MB0032: Operations

Research
[Assignment SET1 & SET2]

Name : P. Srinath
SMDUE ID : 520923307
Center : Mehbub College Campus, Secunderabad
Subject Code : MB0032
Subject : Operations Research
 ASSIGNMENT MBA SEM II Subject Code:
MB0032 SET 1
1. Describe in details the different scopes of application of Operations
Research?

Operations Research (OR) in the USA, South Africa and Australia,

and Operational Research in Europe and Canada, is an interdisciplinary
branch of applied mathematics and formal science that uses methods such as
mathematical modeling, statistics, and algorithms to arrive at optimal or near
optimal solutions to complex problems. It is typically concerned with
optimizing the maxima (profit, assembly line performance, crop yield,
bandwidth, etc) or minima (loss, risk, etc.) of some objective function.
Operations research helps management achieve its goals using scientific
methods.

The terms operations research and management science are often

used synonymously. When a distinction is drawn, management science
generally implies a closer relationship to the problems of business
management. The field of operations research is closely related to Industrial
engineering. Industrial engineers typically consider Operations Research (OR)
techniques to be a major part of their toolset.

Some of the primary tools used by operations researchers are

statistics, optimization, probability theory, queuing theory, game theory,
graph theory, decision analysis, and simulation. Because of the
computational nature of these fields, OR also has ties to computer science,
and operations researchers use custom-written and off-the-shelf software.

Operations research is distinguished by its frequent use to examine an

entire management information system, rather than concentrating only on
specific elements (though this is often done as well). An operations
researcher faced with a new problem is expected to determine which
techniques are most appropriate given the nature of the system, the goals for
improvement, and constraints on time and computing power. For this and
other reasons, the human element of OR is vital. Like any other tools, OR
techniques cannot solve problems by themselves.

Scope of operation Research

Examples of applications in which operations research is currently used

include:
Critical path analysis or project planning: identifying those processes in
a complex project which affect the overall duration of the project
Designing the layout of a factory for efficient flow of materials
constructing a telecommunications network at low cost while still
guaranteeing QoS (quality of service) or QoS (Quality of Experience) if
particular connections become very busy or get damaged

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 Road traffic management and 'one way' street allocations i.e. allocation
problems.
Determining the routes of school buses (or city buses) so that as few
buses are needed as possible
designing the layout of a computer chip to reduce manufacturing time
(therefore reducing cost)
Managing the flow of raw materials and products in a supply chain based
on uncertain demand for the finished products
Efficient messaging and customer response tactics
Robotizing or automating human-driven operations processes
Globalizing operations processes in order to take advantage of cheaper
materials, labor, land or other productivity inputs
Managing freight transportation and delivery systems (Examples: LTL
Shipping, intermodal freight transport)
Scheduling:
Personnel staffing
Manufacturing steps
Project tasks
Network data traffic: these are known as queuing models or
queueing systems.
sports events and their television coverage
blending of raw materials in oil refineries
determining optimal prices, in many retail and B2B settings, within the
disciplines of pricing science
Operations research is used extensively in government where evidence-
based policy is used.

2. What do you understand by Linear Programming Problem? What are

the requirement of L.P.P? What are the basic assumption of L.P.P?

Linear programming problem (LPP):

The standard form of the linear programming problem is used to
develop the procedure for solving a general programming problem.

A general LPP is of the form

Max (or min) Z = c1x1 + c2x2 + +cnxn

x1, x2, ....xn are called decision variable.

subject to the constraints

c1, c2,. Cn, a11, a12,. amn are all known constants
Z is called the "objective function" of the LPP of n variables which is to be
maximized or
minimized.

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 Requirements of L.P.P: There are mainly four steps in the mathematical
formulation of linear programming problem as a mathematical model. We will
discuss formulation of those problems which involve only two variables.
Identify the decision variables and assign symbols x and y to
them. These decision variables are those quantities whose values we
wish to determine.
Identify the set of constraints and express them as linear
equations/inequations in terms of the decision variables. These
constraints are the given conditions.
Identify the objective function and express it as a linear function
of decision variables. It might take the form of maximizing profit or
production or minimizing cost.
Add the non-negativity restrictions on the decision variables, as
in the physical problems, negative values of decision variables have no
valid interpretation.

