HARAMAYA UNIVERSITY

College of Business and Economics Department

of Management (MBA Program)
Quantitative techniques for management
Decisions
Individual Assignment

NAME ID
Aklilu Girma Sileshi C/PGP/29/15

Submitted to: Admekew Haile (Assistance Professor, P H D Fellow)

November -2023
Dire Dawa Ethiopia
1. Formulate the l.p.p. and solve the below given problem graphically. Old hens can be bought
for br 2 each but young ones costs br 5 each. The old hens lay 3 eggs per week and the young
ones lay 5 eggs per week. Each egg costs br 0.3. A hen costs br 1 per week to feed. If the
financial constraint is to spend br 80 per week for hens and the capacity constraint is that
total number of hens cannot exceed 20 hens and the objective is to earn a profit more than br
6 per week, find the optimal combination of hens.
Solution: Let x be the number of old hens and y be the number of young hens to be bought.
Now the old hens lay 3 eggs and the young one lays 5 eggs per week. Hence total number of
eggs one get is 3x + 5y.
Total revenues from the sale of eggs per week is Rs. 0.30 (3x + 5y) i.e., 0.90 x + 1.5 y Now the
total expenses per week for feeding hens is Re.1 (1x + 1y) i.e., 1x + 1y.
Hence the net income = Revenue – Cost = (0.90 x + 1.5 y) – (1 x + 1 y) = – 0.1 x + 0.5 y or 0.5y
– 0.1 x. Hence the desired l.p.p. is Maximise Z = 0.5 y – 0.1 × S.T.
2 x + 5 y ≤ 80
1x + 1y ≤ 20 and both x and y are ≥ 0 The equations are:
Maximise Z = 0.5 y – 0.1 × S.T.
2 x + 5 y = 80
1x + 1y = 20 and both x and y are ≥ 0
In the figure 2.13, which shows the graph for the problem, the isoprofit line passes through the
point C. Hence Zc = Z (0,16) = Br.8.00. Hence, one has to buy 16 young hens and his weekly
profit will be Br.8.00

Figure 1. Graph for the problem 1

2. You’re on a special diet and know that your daily requirement of five nutrients is 60
milligrams of vitamin C, 1,000 milligrams of calcium, 18 milligrams of iron, 20 milligrams of
niacin, and 360 milligrams of magnesium. You have two supplements to choose from: Vega
Vita and Happy Health. Vega Vita costs 20 cents per tablet, and Happy Health costs 30 cents
per tablet. Vega Vita contains 20 milligrams of vitamin C, 500 milligrams of calcium, 9
milligrams of iron, 2 milligrams of niacin, and 60 milligrams of magnesium. Happy Health
contains 30 milligrams of vitamin C, 250 milligrams of calcium, 2 milligrams of iron, 10
milligrams of niacin, and 90 milligrams of magnesium. How many of each tablet should you
take each day to meet your minimum requirements while spending the least amount of
money?
Solution:
A good way to organize this is to make a chart or table listing the requirements, costs, and
amount of nutrients in each tablet.

With all the information organized into the table, it’s time to solve for the number of tablets that
will minimize your cost using linear programming.
1. Choose variables to represent the quantities involved. The quantities here are the number
of tablets. Let a tablet of Vega Vita be represented by v and a tablet of Happy Health be
represented by h.
2. Write an expression for the objective function using the variables. The goal is to spend
the smallest amount of money necessary (so you want the minimum). Vega Vita costs 20
cents per tablet, and Happy Health costs 30 cents per tablet. Minimize: $0.20v + $0.30h
3. Write constraints in terms of inequalities using the variables. The constraints are all in
terms of meeting the daily requirements. Each requirement has at least in its form, so you
use the greater than or equal to symbol in your equations.

It makes no sense to have a negative number of tablets, so you add the two constraints

This keeps the graph in the first quadrant.

