while retaining the balance of supply and demand for that
table?

The Stepping- stone path for cell (F1, C) is:

Project Project Project ss
A B C
F1 4 2 8 100
50 50 +

-
F2 5 1 9 200
100 + 100-
F3 7 6 3 200
200
Dd 50 150 300 500

The + Signs in the path indicate units to be added, the - signs indicate
units to be subtracted. The limit on subtraction is the smallest quantity
in a negative position along the cell path. There are two quantities in
negative positions, 50 and 100. Because 50 is the smaller quantity, that
amount will be shifted in the following manner: Subtract 50 units from
each cell on the path with a - sign and add 50 units to the quantity of each
cell with a + sign in it.
With each iteration (new solution), it is necessary to evaluate the empty
cells to see if further improvements is possible.

110
The distribution plan after reallocation of 50 units is:
A B C ss
F1 4 2 8 100
50 50
F2 5 1 9 200
150 50

F3 7 6 200
3
200
dd 50 150 300 500
Table: Test of optimality
Unoccupied cells Cell evaluators
(F1 ,B) +2 -8+9-1 =+2

(F2 ,A) +5 -4+8-9 =0

(F3 ,A) +7-4+8-3 =+8

(F3 ,A) +6-1+9-3= +11

Because none of these no is negative, this is an optimal solution. Therefore,

the total cost for the distribution plan is:
The total transportation cost = $ (50x4 +50x8 150x1+50x9 +200x3) =
$1,800
2. Consider the following TP
Destination
R S T ss
A 1 2 3 100
B 4 1 5 110
Origin

21
dd 80 120 60 0
260
a. Obtain the basic feasible solution using VAM
b. Obtain the optimal solution
c. What is the optimal shipping cost?
Solution:
a. Initial feasible solution
To
R S T ss
From

Opportunity cost
1 2 3 100
A 1 1 1 1
80 10 10
4 1 5 110
B 110 3 3 - -
Dum 0 0 0 50 0 - - -
my
dd 80 120 60 260

111
 Opportunity 1 1 3
3 1 2
cost 1 2
3
1 2 -
Note: Include the dummy cells to select the opportunity cost under VAM
problems.

b. Test of optimality.
Table: Test of optimality

Unoccupied cells Cell evaluators

+4-1+2-1= +4
(B,R)
+5-1+2-3= +3
(B,T)
+0-1+3-0= +2
(D,R)
+0-2+3-0= +1
(D,S)
Since none of the cell evaluators is negative, the above feasible
solution is optimal.
Thus, accordingly the distribution is as follows
A Supplies 80 units to warehouse R
B Supplies 10 units to warehouse S
C Supplies 10 units to warehouse T
B Supplies 110 units to warehouse S

c. The total optimal shipping cost is = $240

Exercise:
Consider the following transportation problem

Store Store Store

Supply
1 2 3

A 12 20 15 50
warehouses

B 9 11 4 15
C
20 14 8 55
Deman 25 50 45 120
d

a. Develop an initial feasible solution using the NWCM. And compute

the total cost for this solution.

112
 b. Evaluate the solution using the stepping-stone method. Is the
solution optimal? Explain.
c. What is the total cost for the optimal solution?

B. Modified Distribution Method (MODI Method)

It is another logarithm for finding the optimal solution to a transportation
problem.
The MODI method allows us to compute improvement indices quickly foe
each unused cell with out drawing all of the closed paths. Because of
this, it can often provide considerable time savings over the stepping-
stone method for solving transportation problems.
[

MODI provides a new means of finding the unused route with the largest
negative improvement index. Once the largest index is identified, we are
required to trace only one closed path. Just as with the stepping-stone
approach, this path helps to determine the maximum N o of units that can
be shipped via the best unused route.

Steps in the MODI Method

The steps to evaluate unoccupied calls are as follows:
1. For an initial basic feasible solution, calculate Ui and Vj ;for rows
and columns and set

Cij = Ui + Vj for all occupied calls

(i , j)
i.e: Cell cost= Raw Index +Column
2. For unoccupied cells, calculate opportunity cost by using
the relation:

Kij = Cij– (Ui + Vj); for all j and j.

