COURSE MODULE

Quantitative Techniques in Business

SY 2021-2022

Introduction

Linear Programming (LP) is a method of dealing with decision problems that can be expressed
as constrained linear models. The primary objectives of all Linear Programming models are to maximize
the use of resources available for the firm since having idle resources will maximize the costs of the
company. Further, minimizing the cost incurred in the production/operations of the company can also
be an objective. In running a business, optimization of resources either to maximize profit and minimize
cost can be a comparative advantage of the company over the other. LP assumes that certainty of the
parameters and linearity of the objective function and all constraints are present.

Rationale

Linear programming will greatly help an operations manager make a sound decision as to how many units of
products can the firm produces given the resources available to them while achieving the main objective;
either to maximize profit or minimize loss.

Intended Learning Outcomes

• Explain what Linear Programming is;
• Identify Linear Programming problems that are amenable to simplex method;
• Formulate Linear Programming models and its standard form;
• Solve Linear Programming problems using simplex method and interpret the solutions; and
• Describe different problem types that lend themselves to solutions using Linear programming models.
Activity (0. 25 hour)

Additional Materials
To learn more about the topic, watch and ponder on the following videos
1. How to use the Simplex method to solve maximization problems (Question 1, Easy) by Study
Force. https://www.youtube.com/watch?v=TVbLWxN8q7I
2. Simplex Method Tabular Form 01 by Goal Project. https://www.youtube.com/watch?
v=FY97HLnstVw
3.

Discussion (1.25 hour)

Simplex Method. This involves an iterative proves whereby the computational routine following a
standard pattern is repeated over and over until an optimum solution is reached.

- A step-by-step process following a standard process for solving linear programming

problems

- For complicated problems or problems having more than two constraints.

STEPS IN THE SIMPLEX MAXIMIZATION (LESS-THAN-OR-EQUAL-TO CONSTRAINTS)

PROCEDURE

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COURSE MODULE
1. Set up the inequalities describing the problem constraints.
2. Convert the inequalities to equations by adding slack variables.
3. Enter the equations in the simplex tableau.
4. Calculate the Zj and Cj –Z j values for this solution.
5. Determine the entering variable (optimal column) by choosing the one with highest Cj –
Zj value.
6. Determine the row to be replaced by dividing quantity column values by their
corresponding optimal column values and choosing the smallest nonnegative quotient.
(That is, only compute the ratios for rows whose elements in the optimal column are
greater than zero.)
7. Compute the values for the replacing row.
8. Compute the values for the remaining rows.
9. Calculate Zj and Cj – Zj values for this solution.
10. If there is a positive for maximization (negative value for minimization) Cj – Zj value,
return to step 5.
11. If there is no positive (no negative) Cj – Zj value, the optimal solution has been obtained.

EXAMPLE:

Puck and Pawn Company, manufactures hockey sticks and chess sets. Each hockey stick
yields an incremental profit of $2 and chess sets, $4. A hockey stick requires 4 hours of processing
at Machine Center A and 2 hours at Machine Center B. A chess set requires 6 hours at Machine
Center A, 6 hours at Machine Center B, and 1 hour at Machine Center C. Machine Center A has a
maximum of 120 hours of available capacity per day, Machine Center B has 72 hours, and Machine
Center C has 10 hours. If the company wishes to maximize profit, how many hockey sticks, and
chess sets should be produced per day?

Summary of the Problem

HOURS REQUIRED
FOR PROCESSING
HOCKEY STICK CHESS SET AVAILABLE CAPACITY/DAY
Machine Center A 4 6 120
Machine Center B 2 6 72
Machine Center
C 0 1 10
Profit per unit 2 4

1. Setting up the Initial Solution

Maximize Zj = 2H + 4C

Subject to the Constraints:

4H + 6C ≤ 120
2H + 6C ≤ 72
0H + 1C ≤ 10
H and C ≥ 0

2. Convert the Initial Solution into its Standard Form:

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COURSE MODULE Follow the rules in converting initial solution to its standard form:

Constraints Adjustments Objective Function

Maximization Minimization
≤ Add a slack variable 0 0
= Add an artificial variable -M M
≥ Subtract a surplus variable and 0 0
add an artificial variable -M M

Standard form is the way of expressing the constraints as equalities. In doing so, the following
variables are required. Slack variables are those added to absorb any unused resources on a given
equation; surplus variables are those who absorbing the excess use of a given variables; and
artificial variables is a computational device used in LP to reach an optimal decision.

