Linear Programming, Simplex Method

OPERATIONAL RESEARCH
LINEAR PROGRAMMING
SIMPLEX METHOD
Reporter:
Vanessa Lou E. Torejas
October 15, 2016
Microsoft Excel
Worksheet
WHAT IS LINEAR
• Linear means
• Straight
• Can be represented in a straight
line
• Have one dimension
WHAT IS LINEAR PROGRAMMING - LP
• It is a quantitative method of decision making
(Quantitative means numerical, can be represented
by numbers)
• Production decisions – what product should be
produced etc. can be made to fulfill the
organization’s objective
• The objective may be;
• Maximize profit or
• Minimize cost
Simplex Method
The most frequently used method to solve LP problem. A linear-programming algorithm
that can solve problems having more than two decision variables.
Standard Form- A linear program in which all the constraints are written as equalities.
*Constraints – requirements or restrictions placed on the firm by the operating environment, stated in linear
relationships of the decision variables.
Slack Variable- A variable added to the LHS of “Less than or equal to” constraint to
convert it into an equality.
Surplus Variable- A variable subtracted from the LHS of

“More than or equal to” constraint to convert it into an equality.
Basic Solution- For a system of m linear equations in n variables (n>m),a solution

obtained by setting (n-m) variables equal to zero and solving the system of equations for
remaining m variables.
Basic Feasible Solution (BFS)- If all the variables in basic solution are more than or
equal to zero.
Optimum Solution- Any BFS which optimizes(maximizes or minimizes) the objective function.
Tableau Form- When a LPP is written in a tabular form prior to setting up the Initial Simplex Tableau.
Simplex Tableau- A table which is used to keep track of the calculations made at each iteration when
the simplex method is employed.
Net Evaluation Row (Cj-Zj )- The row containing net profit or loss. The nos.in this row are also known
as shadow prices.
Pivotal Column- The column having largest positive (or negative) value in the Net Evaluation Row for
a maximization (or minimization) problem.
Pivotal Row- The row corresponding to variable that will leave the table in order to make room for
another variable.
Pivotal Element- Element at the intersection of pivotal row and pivotal column.
LINEAR PROGRAMMING PROBLEM EXAMPLE
PROFIT: HOTPACK
COMPANY
Bun= P 5.00
Bread= P 7.00
The company can utilize maximum of 50 labor hours which

a Bun and a Bread requires 1 and 2 hours accordingly.
The management has decided to utilize all labor hours
Also the company needs to produce at least 20 Buns,

whereas it can produce maximum of 20 Breads
The company needs to maximize the profit.

SOLVING STEP 1 – MATHEMATICAL FORM
• It has several steps;
• Identifying the decision variables
• Building the objective function
• Identifying and formulating constraints
• Identifying and formulating non-negative
variables
IDENTIFYING THE DECISION
VARIABLES
• Decision variable means

• What we have to decide
• Unknown variables
• On what, our objective depends
IDENTIFYING THE DECISION
VARIABLES
• Now, we should formulate the decision variables as follows
BUILDING THE OBJECTIVE FUNCTION
• This is the formula represents the total profit of the

organization
Total profit = Unit profit * No. of units

IDENTIFYING AND FORMULATING
CONSTRAINTS
• Constraints means limitations to fulfill the objective
• Here we can identify three constraints
• Maximum labor hours is limited to 50 (The company will utilize
all hours)
• The company have to produce at least 20 units from Buns
• The company can only produce maximum of 20 units from Bread
Let’s formulate these three constraints

IDENTIFYING AND FORMULATING
CONSTRAINTS
As the company utilize all
Labor hours the symbol must be
Labor hour of one unit * No of units EQUAL
As the 20 is the minimum

(at least) the symbol must be
No of units
GREATER THAN OR EQUAL
As the 20 is the maximum

No of units the symbol must be
LESS THAN OR EQUAL
IDENTIFYING AND FORMULATING NON-
NEGATIVE VARIABLES
• All the variables in a LP should be Positive (non-negative)
• Why they cannot be negative
• No. of units (In this case No. of Buns and Breads) cannot be
negative
• You cannot produce -1 or -5 Buns or Breads
• This can be formulated as;
FINAL OUTPUT OF STEP 1
 Identifying the
decision variables
 Building the objective

function
 Identifying and
formulating
constraints
 Identifying and
formulating non-
negative variables
SOLVING STEP 2 – STANDARD FORM
• We cannot solve the given formulas with the < and > symbols,
therefore we have to remove the < and > marks using a special
method
• First we have to convert the constraints
Now you have identified If the symbol is =, you should add

An artificial variable; +A1
Three types of variables
1. Slack variables (S) If the symbol is >=, you should subtract
A surplus variable; -S1 and add an
2. Surplus variables (-S) artificial variable; +A2
3. Artificial variables (A)
If the symbol is <=, you should add
An slack variable; +S2
• First we have to convert the objective function
Slack and surplus variables Artificial variables