There are many real life situations where an LPP may be formulated. The
following examples will help to explain the mathematical formulation of an
LPP.

Example 1: A diet is to contain at least 4000 units of carbohydrates,

500 units of fat and 300 units of protein. Two foods A and B are available.
Food A costs 2 dollars per unit and food B costs 4 dollars per unit. A unit of
food A contains 10 units of carbohydrates, 20 units of fat and 15 units of
protein. A unit of food B contains 25 units of carbohydrates, 10 units of fat
and 20 units of protein. Formulate the problem as an LPP so as to find the
minimum cost for a diet that consists of a mixture of these two foods and also
meets the minimum requirements.

Suggested answer:
The above information can be represented as

Let the diet contain x units of A and y units of B.

Total cost = 2x + 4y
The LPP formulated for the given diet problem is
Minimize Z = 2x + 4y
subject to the constraints

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 Basic Assumptions of L.P.P:
Linear programming 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, weather conditions etc. are not taken into
consideration.
There may not be an integer as the solution, e.g., the number of men
required may be a fraction and the nearest integer may not be the
optimal solution. i.e., Linear programming techqnique may
give practical valued answer which is not desirable.
Only one single objective is dealt with while in real life situations,
problems come with multi-objectives.
Parameters are assumed to be constants but in reality they may not be
so.

3. Describe the different steps needed to solve a problem by Simplex

method.

Simplex method

The simplex method is a method for solving problems in linear

programming. This method, invented by George Dantzig in 1947, tests
adjacent vertices of the feasible set (which is a polytope) in sequence so that
at each new vertex the objective function improves or is unchanged. The
simplex method is very efficient in practice, generally taking 2m to 3m
iterations at most (where m is the number of equality constraints), and
converging in expected polynomial time for certain distributions of random
inputs (Nocedal and Wright 1999, Forsgren 2002). However, its worst-case
complexity is exponential, as can be demonstrated with carefully constructed
examples (Klee and Minty 1972).
A different type of methods for linear programming problems are
interior point methods, whose complexity is polynomial for both average and
worst case. These methods construct a sequence of strictly feasible points
(i.e., lying in the interior of the polytope but never on its boundary) that
converges to the solution. Research on interior point methods was spurred by
a paper from Karmarkar (1984). In practice, one of the best interior-point
methods is the predictor-corrector method of Mehrotra (1992), which is
competitive with the simplex method, particularly for large-scale problems.
Dantzig's simplex method should not be confused with the downhill
simplex method (Spendley 1962, Nelder and Mead 1965, Press et al. 1992).
The latter method solves an unconstrained minimization problem in n
dimensions by maintaining at each iteration n+1 points that define a simplex.

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 At each iteration, this simplex is updated by applying certain transformations
to it so that it "rolls downhill" until it finds a minimum.
The Simplex Method is "a systematic procedure for generating and
testing candidate vertex solutions to a linear program." (Gill, Murray, and
Wright, p. 337) It begins at an arbitrary corner of the solution set. At each
iteration, the Simplex Method selects the variable that will produce the
largest change towards the minimum (or maximum) solution. That variable
replaces one of its compatriots that is most severely restricting it, thus
moving the Simplex Method to a different corner of the solution set and
closer to the final solution. In addition, the Simplex Method can determine if
no solution actually exists. Note that the algorithm is greedy since it selects
the best choice at each iteration without needing information from previous
or future iterations.
The Simplex Method solves a linear program of the form described in
Figure 3. Here, the coefficients represent the respective weights, or costs,
of the variables . The minimized statement is similarly called the cost of
the solution. The coefficients of the system of equations are represented by
, and any constant values in the system of equations are combined on the
right-hand side of the inequality in the variables . Combined, these
statements represent a linear program, to which we seek a solution of
minimum cost.

