Chapter Two

Linear Programming
 Chapter Two
Linear Programming

• 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
• 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
• limitations or restrictions imposed by the problems. And constraints
include:
1. Resource constraints
• 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 material
availability Labor power Market demand, etc
 contd

• Linear Programming Problems can be solved by using:

i. The Geometric method called” Graphical Method”
ii. The Algebraic method called” Simplex Method”
• 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.
contd
 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
 Maximization case
 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?
Solution contd
contd
contd
contd
 Contd…
• Interpretation:
• 12 units of product A and 11 units of product
B should be produced so that the total profit
will be $6350.
 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 machines vary in the amount of product produced per
hr., in the amount of labor used and in the cost of operation.
• 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 the requirement? 
Min…
contd
• Corners Coordinates Z 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
 Special Cases in Graphical solution
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.
• [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
contd
Contd….
Redundant example
Contd…
• 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 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 corers give optimal solution, then
the line segment joining these points will be the solution.
 Contd….
• ==>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.
 Contd…
• 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
• The LPP Model of the problem is:
 
Contd…
 contd…..

• Corners Coordinates MaxZ=8 X1 + 16X2

• A (0, 0) 0 
• B (0, 125) 2000
• C (50, 125) 2400 
• D (100, 100) 2400
• E (200, 0) 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
• 4X1+X2< 60
• X1 > 30
• X1, X2 > 0
• Solution:
contd……
 B. Simplex Method
• Steps in Simplex Method
• 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.
• 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.
example
 Contd…

• Step 4 construct the initial tabula

contd
• Step 5 choose the entering variable with
maximum positive number in cj-zj row
• Step 6 choosing the leaving variable ration
RHS
contd
contd
 Minimization Problem
• 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.
– 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.
 Contd…
• Example:
• 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
• 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)
• 5x1+2x2 >20
• x1= 4.5 and x2= 2==> 5x1+2x2- s = 20 ==>5(4.5)+2(2)-s = 20
• ==> s=6 unused resource
• 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
 The Big M-method
• /Charnes Penalty Method/
• 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:
• High penalty cost (or profit) is assumed as M
• M is assigned to artificial variable A in the objective function Z.
• Big-M method can be applied to minimization as well as maximization
problems with the following distinctions:
 1. Minimization problems
• -Assign +M as coefficient of artificial variable A in the objective function Z
• Maximization problems:
• -Here –M is assigned as coefficient of artificial variable A in the objective
function Z
• Coefficient of S (slack/surplus) takes zero values in the objective function Z
• For minimization problem, the incoming variable corresponds to the highest
negative value of Cj-Zj.
• 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
 Contd…..
• 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
• x1, x2 , s1, s2 ,A1 ,A2 > 0  
• Step 2
• Initial simplex tableau
• The initial basic feasible solution is obtained by setting x1= 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
Contd…..
Contd…..
Contd….
 Sensitivity Analysis and Duality

• Reading Assignment
 Chapter Three : Transportation problem
• Transportation problem deals with the distribution of goods from
several points of supplies (sources) to a number of points of
demands (destinations). 
• 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.
 contd

• There are 3 methods to find the initial feasible solution.

•  

• North-West Corner Method (NWCM)

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

• The solution must be feasible

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

• 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)
 contd

• 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:
Contd soln
ontd
 Methods of 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.
 contd

• 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.
•  
•  
example
solution
contd
exercise
 cont

• 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
• - Add a dummy row
Develop initial feasible soln
 B. THE LEAST- COST METHOD (LCM) or
(LARGEST- PROFIT) METHOD

• LCM is the method used a minimum cost in the allocation. 

• 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:
contd
contd
Least cost slon
Con…
Con…
 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.
 Steps in VAM method
• 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
• 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 it 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.
contd
 Evaluating a Solution for Optimality

• The test for optimality for a feasible solution

involves a cost evaluation of empty cells.
• We shall consider two methods for cell
evaluation:
– The Stepping Stone Method
– The MODI Method
 The Stepping Stone Method

• Involves tracing a series of closed paths in the transportation

table, using one such path for each empty cell. Rules for
tracing Stepping-stone paths:
• All unoccupied cells must be evaluated.
• Except for the cell being evaluated, only add or subtract in
occupied cells.
• A path will consist of only horizontal and vertical moves,
starting and ending with the empty cell that is being
evaluated.
• Alter + and – signs, beginning with a + sign in the cell being
evaluated.
Evaluation Path for Cell C-1
 Empty Cell Evaluation
• Cell B-1: + 2 = 5 – 1 + 2 – 4
• Cell C-1: +10 = 7 – 3 + 9 – 1 + 2 – 4
• Cell A-3: -2 = 8 – 9 + 1 – 2
• Cell C-2: +11 = 6 – 3 + 9 – 1
• The negative value for cell A-3 indicates
an improved solution is possible
 The MODI method
• Involves the use of index numbers that are established for the rows
and columns. These are based on the unit costs of the occupied cells.
• The index numbers can be used to obtain the cell evaluations for
empty cells