Maximize:

Profit = 2H + 4C + 0Sa + 0Sb + 0Sc

Subject to the Constraints:

4H + 6C + Sa = 120
2H + 6C + Sb = 72
0H + 1C + Sc = 10
H, C, and Sn ≥ 0

3. Enter the equations in the Simplex Tableau

To make the equations in the problem easier to handle, they can be put into a tabular form called
the Simplex Tableau.

Simplex Tableau is a tabular format for organizing the data of a linear programming
problem and performing the computations of the simplex method.

Cj row     2 4 0 0 0
Cj Product
column Mix Quantity H C Sa Sb Sc
0 Sa 120 4 6 1 0 0
0 Sb 72 2 6 0 1 0
0 Sc 10 0 1 0 0 1

Cj Column – a colum in the simplex tableau which contains the profit or cost per unit for variables in
the product mix.

Product Mix Column – the column containing the variables in the solution in the simplex tableau (in
the first solution are the slack variables).

Slack Variables – these are the unutilized resources and the variables added to the less-than-to-or-
equal-to constraints to convert them into equations

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COURSE MODULE Variable Column – the column of the entries under a heading variable in the simplex tableau

Quantity Column – the column in the simplex tableau indicating the quantities of the variables that
are in the solution, right hand side values.

Cj Row – a row in the simplex tableau which contains the profit or cost per unit for all the variables
in the solution.

Adding Two More Rows to the Simplex Tableau

4. Calculate the Zj and Cj –Z j values for this solution.

To find the profit for each solution and to determine whether the solution can be improved
upon, we need to add two more rows to the initial simplex tableau, a Zj row and Cj – Zj row.

Zj Row – the row containing the opportunity costs of bringing one unit of a variable into solution of a
linear programming problem; it represents the total profit or cost from this particular solution.

Cj – Zj Row – the row containing the net profit or benefit occasioned by bringing one unit of a
variable into the solution of a linear programming problem.

1st Simplex Tableau

Cj row   2 4 0 0 0  
Cj Product
column Mix H C Sa Sb Sc Quantity
0 Sa 4 6 1 0 0 120
0 Sb 2 6 0 1 0 72
0 Sc 0 1 0 0 1 10
  Zj 0 0 0 0 0 0
  Cj - Zj 2 4 0 0 0  

Note: Sc row – Replaced row (smallest + value)

C column – optimal column (highest + value)
:
To compute for Zj = (Cj column x each number in the variable column)

Zh = 0(4)+ 0(2) + 0(0) = 0

Zc = 0(6) + 0(6) + 0(1) = 0
Zsa = 0(1) + 0(0) + 0(0) = 0
Zsb = 0(0) + 0(1) + 0(0) = 0
Zsc = 0(0) + 0(0) + 1(0) = 0
Zqty= 0(120) + 0(72) + 0(10) = 0

To compute for the Cj – Zj

H =2–0=2
C =4–0=4

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COURSE MODULE Sa = 0 – 0 = 0
Sb = 0 – 0 = 0
Sc = 0 – 0 = 0

Once the initial simplex tableau is established, the next step is to determine how to improve profits.

Pivoting – the procedure of going from one tableau to the next

Pivot – each iteration, the procedure for the second solution (that is, the first pivot) follows.

Step 1

Determine which variable will add the most per unit to profit. The numbers in the Cj – Zj row
tell exactly which product will increase profits most. The presence of a positive number in the Cj – Zj
row indicates that the current profit can still be improved upon,; the larger the positive number, the
greater the improvement possible.

The highest positive value in Cj – Zj row is the optimal column

Optimal Column – the column which has the largest positive in the Cj – Zj and whose product will
contribute the most profit per unit

From our initial solution C column has the highest positive value in Cj – Zj row, so C column will be
our optimal column.

Developing the Solution

5. Determine the entering variable (optimal column) by choosing the one with highest Cj – Zj
value for maximization while the lowest for minimization.