Where Kij is the cell evaluator or
opportunity cost
3. Examine the sign of each Kij
For minimization case:
i. If Kij > 0, then current basic feasible solution is optimal.
ii. If Kij = 0, then the current basic feasible solution will remain
be unaffected but an alternative solution exists.
iii. If one or more Kij < 0, then an improved solution be
obtained entering unoccupied cell (i, j), in the basis. An
unoccupied cell having the largest negative value of Kij is
chosen for entering into the solution mix (new
transportation schedule)

113
 4. Solve the problem as you did using the stepping-stone method.
i.e. construct a closed path (or loop) for the unoccupied cell with
largest negative opportunity cost. Start the close path with the
selected unoccupied cell and mark a plus sign (+) and in this cell,
trace a path along the rows (or columns) to an occupied cell,
mark the corner with minus sign (-) and continue down the
column (or row) to an occupied cell and mark the corner with
plus sign (+) and minus sign (-) alternatively. Close the path
back to the selected unoccupied call.
Locate the smallest quantity allocated to a cell marked with a
minus sign. Allocate this value to the selected unoccupied cell
and add it to other occupied cells marked with plus signs and
subtract it from the occupied cells marked with minus signs.

5. Obtain a new improved solution by allocating units to the

unoccupied call and calculate the new transportation cost.

6. Test the revised solution for optimality.

Note:
 Any initial feasible solution will do: NWCM, VAM Solution, or any
arbitrary assignment.
 The stepping- stone method is efficient for small sized
transportation problems. For larger problems, however, the MODI
method is recommended.

Example:
1. Obtain an optimal solution to the transportation problem by MODI
method given below:

Project Project Project

Supply
No 1 No 2 No 3

Farm 1 4 2 8 100
Farm 2 5 1 9 200
7 6 3 200
Farm 3
Deman 50 150 300 500
d

114
Solution
Note:
Both the MODI and the stepping - stone method will yields the same
values.
Remark:
Conventionally, we begin by assigning a value of zero as the index for
row 1 (U1=0). Once row index has been established, it will enable us to
compute column index numbers for all occupied cells in that row. Similarly,
once a column index number has been determined, index numbers for all
rows corresponding to occupied cells in that column can be determined.

Consider the initial feasible solution of the given example by NWCM as

shown below:

Initial solution, NWCM

Proje Projec Projec

ct t t Supply Ui
No 1 No 2 No 3
Farm 1
4 2 8 100 U1=0
50
5 1 9 200
Farm 2 U2=1
100 100
7 6 3 200
Farm 3 200 U3=-7

Deman
50 500
150 300
d

Vj V1=4 V2=2 V3=10

115
To determine Cij , use the occupied cells.

For instance, C11=4, C12=2, C22=1, C23=9, and C33=3

Cij= Ui + Vj
==>C11= U1 +V1==>4=0+ V1==> V1=4 , U1=0 by convention
==>C12= U1 +V2==>2=0 +V2==> V1=2
==>C22= U2 +V2==>1= U2+ 0==> U2=-1
==>C23= U2 +V3==>9= -1+V3==> V3=10
==>C33= U3 +V3==>3= U3+10 ==> U3= -7

Note:
Cij≠ Ui + Vj (For unoccupied cells)
For instance, from the above information, C32 ≠ U3 + V2==>6≠-
7+2

Table: Test of optimality

Unoccupied cells Cell evaluators

Kij = Cij– (Ui + Vj)
(1,3) C13 – (U1 +V3)=8-(0+10)= -2
(2,1) C21 – (U2 +V1)=5-(-1+4)=+2
(3,1) C31– (U3 +V1)=7-(-7+4)=10
(3,2) C32– (U3 +V2)=6-(-7+2)=+11

In this case, we found hat cell (1, 3) had an evaluation of -2, which
represented an improvement potential of and $ 2 per unit. Hence, an
improved solution is possible.

The stepping-stone path for call (1, 3) is:

116
 Proje Projec Projec
ct t t Supply
No 1 No 2 No 3
Farm 1
4 2 8 100
50 50
5 1 9 200
Farm 2
100 100
7 6 3 200
Farm 3
200
Deman
50 500
150 300
d

The distribution plan after reallocation of 50 units is:

Proje Projec Projec

ct t t Supply Ui
No 1 No 2 No 3
4 2 8 100
Farm 1 U1=0
50 50
Farm 2
5 1 9 200 U2=1
+ 100 100 -
7 - 6 +3 200
Farm 3 200 U3=-5

Deman
50 500
150 300
d

Vj V1=4 V2=0 V3=8

Cij= Ui + Vj
==>C11= U1 +V1==>4=0+ V1==> V1=4 , U1=0 by convention

117
 ==>C13= U1 +V3==>8=0 +V3==> V3=8
==>C23= U2 +V3==>1= U2+ 0==> U2=1
==>C22= U2 +V2==>1= 1+V2==> V2= 0
==>C33= U3 +V3==>3= U3+8 ==> U3= -5
Table: Test of optimality

