CHAPTER TWO

PHARAMA COLLEGE

LINEAR PROGRAMMING MODEL

Instructor:
Dr. Sintayehu Assefa (Ph.D.)
1
 LINEAR PROGRAMMING MODEL
2
OBJECTIVES

After pursuing this chapter, you should be able to:

 Define linear programming

 Discuss structure of linear programming model, application

areas, solution methods
LEARNING

 Explain complication and their solution

 Discuss special cases of LPP

Linear Programming: An Overview
3

 A linear programming is a mathematical technique for an

optimal allocation of scarce resources such as materials, time,
money, etc. subject to a set of constraints.

 It is a model that seeks to either maximize or minimize a linear

objective function subject to a set of linear constraints.

 In linear programming the objectives to be maximized may be

profit or revenue, market share, return on investment, etc. and the
objects to be minimized may be cost, time, distance, etc.
Conti…
4

 LPM uses linear algebraic relationships to represent a firm’s

decisions, given a business objective, and resource constraints.

 Steps in application:

 Identify problem as solvable by linear programming

 Formulate a mathematical model of the unstructured problem

 Solve the model

 Implementation
Characteristics of Linear Programming Model
5

 The characteristics are grouped into two including components

and assumptions.

 The components relate to the structure of the models and the

assumptions revealed the condition under which the model is
valid. OR is a problem solving and a decision making science.

 Whenever we have conflicts, uncertainty and complexity in any

situation, OR can help in the end to reduce costs and improve
profits.

 So, it is very important that the problem at hand be clearly

defined. The problem may be set out explicitly by the consumer,
the sponsoring organization or may be formulated by the OR
team.
Components of Linear programming model
6

 Decision variables: mathematical symbols representing levels of

activity of a firm.

 Objective function: a linear mathematical relationship describing

an objective of the firm, in terms of decision variables- this
function is to be maximized or minimized.

 Constraints: requirements or restrictions placed on the firm by the

operating environment, stated in linear relationships of the
decision variables.

 Parameters: numerical coefficients and constants used in the

objective function and constraints.
Characteristics of LPM
7

 A decision amongst alternative course of action is required

 The decision is represented in the model by decision variables

 The problem encompasses a goal, expressed as an objective

function, that the decision maker wants to achieve

 Restrictions (represented by constraints) exist that limit the extent

of achievement of the objective

 The objective and constraint must be definable by linear

mathematical functional relationships.
Assumptions of linear programming
8

 Proportionality: the rate of change (slope) of the objective function

and constraint equations is constant.

 Additivity: terms in the objective function and constraint equations

must be additive.

 Divisibility: decision variables can take on any fractional value

and are therefore continuous as opposed to integer in nature.

 Certainty: values of all the model parameters are assumed to be

known with certainty (non-probabilistic)
Applications of Linear Programming
9

 Personnel Assignment Problem

 Transportation Problem
 Efficiency on Operation of System of Dams
 Optimum Estimation of Executive Compensation
 Agriculture Applications
 Military Applications
 Production Management
 Marketing Management
 Manpower Management
Advantages of Linear Programming Techniques
10

 It helps us in making the optimum utilization of productive

resources.

 The quality of decisions may also be improved by linear

programming techniques.

 Provides practically solutions. In production processes, high

lighting of bottlenecks is the most significant advantage of this
technique.

 LP also helps in re-evaluation of a basic plan for changing

conditions.
Disadvantages of Linear Programming Model
11

LPM is applicable only to problems where the constraints and

objective function are linear i.e. where they can be expressed as
equations which represent straight lines. In real life situations,
when constraints or objective functions are not linear, this
technique cannot be used.

Factors such as uncertainty, and time are not taken into

consideration

Parameters in the model are assumed to be constant but in real

life situations they are not constants
Conti…
12

 Linear programming deals with only single objective, whereas in

real life situations may have multiple and conflicting objectives

 In solving LPP there is no guarantee that we get an integer value.