Cj row   2 4 0 0 0  
Cj Product
column Mix H C Sa Sb Sc Quantity
0 Sa 4 6 1 0 0 120
0 Sb 2 6 0 1 0 72
0 Sc 0 1 0 0 1 10
  Zj 0 0 0 0 0 0
  Cj - Zj 2 4 0 0 0  

6. Determine the row to be replaced by dividing quantity column values by their

corresponding optimal column values and choosing the smallest nonnegative quotient. (That
is, only compute the ratios for rows whose elements in the optimal column are greater than
zero.)

Cj row   2 4 0 0 0  
Cj Product Quantit
column Mix H C Sa Sb Sc y
0 Sa 4 6 1 0 0 120 120/6 = 20
0 Sb 2 6 0 1 0 72 72/6 = 12
0 Sc 0 1 0 0 1 10 10/1 = 10

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  Zj 0 0 0 0 0 0
  Cj - Zj 2 4 0 0 0  

Step 2

Determine which variable will be replaced. This is done by dividing the quantity column by
the intersectional elements.

Intersectional Elements – elements which are common to both the optimal column and the
rows representing variables in the solution.

From our initial solution Sc row has the smallest positive value; it is called the replaced row
because it will be replaced in the next solution by 10 units of C.

Step 3

Having selected the optimal column and the replaced row, we can develop the second
simplex solution, an improved solution.

The first part to be developed is the C row which will appear in place of the replaced row
(Sc).

7. Compute the values for the replacing row.

Cj row   2 4 0 0 0  
Cj column Product Mix H C Sa Sb Sc Quantity
0 Sa 4 0 1 0 -6 60
0 Sb 2 0 0 1 -6 12
4 C 0 1 0 0 1 10

To compute for the new C row value = each number in the replaced row/ the intersectional element
(1) of the replaced row.

Ch = 0/1 = 0
Cc = 1/1 = 1
Csa = 0/1 = 0
Csb = 0/1 = 0
Csc = 1/1 = 1
Cqty = 10/1 = 10

8. Compute the values for the remaining rows.

Cj row   2 4 0 0 0  
Cj column Product Mix H C Sa Sb Sc Quantity
0 Sa 4 0 1 0 -6 60
0 Sb 2 0 0 1 -6 12
4 C 0 1 0 0 1 10

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COURSE MODULE To compute for the new Sa row value

Intersectional
Elements in Element New C row Elements in
Old Sa row - of Old Sa row x value = New Sa row
4 - 6 x 0 = 4
6 - 6 x 1 = 0
1 - 6 x 0 = 1
0 - 6 x 0 = 0
0 - 6 x 1 = -6
120 - 6 x 10 = 60

To compute for the new Sb row value

Intersectional
Elements in Element New C row Elements in
Old Sb row - of Old Sb row x value = New Sb row
2 - 6 x 0 = 2
6 - 6 x 1 = 0
0 - 6 x 0 = 0
1 - 6 x 0 = 1
0 - 6 x 1 = -6
72 - 6 x 10 = 12

9. Calculate Zj and Cj – Zj values for this solution.

Cj row   2 4 0 0 0  
Cj column Product Mix H C Sa Sb Sc Quantity
0 Sa 4 0 1 0 -6 60
0 Sb 2 0 0 1 -6 12
4 C 0 1 0 0 1 10
  Zj 0 4 0 0 4 40
  Cj - Zj 2 0 0 0 -4  

To compute for Zj
Zh = 0(4) + 0(2) + 4(0) = 0
Zc = 0(0) + 0(0) + 4(1) = 4
Zsa = 0(1) + 0(1) + 4(1) = 0
Zsb = 0(0) + 0(1) + 4(0) = 0
Zsc = 0(-6) + 0(-6) + 4(1) = 4
Zqty = 0(60) + 0(12) + 4(10) = 40

To compute for Cj – Zj
H =2–2=2
C =4–4=0
Sa = 0 – 0 = 0
Sb = 0 – 0 = 0
Sc = 0 – 4 = -4

10. If there is a positive for maximization (negative value for minimization) Cj – Zj value,
return to step 5.

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Developing the Third Solution

The presence of a positive number 2 in the H column of the Cj – Zj row of the second
solution indicates that further improvement is possible. Therefore, we repeat the same process to
develop the third solution.