Unoccupied cells Cell evaluators

Kij = Cij– (Ui + Vj)
(1,2) C12– (U1 +V2)=2-(0+0)= 2
(2,1) C21 – (U2 +V1)=5-(1+4)=0
(3,1) C31– (U3 +V1)=7-(-5+4)=8
(3,2) C32– (U3 +V2)=6-(-5+0)=+11

Because none of the cell evaluators is negative, this is an optimal

solution.
Thus, the total cost for the distribution plan =$1800

118
Assignment
1. Obtain an optimal solution to the transportation problem by MODI
method given below.

Suppl
D1 D2 D3 D3
y
19 30 50 10 7
Farm 1

Farm 2
70 30 40 60 9

40 8 70 20 18
Farm 3

Deman
5 34
8 7 14
d

2.A company has four ware houses a, b, c and d. It is required to deliver a

product from these warehouses to three customers A, B and C. The
warehouses have the following amounts in stock:

Ware a b c d
house:
No of 15 16 12 13
units:

119
 And the customer’s requirements are:

Customer: A B C
No of 18 20 18
units:

The table below shows the costs of transporting one unit from
warehouse to customer.

A b c d

8 9 6 3
A
6 11 5 10
B
3 8 7 9
C

Find the optimal transportation routes.

3.A manufacturer has distribution centers at X, Y and Z. These centers

have availability 40, 20, and 40 units of his product. His retail outlets at
A, B, C, D and E require 25,10,20,30 and 15 units respectively. The
transportation cost (in $) per unit between each centre outlet is given
below:

Distributio
Retail outlets
n center

A B C D
E
X
55 30 40 50 40

35 30 100 45 60
Y
40 60 95 35 30
Z

120
 Determine the optimal distribution to minimize the cost of
transportation.

4.A company has factories A, B and C which warehouses t D, E, F and G.

Monthly factory capacities are 160,150 and 190 units respectively.
Monthly warehouses requirements are 80, 90,110 & 160 units
respectively. Unit shipping costs (in $) are as follows:
To

D E F G

A 42 48 38 37

40 49 52 51
B
From

39 38 40 43
C

Determine the optima distribution for this company to minimize

shipping costs.

5.4. SPECIAL CASES

5.4.1. Degeneracy
A condition that occurs when the N o of occupied cells in any solutions less
than the No of rows plus the No of columns minus 1 in a transportation
table.

i.e. No of occupied calls < m+ n

-1 .....................Degeneracy

If the No of occupied cells = m+n-1, then the solution is

The degeneracy in the transportation problems may occur at two stages:
1. when obtaining an initial solution

121
 2. During improvement (or at any stage while moving to
wards optimal solution.
To resolve degeneracy, we processed by allocating a very small quantity
close to zero to one or more unoccupied cell so as to get m+n-1

number of occupied cells. This amount is denoted by a Greek letter ε

(epsilon) or  (delta). This quantity would not affect the total cost as
well as supply and demand values.
ε = Almost zero
In a minimization transportation problem, allocate the smallest

transportation cost toε .

In a maximization transportation problem, it should be allocated to a cell

that has a high pay off value.

Insert ε when it is able to create a closed loop for each occupied cell.
The purpose of epsilon/delta is to enable evaluation of the remaining
empty cells. The choice of location for the epsilon/delta can be some what
tricky: some empty cells may be unsuitable if they do not enable
evaluations of remaining empty cells. Not all choices would be acceptable.
Actually, the No of epsilon/deltas needed will equal the difference between
the No of completed cells and m+n-1.Howerver; you will only be exposed
to the most common case in which one more completed cell is needed.
The epsilon/delta cannot be placed in a cell which later turns out to be in a
negative position of a cell path involved in reallocation because
epsilon/delta will be the “smallest quantity a negative position “ and
shifting that minute quantity around the cell path will leave the solution
virtually unchanged. Consequently, a certain amount of trial and error may
be necessary before a satisfactory location can be identified for
epsilon/delta.

Example
1. Solve the following transportation problem.