Figure 3

A Linear Program

Solving this linear program involves solutions of the set of equations. If

no solution to the set of equations is yet known, slack variables
, adding no cost to the solution, are introduced. The initial
basic feasible solution (BFS) will be the solution of the linear program where
the following holds:

Once a solution to the linear program has been found, successive

improvements are made to the solution. In particular, one of the nonbasic
variables (with a value of zero) is chosen to be increased so that the value of

the cost function, , decreases. That variable is then increased,

maintaining the equality of all the equations while keeping the other nonbasic
variables at zero, until one of the basic (nonzero) variables is reduced to zero

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 and thus removed from the basis. At this point, a new solution has been
determined at a different corner of the solution set.
The process is then repeated with a new variable becoming basic as
another becomes non-basic. Eventually, one of three things will happen. First,
a solution may occur where no non-basic variable will decrease the cost, in
which case the current solution is the optimal solution. Second, a non-basic
variable might increase to infinity without causing a basic-variable to become
zero, resulting in an unbounded solution. Finally, no solution may actually
exist and the Simplex Method must abort. As is common for research in linear
programming, the possibility that the Simplex Method might return to a
previously visited corner will not be considered here.
The primary data structure used by the Simplex Method is "sometimes called
a dictionary, since the values of the basic variables may be computed
(looked up) by choosing values for the non-basic variables." (Gill, Murray,
and Wright, p. 337) Dictionaries contain a representation of the set of
equations appropriately adjusted to the current basis. The use of dictionaries
provide an intuitive understanding of why each variable enters and leaves
the basis. The drawback to dictionaries, however, is the necessary step of
updating them which can be time-consuming. Computer implementation is
possible, but a version of the Simplex Method has evolved with a more
efficient matrix-oriented approach to the same problem. This new
implementation became known as the Revised Simplex Method.

The steps of the Simplex Method also need to be expressed in the

matrix format of the Revised Simplex Method. The basis matrix, B, consists of
the column entries of A corresponding to the coefficients of the variables
currently in the basis. That is if is the fourth entry of the basis, then

is the fourth column of B. (Note that B is therefore an

matrix.) The non-basic columns of A constitute a similar though likely
not square, matrix referred to here as V.
Simplex Method Revised Simplex Method

Determine the current basis,

d.

Choose to enter the basis

based on the greatest cost
contribution.

If cannot decrease the cost, If , d is optimal solution.

d is optimal solution.

Determine that first exits

the basis (becomes zero) as
increases.

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 If can decrease without If for all i, the solution is
causing another variable to unbounded.
leave the basis, the solution is
unbounded.

Update dictionary. Update .

Examples:

Use the two phase method to

Maximize z = 3x1 x2
Subject to 2x1 + x2 2
x1 + 3x2 2
x2 4,
x1, x2 0

Rewriting in the standard form,

Maximize z = 3x1 x2 + 0S1 MA1 + 0.S2 + 0.S3
Subject to 2x1 + x2 S1 + A1 = 2
x1 + 3x2 + S2 = 2
x2 + S3 = 4,
x1, x2, S1, S2, S3, A1 0.

Phase I : Consider the new objective,

Maximize Z* = A1
Subject to 2x1 + x2 S1 + A1 = 2
x1 + 3x2 + S2 = 2
x2 + S3 = 4,
x1, x2, S1, S2, S3, A1 0.

Solving by Simplex method, the initial simplex table is given by

x1 x2 S1 A1 S2 S3
2 0 0 1 0
0 Ratio
A1 1 2* 1 1 1 0 0 2 2/2=1
S2 0 1 3 0 0 1 0 2 2/1=2
S3 0 0 1 0 0 0 1 4
2 1 1 0 0 0 2

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 Work column * pivot element

x1 enters the basic set replacing A1.

The first iteration gives the following table:

x1 x2 x1 A1 S2 S3
0 0 0 1 0 0
X1 0 1 1/2 1/2 0 0 1
S2 0 0 5/2 1/2 1 0 1
S3 0 0 1 0 0 0 1 4
0 0 0 1 0 0 0

Phase I is complete, since there are no negative elements in the last row. The
Optimal solution of the new objective is Z* = 0.
Phase II: Consider the original objective function,
Maximize z = 3x1 x2 + 0S1 + 0S2 + 0S3
Subject to x1 + x2/2 S1/2=1
5/2 x2 + S1/2 + S2=1
x2 + S3 = 4
x1, x2, S1, S2, S3 0
with the initial solution x1 = 1, S2 = 1, S3 = 4, the corresponding simplex
table is
x1 x2 S1 S2 S3
3 1 0 0 0 Ratio
X1 3 1 1/2 1/2 0 0 1
S2 0 0 5/2 1/2* 1 0 1 1/1/2
=2
S3 0 0 1 0 0 1 4
0 5/2 3/2 0 0 3

Work column * pivot element

Proceeding to the next iteration, we get the following table:

x1 x2 S1 S2 S3
3 1 0 0 0
X1 0 1 3 0 1 0 2
S1 0 0 5 1 2 0 2
S3 0 0 1 0 0 1 4
0 10 0 3 0 6

Since all elements of the last row are non negative, the current solution is
optimal.