3rd Simplex Tableau

Cj row 2 4 0 0 0
Cj column Product Mix H C Sa Sb Sc Quantity
0 Sa 0 0 1 -2 6 36 36/6 = 6
2 H 1 0 0 1/2 -3 6 6/-3 = -2
4 C 0 1 0 0 1 10 10/1 = 10
Zj 2 4 0 1 -2 52
Cj - Zj 0 0 0 -1 2

To compute for new H row value

Hh = 2/2 = 1
Hc = 0/2 = 0
Hsa = 0/2 = 0
Hsb = 1/2 = 1/2
Hsc = -6/2 = -3
Hqty = 12/2 = 6

To compute for the new Sa row value

Intersectional
Elements in Element New H row Elements in
Old Sa row - of Old Sa row x value = New Sa row
4 - 4 x 1 = 0
0 - 4 x 0 = 0
1 - 4 x 0 = 1
0 - 4 x 1/2 = -2
-6 - 4 x -3 = 6
60 - 4 x 6 = 36
To compute for the new Sa row value

Intersectional
Elements in Element New H row Elements in
Old C row - of Old C row x value = New C row
0 - 0 x 1 = 0
1 - 0 x 0 = 1
0 - 0 x 0 = 0
0 - 0 x 1/2 = 0
1 - 0 x -3 = 1
10 - 0 x 6 = 10

To compute for Zj
Zh = 0(0) + 2(1) + 4(0) = 2

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COURSE MODULE Zc = 0(0) + 2(0) + 4(1) = 4
Zsa = 0(1) + 2(0) + 4(0) = 0
Zsb = 0(-2) + 2(1/2) + 4(0) = 1
Zsc = 0(6) + 2(-3) + 4(1) = -2
Zqty = 0(36) + 2 (6) + 4(10) = 52

To compute for Cj – Zj
H =2–2=0
C =4–4=0
Sa = 0 – 0 = 0
Sb = 0 – 1 = -1
Sc = 0 – (-2) = 2

Developing the Fourth Solution

The presence of a positive number 2 in the Sc column of Cj – Zj row of the 3rd solution
indicates that further improvement is possible. Therefore, we repeat the same process to develop
the 4th solution

4th Simplex Tableau

Cj row   2 4 0 0 0  
Cj Product Quantit
column Mix H C Sa Sb Sc y
0 Sc 0 0 1/6 -1/3 1 6
2 H 1 0 1/2 -1/2 0 24
4 C 0 1 -1/6 1/3 0 4
  Zj 2 4 1/3 1/3 0 64
  Cj - Zj 0 0 -1/3 -1/3 0  

To compute for the new Sc row value

ScH = 0/6 = 0
ScC = 0/6 = 0
ScSa = 1/6 = 1/6
ScSb = -2/6 = -1/3
ScSc = 6/6 = 1
Sqty = 36/6 = 6

To compute for the new H row value

Intersectional
Elements in Element New Sc row Elements in
Old H row - of Old H row X value = New H row
1 - -3 X 0 = 1
0 - -3 X 0 = 1
0 - -3 X 1/6 = ½
½ - -3 X -1/3 = -1/2
-3 - -3 X 1 = 0
6 - -3 X 6 = 24

To compute for the new C row value

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COURSE MODULE Intersectional
Elements in Element New Sc row Elements in
Old C row - of Old C row X value = New C row
0 - 1 X 0 = 0
1 - 1 X 0 = 1
0 - 1 X 1/6 = -1/6
0 - 1 X -1/3 = 1/3
1 - 1 X 1 = 0
10 - 1 X 6 = 4

To compute for Zj
Zh = 0(0) + 2(1) + 4(0) = 2
Zc = 0(0) + 2(0) + 4(1) = 4
Zsa = 0(1/6) + 2(1/2) + 4(-1/6) = 1/3
Zsb = 0(-1/3) + 2(-1/2) + 4(1/3) =1/3
Zsc = 0(1) + 2(0) + 4(0) = 0
Zqty= 0(6) + 2(24) + 4(4) =64

To compute for Cj - Zj
H=2–2=0
C=4–4=0
Sa= 0 – 1/3 = -1/3
Sb= 0 – 1/3 =-1/3
Sc= 0 – 0 = 0

11. If there is no positive (no negative) Cj – Zj value, the optimal solution has been obtained.

Since, there is no positive Cj – Zj in the solution, no further improvement is possible; thus the
optimal solution has been obtained. It is:

Sc = 0
H = 24
C =4
Sa = 0
Sb = 0

Maximum Profit = 64

Therefore, profits will be maximized to 64 per day by producing 24 units of hockey sticks and
4 units of chess sets.