Suppl
1 2
y
1 3 3
50
2 4 6 30
Deman
50 30 80
d

122
Solution:
Using NWCM and MODI, the initial solution is:

Suppl Ui
1 2
y
3 3 U 1=
1 50
50 ε 0
4 6 U 2=
2 30
30 3
Deman
50 30 80
d
Vj V1=3 V2=3

Cij= Ui + Vj
==>C11= U1 +V1==>3=0+ V1==> V1=3, U1=0 by convention
==>C12= U1 +V2==>3=0 +V2==> V2=3
==>C22= U2 +V2==>6= U2+3==> U2= 3
==>C33= U3 +V3==>3= U3+8 ==> U3= -5
Note: m=2 and n=2==>2+2-1=3==>Occupied cells=2< 3
(Degeneracy)
Table: Test of optimality

Unoccupied cell Cell evaluator

Kij = Cij– (Ui + Vj)
(2,1) C21 – (U2 +V1)=4-(3+3) =-2

The optimal solution is:

123
 Suppl Ui
1 2
y
3 3
U 1=
1 50 30 50
0

4 6 U 2=
2 30
30 1
Deman
50 30 80
d

Vj V1=3 V2=3

Cij= Ui + Vj
==>C11=U1+V1==>3=0+V1==>V1=3, U1=0 by convention
==>C21= U2+V1==>4= U2+3==> U2=3
==>C12= U1 +V2==>3= 0+ V2==> V2= 3

Table: Test of optimality

Unoccupied cells Cell evaluators

Kij = Cij– (Ui + Vj)
(2,2) C22– (U2 +V2)=6-(1+3)= +2

The total cost= $(20x3+30x3+30x40=$270

5.4.1. Alternative Optimal solutions
The esist6ane of alternative optimal solution can be determined by an
inspection of the opportunity costs, Kij for the unoccupied cells. If an
unoccupied cell in an optimal solution has opportunity cost of zero, then
an alternative optimal solution can be formed with another set of
allocations without increasing the total transportation cost.

Exercise
XYZ Tobacco Company purchases tobacco and stores in warehouses
located in the following four cities.

warehouse location Capacity (Tones)

City A 90
City B 50
City C 80

124
 city D 60

The warehouses supply tobacco to cigarette companies in three cities that

have the following demand:

Cigarette Company Demand (Tones)

L 120
P 100
Q 110

The following railroad shipping costs per tone (in hundred dollars) have been
determined:

Warehous L p Q
e location
A 7 10 5
B 12 9 4
C 7 3 11
D 9 5 7

Because of rail road construction, shipments are temporarily from

warehouse at city A to L Cigarette Company.
A. Find the optimum distribution for XYZ Tobacco Company.
B. Are there multiple optimum solutions? If there are alternative
optimum solutions, identify them.

5.4.3. Prohibited Transportation Routes.

The situation may arise such as road hazards (snow, foods, etc), traffic
regulation etc, when it is not possible to transport goods from certain
sources to certain destinations. In this case, the appropriate cell may either
be completely crossed out or a very large per unit transportation cost assign
to it (M)

5.5. ASSIGNMENT PROBLEMS

The Assignment Problem(AP) refers to the class of LPPs that involves
determining the most efficient assignment of people to projects,
salespeople to territories, contracts to bidders ,jobs to machines,
and so on. The objective is to assign a number of resources to an equal

125
number of activities so as to minimize total costs or total time or maximize
total profit of allocation.

The problem of assignment arises because available resources such as

men, machines, etc have varying degrees of efficiency for performing
different activities such as job. Therefore, cost, profit or time of performing
the different activities is different.
Assumptions:
The AP is a special case of TP under the condition that the number of
origins is equal to the number of destinations. Viz. m=n .Hence
assignment is made on the basis of 1:1.

Following are the assumptions:

♦ Number of jobs is equal to the number of machines or persons
♦ Each man or machine is loaded with one and only one job.
♦ Each man or machine is independently capable of handling any of the
job being presented.
♦ Loading criteria must be clearly specified such as “minimizing
operating time” or “maximizing profit” ,or “minimizing
production cost” or “minimizing throughout (production cycle)
time ” etc.

Remark:
• The AP is considered as a special TP in which the supply at each source
and the demand at each destination are always one unit.
• Since the supply and demand are always equal to one unit in each row
and column, there is no need to write them in the assignment table.

Example:
Service costs of different team assignment ($ in thousands)
Table: The assignment
Zone table
Servic Z1 Z2 Z3 Zone
e Servi
S1
Team 20 15 31 ce
====> Team
S2 17 16 33
S3 18 19 27

126
 Z1 Z2 Z3 Suppl
y
S1 20 15 31 1
S2 17 16 33 1
S3 18 19 27 1
Dema
1 1 1
nd

The above problem can be presented as a LPP as follows:

MinZ = 20x11 +15x12 + 31x13 +17x21 +16x22 +33x23 +18x31+19x32 +27x33
Subject to the constraints
a. Supply constraints:
x11 +x12 +x13 =1 S1 constraint
x21 + x22 + x23 =1 S2 constraint
x31 +x32 +x33 = 1 S3 supply constraint
b. Demand constraints
x11 + x21 + x31 = 1 Z1 constraint
x12 + x22 + x32 = 1 Z2 constraint
x13 + x23 +x33 = 1 Z3 constraint
xij either 0 or 1 for all i , j
Since all xij can be either 0 or 1, there will be one assignment in each
supply constraint and one assignment in each demand constraint.