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 The maximum value of the objective function Z = 6 which is attained for x1 =
2, x2 = 0.

4. Describe the economics importance of the Duality concept.

The Importance of Duality Concept Is Due To Two Main Reasons

i. If the primal contains a large number of constraints and a smaller number

of variables, the labour of computation can be considerably reduced by
converting it into the dual problem and then solving it.
ii. The interpretation of the dual variable from the loss or economic point of
view proves extremely useful in making future decisions in the activities
being programmed.

Economic importance of duality concept

The linear programming problem can be thought of as a resource allocation

model in which the objective is to maximize revenue or profit subject to
limited resources. Looking at the problem from this point of view, the
associated dual problem offers interesting economic interpretations of the L.P
resource allocation model. We consider here a representation of the general
primal and dual problems in which the primal takes the role of a resource
allocation model.

Primal

Maximize

C .xj j
z = j =1
n

a x
j =1
ij j b j
Subject to , i = 1,2,., m
xj 0, j = 1,2,., n

Dual

Minimize

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 m

b .yi i
w = i =1

i =1
a ij yi ci
Subject to , i = 1,2,., n
yj 0, i = 1,2,., m

From the above resource allocation model, the primal problem has n
economic activities and m resources. The coefficient cj in the primal
represents the profit per unit of activity j. Resource i, whose maximum
availability is bi, is consumed at the rate aij units per unit of activity j.

Interpretation of Duel Variables

For any pair of feasible primal and dual solutions,

(Objective value in the maximization problem) (Objective value in the

minimization problem)

At the optimum, the relationship holds as a strict equation. Note: Here

the sense of optimization is very important. Hence clearly for any two primal
and dual feasible solutions, the values of the objective functions, when finite,
must satisfy the following inequality.

n m

C x b y
j j i i =w
z = j =1 i =1

The strict equality, z = w, holds when both the primal and dual
solutions are optimal.

Consider the optimal condition z = w first given that the primal

problem represents a resource allocation model, we can think of z as
representing profit in Rupees. Because bi represents the number of units
available of resource i, the equation z = w can be expressed as profit (Rs) =
(units of resource i) x (profit per unit of resource i)

This means that the dual variables yi, represent the worth per unit of
resource i [variables yi are also called as dual prices, shadow prices and
simplex multipliers].

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 With the same logic, the inequality z < w associated with any two
feasible primal and dual solutions is interpreted as (profit) < (worth of
resources)

This relationship implies that as long as the total return from all the
activities is less than the worth of the resources, the corresponding primal
and dual solutions are not optimal. Optimality is reached only when the
resources have been exploited completely, which can happen only when the
input equals the output (profit). Economically the system is said to remain
unstable (non optimal) when the input (worth of the resources) exceeds the
output (return). Stability occurs only when the two quantities are equal.

5. How can you use the Matrix Minimum method of finding the initial
basic feasible solution in the transportation problem?

The Initial basic Feasible solution using Matrix Minimum

Method

Let us consider a T.P involving m-origins and n-destinations. Since the

sum of origin capacities equals the sum of destination requirements, a
feasible solution always exists. Any feasible solution satisfying m + n 1 of
the m + n constraints is a redundant one and hence can be deleted. This also
means that a feasible solution to a T.P can have at the most only m + n 1
strictly positive component, otherwise the solution will degenerate.
It is always possible to assign an initial feasible solution to a T.P. in
such a manner that the rim requirements are satisfied. This can be achieved
either by inspection or by following some simple rules. We begin by
imagining that the transportation table is blank i.e. initially all xij = 0. The
simplest procedures for initial allocation discussed in the following section.

Matrix Minimum Method

Step 1:Determine the smallest cost in the cost matrix of the
transportation table. Let it be cij , Allocate xij = min ( ai, bj) in the cell ( i, j)

Step 2: If xij = ai cross off the ith row of the transportation table and
decrease bj by ai go to step 3.
if xij = bj cross off the ith column of the transportation table and
decrease ai by bj go to step 3.
if xij = ai= bj cross off either the ith row or the ith column but not both.