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COURSE MODULE

MINIMIZATION PROBLEMS AND GREATER-THAN-OR-EQUAL-TO CONSTRAINTS

Aquamundo Sports Inc., a local distributor of diving equipment makes two products, wetsuits,
and booties, which must be processed through assembly and finishing departments. Assembly has
60 hours available per week; finishing can handle up to 48 hours of work a week. Manufacturing one
wetsuit requires 4 hours in assembly and 2 hours in finishing. Each bootie requires 2 hours in
assembly and 4 hours in finishing.
Richard Espino, the Director of Marketing, has promised customers the company will make at
least 2 wetsuits and at least 4 booties per week. Richard has determined that it costs P20 per unit to
manufacture a wetsuit and P8 per unit to a bootie.

Minimize:
Cost = 20W +8B

Subject to:
Assembly: 4W + 2B < 60
Finishing: 2W + 4B < 48
Minimum number of wetsuits: W >2
Minimum number of booties: B>4
All Variables > 0

OBJECTIVE FUNCTION:
Minimize:
Cost = 20W + 8B + 0SA + 0SF + 0SW + 0SB
Subject to:
4W + 2B + SA + 0SF + 0SW + 0SB =60
2W + 4B + 0SA + SF + 0SW + 0SB = 48
W + 0B + 0SA + 0SF - SW + 0SB = 2
0W + B + 0SA + 0SF + 0SW - SB = 4

Surplus variables – variables subtracted from greater-than-or-equal-to

constraints to convert them into equations.

 Introducing artificial variables

 Original constraint: W>2

New constraint: W + AW > 2

Equation: W + AW – SW = 2

 Original constraint: B>4

New constraint: B + AB > 4

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COURSE MODULE Equation: B + AB – SB = 4

Final form of the problem:

Minimize:
Cost = 20W + 8B + 0SA + 0SF + MAW + MAB + 0SW + 0SB

Subject to:

4W+ 2B + SA + 0SF + 0AW + 0AB + 0SW + 0SB = 60

2W + 4B + 0SA + SF + 0AW + 0AB + 0SW + 0SB = 48
W + 0B + 0SA + 0SF + AW + 0AB – SW + 0SB = 2
0W + B + 0SA + 0SF + 0AW + AB + 0SW - SB = 4
All variables > 0

 Solving the problem using simplex tableau

o Initial simplex tableau

Cj 20 8 0 0 M M 0 0
Product Quantity W B SA SF AW AB SW SB
mix
0 SA 60 4 2 1 0 0 0 0 0
0 SF 48 2 4 0 1 0 0 0 0
M AW 2 1 0 0 0 1 0 -1 0
M AB 4 0 1 0 0 0 1 0 -1

To get Zj row: To get Cj –Zj row:

Ztotal = 0(60)+ 0(48) +M( 2) +M( 4) = 6M W = 20-M =
ZW = 0( 4)+ 0( 2)+M( 1) +M( 0) = M B = 8-M =
ZB = 0( 2)+ 0( 4)+M( 0) +M( 1) = M SA = 0-0 = 0
ZSA = 0( 1)+ 0( 0)+M( 0) +M( 0) = 0 SF = 0-0 = 0
ZSF = 0( 0)+ 0( 1)+M( 0) +M( 0) = 0 AW = M-M = 0
ZAW = 0( 0)+ 0( 0)+M( 1) +M( 0) = M AB = M-M = 0
ZAB = 0( 0)+ 0( 0)+M( 0) +M( 1) = M SW = 0-(-M) = M
ZSW = 0( 0)+ 0( 0)+M(-1) +M( 0) = -M SB = 0-(-M) = M
ZSB = 0( 0)+ 0( 0)+M( 0) + M(-1) = -M

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COURSE MODULE
8
Cj 20 0 0 M M 0 0
Product
Quantity W B SB SF AW AB SW SB
mix
0 SA 60 4 2 1 0 0 0 0 0