The cell evaluations for each of the unoccupied cells are

determined using the relationship:
Cell Evaluations Using the MODI Method
 Developing an Improved
Solution
• Developing an improved solution to a transportation problem
requires focusing on the unoccupied cell that has the largest
negative cell evaluation.
• Improving the solution involves reallocating quantities in the
transportation table.
• The stepping-stone path for that cell is used for determining
how many units can be reallocated (both the magnitude and
direction of changes)
• 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.
Cell Evaluations Using the MODI Method
Optimal Solution
 Special Cases

1. Determining if there are alternate optimal

solutions.
2. Recognizing and handling degeneracy (too few
occupied cells to permit evaluation of a solution).
3. Avoiding unacceptable or prohibited route
assignments.
4. Dealing with problems in which supply and
demand are not equal.
5. Solving maximization problems.
Degeneracy
 Unacceptable route
 Certain origin-destination combinations may be
unacceptable due to weather factors, equipment
breakdowns, labor problems, or skill requirements that
either prohibit, or make undesirable, certain
combinations.
 In order to prevent that route from appearing in the
final solution, the manager could assign a unit cost to
that cell that was large enough to make that route
uneconomical and, hence, prohibit its occurrence.
 One rule of thumb would be to assign a cost that is 10
times the largest cost in the table (or a very big +M).
 Maximization case
• Transportation-type problems that concern
profits or revenues rather than costs with the
objective to maximize profits rather than to
minimize costs.
• Such problems can be handled by adding one
additional step at the start:
• Identify the cell with the largest profit and
subtract all the other cell profits from that
value.
• Replace the cell profits with the resulting
values.
 Un equal supply and Demand
• Situations in which supply and demand are not equal
such that it is necessary to modify the original problem
so that supply and demand are equalized.
• This is accomplished by adding either a dummy column
or a dummy row; a dummy row is added if supply is
less than demand and a dummy column is added if
demand is less than supply.
• The dummy is assigned unit costs of zero for each cell,
and it is given a supply (if a row) or a demand (if a
column) equal to the difference between supply and
demand.
example
Chapter Four
Assignment
Problems
 The Hungarian Method

• Provides a simple heuristic that can be used to

find the optimal set of assignments.
• It is based on minimization of opportunity
costs that would result from potential pairings.
These are additional costs that would be
incurred if the lowest-cost assignment is not
made
Requirements for Use of the Hungarian Method

• Situations in which the Hungarian method can

be used are characterized by the following:
 There needs to be a one-for-one matching of
two sets of items.
 The goal is to minimize costs (or to maximize
profits) or a similar objective
 The costs or profits are known or can be
closely estimated.
 The Hungarian Method

• Step 1: Locate the smallest cost element in each row of the cost table.
Now subtract this smallest from each element in that row.
• Step 2: Consider each column and locate the smallest element in it.
Subtract the smallest value from every other entry in the column.
• Step 3: Draw the minimum number of horizontal and vertical lines
required to cover the entire ‘zero’ elements. If the number of lines drawn
is equal to n (the number of rows/columns) the solution is optimal
• Step 4: Select the smallest uncovered cost element. Subtract this element
from all uncovered elements including itself and add this element to each
value located at the intersection of any lines.
• Step 5: Repeat steps 3 and 4 until an optimal solution is obtained.
• Step 6: Given the optimal solution, make the job assignments as indicated
by the ‘zero’ elements.
Example
contd
Determine the Minimum Number of Lines Needed to Cover
the Zeros

Further
FurtherRevision
Revisionofofthe
theCost
CostTable
Table
Optimal Assignments
 Example 2
• A production supervisor is considering how he should assign the
four jobs that are performed, to four of the workers working
under him. He want to assign the jobs to the workers such that
the aggregate time to perform the job in the least. Based on the
previous experience, he has the information on the time taken by
the four workers in performing these jobs, as given in below
The final assignments is 1-B, 2-D, 3-C,
 Special Situations

• Among those situations are the following:

• The number of rows does not equal the
number of columns.
• The problem involves maximization rather
than minimization.
• Certain matches are undesirable or not
allowed.
• Multiple optimal solutions exist.
 Unbalanced Assignment Problems
• In such situations, dummy column(s)/row(s),
whichever is smaller in number, are inserted with
zeros as the cost elements

A-1 B-4 C-3 D-2

 Constrained/Prohibited/ Assignment
Problems
• It happens sometimes that a worker cannot perform a certain job or is
not to be assigned a particular job. To cope with this situation, the cost
of performing that job by such person is taken to be extremely large
• Example: Determine the optimal set of pairings given the following
cost table. Note that assignment B-3 is undesirable, as denoted by the
M in that position:
 Multiple Optimal Solutions
• In some cases, there are multiple optimal solutions
to a problem. This condition can be easily
recognized when making the optimal assignments.
• Example: Given this final assignment table, identify
the optimal solutions: