Characteristics of Simplex Method

1. Computational routine is an iterative process.

2. Each new solution yields a value of the objective function and at least as good
as the previous solution.
3. The simplex method indicates when an optimal solution is reached.

Summary of the Steps in solving Simplex Method:

1. Set up the expression by describing the problem constraints ( , )
inequalities.
2. Convert any inequalities to equations.
3.
A. For Maximization Problem:
i. If the symbol is , then add Slack variable Sj to the left side
then change the sign to equality =.
ii. If the symbol is =, then add Slack variable Sj to the left side
then change the sign to equality =.
iii. If the symbol is , then multiply both sides by (-1), add slack
variable Sj to the left side then change the sign to equality =.
B. For Minimization Problem:
i. If the symbol is , then add Slack variable Sj to the left side
then change the sign to equality =.
ii. If the symbol is =, then add Artificial variable Aj to the left
side then change the sign to equality =.
iii. If the symbol is , then Subtract Slack variable Sj, and add
Artificial variable Aj, to the left side then change the sign to
equality =.
4. Enter the resulting equations in the simplex tableau.
5. Calculate the Zj and Cj Zj values for this solution.
6. Determine the entering variable (optimal column) by choosing the one with
the most negative Cj Zj value in minimization problems and the largest
positive Cj Zj value in maximization problems.
7. Determine the row to be replaced by dividing quantity-column values by their
corresponding optimal-column values and choosing the smallest non-negative
quotient. (That is, only compute the ratios for rows whose elements in the
optimal column are greater than zero; for example; omit ratios like 160/0 and
15/-5.)
8. Compute the values for the replacing row.
9. Compute the value for the remaining row.
10. Calculate the Zj and Cj Zj values for this solution.
11. If there is still no negative Cj Zj in a minimization problem, or a positive C j
Zj in a maximization problem, return to step 6.
12. If there is not negative Cj Zj remaining in a maximization problem, the
optimal solution has been obtained.

Parts of the Simplex Tableau

1. Cj Column column in the simplex tableau which contains the profit or cost
per unit for the variable in the solution.
2. Product Mix Column- column containing all the variables in a solution in the
simplex tableau.
3. Quantity Column- column in the tableau indicating the quantities of the
variables that is in a solution.
4. Variable Column- column of entries under a heading valuable in the simplex
tableau.
5. Zj Row- is the row containing the opportunity costs of bringing one unit of a
variable into the solution of a linear programming problem.
6. Cj-Zj Row- row containing the net benefit of loss accessioned by bringing
one unit of a variable into the solution of a linear programming problem.
7. Intersectional Elements- elements which are common to both the optimal
column and the rows representing variables in the solution.
8. Optimal Column- is the column in any solution to a maximizing problem
which has the largest Cj-Zj positive value in the row of which has the largest
negative value in a minimizing problem.
9. Replaced Row- a Row in the simplex tableau which is replaced by the
variable entering the new solution.
Problem 1 on Maximization.
Dimensions inc. makes two products: tables and chairs, which must be
processed through assembly and finishing. Assembly has 60 hours available for
weeks, finishing has 40 hours. Manufacturing the table requires 4 hrs in assembly and
2 hrs in finishing. Each chair requires 2 hrs assembly and 4 hrs finishing. If profit is 8
pesos per table and 6 pesos per chair, determine the possible combination of tables
and chairs to produce and sell in order to realize a maximum profit.
Solution:
Let

T- tables
C- chairs

Objective: Maximize: 8t + 6c
Subject to:
Assembly:
4t + 2c 60
Finishing:
2t + 4c 48
x; y 0
Add Slack Variables:
Let Sa unused time in assembly
Sf- unused time for finishing

New Constraints:
Objective: Maximize: 8t + 6c + 0Sa + 0Sf
Subject to:
Assembly:
4t + 2c + Sa + 0Sf = 60
Finishing:
2t + 4c + 0Sa + Sf = 48
x; y 0
Initial Tableau
Cj
Product mix
0
Sa
0
Sf
Zj
Cj-Zj

Tableau 2
Cj
Product mix
8
T
0
Sf
Zj
Cj-Zj
Tableau 3
Cj
Product mix
8
T
6
C
Zj
Cj-Zj