Should be inserted with Should be inserted with
“0” coefficient “-M” coefficient
• Also, all the variables should be non-negative

SOLVING STEP 3 – INITIAL TABLEAU
• Lets build the initial tableau step by step
Maximize P = 5X1 + 7X2 -0S1 +0S2 -MA1 -MA2

New Variables
Added
(Basic variables)
New Variables
Added
(Basic variables)
New Variables 20 = 1X1 -1S1 +1A 2

Added
(Basic variables) First, find the constraint including S1, then fill the Xb – A2 as above
You may have following problems after studying the given slides
• Where is the A2 in Xb column?
• Both S1 and A2 are included in the same constraint, in a
such situation, we should get only one variable. (I have get
only the S1 from it)
• Why S1 is not –S1 in Xb column?
• In Xb, we get only the variable (without + or -)
• Why “0” in “Cb” column related to S1 is not “-0”
• In mathematics, “0” have no “+” or “-” condition
• We have to develop the initial tableau further
Cb X1 Cb*X1 Cb X2 Cb*X2
0 1 0 0 1 0
0 0 0 0 0 0
-M 1 -M -M 2 -2M
Total -M Total -2M
SOLVING STEP 4 – CHECKING FOR
OPTIMAL SOLUTION
• To the solution to the optimal, all the “Cj-Zj” values should
be zero or negative
• In the “Cj-Zj” row, there are “M” values which is unknown, then how
to check whether the solution is optimal (best or most effective)?
• You can use a positive value for M and find the values
• Then you can observe that 5+M and 7+2M are positive
(if the M=1, 5+M=6, 7+2M=9 etc.)
• Then you can conclude that solution is not optimal
SOLVING STEP 5 – FIND VALUES FOR NEXT
TABLEAU
• As the solution is not optimal we have to proceed the step 5
• In this step we will find
• Pivot column
• Pivot row
• Pivot elements
• Entering variable
• Leaving variable
TABLEAU
Step 1 – Pivot column (PC)

HIGHEST POSITIVE VALUE
OF CJ-ZJ ROW
TABLEAU
Step 1 – Pivot column (PC) Step 2 – Pivot elements (PE)

HIGHEST POSITIVE VALUE VALUES OF PIVOT
OF CJ-ZJ ROW COLUMN
TABLEAU
Step 3 – Entering variable (EV) Step 1 – Pivot column (PC) Step 2 – Pivot elements (PE)
VARIABLE IN THE PIVOT HIGHEST POSITIVE VALUE VALUES OF PIVOT
COLUMN OF CJ-ZJ ROW COLUMN
TABLEAU
Step 3 – Entering variable (EV) Step 1 – Pivot column (PC) Step 2 – Pivot elements (PE) Step 4 – YB/PC
VARIABLE IN THE PIVOT HIGHEST POSITIVE VALUE VALUES OF PIVOT (Pivot Column)
TABLEAU
Step 5 – Pivot
Row (PR)
SMALLEST
POSITIVE
VALUE
IN YB/PC
COLUMN
TABLEAU
Step 5 – Pivot
Row (PR)
SMALLEST
POSITIVE
VALUE
IN YB/PC
COLUMN
Step 6 - Leaving variable (LV)
XB VALUE OF PIVOT
ROW
TABLEAU
• The meaning of entering variable and leaving variable
• In this case entering variable is X2 and leaving variable is S2
• That means, in the new tableau
• Xb column
X2 X2 has been entered
S1
A1
S2 has been removed
TABLEAU
You may have following question after studying the given slides
• What is to be done if there are two or many highest positive values in the
Cj-Zj row
• You have to select any one (It is better to select decision variables; X1, X2,
because to decide their values, they should be in the Xb row)
• What is to be done if there are two or many smallest positive values in the
Yb/PC column
• You have to select any one (It is better to select slack/artificial variables;
S1, A1 etc, because we need to remain the decision variables)
TABLEAU
You may have following question after studying the given slides
• What is to be done if there is no any positive values in the
Yb/PC column
• The question cannot be solved further, they
are called UNBOUNDED PROBLEMS
TABLEAU
• Now you can find the new values for X2, S1, A1
• New value for EV= LV/ PE of LV row (Pivot row)
TABLEAU
• New value for other remaining variables =
• Remaining variable – (PE of remaining variable row * values of
EV)
TABLEAU
• Now you can build the tableau 2
X2
S1
A1
OPTIMAL SOLUTION
all the “Cj-Zj” values
• To the solution to the optimal,
should be zero or negative
• You can observe that 5+M is positive
TABLEAU
Step 5 – Pivot
Row (PR)
SMALLEST
POSITIVE
VALUE
IN YB/PC
COLUMN
XB VALUE OF PIVOT
ROW
SOLVING STEP 5 – FIND VALUES FOR
NEXT TABLEAU
• Now you can find the new values for X1, X2, S1
SOLVING STEP 5 – FIND VALUES FOR
NEXT TABLEAU
EV)
TABLEAU
OPTIMAL SOLUTION
• To the solution to the optimal,
• You can observe that 3 is positive
TABLEAU
Step 5 – Pivot
Row (PR)
SMALLEST
POSITIVE
VALUE
IN YB/PC
COLUMN