Step 3: Repeat steps 1 and 2 for the resulting reduced transportation

table until all the rim requirements are satisfied whenever the minimum cost
is not unique make an arbitrary choice among the minima.

6. Describe the Integer Programming Problem? Describe the Gomorys

All-I.P.P. method for solving the I.P.P. problem.
Integer Programming Problem

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 The Integer Programming Problem I P P is a special case of L P P where
all or some variables are constrained to assume nonnegative integer values.
This type of problem has lot of applications in business and industry where
quite often discrete nature of the variables is involved in many decision
making situations. Eg. In manufacturing the production is frequently
scheduled in terms of batches, lots or runs In distribution, a shipment must
involve a discrete number of trucks or aircrafts or freight cars

An integer programming problem can be described as follows:

Determine the value of unknowns x1, x2, , xn

so as to optimize z = c1x1 +c2x2 + . . .+ cnxn

subject to the constraints

ai1 x1 + ai2 x2 + . . . + ain xn =bi , i = 1,2,,m

and xj 0 j = 1, 2, ,n

where xj being an integral value for j = 1, 2, , k n.

If all the variables are constrained to take only integral value i.e. k = n,
it is called an all(or pure) integer programming problem. In case only some of
the variables are restricted to take integral value and rest (n k) variables
are free to take any non negative values, then the problem is known as
mixed integer programming problem.

Gomorys All IPP Method

An optimum solution to an I. P. P. is first obtained by using simplex
method ignoring the restriction of integral values. In the optimum solution if
all the variables have integer values, the current solution will be the desired
optimum integer solution. Otherwise the given IPP is modified by inserting a
new constraint called Gomorys or secondary constraint which represents
necessary condition for integrability and eliminates some non integer solution
without losing any integral solution. After adding the secondary constraint,
the problem is then solved by dual simplex method to get an optimum
integral solution. If all the values of the variables in this solution are integers,
an optimum inter-solution is obtained, otherwise another new constrained is
added to the modified L P P and the procedure is repeated. An optimum
integer solution will be reached eventually after introducing enough new
constraints to eliminate all the superior non integer solutions. The
construction of additional constraints, called secondary or Gomorys
constraints, is so very important that it needs special attention.

The iterative procedure for the solution of an all integer programming

problem is as follows:
Step 1: Convert the minimization I.P.P. into that of maximization, if it is in
the minimization form. The integrality condition should be ignored.

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 Step 2: Introduce the slack or surplus variables, wherever necessary to
convert the inequations into equations and obtain the optimum solution of
the given L.P.P. by using simplex algorithm.
Step 3: Test the integrality of the optimum solution
a) If the optimum solution contains all integer values, an optimum basic
feasible integer solution has been obtained.
b) If the optimum solution does not include all integer values then proceed
onto next step.
Step 4: Examine the constraint equations corresponding to the current
optimum solution. Let these equations be represented by

n1

y x
j =0
ij j = bi
( i 0 , 1, 2 , ........, m1 )

Where n denotes the number of variables and m the number of equations.

Choose the largest fraction of bis ie to find {bi}i

Let it be [bk 1]

f
or write is as ko
Step 5: Express each of the negative fractions if any, in the k th row of the
optimum simplex table as the sum of a negative integer and a nonnegative
fraction.
Step 6: Find the Gomorian constraint
n1

f
j =0
kj x j f ko

and add the equation

n1
f ko + f kj x j
Gsla ( 1 )= j =0
to the current set of equation constraints.
Step 7: Starting with this new set of equation constraints, find the new
optimum solution by dual simplex algorithm. (So that Gsla (1) is the initial
leaving basic variable).
Step 8: If this new optimum solution for the modified L.P.P. is an integer
solution. It is also feasible and optimum for the given I.P.P. otherwise return
to step 4 and repeat the process until an optimum feasible integer solution is
obtained.

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 ASSIGNMENT MBA SEM II Subject Code:
MB0032 SET 2
1. What are the important features of Operations Research? Describe
in details the different phases of Operations Research.