8
T
4
2
0
8

6
C
2
4
0
6

0
Sa
1
0
0
0

0
Sf
0
1
0
0

Qty
15
18
120

8
T
1
0
8
0

6
C
1/2
3
4
2

0
Sa

-1/2
2
-2

0
Sf
0
1
0
0

Qty
12
6
132

8
T
1
0
8
0

6
C
0
1
6
0

0
Sa
1/3
-1/6
5/3
-5/3

0
Sf
-1/6
1/3
2/3
-2/3

Qty
60
48

Therefore: optimum Solution:

Tables: 12 pcs/ weeks
Chairs: 6 pcs/weeks
To yield profit by:132

Problem 2 on Minimization.
Objective: Minimize C= 8X1 + 2X2
Subject to:
2 X1 + X2 20
X1 + 2 X2 25

X1 + 5 X2 50

X1; X2 0

New Constraints:
Objective: Minimize C= 8X1 + 2X2 + 0S1 + 0S2 + 10A1 + 10A2
Subject to:
2 X1 + X2 - S1 + 0S2 + A1 + 0A2 = 20
X1 + 2 X2+ 0S1 - 0S2 + 0A1 + 0A2 = 25
X1 + 5 X2 + 0S1 + 0S2 + 0A1 + A2 = 50
X1; X2; 0S1;0S2 ;A1;A2 0
Initial Tableau
Cj
Product
mix
10
A1
0
S1
10
A2
Zj
Cj-Zj
Second Tableau
Cj
Product
mix
10
A1
0
S1
2
X2
Zj
Cj-Zj
Third Tableau
Cj
Product
mix
2
X1
0
S1
2
X2
Zj
Cj-Zj

Qty
20
25
50
700

Qty
10
5
10
120

Qty
5 5/9
1 2/3
8 8/9
62 2/9

Decision:
X1= 5 5/9 units and X2 = 8 8/9 units
Minimum C= 62.22

8
X1

2
X2

0
S1

0
S2

10
A1

10
A2

2
1
1
30
-22

1
2
5
60
-58

-1
0
0
-10
10

0
1
0
0
0

1
0
0
10
0

0
0
1
10
0

8
X1

2
X2

0
S1

0
S2

10
A1

10
A2

9/5
3/5
1/5
18 2/5
-10
2/5

0
0
1
2
0

-1
0
0
-10
10

0
1
0
0
0

1
0
0
10
0

-1/5
-2/5
1/5
-1 3/5
11 3/5

8
X1

2
X2

0
S1

0
S2

10
A1

10
A2

1
0
0
8
0

0
0
1
2
0

-5/9
1/3
1/9
-4 2/9
4 2/9

0
1
0
0
0

5/9
-1/3
-1/9
4 2/9
5 7/9

-1/9
-1/3
2/9
-4/9
10 4/9

The Dual in Linear Programming

In LP the solution for the profit-maximizing combination of outputs automatically
determines the input amounts that must be used in the production process.
If the optimal output combination, suggested by the LP solution, uses up all available
inputs, we say that the capacity constraints are binding.
Under this condition, any reduction/increase in the use of inputs will reduce/increase
the firms profits.
marginal opportunity cost of using the input
How much profit do we lose not having one more unit of an input?
Finding the Opportunity Costs
For every maximization problem in LP there exists a symmetrical
minimization problem and vice versa
The problems are called the primal problem and the dual problem
Primal Problem and Dual Problem
optimal solutions for these two problems are always the same
objective of the dual problem is to find shadow prices (= dual prices)
shadow prices can be used to decide whether the firm should employ
an additional unit of a resource or not
Example: Primal and Its Dual

Primal Problem
Gross profit:
Max GP = 50X + 30Y
st. 5X + 2Y 220
3X + 2Y
180
X, Y
0

Dual Problem*
Total opportunity cost:
Min C = 220a + 180p
st. 5a + 3p 50
2a + 2p 30
a, p 0

Coefficient matrix of a dual problem is a transpose of the primals coefficient matrix

RHS

5 2 220
3 2 180

50 30 GP

5 3
2 2

220 180

RHS

50
30
C

a=
opportunity cost of using an additional unit of labor for the assembly of PCs
and printers
p=
opportunity cost of using an additional unit of labor for the packaging of PCs
and printers
The solution for the above problem is:
GP = 2800, X = 20 and Y = 60
a = 2.50 and p = 12.50