In some cases of number of men or machine a non-integer value
is meaningless
Formulating a Linear programming model
13

 The formulation of LPM involves the following steps:

 Step 1: Define the problem. It involves the determination of our

specific objective. Example: To determine the quantity of P1 and
P2 to be produced/month so as to maximize profit subject to the
set of limiting factors.

 Step 2: Identify the decision variables. It involves the

representation of the unknown quantities by letters. Example: Let
X1 and X2 represent the number of units of products P1 and P2
to be produced/month respectively.
Conti…
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 Step 3: Formulate the objective function. In formulating the

objective function, make sure that

 All the decision variables are represented in the objective

function.
 All terms in the objective function must include a variable.

 The unit of measurement of all the coefficients in the objective

function must be the same.
Conti…
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 Step 4: Formulate the constraints and writing the completed LPM.

Z = c1X1 + c2X2 + c3X3 + ………+ cnXn
Subject to the following constraints:

Where aij, bi, and cj are given constants

Example 1
16

A firm produces products, A & B, each of which requires two

resources, namely raw materials and labour. Each unit of
product A requires 2 & 4 units and each unit of product B
requires 3 & 3 units respectively of raw materials and labour.
Every day at least 60 units of raw materials and at most 96
units of labour must be used. If the unit profit contribution of
product A is Br. 40/unit, product B is Br. 35/unit determine the
number of units of each of the products that should be made
each day to maximize the total profit contribution.

Question 1: Describe the mathematical model of the situation.

Conti…
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 Step 1: Problem definition. To determine the number of products A

and B to be produced in order to maximize profit under the
restrictions.

 Step 2: Write the decision variables.

X1 = The number of units of Product A to be produced daily
X2 = The number of units of Product B to be produced daily
Z = Total profit

 Step 3: Formulate the objective function.

Max Z = 40x1 + 35x2
Conti…
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 Step 4: Formulate the constraints.

Raw material: 2x1 + 3x2 ≥ 60
Labour: 4x1 + 3x2 ≤ 96
Non-negativity: X1, x2 ≥ 0

 Therefore, the complete LPM is:

Max Z = 40x1 + 35 x2
Subject to:
Raw material: 2x1 + 3x2 ≥ 60
Labour: 4x1 + 3x2 ≤ 96
Non-negativity: X1, x2 ≥ 0
Example 2
19

 ABC private limited company is engaged in the production of

power and traction transformers. Both of these categories of
transformers pass through three basic processes: core
preparation, core to coil assembly, and vapor phase drying. A
power transformer yields a contribution of Birr 50,000 and
traction transformer contributes Birr 10,000. The time required in
the production of these two products in terms of hours for each
of the processes is as follows.
Conti…
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Power transformer Traction Transformer

Core preparation 75 15
Core to Coil Assembly 160 30
Vapor Phase Drying 45 10

If the capacities available are 1000, 1500, and 750 machine hours
in each processes respectively, formulate the problem as LP?
Conti…
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Step 1: Problem definition. To determine the number of power and

traction transformers to be produced under the limiting factors

Step 2: Write the decision variables.

X1 = the no of power transformers to be produced
X2= the no of traction transformer to be produced
Z = Total profit

Step 3: Formulate the objective function.

Zmax = 50,000X1+ 10,000X2
Conti…
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Step 4: Formulate the constraints.

75X1 + 15X2 ≤ 1000
160X1 + 30X2 ≤ 1500
45X1 + 10X2 ≤ 750
X1, X2 > 0
Therefore, the complete LPM is:

Zmax = 50,000X1+ 10,000X2

Subject to:
75X1 + 15X2 ≤ 1000 hrs.
160X1 + 30X2 ≤ 1500 hrs.
45X1 + 10X2 ≤ 750 hrs.
X1, X2 > 0
Example 3
23

A firm that assembles computers and computer equipment is

about to start production of two new micro-computers (Type 1
and Type 2). Each type of micro-computer will require
assembly time, inspection time and storage space. The
amounts of each of this resources that can be devoted to the
production of microcomputers is limited.

The manager of the firm would like to determine the quantity

of each micro- computer to produce in order to maximize the
profit generated by sales of this Micro-computers. In order to
develop 2 suitable model of the problem, the manager has
met with the design and manufacturing personnel. As a result
of these meetings, the manager has obtained the following
information:
Conti…
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Type 1 Type 2
Profit 60 50
Assembly time 4 10
Inspection time 2 1
Storage space/unit 3 3

The manager has also acquired information on the availability

of the company of resources. This daily amount are

Resource Amounts available

Assembly time 100 hours
Inspection time 22 hours
Storage space 39 cubic feet
Conti…
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The manager also met with the firms marketing manager and
learn that the demand for Micro-computer was such that
whatever combination of these two types of Micro-computers
produced all of the outputs can be sold.

Q:Formulate the Linear Programming Model.

Conti…
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Step 1: Problem definition. To determine the quantity of type I and

type II micro-computers to be produced per day so as to maximize
profit given the restrictions.

Step 2: Identify the decision variables.

X1 = The quantity of type I micro-computer to be produced and sold

per day.
X2= The quantity of type II micro-computer to be produced and sold
per day.
Z = Total profit

Step 3: Formulate the objective function.

Max Z = 60x1 + 50 x2
Conti…
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Step 4: List the constraints.

Assembly time: 4x1 + 10x2 ≤ 100
Inspection time: 2x1 + x2 ≤ 22
Storage space: 3x1 + 3x2 ≤ 39
Non-negativity: X1, x2 ≥ 0

Therefore, the complete LPM is:

Max Z = 60x1 + 50 x2
Subject to:
Assembly time: 4x1 + 10x2 ≤ 100
Inspection time: 2x1 + x2 ≤ 22
Storage space: 3x1 + 3x2 ≤ 39
Non-negativity: X1, x2 ≥ 0
Example 4
28

A firm produces products, A & B, each of which requires two

resources, namely raw materials and labour. Each unit of
product A requires 2 & 4 units and each unit of product B
requires 3 & 3 units respectively of raw materials and labour.
Every day at least 60 units of raw materials and at most 96
units of labour must be used. If the unit profit contribution of
product A is Br. 40/unit, product B is Br. 35/unit determine the
number of units of each of the products that should be made
each day to maximize the total profit contribution.

Question 1: Describe the mathematical model of the situation.

Conti…
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Step 1: Problem definition. To determine the number of

products A and B to be produced in order to maximize profit
under the restrictions.

Step 2: Write the decision variables.

X1 = The number of units of Product A to be produced daily
X2 = The number of units of Product B to be produced daily
Z = Total profit

Step 3: Formulate the objective function.

Max Z = 40x1 + 35x2
Conti…
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Step 4: Formulate the constraints.

Raw material: 2x1 + 3x2 ≥ 60
Labour: 4x1 + 3x2 ≤ 96
Non-negativity: X1, x2 ≥ 0

Therefore, the complete LPM is:

Max Z = 40x1 + 35 x2
Subject to:
Raw material: 2x1 + 3x2 ≥ 60
Labour: 4x1 + 3x2 ≤ 96
Non-negativity: X1, x2 ≥ 0
Minimization case
31

General format

Min.C = c1 x1+c2x2+ … + Cn xn

Subt to:

a11 x1 + a12 x2+ … + a1n xn ≥ b1

a21 x1 + a22 x2+ … + a2n xn ≥ b2
. . . .
. . . .
am1 x1 + am2 x2+ … + amn xn ≥ bn
x1, x2 …., xn ≥ 0
Minimization Example 1

A dietician is preparing a diet consisting of 2 foods A and B.

each unit of food A contains 20 grams of proteins, 12 grams
of fat and 15 grams of carbohydrates and costs Br 4. Each unit
of food B, 30 grams of protein, 6 grams of fat and 15 grams
of carbohydrates and costs Br 3. The diet being prepared must
contain the following minimum requirements of at least 60
grams of protein, at least 24 grams of fat and at least 30
grams of carbohydrates. How many units of each food should
be used in the diet so that all the minimum requirement
satisfied and we have a diet whose cost is minimal?
Conti…

Step 1: Problem definition. To determine the number of units of

each food to be used in the diet to minimize cost satisfying the
requirements.

Step 2: Represent the decision variables.

X1 = The number of units of Food A
X2 = The number of units of Food B
C = Total cost

Step 3: Develop the objective function.

Max Z = 4x1 + 3x2
Conti…

Step 4: List the constraints.

Protein: 20x1 + 30x2 ≥ 60
Fat: 12x1 + 6x2 ≥ 24
Carbohydrate: 15x1 + 15X2 ≥ 30
Non-negativity: X1, x2 ≥ 0

Therefore, the complete LPM is:

Min C = 4x1 + 3x2

Subject to:
Protein: 20x1 + 30x2 ≥ 60
Fat: 12x1 + 6x2 ≥ 24
Carbohydrate: 15x1 + 15X2 ≥ 30
Non-negativity: X1, x2 ≥ 0
Example 2
35

Two machines (1 and 2) produces two grades of tyres A and

B. In 1 hr of operation, machine I produces 20 units of grade A
and 40 units of grade B tyres. Whereas, machine 2 produces,
30 units of grade A and 40 unis of grade B tyres. The
machines are required to meet the production schedule. At
least 1400 grade A and 1200 units of grade B tyres. The cost
of operating machine I is Br 50/hr and the cost of operating
machine 2 is Br 80/hr.

Q. Formulate the linear programming model if the objective is

to minimize the cost of operating the machine.
Conti…
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Step 1: Problem definition. To determine the number of hours

machine I and machine II operate in order to minimize cost
satisfying the production requirement.

Step 2: Represent the decision variables.

X1 = The number of hours machine I operates
X2 = The number of hours machine II operates
C = Total cost

Step 3: Develop the objective function.

Max Z = 50x1 + 80x2
Conti…
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Step 4: List down the constraints.

Grade A : 20x1 + 30x2 ≥ 1400
Grade B : 40x1 + 40x2 ≥ 1200
Non-negativity: X1, x2 ≥ 0

Therefore, the complete LPM is:

Min C = 50x1 + 80x2

Subject to:
Grade A : 20x1 + 30x2 ≥ 1400
Grade B : 40x1 + 40x2 ≥ 1200
Non-negativity: X1, x2 ≥ 0
Example 3
38

A chemical corporation produces a chemical mixture for the

customer in 1000- pound batches. The mixture contains three
ingredients- Zinc, mercury and potassium. The mixture must
conform to formula specifications (i.e., a recipe) supplied by a
customer. The company wants to know the amount of each
ingredient to put in the mixture that will meet all the requirements
of the mix and minimize total cost. The customer has supplied the
following formula specifications for each batch of mixture.

 The mixture must contain at least 200 lb of mercury

 The mixture must contain at least 300 lb of zinc
 The mixture must contain at least 100 lb of potassium

The cost per pound of mixture is Birr 4 of mercury, Birr 8 of zinc

and of potassium Birr 9. Required: Formulate LPM for the problem
Conti…
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Step 1: Problem definition. To determine the amount of

ingredients of Zinc, mercury and potassium to produce a
chemical mixture

Step 2: Represent the decision variables.

X1 = number of lb of mercury in a batch
X2 = number of lb of zinc in a batch
X3 = number of lb of potassium in a batch
C = Total cost

Step 3: Develop the objective function.

Zmin = 4x1 + 8x2 + 9x3
Conti…
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Step 4: List the constraints.

X1 ≥ 200 lb
X2 ≥ 300 lb
X3 ≥100 lb
Finally, the sum of all ingredients must equal 1000 pounds.
x1 + x2 + x3 = 1000 lb
Therefore, the complete LPM is:
Zmin = 4x1 + 8x2 + 9x3
Subject to:
X1 ≥200 lb
X2 ≥300 lb
X3 ≥100 lb
x1 + x2 + x3 = 1000 lb
Non-negativity: X1, x2 ≥ 0
Solutions to linear programming problems
41

There are two methods for solving linear programming

problems:

A. The geometric approach - Graphic method

B. The simplex approach - Algebric method

Definitions of some terms
42

 Solution The set of values of decision variables xj (j = 1,2,…, n)

which satisfy the constraints of an LP problem is said to
constitute solution to that LP problem.

 Feasible solution The set of values of decision variables xj (j =

1,2,…, n) which satisfy all the constraints and non- negativity
conditions of an LP problems simultaneously is said to constitute
the Feasible solution to that LP problem.

 Infeasible solution is a solution for which at least one constraint

is not satisfied.

 Feasible region is a collection of all feasible solutions.

Conti…
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 Optimal solution is a feasible solution that has the most

favorable value of the objective function.

 Basic feasible solution: A feasible solution to LP problem which

is also the basic solution is called the basic feasible solution.
That is, all basic variables assume non-negative values. Basic
feasible solutions are of two types:

 Degenerate: A basic feasible solution is called degenerate if

value of at least one basic variable is zero.
 Non-degenerate: A basic feasible solution is called non-
degenerate if value of all m basic variables are non- zero
and positive.
Conti…
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 Optimal Basic feasible solution: A basic feasible solution which

optimizes the objective function value of the given LP problem is
called an optimal basic feasible solution.

 Most favorable value is the largest value if the objective function

is to be maximized, whereas it is the smallest value if the
objective function is to be minimized.

 Multiple optimal solution – More than one solution with the same
optimal value of the objective function.
Conti…
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 Unbounded solution – If the value of the objective function can

be increased or decreased indefinitely such solutions are called
unbounded solution.

 Corner point feasible solution is a solution that lies at the corner

of the feasible region.
Geometric method
46

Geometric approach is applied when there are only two decision

variables.

Steps in the graphic method

Step 1: Form a mathematical model of the problem. This step deals

with the expression of the completed LPM.

Step 2: Graph each of the constraints and identify its region.

Here it is the conversion of the inequalities into equalities.
Conti…
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 Step 3: Determine the region or area that contains all the points
that satisfy the entire set of constraints. Then,

 Determine the values of the decision variables at each of the

corner points. This can be done either by observation or by
solving 2 equations simultaneously.

 Substitute the values of the decision variables at each corner

point into the objective function to compute its value.
Conti…
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 Step 4: select the one with the highest or lowest value of the
objective function depending on the optimization case and make
an interpretation.

 If the objective function is maximization, we can select the

highest value. When it is minimization, we may select the
lowest value.
Conti…
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Example 1: Solve the equations through graphical method

Max Z = 80x1 + 55x2
Subject to
4x1+ 2x2 ≤ 40
2x1 + 4x2 ≤ 32
x1 ≥ 0 , x2 ≥ 0
Conti…
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Step 1: Write the completed LPM

Max Z = 80x1 + 55x2
Subject to
4x1+ 2x2 ≤ 40
2x1 + 4x2 ≤ 32
x1 ≥ 0 , x2 ≥ 0
Conti…
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Step 2: Graph the constraints

The first constraint 4x1+ 2 x2 ≤ 40, written in a form of equation

4x1+ 2 x2 = 40
Let x1 =0, then x2 = 20
Let x2 =0, then x1 = 10
The coordinates are (0, 20) and (10, 0)

The second constraint 2x1 + 4x2 ≤ 32, written in a form of equation

2x1 + 4x2 =32
Let x1 =0, then x2 = 8
Let x2 =0, then x1 = 16
The coordinates are (0, 8) and (16, 0)
Conti…
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The graphical representation is:

Conti…
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Step 3: Identify the common regions

Extreme Coordinates How determined Value of the objective function
point Max Z = 80x1 + 55x2
X1 X2
A 0 8 Observation 440
B 8 4 Simultaneous 860
C 10 0 Observation 800

Step 4: Select the optimal

The maximum value is obtained at the point B. Therefore Max Z =

860 and x1 = 8, x2 = 4
Conti…
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Example 2: Solve the equations through graphical method

Minimize Z = 10x1 + 4x2
Subject to
3x1 + 2x2 ≥ 60
7x1 + 2x2 ≥ 84
3x1 +6x2 ≥ 72
x1 ≥ 0 , x2 ≥ 0
Conti…
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Step 1: Write the completed LPM

Minimize Z = 10x1 + 4x2
Subject to
3x1 + 2x2 ≥ 60
7x1 + 2x2 ≥ 84
3x1 +6x2 ≥ 72
x1 ≥ 0 , x2 ≥ 0
Conti…
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Step 2: Graph the constraints

The first constraint 3x1 + 2x2 ≥ 60, written in a form of equation 3x1 + 2x2 = 60
Let x1 =0, then x2 = 30, let x2 =0, then x1 = 20 and the coordinates are (0, 30)
and (20, 0)

The second constraint 7x1 + 2x2 ≥ 84, written in the equation 7x1 + 2x2 = 84
Let x1 =0, then x2 = 42, let x2 =0, then x1 = 12 and the coordinates are (0, 42)
and (12, 0)

The third constraint 3x1 +6x2 ≥ 72, written in a form of equation 3x1 +6x2 = 72
Put x1 =0, then x2 = 12 and let x2 =0, then x1 = 24 and the coordinates are (0,
12) and (24, 0)
Conti…
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The graphical representation is

Conti…
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Step 3: Identify the common regions

Extreme Coordinates How determined Value of the objective function
point Max Z = 10x1 + 4x2
X1 X2
A 0 42 Observation 168
B 6 21 Simultaneous 144
C 18 3 Simultaneous 192
D 24 0 Observation 240

Step 4: Select the optimal

The minimum value is obtained at the point B. Therefore Min Z
= 144 and x1 = 6, x2 = 21
Special cases in graphical method
59
2. No Optimal Solution
60
3. Unbounded Solution
61
The simplex method
62

 Is an iterative (repetitive) algebraic process that moves

automatically from one basic feasible solution to another,
improving the situation each time until an optimal solution is
reached.

 We use an algebraic method called the simplex method, which

was developed by George B. DANTZIG (1914-2005) in 1947
while an assignment with the U.S. Department of the air force.
Simplex Tableau
63

 Most real-world problems are too complex to solve graphically.

 They have too many corners to evaluate, and the algebraic

solutions are lengthy.

 A simplex tableau is a way to systematically evaluate variable

mixes in order to find the best one.
Initial Simplex Tableau
64

All variables Solution

Basic variables coefficients

0
Simplex Method
65

 Step 1. Write the Problem in Standard Form

 Characteristics of the problem:
 All constraints are expressed in the form of equalities or
equations.
 All right hand sides are non-negative
 All variables are non-negative

 Rules to follow while Standardization/Tableau Form/:

Step 2. Develop an Initial Simplex Tableau
66

 1) List the variables in the model across the top of the tableau.

 2) Next fill-in the parameters of the model in the appropriate

rows and columns.

 3) Add two columns to the left side of the tableau. The first
column is a list of variables called Basis.

 4) The C at the top second column indicates that the values in

that column and the values in the top row are objective function
coefficients.
Conti…
67

 5) The last column at the right is called the quantity column. It

refers to the right hand side values (RHS) of the constraints.

 6) There are two more rows at the bottom of the tableau. The first
raw is a Z - row. For each column the Z – value is obtained by
multiplying each of the number of the column by their respective
row coefficient in column C.

 7) The last raw is Cj-Z row. The values in this row are also
calculated column by column. For each Column, the value in row
Z is subtracted from the C value in the top row.
Conti…
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 Step 3. Determining the Entering Variable

 For a maximization problem; the entering variable is identified

as the one which has the largest positive value in Cj-Z row.
This column corresponding to the entering variable is called
pivot column.

 In a minimization problem, the entering variable is the one

which has the largest negative Cj-Z row value in the simplex
tableau.
Conti…
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 Step 4. Determining the Leaving Variable

 The leaving variable is identified as the one with the smallest

non-negativity ratio for quantity divided by respective positive
pivot columnar entries.

 The row of the leaving variable is called pivot row.

Conti…
70

 Step 5. Drive the Revised Tableau for Improved Solution

 Divide each element of the pivot raw (including quantity) by

the pivot element to get the corresponding value in the new
tableau. The divided raw value is called the replacement raw.

 For each raw other than the pivot raw;

 New raw element = old raw element – (raw element in pivot

column X corresponding replacement value.)
Conti…
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 Step 6. Check for Optimality

 Remark:
 A simplex solution for a maximization problem is optimal if
and only if cj – z row contains only zeros and negative
value (i.e. if there are no positive values in the cj – z row).

 The simplex solution for a minimization problem is optimal

if Cj-Z row contains only zero and positive values (Cj-Z ≥
0).

 Note: if the solution is not optimal the steps 2-6 will be repeated
again and again until the optimal solution is obtained!
Example
72

 Z Max = 60X1+50X2
Subject to

Assembly time 4x1 + 10x2 ≤ 100

Inspection time 2x1 + 1x2 ≤ 22
Storage space 3x1 + 3x2 ≤ 39
X1, X2 > = 0

 Solve through Simplex Algorithm

Develop Initial Tableau
73
Undertake row operations
74
Conti…
75

 In computing for the new row values from our initial simplex
tableau, we first multiply the second constraint by ½ obtaining
the values as follows:
 1X1+1/2X2+0S1+1/2S2+0S3 = 11, which results in making
the pivot element 1.
 Next, we multiply the above new row values by 4 and subtract it
from the first constraint obtaining the following results:
 0X1+8X2+1S1+2S2+0S3 = 56.

 Then, we multiply the new row values in the pivot row by 3 and
subtract it from the third constraint resulting as follows:
 0X1+3/2X2+0S1-3/2S2+1S3 = 6
Conti…
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 Having these new row values, we develop the second simplex

tableau as shown below.
Conti…
77

 Interpretation of the Second Simplex Tableau

 The profit obtained at this point of solution is $660. In the Cj-Zj

row, we search for the highest positive value. If there is, it means
that we can further improve this solution. Therefore, we have a
positive value in the Cj-Zj row which indicates that this is not the
optimal solution. As a result, we go for the next tableau.
Developing the Third Tableau
78

 Here, we select the entering and the leaving variables.

 The entering variable is the one with the highest Cj-Zj row value
which is the X2 column. This means that bringing one unit of X2
into the solution increases profit by $20. Therefore, the X2 will be
the entering variable designated as the pivot column.

 To determine the leaving the variable, we divide the values in the

pivot column by their corresponding row values in the quantity
column. The result obtained, as shown in the table below
indicates that S3 is the leaving variable with the smallest non-
negative ratio. This means that S3 is the most limiting resource
for how much units of X2 can be made.
Conti…
79
Conti…
80

 After identifying the entering and the leaving variables, we

perform elementary row operations as follows. To obtain a unit
vector with 1 in the pivot element, we multiply the pivot row by
2/3 resulting as follows:
 0X1+1X2+0S1+-1S2+2/3S3 = 4

 Then, multiply the above new row values by 8 and subtract it

from the first constraint (row) resulting as follows:
 0X1+0X2+1S1+6S2+-16/3S3 = 24.

 For row 2, first multiply the new row values in the pivot row by
½ and subtract it from the second row resulting as follows:
 1X1+0X2+0S1+1S2+-1/3S3 = 9.

 And the third tableau looks like the following.

Conti…
81

 Interpreting the Third Tableau

 All the values in the Cj-Zj row are zero and negative indicating
that there cannot be additional improvement. This makes the
third tableau to contain the optimal solution with the following
basic variables: S1 = 24, X1 = 9, and X2 = 4 producing a
maximum profit of $740.
Minimization Case
82

 The Big-M Method is a technique, 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 cost

(also called penalty) is assigned to each of these variables.
Following are the characteristics of Big-M Method:
Conti…
83

 Example: Assume the following minimization problem.

ZMin = 7X1+9X2
Subject to 3X1+6X2 >= 36
8X1+4X2 > = 64
X1, X2 > = 0
Conti…
84

 We introduce both surplus and artificial variables into both

constraints as follows.

ZMin = 7X1+9X2+0S1+0S2+MA1+MA2
Subject to 3X1+6X2 - S1+A1 = 36
8X1+4X2 - S2+A2 = 64
X1, X2 > = 0
Conti…
85

 So the subsequent tableaus for this problem are shown below. To

remind in these tableaus is in transforming from one tableau to
another, we perform elementary row operations to obtain the unit
vector in the pivot column for the entering variable into the
solution. Initial Simplex Tableau
Cj 7 9 0 0 M M Quantity
Basic V. X1 X2 S1 S2 A1 A2
A1 M 3 6 -1 0 1 0 36
A2 M 8 4 0 -1 0 1 64
Zj 11M 10M -M -M M M 100M
Cj-Zj 7-11M 9-10M M M 0 0
Conti…
86

 Second Simplex Tableau

Cj 7 9 0 0 M Quantity
Basic V. X1 X2 S1 S2 A1
A1 M 0 9/2 -1 3/8 1 12
X1 7 1 ½ 0 -1/8 0 8
Zj 7 7/2+9/2M -M 3/8M-7/8 M 56+12M
Cj-Zj 0 11/2-9/2M M 7/8-3/8M 0
Conti…
87

 Third Simplex Tableau

Cj 7 9 0 0 Quantity
Basic V. X1 X2 S1 S2
X2 9 0 1 -2/9 1/12 8/3
X1 7 1 0 1/9 -1/6 20/3
Zj 7 9 -11/9 -5/12 212/3
Cj-Zj 0 0 11/9 5/12

 The third tableau represents a final tableau since it is the optimal

solution with entirely zeros and non-negative values in the Cj-Zj
row. Therefore, the optimal solution is: X1 = 20/3 and X2 = 8/3
and value of objective function is 212/3.
Summary
88
Self check questions
89

 1. A firm uses three machines M1, M2 and M3 in the manufacture

of three products A, B and C. Each unit of A requires 3, 2 and
1hrs on M1, M2 and M3 respectively. Each unit of B requires 4, 1
and 3 hours on M1, M2 and M3 respectively while each unit of C
requires 2hrs each on M1, M2 and M3 respectively. The machine
hours available on the three machines are 90, 54 & 93 hours
respectively. The profit contributions of the three products are
rupees 30, 40 & 35 per unit respectively.

 a) Formulate the above case as linear programming problem

 b) Obtain optimal solution to the problem by using simplex
method. Which of the three products shall not be produced by
the firm? Why?
Conti…
90

 c) Calculate the percentage of capacity utilization by the firm in

the optimal solution
 d) What are the shadow prices of the machine hours?

 e) Is the optimal solution degenerate?

 f) Is the optimal solution unique?

 g) If a customer demands the product not allowed by the

optimal solution what should be the approach of the
Operations Manager?
Conti…
91

 2. A company manufactures two types of belts A & B. The profits

are $. 0.40/- & $. 0.30/- per belt respectively. Time required for
manufacturing A is twice the time required for B. If the company
were to manufacture only B type of belts they could make 1000
units per day. Leather available for production is only worth 800
belts per day (A & B combined). Belt A requires a fancy buckle
availability of which is restricted to 400 units per day. Buckles
required for B are available only 700 per day. What should the
daily production plan be for belts A & B? Formulate the problem
as LPP and use graphical method to solve the problem.
92