4. Graph the feasible region using the constraint statements. The graph will be completely
in the first quadrant and will be boundless; the solution area extends forever upward and
to the right, as shown in the figure. You’re more concerned with the points closer to the
axes, though.
 Graphing the
combinations of nutrients in the two tablets.
5. Identify the corner points of the feasible region. There are four corner points. Two of the
corner points are where lines corresponding to the constraints intersect, and the other two
lie on the axes.
o Intersection of 9v + 2h = 18 and 60v + 90h = 360:

o Intersection of 60v + 90h = 360 and 2v + 10h = 20:

o Intercept on vertical axis: (0, 9)

o Intercept on horizontal axis: (10, 0) The following figure shows the feasible with
the corner points labeled.
 Some of the
intersections involve fractions.
6. Find and compare the values at the corner points to determine the solution. You see that
two of the intersections contain fractions of tablets. Yes, you can buy one of those handy-
dandy pill cutters, but these are pretty strange fractions. It’s best to just round the
numbers up to a whole number (a whole tablet). So the corner points you’ll consider are
(2, 4), (5, 2), (0, 9), and (10, 0).

It appears that you have two choices. You can either take two Vega Vita and four Happy Health
each day or five Vega Vita and two Happy Health each day. They cost the same amount. Of
course, the first choice is fewer pills, but the Vega Vita may be easier to swallow. It’s up to you.

3. A manufacturing company makes two models A and B of a product. Each piece of Model A
requires 9 labor hours for fabricating and 1 labor hour for finishing. Each piece of Model B
requires 12 labor hours for fabricating and 3 labor hours for finishing. For fabricating and
finishing, the maximum labor hours available are 180 and 30 respectively. The company
makes a profit of Br. 8000 on each piece of model A and Br. 12000 on each piece of Model B.
How many pieces of Model A and Model B should be manufactured per week to realize a
maximum profit? What is the maximum profit per week?
Solution :
Suppose x is the number of pieces of Model A and y is the number of pieces of Model B. Then
Total profit (in Rs) = 8000 x + 12000 y
Let Z = 8000 x + 12000 y
We now have the following mathematical model for the given problem.
Maximise Z = 8000 x + 12000 y ... (1)
subject to the constraints: 9x + 12y ≤ 180 (Fabricating constraint)
i.e. 3x + 4y ≤ 60 ... (2)
x + 3y ≤ 30 (Finishing constraint) ... (3)
x ≥ 0, y ≥ 0 (non-negative constraint) ... (4)
The feasible region (shaded) OABC determined by the linear inequalities (2) to (4) is shown in
the below figure. Note that the feasible region is bounded.
Let us evaluate the objective function Z at each corner point as shown below:

We find that maximum value of Z is 1,68,000 at B (12, 6). Hence, the company should produce
12 pieces of Model A and 6 pieces of Model B to realise maximum profit and maximum profit
then will be Br. 1, 68,000.
4. A company manufactures three products namely X, Y and Z. Each of the product require
processing on three machines, Turning, Milling and Grinding. Product X requires 10 hours
of turning, 5 hours of milling and 1 hour of grinding. Product Y requires 5 hours of turning,
10 hours of milling and 1 hour of grinding, and Product Z requires 2 hours of turning, 4
hours of milling and 2 hours of grinding. In the coming planning period, 2700 hours of
turning, 2200 hours of milling and 500 hours of grinding are available. The profit
contribution of X, Y and Z are Br 10, Br 15 and Br 20 per unit respectively. Find the optimal
product mix to maximize the profit.
Solution: The given data can be written in a table.
Product

Machine Time required in hours per Available

unit hours
X Y X

Turning. 10 5 2 2,700
Milling 5 10 4 2,200
Grinding. 1 1 2 500
Profit 10 15 20
contribution in
Br. per unit.