Important features of OR are:

i. It is System oriented: OR studies problem from over all point of view
of organizations or situations since optimum result of one part of the system
may not be optimum for some other part.
ii. It imbibes Inter disciplinary team approach. Since no single
individual can have a thorough knowledge of all fast developing scientific
knowhow, personalities from different scientific and managerial cadre form a
team to solve the problem.
iii. It makes use of Scientific methods to solve problems.
iv. OR increases the effectiveness of a management Decision making
ability.
v. It makes use of computer to solve large and complex problems.
vi. It gives Quantitative solution.
vii. It considers the human factors also.
Phases of Operations Research
The scientific method in OR study generally involves the following
three phases:
i) Judgment Phase: This phase consists of
a) Determination of the operation.
b) Establishment of the objectives and values related to the operation.
c) Determination of the suitable measures of effectiveness and
d) Formulation of the problems relative to the objectives.
ii) Research Phase: This phase utilizes
a) Operations and data collection for a better understanding of the
problems.
b) Formulation of hypothesis and model.
c) Observation and experimentation to test the hypothesis on the basis
of additional data.
d) Analysis of the available information and verification of the
hypothesis using pre established measure of effectiveness.
e) Prediction of various results and consideration of alternative
methods.
iii) Action Phase: It consists of making recommendations for the decision
process by those who first posed the problem for consideration or by anyone
in a position to make a decision, influencing the operation in which the
problem is occurred.

2. Describe a Linear Programming Problem in details in canonical form.

Linear Programming
The Linear Programming Problem (LPP) is a class of mathematical
programming in which the functions representing the objectives and the
constraints are linear. Here, by optimization, we mean either to maximize or

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 minimize the objective functions. The general linear programming model is
usually defined as follows:
Maximize or Minimize
Z = c1 x1 + c2 x 2 +.. +cn x n
subject to the constraints,
a11 x1 + a12 x2 + .+ a1n xn ~ b1
a21 x1 + a22 x2 +..+ a2n xn ~ b2


am1x1 + am2 x2 +. +amn xn ~ bm
and x1 > 0, x2 > 0, xn > 0.
Where cj, bi and aij (i = 1, 2, 3, .. m, j = 1, 2, 3.. n) are constants
determined from the technology of the problem and xj (j = 1, 2, 3 n) are the
decision variables. Here ~ is either < (less than), > (greater than) or =
(equal). Note that, in terms of the above formulation the coefficient cj, aij, bj
are interpreted physically as follows. If bi is the available amount of resources
i, where aij is the amount of resource i, that must be allocated to each unit of
activity j, the worth per unit of activity is equal to cj.
Canonical forms:
The general Linear Programming Problem (LPP) defined above can
always be put in the
following form which is called as the canonical form:
Maximise Z = c1 x1+c2 x2 + .+cn xn
Subject to
a11 x1 + a12 x2 +.. +a1n xn < b1
a21 x1 + a22 x2 +.. +a2n xn < b2


am1x1+am2 x2 + + amn xn < bm
x1, x2, x3, xn > 0.
The characteristics of this form are:
1) all decision variables are nonnegative.
2) all constraints are of < type.
3) the objective function is of the maximization type.
Any LPP can be put in the cannonical form by the use of five
elementary transformations:
1. The minimization of a function is mathematically equivalent to the
maximization of the negative expression of this function. That is, Minimize Z
= c1 x1 + c2x2 + . + cn xn is equivalent to
Maximize Z = c1x1 c2x2 cnxn.
2. Any inequality in one direction (< or >) may be changed to an inequality in
the opposite direction (> or <) by multiplying both sides of the inequality by
1.
For example 2x1+3x2 > 5 is equivalent to 2x13x2 < 5.
3. An equation can be replaced by two inequalities in opposite direction. For
example, 2x1+3x2
= 5 can be written as 2x1+3x2 < 5 and 2x1+3x2 > 5 or 2x1+3x2 < 5 and
2x1 3x2 < 5.

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 4. An inequality constraint with its left hand side in the absolute form can be
changed into two regular inequalities. For example: | 2x1+3x2 | < 5 is
equivalent to 2x1+3x2 < 5 and 2x1+3x2 >
5 or 2x1 3x2 < 5.
5. The variable which is unconstrained in sign (i.e., > 0, < 0 or zero) is
equivalent to the difference between 2 nonnegative variables. For example, if
x is unconstrained in sign then x
= (x + x ) where x + > 0, x < 0.