As in the transportation problem, assignment problems can be balanced or

not. In a balanced case, the number of objects to be assigned equals the
number of objects to which they are assigned. Unbalanced problem can be
balanced by adding a dummy (dummies) with zero cost coefficients.

5.5.1. Methods of solving assignment problems

An assignment problem can be solved by the following methods:
1. Enumeration method
2. Simplex method
3. Transportation method
4. Hungarian method

5.5.1.1. Hungarian Method/Flood’s Technique/

The Hungarian Method (developed by Hungarian mathematician D.Konig)
of assignment provides us with efficient method of finding the optimal

127
solution without having to make a direct comparison of every solution. It
works on the principle of reducing the given cost matrix (the
principle of matrix reduction) to a matrix of opportunity costs,
which means that by subtracting and adding appropriate numbers in the
cost table or matrix ,we can reduce the problem to a matrix of
opportunity costs.

Opportunity costs show the relative penalties associated with assigning

resource to an activity as opposed to making the best or least-cost
assignment. If we can reduce the cost matrix to the extent of having at
least one zero in each row and column, then it will be possible to make
optimal assignments.

Steps in solving assignment problems:

Step.1. Develop the cost table from the given problem
If the number of rows does not equal the number of columns and vice
versa, then a dummy row or dummy column must be added. The
assignment costs for dummy cells are always zero.

Step 2.Find the opportunity cost table

i.e. The transformation of the cost matrix to what is termed as a
total-opportunity cost matrix.
It involves two operations:
a. Perform row operation
i.e. Locate the smallest element in each row of the given cost
table and then subtract that the given cost table and then
subtract that from each element of that row
b. Perform column operation
i.e. In the reduced matrix obtained from 2(a) ,locate the
smallest element in each column and then subtract that from
each element of that column. Notice that each row and
column now have at least one zero value.
Step 3.Test for an optimal assignment
i.e. Test the table resulting from step 2 to see whether an optimal
assignment can be made. The procedure is:
a. Draw the minimum number of Horizontal and /or Vertical lines
necessary to cover all zeros costs.

128
 Draw the lines by trial and error but always try to cover two or
more zeros with one line.
b. Count the number of the lines
If the number of lines equals either the number of rows or
columns in the table, an optimal assignment can be made. If
the number of lines is less than the number of rows or
columns, an improvement is possible (we proceed to step 4).

Step 4.Improve the present opportunity cost table (matrix)

This is done by the following operations:
a. Find the smallest entry in the uncovered cells (cells with no lines
through them) and subtract it from all entries in the uncovered cells.
b. Add the same smallest entry to those cells in which the lines intersect
(cells with two lines them)
c. Cells with one line through them are transferred (i.e. unchanged to the
improved table).

In those problems where the first improvement does not yield an

optimal solution, we keep on improving the solution by repeating step 4
until an optimal solution is achieved.

Step 5: Make an optimal assignment

An optimal assignment should be made to cells with a zero entery,
maintaining the one-to-one requirement

If more than one optimal solution exists, a trial-and –error approach can be
used to find all possible combination assignments in the zero cells.

Note that multiple optimal solutions are possible.

Example:
1. A computer center has three programmers. The center wants three
application programs to be developed. The head of the computer center,
after studying carefully the programs to be developed, estimate the
computer time in minutes required by the experts for the application
programs as follows:

129
 Programs

Programmers
(Estimated time in
minute)
A B
1 120 100 80
2 80 90 110
3 110 140 120

Assign the programmers to the programs in such a way that the total
computer time is minimum.

Solution:
Steps 1 and 2:
a. Perform row reduction
The minimum time element in row 1, 2, and 3 is 80, 80 and 110
respectively. Subtract those elements from all elements in there respective
row. The reduced time matrix is:
Table: After row reduction

A B
-80 1 40 20 0
-80 2 0 10 30
-110 3 0 30 10

b. Column reduction
Since column B has no one ‘0’, perform also column reduction. The
minimum time element in columns A, B and C is 0, 10 and 0 respectively.
Subtract these elements from all elements in their respective column to
get the reduced time matrix.
Table: After column reduction

A B
1 40 10 0
2 0 0 30
3 0 20 10

Step 3: Test for an optimal assignment

130
a. Draw the minimum number of horizontal and /or vertical lines necessary
to cover all zero times (costs).
Table: Test of optimal assignment

A B
1 40 10 0
2 0 0 30
3 0 20 10

b. Count the number of lines

If the number of lines is equal to the number of rows/columns, the optimal
solution is obtained. Thus proceed directly to step 5.