0 SF 48 2 4 0 1 0 0 0 0

M AW 2 1 0 0 0 1 0 -1 0
M
AB 4 0 1 0 0 0 1 0 -1
-M
Zj 6M M M 0 0 M M -M
0
Cj-Zj 20-M 8-M 0 0 0 M M

Optimal column
Replacing row
To get which row to replace
SA 60/2 = 30
SF 48/4 = 12
AW 2/0 = 0
AB 4/1 = 4

 Second simplex tableau

Cj 20 8 0 0 M M 0 0
Product Quantity W B SA SF AW AB SW SB
mix
0 SA
0 SF
M AW
8 B 4 0 1 0 0 0 1 0 -1

To get row B:

Quantity = 4 / 1 = 4
W = 0/1=0
B = 1/1=1
SA = 0/1=0
SF = 0/1=0
AW = 0/1=0
AB = 1/1=1
SW = 0/1=0
SB = -1 / 1 = -1

Procedure to get new SA, SF and AW row

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COURSE MODULE
in te rs e c tio n a l c o rre s p o n d in g
E le m e n ts in E le m e n ts in
e le m e n t o f x e le m e n ts in =
o ld ro w n e w ro w
o ld ro w re p la c in g ro w
SA 60 - (2 x 4) = 52 SF 48 - (4 x 4) = 32 AW 2 - (0 x 4) = 2
4 - (2 x 0) = 4 2 - (4 x 0) = 2 1 - (0 x 0) = 1
2 - (2 x 1) = 0 4 - (4 x 1) = 0 0 - (0 x 1) = 0
1 - (2 x 0) = 1 0 - (4 x 0) = 0 0 - (0 x 0) = 0
0 - (2 x 0) = 0 1 - (4 x 0) = 1 0 - (0 x 0) = 0
0 - (2 x 0) = 0 0 - (4 x 0) = 0 1 - (0 x 0) = 1
0 - (2 x 1) = -2 0 - (4 x 1) = -4 0 - (0 x 1) = 0
0 - (2 x 0) = 0 0 - (4 x 0) = 0 -1 - (0 x 0) = -1
0 - (2 x-1) = 2 0 - (4 x-1) = 4 0 - (0x-1) = 0
Cj 20 8 0 0 M M 0 0
Product Quantity W B SA SF AW AB SW SB
mix
0 SA 52 4 0 1 0 0 -2 0 2
0 SF 32 2 0 0 1 0 -4 0 4
M AW 2 1 0 0 0 1 0 -1 0
8 B 4 0 1 0 0 0 1 0 -1

To get Zj and Cj – Zj:

Zj total = 0(52) + 0(32) + M(2) + 8(4) = 2M + 32 Cj – Zj W = 20-M

W = 0 (4) + 0 (2) + M(1) + 8(0) = M B = 8-8 = 0
B = 0 (0) + 0 (0) + M(0) + 8(1) = 8 SA = 0-0 = 0
SA = 0 (1) + 0 (0) +M(0)+8(0) = 0 SF = 0-0 = 0
SF = 0 (0) + 0 (1) +M(0)+8(0) = 0 AW = M-M = 0
AW = 0 (0) + 0 (0) +M(1)+8(0) = M AB = M-8
AB = 0(-2) + 0(-4) +M(0)+8(1) = 8 SW = 0-M = 0
SW = 0 (0) + 0 (0) +M(-1)+8(0) = -M SB = 0-8 = 0
SB = 0 (2) + 0 (4) +M(0)+8(-1) = -8

Cj 20 8 0 0 M M 0 0
Product
Quantity W B SA SF AW AB SW SB
mix
0 SA 52 4 0 1 0 0 -2 0 2

0 SF 32 2 0 0 1 0 -4 0 4

M AW 2 1 0 0 0 1 0 -1 0

8 B 4 0 1 0 0 0 1 0 -1

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COURSE MODULE
Zj 2M + 32 M 8 0 0 M 8 -M -8

Cj – Zj 20-M 0 0 0 0 -8+M M 8

To get which row to replace

SA 52/4 = 13
SF 32/2 = 16
AW 2/1 = 2
B 4/0 = 0

 Third simplex tableau

Cj 20 8 0 0 M M 0 0
Product Quantity W B SA SF AW AB SW SB
mix
0 SA
0 SF
20 W 2 1 0 0 0 1 0 -1 0
8 B