3. What are the different steps needed to solve a system of equations

by the simplex method?

To Solve problem by Simplex Method

1. Introduce stack variables (Sis) for < type of constraint.
2. Introduce surplus variables (Sis) and Artificial Variables (Ai) for > type of
constraint.
3. Introduce only Artificial variable for = type of constraint.
4. Cost (Cj) of slack and surplus variables will be zero and that of Artificial
variable will be M
Find Zj Cj for each variable.
5. Slack and Artificial variables will form Basic variable for the first simplex
table. Surplus variable will never become Basic Variable for the first simplex
table.
6. Zj = sum of [cost of variable x its coefficients in the constraints Profit or
cost coefficient of the variable].
7. Select the most negative value of Zj - Cj. That column is called key column.
The variable corresponding to the column will become Basic variable for the
next table.
8. Divide the quantities by the corresponding values of the key column to get
ratios select the minimum ratio. This becomes the key row. The Basic
variable corresponding to this row will be replaced by the variable found in
step 6.
9. The element that lies both on key column and key row is called Pivotal
element.
10. Ratios with negative and a value are not considered for determining
key row.
11. Once an artificial variable is removed as basic variable, its column will be
deleted from next iteration.
12. For maximisation problems decision variables coefficient will be same as
in the objective function. For minimization problems decision variables
coefficients will have opposite signs as compared to objective function.
13. Values of artificial variables will always is M for both maximisation and
minimization problems.
14. The process is continued till all Zj Cj > 0.

4. What do you understand by the transportation problem? What is the

basic assumption behind the transportation problem? Describe the
MODI method of solving transportation problem.
This model studies the minimization of the cost of transporting a
commodity from a number of sources to several destinations. The supply at

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 each source and the demand at each destination are known. The
transportation problem involves m sources, each of which has available ai (i
= 1, 2, ..,m) units of homogeneous product and n destinations, each of
which requires bj (j = 1, 2., n) units of products. Here ai and bj are positive
integers. The cost cij of transporting one unit of the product from the i th
source to the j th destination is given for each I and j. The objective is to
develop an integral transportation schedule that meets all demands from the
inventory at a minimum total transportation cost. It is assumed that the total
supply and the total demand are equal.
The condition (1) is guaranteed by creating either a fictitious
destination with a demand equal to the surplus if total demand is less than
the total supply or a (dummy) source with a supply equal to the shortage if
total demand exceeds total supply. The cost of transportation from the
fictitious destination to all sources and from all destinations to the fictitious
sources are assumed to be zero so that total cost of transportation will
remain the same.

The Transportation Algorithm (MODI Method)

The first approximation to (2) is always integral and therefore always a
feasible solution. Rather than determining a first approximation by a direct
application of the simplex method it is more efficient to work with the table
given below called the transportation table. The transportation algorithm is
the simplex method specialized to the format of table it involves:
i) finding an integral basic feasible solution
ii) testing the solution for optimality
iii) improving the solution, when it is not optimal
iv) repeating steps (ii) and (iii) until the optimal solution is obtained.
The solution to T.P is obtained in two stages. In the first stage we find Basic
feasible solution by any one of the following methods a) Northwest corner
rale b) Matrix Minima Method or least cost method c) Vogels approximation
method. In the second stage we test the B.Fs for its optimality either by MODI
method or by stepping stone method.

Modified Distribution Method / Modi Method / U V Method.

Step 1: Under this method we construct penalties for rows and columns by
subtracting the least value of row / column from the next least value.
Step 2: We select the highest penalty constructed for both row and column.
Enter that row / column and select the minimum cost and allocate min (ai, bj)
Step 3: Delete the row or column or both if the rim availability /
requirements is met.
Step 4: We repeat steps 1 to 2 to till all allocations are over.
Step 5: For allocation all form equation ui + vj = cj set one of the dual
variable ui / vj to zero and solve for others.
Step 6: Use these value to find ij = cij ui vj of all ij >, then it is the
optimal solution.
Step 7: If any Dij 0, select the most negative cell and form loop. Starting
point of the loop is +ve and alternatively the other corners of the loop are ve
and +ve. Examine the quantities allocated at ve places. Select the
minimum. Add it at +ve places and subtract from ve place.
Step 8: Form new table and repeat steps 5 to 7 till ij > 0

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5. Describe the North-West Corner rule for finding the initial basic
feasible solution in the transportation problem.