XB VALUE OF PIVOT
ROW
TABLEAU
• Now you can find the new values for X1, X2, S2
TABLEAU
EV)
TABLEAU
OPTIMAL SOLUTION
• To the solution to ne optimal,
• You can observe that 1.5 is positive
TABLEAU
Step 5 – Pivot
Row (PR)
SMALLEST
POSITIVE
VALUE
IN YB/PC
COLUMN

XB VALUE OF PIVOT
ROW
TABLEAU
• Now you can find the new values for X1, S1, S2
TABLEAU
EV)
TABLEAU
SOLVING STEP 5 – CHECKING FOR OPTIMAL
SOLUTION
• To the solution to ne optimal,
• You can observe that all values are negative and zero
• Then you can conclude that solution is optimal.
SOLVING STEP 6 – INTERPRETATION
Xb row Yb row Cb row
Interpretation:
The company should produce 50 Buns (X1) which gain
a profit of P5.00 to maximize the profit. The company can
gain P250.00 of total profit from that production mix.
SOLVING STEP 6 – INTERPRETATION
You may have the following question related to the previous slide
• Why other variables in Xb row is not considered in the
interpretation?
• In the interpretation, we should
consider only the decision variables.
MINIMIZATION PROBLEMS – CHANGES
IN SOLVING PROCEDURE
• In above case, our objection was maximizing the problem. Also we have to
solve minimization problems, those objective is to minimize the cost
• When solving minimization problems, we have to change our solving
procedure using one three methods.
1. Multiply the objective function by -1 -or-
2. Change the Cj-Zj as Zj-Cj -or-
3. Change the optimal criteria as, all the Cj-Zj values should be zero or
positive
Do the other things as usual

MINIMIZATION PROBLEMS – THE
MEANING OF OBJECTIVE FUNCTION
• In a maximization problem, the coefficients of objective
function are profits, but in a minimization problem, the
coefficients of objective function are costs to be minimized.
• Ex: Objective function; Minimize C = 5X1 + 7X2
This may be direct labor cost of product 1 and product 2

MINIMIZATION PROBLEMS –
INTERPRETATION
EX:
Xb row Yb row Cb row
Interpretation:
The company should produce 50 X1s which’s unit
cost is P5.00 to minimize the cost. The company’s
total cost is P250 under this production mix.
Thank
you!
OPERATIONAL RESEARCH
LINEAR PROGRAMMING
SIMPLEX METHOD
Reporter:
Vanessa Lou E. Torejas
October 15, 2016
Microsoft Excel
Worksheet

Linear Programming, Simplex Method

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OPERATIONAL RESEARCH

Surplus Variable- A variable subtracted from the LHS of

Basic Solution- For a system of m linear equations in n variables (n>m),a solution

The company can utilize maximum of 50 labor hours which

The management has decided to utilize all labor hours

Also the company needs to produce at least 20 Buns,

The company needs to maximize the profit.

• Decision variable means

• This is the formula represents the total profit of the

Total profit = Unit profit * No. of units

Let’s formulate these three constraints

As the 20 is the minimum

As the 20 is the maximum

 Building the objective

Now you have identified If the symbol is =, you should add

Slack and surplus variables Artificial variables

• Also, all the variables should be non-negative

• Lets build the initial tableau step by step

Maximize P = 5X1 + 7X2 -0S1 +0S2 -MA1 -MA2

• Lets build the initial tableau step by step

Maximize P = 5X1 + 7X2 -0S1 +0S2 -MA1 -MA2

• Lets build the initial tableau step by step

Maximize P = 5X1 + 7X2 -0S1 +0S2 -MA1 -MA2

• Lets build the initial tableau step by step

Maximize P = 5X1 + 7X2 -0S1 +0S2 -MA1 -MA2

New Variables 20 = 1X1 -1S1 +1A 2

• We have to develop the initial tableau further

Step 1 – Pivot column (PC)

Step 1 – Pivot column (PC) Step 2 – Pivot elements (PE)

Step 6 - Leaving variable (LV)

Step 6 - Leaving variable (LV)

Xb row Yb row Cb row

Do the other things as usual

This may be direct labor cost of product 1 and product 2

Xb row Yb row Cb row

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