To get row W:

Quantity = 2 / 1 = 2
W = 1/1= 1
B = 0/1= 0
SA = 0/1= 0
SF = 0/1= 0
AW = 1/1= 1
AB = 0/1= 0
SW = -1 / 1 = -1
SB = 0/ 1 = 0

To get new SA, SF, B:

SA 52 - (4 x 2) = 44 SF 32 - (2 x 2) = 28 B 4 - (0 x 2) = 4
4 - (4 x 1) = 0 2 - (2 x 1) = 0 0 - (0 x 1) = 0
0 - (4 x 0) = 0 0 - (2 x 0) = 0 1 - (0 x 0) = 1
1 - (4 x 0) = 1 0 - (2 x 0) = 0 0 - (0 x 0) = 0
0 - (4 x 0) = 0 1 - (2 x 0) = 1 0 - (0 x 0) = 0
0 - (4 x 1) = -4 0 - (2 x 1) = -2 0 - (0 x 1) = 0
-2 - (4 x 0) = -2 -4 - (2 x 0) = -4 1 - (0 x 0) = 1
0 - (4 x-1) = 4 0 - (2 x-1) = 2 0 - (0 x-1) = 0
2 - (4 x 0) = 2 4 - (2 x 0) = 4 -1 - (0 x 0) = -1

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COURSE MODULE
Cj 20 8 0 0 M M 0 0
Product Quantit W B SA SF AW AB SW SB
mix y
0 SA 44 0 0 1 0 -4 -2 4 2
0 SF 28 0 0 0 1 -2 -4 2 4
20 W 2 1 0 0 0 1 0 -1 0
8 B 4 0 1 0 0 0 1 0 -1

To get Zj and Cj – Zj:

Zj total = 0(44) + 0(28) + 20(2) + 8(4) = 72 Cj – Zj W = 20-20 = 0

W = 0 ( 0) + 0 (0) + 20(1) + 8(0) = 20 B = 8-8 = 0
B = 0 ( 0) + 0 (0) + 20(0) + 8(1) = 8 SA = 0-0 = 0
SA = 0 ( 1) + 0 (0) +20(0)+8(0) = 0 SF = 0-0 = 0
SF = 0 ( 0) + 0 (1) +20(0)+8(0) = 0 AW = M-20
AW = 0 (-4) + 0 (-2) +20(1)+8(0) = 20 AB = M-8
AB = 0(-2) + 0(-4) +20(0)+8(1) = 8 SW = 0-(-20) = 20
SW = 0 ( 4) + 0 (2) +20(-1)+8(0) = -20 SB = 0-(-8) = 8
SB = 0 ( 2) + 0 (4) +20(0)+8(-1) = -8

Third simplex tableau ( optimal solution )

Cj 20 8 0 0 M M 0 0
Product
Quantity W B SA SF AW AB SW SB
mix
0 SA 44 0 0 1 0 -4 -2 4 2

0 SF 28 0 0 0 1 -2 -4 2 4

20 W 2 1 0 0 0 1 0 -1 0

8 B 4 0 1 0 0 0 1 0 -1

Zj 72 20 8 0 0 20 8 -20 -8

Cj – Z j 0 0 0 0 -20+M -8+M 20 8

Exercise (0.5 hours)

Convert into standard form the problems/examples used in topic 2, Linear Programming Graphical Method.

Assessment (0.5 hour)

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COURSE MODULE
At the end of the topic, a short 10 item exercise will be given and uploaded in MS Teams.

Pick at least one of the examples in LP Graphical Method, and using Simplex Method, prove that the
computed final answers are correct.

Reflection (0.5 hour)

Given the tediousness involve in doing Simplex Method, search a software that could help an industrial
engineering, economist, and or entrepreneur solve this kind of problem.

Resources and Additional Resources

Heizer Jay, and Render Barry. Operations Management. 10th ed. (2012). Pearson Education Inc.

Hillier, F and Hillier M, Introduction to Management Science: A Modelling and Case Studies Approach. 2nd edition. (2005).
McGraw Hill Publishing.

Sirug, W. Quantitative Method for Business, Revised ed. (2015). Mindshapers Co., Inc

Stevenson, William J. Operations Management. 10th ed. (2010). McGraw Hill Publishing.

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