North West Corner Rule

Step1: The first assignment is made in the cell occupying the upper
left hand (north west) corner of the transportation table. The maximum
feasible amount is allocated there, that is x11 = min (a1,b1). So that either
the capacity of origin O1 is used up or the requirement at destination D1 is
satisfied or both. This value of x11 is entered in the upper left hand corner
(small square) of cell (1, 1) in the transportation table
Step 2: If b1 > a1 the capacity of origin O, is exhausted but the
requirement at destination D1 is
still not satisfied , so that at least one more other variable in the first column
will have to take on a positive value. Move down vertically to the second row
and make the second allocation of
magnitude x21 = min (a2, b1 x21) in the cell (2,1). This either exhausts the
capacity of origin O2 or satisfies the remaining demand at destination D1.
If a1 > b1 the requirement at destination D1 is satisfied but the
capacity of origin O1 is not completely exhausted. Move to the right
horizontally to the second column and make the second allocation of
magnitude x12 = min (a1 x11, b2) in the cell (1, 2) . This either exhausts
the remaining capacity of origin O1 or satisfies the demand at destination
D2 .
If b1 = a1, the origin capacity of O1 is completely exhausted as well as
the requirement at destination is completely satisfied. There is a tie for
second allocation, An arbitrary tie breaking choice is made. Make the second
allocation of magnitude x12 = min (a1 a1, b2) = 0 in the cell (1, 2) or x21 =
min (a2, b1 b2) = 0 in the cell (2, 1).
Step 3: Start from the new north west corner of the transportation
table satisfying destination requirements and exhausting the origin capacities
one at a time, move down towards the lower right corner of the
transportation table until all the rim requirements are satisfied.
6. Describe the Branch and Bound Technique to solve an I.P.P.
problem.

The Branch And Bound Technique

Sometimes a few or all the variables of an IPP are constrained by their
upper or lower bounds or by both. The most general technique for the
solution of such constrained optimization problems is the branch and bound
technique. The technique is applicable to both all IPP as well as mixed I.P.P.
the technique for a maximization problem is discussed below:
Let the I.P.P. be

Subject to the constraints

xj is integer valued , j = 1, 2, .., r (< n) (3)

xj > 0 . j = r + 1, .., n (4)

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 Further let us suppose that for each integer valued xj, we can assign lower
and upper bounds for the optimum values of the variable by

Lj xj Uj j = 1, 2, . r (5)

The following idea is behind the branch and bound technique

Consider any variable xj, and let I be some integer value satisfying Lj I
Uj 1. Then clearly an optimum solution to (1) through (5) shall also satisfy
either the linear constraint.

x j > I + 1 ( 6)
Or the linear constraint xj I ...(7)

To explain how this partitioning helps, let us assume that there were
no integer restrictions (3), and suppose that this then yields an optimal
solution to L.P.P. (1), (2), (4) and (5). Indicating x1
= 1.66 (for example). Then we formulate and solve two L.P.Ps each
containing (1), (2) and (4). But (5) for j = 1 is modified to be 2 x1 U1 in
one problem and L1 x1 1 in the other.
Further each of these problems process an optimal solution satisfying
integer constraints (3).Then the solution having the larger value for z is
clearly optimum for the given I.P.P. However, it usually happens that one (or
both) of these problems has no optimal solution satisfying (3), and thus some
more computations are necessary. We now discuss step wise the algorithm
that specifies how to apply the partitioning (6) and (7) in a systematic
manner to finally arrive at an optimum solution.
We start with an initial lower bound for z, say z (0) at the first iteration
which is less than or equal to the optimal value z*, this lower bound may be
taken as the starting Lj for some xj. In addition to the lower bound z (0) , we
also have a list of L.P.Ps (to be called master list) differing only in the bounds
(5). To start with (the 0 th iteration) the master list contains a single L.P.P.
consisting of (1), (2), (4) and (5). We now discuss below, the step by step
procedure that specifies how the partitioning (6) and (7) can be applied
systematically to eventually get an optimum integer valued solution.

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