Let the company manufacture x units of X, y units of Y and z units of Z

Inequalities: Equations:
Maximise Z = 10x + 15 y + 20 z S.T. Maximise Z = 10x +15y +20x S.T
10 x+ 5y + 2z ≤ 2,700 10x + 5y + 2z +1S1 =
2700
5x + 10y + 4z ≤ 2,200 5x + 10y + 4z + 1S2 =
2200
1x + 1y + 2z ≤ 500 and 1x + 1y + 2z + 1S3 = 500
and
All x, y and z are ≥ 0 x, y and z all ≥ 0
Simplex format:
Maximise Z = 10x + 15y + 20z + 0S1 + 0S2 + 0S3 S.t. 10x
+5y + 2z + 1S1 + 0S2 + 0S3 = 2700
5x + 10y + 4z + 0S1 + 1S2 + 0S3 = 2200
1x + 1y + 2z + 0S1 + 0S2 + 1S3 = 500
And all x, y, z, S1, S2, S3 are ≥ 0

Table I. x = 0, y = 0, z = 0, S1 = 2700, S2 = 2200, S3 = 500. Profit Z = Br. 0

 Programme Profit Capacity C j =10 15 20 0 0 0 Replacement Check
x y z S1 S2 S3 ratio column.

S1 0 2700 10 5 2 1 0 0 2700/2 = 13500 2718

S2 0 2200 5 10 4 0 1 0 2200/4 = 550 2220
S3 0 500 1 1 2 0 0 1 500/2 = 250 505
Net 10 15 20 0 0 0
evaluation

{Note: The check column is used to check the correctness of arithmetic calculations. The
check column elements are obtained by adding the elements of the corresponding row starting
from capacity column to the last column (avoid the elements of replacement ration column). As
far as treatment of check column is concerned it is treated on par with elements in other columns.
In the first table add the elements of the row as said above and write the elements of check
column. In the second table onwards, the elements are got by usual calculations. Once you get
elements, add the elements of respective row starting from capacity column to the last column of
identity, then that sum must be equal to the check column element.}
Table: II. x = 0, y = 0, z = 250 units, S1 = 2200, S2 = 1200, S3 = 0 and Z = Br. 20 × 250
= Br. 5,000.
Programme Profit Capacity C j =10 15 20 0 0 0 Check Replacement
x y z S1 S2 S3 column. ratio

S1 0 2210 9 4 0 1 0 –1 2213 552.5

S2 0 1200 3 8 0 0 1 –2 1210 150
Z 20 250 0.5 0.5 1 0 0 0.5 500 500
Net 0 5 0 0 0 – 10
Evaluation.

Profit at this stage = Br. 20 × 250 = Br. 5,000 and Shadow price = 10 × 500 = Br. 5000.
Table: III. x = 0, y = 150, z = 174.4, S1 = 1600, S2 = 0, S3 = 0 and Z = Br. 5738/–
Programm Profi Capacit Replacemen
e t y Cj=10 15 20 0 0 0 Check t
x y z S1 S2 S3 column Ratio
.
S1 0 1600 7.5 0 0 1 –0.5 0 1608

Y 15 150 0.375 1 0 0 0.125 – 151.25

0.25
Z 20 174.4 0.311 0 1 0 – 0.626 423.7
0.063
Net Evn. –1.85 0 0 0 – –
 0.615 8.77
As all the elements of Net evaluation row are either zeros or negative elements, the solution
is optimal. The firm has to produce 150 units of Y and 174.4 units of Z. The optimal profit = 15
× 150 +
20 × 174.4 = Br.5738 /–
To check the shadow price = 0.615 × 2200 + – 8.77 × 500 = 1353 + 4385 = Br. 5738 /–.

5. A company produces three products A, B and C by using two raw materials X and Y. 4000
units of X and 6000 units of Z are available for production. The requirement of raw materials
by each product is given below
Requirement per unit of
Raw material product
A B C
X 2 3 5
Y 4 2 7
The labor time for each unit of product A is twice that of product B and three times that of
product C. The entire labor force of the company can produce the equivalent of 2500 units of
product A. A market survey indicates the minimum demand of the three products are 500, 500
and 375 respectively for A, B and C. However, their ratio of number of units produced must
be equal to 3: 2: 5. Assume that the profit per units of product A, B and C are brr 60/unit ,
40/unit and 100 /unit respectively. Formulate the L.P.P. for maximizing the profit.

Solution:
Let the company manufactures a units of A, b units of B and c units of C. The constraints for raw
materials are
2a + 3b + 5c ≤ 4000 …(1)
4a +2b + 7c ≤ 6000 ...(2)
Now let 't' be the labour time required for one unit of product A, then the time required for per
unit of product B is t/2 and that for product C is t/3. As 2500 units of A are produced, the total
time available is 2500 t. Hence the constraints for time are:
ta + t/2 b + t/3 c ≤ 2500t
i.e., a + 1/2 t b + 1/3 t c ≤ 2500 ...(3)
Now the market demand constraints are: a ≥ 500, b ≥ 500 and c ≥ 375 ...(4)
As the ratio of production must be 3 : 2 : 5,
A = 3k. b = 2k and c = 5k which gives the equations:
1/3 a = 1/2/ b and 1/2 b = 1/5 c …(5)
The objective function is Maximise Z = 60 a + 40 b + 100 c
Hence the Linear programme in the form inequalities for the above problem is:
Maximise Z = 60 a + 40b + 100c s.t.
2a + 3b + 5c ≤ 4000
4a + 2b + 7c ≤ 6000
1a + 1/2 b + 1/3 c ≤ 2500
1/3 a = 1/3 b ½ b = 1/5 c
a ≥ 500, b ≥ 500 and c ≥ 375
As the last constraint shows that the values of all the variables are ≥ 0, the same constraint will
become non-negativity constraint.

6. A company manufactures two product A and B. These are machined on machines X and Y.
A takes one hour on machine X and one hour on Machine Y. Similarly product B takes 4
hours on Machine X and 2 hours on Machine Y. Machine X and Y have 8 hours and 4 hours
as idle capacity. The planning manager wants to avail the idle time to manufacture A and B.
The profit contribution of A is br 3/per unit and that of B is br 9/ per unit. Find the optimal
product mix.
Solution:
Simplex format is:
Maximize Z = 3a + 9b s.t. Maximize Z = 3a + 9b + 0S1 +
0S2 s.t.
1a + 4b ≤ 8 1a + 4b + 1S1 + 0S2 = 8
1a + 2b ≤ 4 both a and b are ≥ 0 1a + 2b + 0S1 + 1S2 = 4 and a, b,
S1, S2 all ≥ 0.

Table: I. A = 0, b = 0, S1 = 8, S2 = 4 and Z = Br.0/–

Problem Profit Cj 3 9 0 0 Replacement
variable Rs. Capacity a b S1 S2 ratio

S1 0 8 1 4 1 0 8/4 = 2

S2 0 4 1 2 0 1 4/2 = 2

Net evaluation 3 9 0 0

Now to select the out going variable, we have to take limiting ratio in the replacement ratio
column. But both the ratios are same i.e. = 2. Hence there exists a tie as an indication of
degeneracy in the problem. To solve degeneracy follow the steps mentioned below:
(i) Divide the elements of identity column by column from left to right by the corresponding key
column element.
Once the ratios are unequal select the lowest ratio and the row containing that ratio is the key
row.
In this problem, for the first column of the identity (i.e. the S1 column) the ratios are: 1/4, and
0/2. The lowest ratio comes in row of S2. Hence S2 is the outgoing variable. In case ratios are
equal go to the second column and try.
Table: II. a = 0, b = 2, S1 = 0, S2 = 0, Z = Br. 18/–
Problem Profi 3 9 0 0 Replacement
t Cj
variable Rs. Capacity a b S1 S2 ratio
S1 0 0 1 –2 –1 0
b 9 2 0 1/2 1/2 1
Net
0 – 9/2 – 3/2 0
evaluation
Optimal solution is b = 2 and Profit is 2 × 9 = Br. 18/–

7.1 Solve the following L.P.P.

Maximize Z = 1a + 2b + 3c – 1d S.t.
1a + 2b + 3c = 15
2a + 1b + 5c = 20
1a + 2b + 1c + 1f = 10 and a, b, c, f all are ≥ 0.
Solution:
In this problem given constraints are equations rather than inequalities. Also by careful
examination, we can see that in the third equation variable ‘f ’ exists and it also exists in
objective function. Hence we consider it as a surplus variable and we add two more slack
variables ‘d’ and ‘e’ is added to first and second equations. But the cost coefficient in objective
function for variables d and e will be –M. When we use big M in maximization problem, we
have to use –M in objective function. While solving the problem, all the rules related to solving
maximization problem will apply. Hence now the simplex format of the problem is as follows:
Maximize Z = 1a + 2b + 3c – 1d – Me – Mf s.t.
1a + 2b + 3c + 1d + 0e + 0f = 15
2a + 1b + 5c + 0d + 1e + 0f = 20
1a + 2b + 1c + 0d + 0e + 1f = 10 and a, b, c, d, e, f all = 0.
Table I. a = 0, b = 0, c = 0, d = 15, e = 20, f = 10 and Z = Rs. 0.
 Problem Profit Cj Capacity, 1 2 3 –1 –M –M Replacement
variable Rs. units a b c d e f ratio

d –1 15 1 2 3 1 0 0 5

e –M 20 2 1 5 0 1 0 4

f –M 10 1 2 1 0 0 1 10

Net 2 + 3M4 + 3M4 + 8M 0 0 0

evaluation.

Table II. A = 0, b = 0, c = 4, d = 0, e = 0, f = 0., Z = Rs. 3 × 4 = Rs. 12.

Problem ProfitC j Capacity, 1 2 3 –1 –M –M Replacement
Variable Rs. units a b c d e f Ratio

d –1 6 3/5 9/5 0 1 0 0 30/9

c 3 4 2/5 1/5 1 0 0 0 20

f –M 3 – 1/5 7/5 0 0 1 1 15/7

Net 2/5 + M /5 16/5 + 7/5M 0 M –M 0

evaluation.

TableL: III. a = 0, b = 15/7, c = 25/7, d = 15/7, e = 0, f = 0, Z = Rs. 107 – 15/7 = Rs.92.

Problem Profit Profit 1 2 3 –1 –M –M
variable Rs. capacity a b c d e f

d –1 15/7 6/7 0 0 1 0 0

c 3 25/7 3/7 0 1 0 – 5/7 – 5/7

b 2 15/7 – 1/7 1 0 0 5/7 5/7

Net 6/7 0 0 0 – M + 5/7 – M + 5/7

evaluation

Table: IV. a =5/2, b = 5/2, c = 5/2, d = 0, e = 0, f = 0, Z = Rs. 15/–

Problem Profi Profit 1 2 3 –1 –M –M
t
Variable Rs. capacity a b c d e f
a 1 5/2 1 0 0 7/6 0 0
c 3 5/2 0 0 1 – 1/2 – 5/7 – 5/7
b 2 5/2 0 1 0 1/6 5/7 5/7
0 0 0 – – M + – M = 5/7
4/12 5/7
As all the elements of net evaluation row are either zeros or negative elements, the solution is
optimal.
Z = Rs. 15/–. And a = b = c = 5/2.

7.2. Maximize 4x + 3y s.t.

1x + 1y ≤ 50
1x + 2y ≥ 80
3x + 2y ≥ 140
And both x and y ≥ 0
Solution:
Simplex format is
Maximize Z = 4x + 3y + 0S + 0p + 0q – MA1 – MA2 s.t.
1x +1y+ 1S + 0p + 0q + 0A1 + 0A2 = 50
1x + 2y +0S – 1p + 0q + 1A1 + 0A2 = 80
3x + 2y + 0S + 0p – 1q + 0A1 + 1A2 = 140 And both x and y ≥ 0 and x, y, S, p, q, A1 and A2 all
≥0
Table: I. X = 0, y, = 0, S = 50, p = 0 q = 0, A1 = 80, A2 = 140 and Z = Rs. 220 M.
Problem Profit Profit: 4 3 0 0 0 –M –M Replace–
variable Rs. capacity units x y S p q A1 A2 ment ratio

S 0 50 1 1 1 0 0 0 0 50

A1 –M 80 1 2 0 –1 0 1 0 40

A2 –M 140 3 2 0 0 –1 0 1 70

Net 4 + 4M3 + 4M 0 M M 0 0
evaluation.

Now in the net evaluation row the element under variable ‘x’ is 4 + 4M is greater than the
element 3 + 3M. But if we take ‘x’ as the incoming variable we cannot send artificial variable
out first. Hence we take ‘y’ as the incoming variable, so that A1 go out first.
Table: II. X = 0, y = 40, S = 10, A1 = 0, A2 = 60, p = 0, q = 0 and Z = Rs. 120 – 60 M.
Problem Profit Profit: 4 3 0 0 0 –M – M Replace–
variable Rs. capacity units x y S p q A1 A 2 ment ratio

S 0 10 0.5 0 1 0.5 0 – 0.5 0 20

y 3 40 0.5 1 0 – 0.5 0 0.5 0 80

A2 –M 60 2 0 0 2 –1 –2 1 30

Net 2.5 + 8M 0 0 1.5 – 2M – M– 1.5 – 3M 0

evaluation.
Table: III. x = 20, y = 30, p = 0, q = 0, A1 = 0, A2 = 20, Z = Rs. 170/–
Problem Profit Profit: 4 3 0 0 0 –M – M Replace–
variable Rs. capacity x y S p q A1 A2 ment ratio
units
x 4 20 1 0 2 1 0 –1 0
y 3 30 0 1 –1 –1 0 1 0
A2 –M 20 0 0 –4 0 –1 0 1
Net 0 0 – 5 – –1 –M –M= 0
evaluation. 4M 1
In the last table though basis variables have the opportunity cost as 0, still artificial variable A2
exists in the problem, hence the original problem has no feasible solution.
X = 20, Y = 30.

8. Maximize Z = 107a + 1b + 2c s.t

14a +1b – 6c + 3d = 7
16a + ½ b + 6c ≤ 5
3a – 1b – 6c ≤ 0
a, b, c and d all ≥ 0.
Find the optimal solution
Solution:
We find that there is variable ‘d’ in the first constraint, with coefficient as 3. Second and third
constraints do not have variable ‘d’. Hence we can divide the first constraint by 3 we can write
as: 14/ 3 a + 1/3 b – 6/3 c + 3/3 d = 7/3. If we write like this, we can consider the variable 'd' as
slack variable.
Hence the given l.p.p. becomes as: Maximize Z = 107 a + 1b + 2c s.t
14/3a + 1/3b – 2c + 1d = 7/3
16a + ½ b – 6c ≤ 5 3a – 1b – 1c ≤ 0 and a, b,c, and d all ≥ 0 Simplex version is
Maximize Z = 107a + 1b + 2c + 0d + 0S1 + 0S2 s.t.
14/3 a + 1/3b – 2c + 1d + 0S1 + 0S2 = 7/3
16a + ½ b – 6c + 0d + 1S1 + 0S2 = 5 3a – 1b – 1c + 0d + 0S1 + 1S2 = 0 and a, b, c, d, S1, S2 all ≥ 0.
Table: I. a = 0, b = 0, c = 0, d = 7/3, S1 = 5, S2 = 0 and Z = Rs. 0.
 Problem Cost Cj 107 1 2 0 0 0 Replacement
variable Rs. Capacity units a b c d S1 S2 ratio

d 0 7/3 14/3 1/3 –2 1 0 0 7/14

S1 0 5 16 1/2 6 0 1 0 5/16

S2 0 0 3 –1 –1 0 0 1 0/3

Net evaluation 107 1 2 0 0 0

Table: II. a = 0, b = 0, c = 0, d = 7/3, S1 = 5, S2 = 0 and Z = Rs.0/–

Problem Cost Cj 107 1 2 0 0 0 Replacement
variable Rs. Capacity units a b c d S1 S2 ratio

d 0 7/3 0 17/9 – 4/9 1 0 – 14/9 —

S1 0 5 0 35/6 – 2/3 0 1 – 16/3 —

a 107 0 1 – 1/3 – 1/3 0 0 1/3 —

Net evaluation 0 110/3 113/3 0 0 107/3

As the elements of incoming variable column are negative we cannot workout replacement ratios
and hence the problem cannot be solved. This is an indication of existence of unbound solution
to the given problem.