Step 5.Make an optimal assignment

An optimal assignment should be made to cells with a zero entery,
maintaining the one-to-one requirement.
Table: optimal assignment

A B
1 40 10
2 3 30
3 1
0
0 10
0
0
0

Note:
In optimal assignment, start with row/column having one zero and
cancel the alternative zeros(x)

The pattern of assignment among programmers and programs with their

respective time (in minute) is given below:

Programmer Program Time (in minutes)

1 C 80
2 B 90
3 A 110
Total time=280
minutes

131
2. A department has five employees with five jobs to be performed .The
time (in hours) each man will take to perform each job is given in the
effectiveness matrix.

Employees

I II III IV V
A 10 5 13 15 16
B 3 9 18 13 6
C 10 7 2 2 2
7 11 9 7 12
Jobs

7 9 10 4 12
E

How should the jobs be allocated, one per employees, so as to minimize

the total man-hours?

Solution:
Table: After row reduction

I II III IV V
-5 A 5 0 8 10 11
-3 B 0 6 15 10 3
-2 C 8 5 0 0 0
0 5 2 0 5
-7 D

3 5 6 0 8
-4 E

Since the number of lines less than the number of rows/columns, an

improvement is possible.
Step 4. Improve the present opportunity cost table
This is done by the following operations;

132
a. Select the smallest entry (element) among all uncovered elements
by the lines and subtract it from all entries in the uncovered cells.
b. Add the same smallest entry to those cells in which lines
intersect (cells with two lines them).
c. Cells with one line through them are unchanged to the improved
table.

Table: After improvement

I II III IV V
A 7 0 8 12 11
B 0 4 13 10 1
C 10 5 0 2 0
0 2 0 0 2
D

3 3 4 0 6
E

Since the number of lines equals to the number of rows/columns, the

solution is optimal.
Table: Optimal assignments

133
 I II III IV V

A 7 8 12 11

B 4 13 10 1
0

C 10 5 2

D 0 2 2
0

E 3 3 4 6

0
0

0 0

The pattern of assignments among jobs and employees with respective

time (in hours) is given below:

Job Employees Time (in minutes)

A II 5
B I 3
C V 2
D III 9

E IV 4

Total time=23 Hours

3. A manager has prepared the following table, which shows the costs for
various combinations of job-machine assignments:
Machine
(Cost in ’000s))
A B C
1 20 15 31
Job 2 17 16 33
3 18 19 27
a. What is the optimal (minimum-cost) assignment for this problem?
b. What is the total cost for the optimum assignment?
Solution:

134
 Table: After row reduction Table:
After column reduction

A B C A B
-15 1 5 0 16 1 5 0 7
-16 2 1 0 17 2 1 0 8
-18 3 0 1 9 3 0 1 0

Table: After improvement

A B
1 4 0 6
2 0 0 7
3 0 2 0

Table: Optimal Assignment

A B C

1 6

4
0

2 7

0 0
3 2

0 0
135
 Job Machine Cost(in $)
1 B 15000
2 A 17000
3 C 27000
Total optimal assignment=$59000

5.6. SPECIAL CASES IN THE ASSIGNMENT

PROBLEMS
Certain situations can arise in which the model deviates slightly from that
previously described. Among those situations are the following:

A. Multiple Optimal Solutions

While making an assignment in the reduced assignment matrix, it is
possible to have two or more ways to strike off a number of zeros. Such
situation indicates multiple optimal solutions with the same optimal
value of objective function. In such cases the more suitable solution
may be considered by the decision-maker.

In multiple optimal solutions, no unique 0 will exist at some point,

resulting in more than one choice for assignment and hence, more than
one optimal solution. It should be noted that all optimal solutions will yield
the same value of the objective function.

Example:

136
1. Given this final assignment table, identify two optimal solutions.
Machine
(Estimated time in
minute)
1 2
A 4 0 0
Job B 0 3 2
C 1 0 0
Solution
The first assignment must be B-1, because B-1 is the only 0 that appears
in a single row or column. Having made that assignment, there are two
choices for the remaining two rows, and two choices for the remaining two
columns. This results in two possible solutions, as shown:
Machine Machine
(Estimated time in (Estimated time in
minute) minute)
1 2 1 2
A 4 0 0 A 4 0 0
Job B 0 3 2 Job B 0 3 2
C 0
1 0
C 1
0 0 0 0

2. The foreman of a machine shop wants to determine a minimum cost

matching for operators and machines. The foreman has determined hourly
cost for of four operators for the four machines, as shown in the following
cost table.
Machine
(Estimated cost in
$) D
A B
70 80 75 6
1
4
55 52 58 5
2
4
Operator

3 58 56 64 6
62 60 67 7
8
4
0
Required:
a. Determine the minimum-cost assignment for this problem
b. What is the total cost for the optimal assignment?
c. Is there an alternative optimal assignment? What is it? Calculate the
total cost for the alternate optimal assignment.

137
Solution:
Table: After row reduction Table: After column
reduction
A B D
A B D 1 4 16 5 0
1 6 16 11 0 2 1 0 0 2
2 3 0 6 2 3 0 0 2 1
3 2 0 8 1
1
2
1
2 4 0 0 1
4 2 0 7 0
0

Table: Optimal Assignments

A B D
1 4 16 5
2 1 2
3 2 0
1
0 0 1
2
4 1
0 0 0
a. Optimal Assignment 0 0 b.
Operator Machine Cost(in $)
4 A 62
3 B 56
2 C 58
1 D 64
Total cost =$240

c. Yes!
Alternative optimal assignment
Operator Machine Cost(in $)
1 D 64
2 C 58
3 A 58
4 B 60
Total cost=$240

B. Maximization case in assignment problems

There may arise situations when the assignment problem calls for
maximization of profit, revenue, etc as the objective function. Such

138
problem may be solved by converting the given maximization problem into
a minimization problem by the following procedure:
i. Find the largest profit coefficient in the entire.
ii. Subtract each entry in the original table from the largest
profit coefficient.
The transformed assignment problem so obtained can be solved by
using the Hungarian method.

Example
1. A company has four territories open, and four salesmen available for
an assignment. The territories are not equally rich in their sales potential.
Based on the past performance, the following table shows the annual
sales (in $) that can be generated by each salesman in each territory.
Find the optimal assignment and the maximum expected total sales.

Territory
I II III IV
A 42 35 28 21
B 30 25 20 15
Salesmen

C 30 25 20 15
D 24 20 16 12

Solution:

Convert maximization problem into minimization problem by subtracting

all elements from the highest element (i.e 42)

Thus, the equivalent cost table is:

I II III IV I II III IV
A 0 7 14 21 A 0 3 6 9
B 12 17 22 27 B 0 1 2 3
C 12 17 22 27 C 0 1 2 3
D 18 22 26 30 D 0 0 0 0

Thus, after improvement of the table, the optimal assignment is:

139
 I II III IV
A 0 2 4 7

B 0 0 0 1

C 0 0 0 1

D 2 1 0 0

The pattern of two alternative optimal assignments among territories and

salesmen with respective sale is given below:

Assignment set I
Assignment set II
___________________________________
_________________________________
Salesman Territory Sales($) Salesman Territory Sales($)
A I 42 A I 42
B III 20 B II 25
C II 25 C III 20
D IV 12 D IV 12
Total= $ 99 Total= $ 99
___________________________________ _________________________________
Exercise
Five salesmen are to be assigned to five territories. Based on the past
performance, the following table shows the annual sales man in each
territory. Find the optional assignment.
T1 T2 T3 T4 T5
S1 26 14 10 12 9
S2 31 27 30 14 16
S3 15 18 16 25 30
S4 17 12 21 30 25
S5 20 19 25 16 10

C. Unbalanced Assignment problem

The Hungarian method of assignment requires that the number of columns
and rows in the assignment matrix be equal. However, when the given cost
matrix is not a square matrix, the assignment problem is called an
unbalanced problem. In such cases a dummy row(s) or column(s) are
added in the matrix (with zeros as the cost elements) to make it a
square matrix. After making the given cost matrix a square matrix, the
Hungarian method may be used to solve the problem.