9. A company manufactures two products X and Y on three machines Turning, Milling and
finishing machines. Each unit of X takes, 10 hours of turning machine capacity, 5 hours of
milling machine capacity and 1 hour of finishing machine capacity. One unit of Y takes 6
hours of turning machine capacity, 10 hours of milling machine capacity and 2 hours of
finishing machine capacity. The company has 2500 hours of turning machine capacity, 2000
hours of milling machine capacity and 500 hours of finishing machine capacity in the coming
planning period. The profit contribution of product X and Y are br 23 per unit and br 32 per
unit respectively. Formulate the linear programming problems and write the dual.
Solution:

Pro duct
Available
Department X Y Capacity
Turning 10 6 2500
Milling 5 10 2000
Finishing 1 2 500
Profit per unit in Rs. 23 32
Let us take the maximization problem stated to be primal problem. Associated with this
maximization problem is the minimization problem that is the dual of the given primal problem.
Let us try to formulate the dual by logical argument.
The primal problem is the seller’s maximization problem, as the seller wants to maximize his
profit. Now the technology, i.e., the machinery required are with the seller and they are his
available resources. Hence he has to prepare the plans to produce the products to derive certain
profit and he wants to know what will be his profit he can get by using the available resources.
Hence the buyer’s problem is:
Maximize 23 x + 32y s.t
10x + 6y ≤ 2500
5x + 10y ≤ 2000
1x + 2y ≤ 500 and both x and y ≥ 0 (This we shall consider as primal problem).
Associated with seller’s maximization problem is a buyer’s minimization problem. Let us
assume seller will pretend to be the buyer. The rationale is the buyer, it is assumed, will consider
the purchase of the resources in full knowledge of the technical specifications as given in the
problem. If the buyer wishes to get an idea of his total outlay, he will have to determine how
much must he pay to buy all the resources. Assume that he designates variables by a, b, c, to
represent per unit price or value that he will assign to turning, milling and finishing capacities,
respectively, while making his purchase plans. The total outlay, which the buyer wishes to
minimize, will be determined by the function 2500a + 2000b + 500c, which will be the objective
function of the buyer. The linear function of the objective function mentioned, must be
minimized in view of the knowledge that the current technology yields a profit of Rs. 23 by
spending 10 machine hours of turning department, 5 machine hours of milling department and 1
man-hour of finishing department. Similarly we can interpret other constraints also. Now the
buyer’s minimization problem will be: Minimize. Z = 2500a + 2000b + 500c s.t.
10a + 5b + 1c ≥ 23
6a + 10b + 2c ≥ 32 and all a, b, c, are ≥ 0 (This minimization version is the dual of seller’s
primal problem given above), where a, b, and c are dual variables and x, y, z are primal
variables.
The values assigned to the dual variables in the optimal tableau of the dual problem, represent
artificial accounting prices, or implicit prices or shadow prices, or marginal worth or machine
hour rate of various resources. Because of this, we can read the values of dual variables from the
net evaluation row of final tableau of primal problem. The values will be under slack variable
column in net evaluation row.
The units of the constraint to which the dual variable corresponds determine the dimension of
any dual variable.
In this problem the dimension of variable ‘a’ as well as ‘b’ is rupees per machine hour and that
of variable 'c' is rupees per man-hour.
Another important observation is by definition, the entire profit in the maximization must be
traced to the given resources, the buyer’s total outlay, at the equilibrium point, must equal to the
total profit. That is, optimal of the objective function of the primal equals to the optimal value of
the objective function of the dual. This observation will enable the problem solver to check
whether his answer is correct or not. The total profit (cost) of maximization problem
(minimization problem) must be equal to the shadow price (or economic worth) of resources.
The given primal problem will have symmetrical dual. The symmetrical dual means all given
structural constraints are inequalities. All variables are restricted to nonnegative values.
Now let us write primal and dual side by side to have a clear idea about both.
Primal problem: Dual Problem:
Maximize Z = 23x + 32y s.t. Minimize Z = 2500a + 2000b + 5000c s.t.
10x + 6y ≤ 2500 10a + 5b + 1c ≥
23
5x + 10y ≤ 2000 6a + 10b + 2c ≥
1x + 2y ≤ 500 32
Both x and y are ≥ 0. All a, b, c, are ≥0.