140
 Example
MEGA printing press, a publisher headquartered in Addis Ababa, wants
to assign three recently hired college graduates, Marta, Bakcha and
Hirut to regional sales districts in Mekelle, Bahir Dare, and DireDawa.
But the firm also has an opening in Gambela and would send one of the
three there if it were more economical than a move to Mekelle, Bahir
Dar and Dire Dawa. It will cost Br. 1,000 to relocate Marta to Gambela,
Br. 800 to relocate Baklcha there, and Br. 1,500 to move Hirut. What is
the optimal assignment of personnel to offices?
Offic
e Mekelle Bahir Dare Dire Dawa
Hire
Marta Br.800 Br 1,100 Br 1,200
Bekcha Br. 500 Br 1,600 Br 1,300
Hirut Br. 500 Br 1,000 Br 2,300

Solution
To balance the problem, we add a dummy row (person) with a zero
relocation cost to each city.
City
C1 C2 C3 C4(Gambe
la)
P1 800 1,100 1,200 1,000
P2 500 1,600 1,300 800
Person P3 500 1,000 2,300 1,500
Dummy 0 0 0 0

Table: After row reduction Table: Optimal

Assignment

C1 C2 C3 C4
C1 C2 C3 C4
P1 0 300 400 200
P1 100 0 100 0
P2 0 1,100 800 300
P2 0 700 400 0
P3 0 500 1800 1000
P3 0 100 1400 700
Dummy 0 0 0 0
Dummy 400 0 0 100
Thus, an optimal assignment can be made at zero cells (squares).
Person City
Dummy(No person) Dire Dawa

Hirut Mekelle

Bekcha Gambela

Marta Bahir Dare

Cost =Br.(0+500+800+1,100)=Br.2,400

D. Restrictions on Assignments

141
In certain instances, it may happen that a particular match or pairing may
be either undesirable or otherwise unacceptable. For example, an
employee may not have the skills necessary to perform a particular job or
a machine may not be equipped to handle a particular operation. In such
cases, the cost of performing that particular activity by a particular
resource is considered to be very large (written as M or ∞ ) so as to
prohibit the entry of this pair of employee-job into the final solution. When
such a restriction is present, a letter (M) is often placed in the table in the
position that would represent a paring. Analysis is performed as usual
except the M is ignored throughout the analysis. That is, M is not used in
any reductions, nor is any value added to it or subtracted from it during
the course of the analysis.

Example
1. In the modification of a plant layout of a factory four new machines
M1, M2, M3 and M4 are to be installed in a machine shop. There are five
vacant places A, B, C, D and E available. Because of limited space,
machine M2 can not be placed at C and M3 cannot be placed at A. the
cost of placing of machine at place i (in $) is shown below.
Location

A B C D E
M1 9 11 15 10 11

Machine M2 12 9 - 10 9
M3 - 11 14 11 7
M4 14 8 12 7 8

Find the optimal assignment schedule.

Solution:
As the cost matrix is not balanced, add one dummy row (machine) with
a zero cost element in that row. Also assign a high cost, denoted by M,
to the pair (M2, C) and (M3, A).

Apply the Hungarian method to solve the problem

A B C D E
M1 9 11 15 10 11

M2 12 9 M 10 9

M3 M 11 14 11 7

M4 14 8 12 7 8

M5 0 0 0 0 0

142
Table: Optimal assignment

A B C D E

M1 0
2 6 1 2

3 M 1
M2 0 0

M3 M 4 7 4

01
M4 7 1 5

0
M5

0 0 0 0 0

The total minimum cost ($) and optimal assignments made are as
follows:

Machine Location Costs ($)

M1 A 9
M2 B 9
M3 E 7
M4 D 7
M5 (Dummy) C 0
Total = $32

143
Exercise:
1. A car rental company has one car at each of five depots a, b, c, d and
e. A customer in each of the five towns A, B, C, D and E requires a car.
The distance in (in kilometers) between the depots and towns where the
customers are, is given in the following distance matrix:
Depots

a b c d e
A 160 130 175 190 200
B 135 120 130 160 175
C 140 110 155 170 185
D 50 50 90 80 110
E 55 35 70 80 105
Towns

How should the cars be assigned to the customers so as to minimize

the distance traveled?
Answer:
A e
B c
C b
D d

Minimum distance = 570 km

2. An airline company has drawn up a new flight schedule involving

five flights. To assist in allocating five pilots to the flights, it has asked
them to state their preference scores by giving each flight a number out
of 10 .The higher the number , the greater is the preference. Certain of
these flights are unsuited to some pilots owing to domestic reasons.
These have been marked with a X
Flight number

144
 a b c d e
A 8 2 X 5 4
B 10 9 2 8 4

Pilot
C 5 4 9 6 X
D 3 6 2 8 7
E 5 6 10 4 3

What should be the allocation of the pilots to flights in order to meet as

many performances as possible?
(Hint: The problem is to maximize the total preference score)

Pilot Flight No Preference Score

A 1 8
B 2 9
C 4 6
D 5 7
E 3 10
Total 40

145