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LINEAR PROGRAMMING PROBLEM

INTRODUCTION

In a decision-making embroilment, model formulation is important because it represents the


essence of business decision problem. The term formulation is used to mean the process of
converting the verbal description and numerical data into mathematical expressions which
represents the relevant relationship among decision factors, objectives and restrictions on the use
of resources. Linear Programming (LP) is a particular type of technique used for economic
allocation of 'scarce' or 'limited' resources, such as labour, material, machine, time, warehouse
space, capital, energy, etc. to several competing activities, such as products, services, jobs, new
equipment, projects, etc. on the basis of a given criterion of optimally. The phrase scarce
resources means resources that are not in unlimited in availability during the planning period. The
criterion of optimality, generally is either performance, return on investment, profit, cost, utilily, time,
distance, etc.
George B Dantzing while working with US Air Force during World War II, developed this
technique, primarily for solving military logistics problems. But now, it is being used extensively in all
functional areas of management, hospitals, airlines, agriculture, military operations, oil refining,
education, energy planning, pollution control, transportation planning and scheduling, research
and development, etc. Even though these applications are diverse, all I.P models consist of
certain common properties and assumptions. Before applying linear programming to a real-life
decision problem, the decision-maker must be aware of all these properties and assumptions,
which are discussed later in this chapter.
Before discussing in detail the basic concepts and applications of linear programming, let us
be clear about the two words, linear and programming. The word linear refers to linear
relationship among variables in a model. Thus, a given change in one variable will always cause a
resulting proportional change in another variable. For example, doubling the investment on a
certain project will exactly double the rate of return. The word programming refers to modelling
and solving a problem mathematically that involves the economic allocation of limited resources
by choosing a particular course of action or strategy among various alternative strategies to
achieve the desired objective.
A large number of computer packages are available for solving a mathematical LP model but
there is no general package for building a model. Model building is an art that improves with
practice. To illustrate, how to build I.P models, a variety of examples are given in this chapter.

STRUCTURE OF LINEAR PROGRAMMING

General Structure of LP Model


The general structure of LP model consists of three components.

Decision variables (activities): We need to evaluate various alternatives (courses of action)


for arriving at the optimal value of objective function. Obviously, if there are no alternatives to
select from, we would not need LP. The evaluation of various alternatives is guided by the nature
of objective function and availability of resources. For this, we pursue certain activities usually
denoted by x1, x2…xn. The value of these activities represent the extent to which each of these is
performed. For example, in a product-mix manufacturing, the management may use LP to decide
how many units of each of the product to manufacture by using its limited resources such as
personnel, machinery, money, material, etc.
These activities are also known as decision variables because they arc under the decision-
maker's control. These decision variables, usually interrelated in terms of consumption of limited
resources, require simultaneous solutions. All decision variables are continuous, controllable
and non-negative. That is, x1>0, x2>0, ....xn>0.
The objective function: The objective function of each L.P problem is a mathematical
representation of the objective in terms of a measurable quantity such as profit, cost, revenue,
distance, etc. In its general form, it is represented as:
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Optimise (Maximise or Minimise) Z = c1x1 + c2X2. … cnxn


where Z is the mcasure-of-performance variable, which is a function of x1, x2 ..., xn. Quantities c1,
c2…cn are parameters that represent the contribution of a unit of the respective variable x1, x2
..., xn to the measure-of-performance Z. The optimal value of the given objective function is
obtained by the graphical method or simplex method.

The constraints: There are always certain limitations (or constraints) on the use of resources,
e.g. labour, machine, raw material, space, money, etc. that limit the degree to which objective can
be achieved. Such constraints must be expressed as linear equalities or inequalities in terms of
decision variables. The solution of an L.P model must satisfy these constraints.

The linear programming method is a technique for choosing the best alternative from a set of
feasible alternatives, in situations in which the objective function as well as the constraints can be
expressed as linear mathematical functions. In order to apply linear programming, there are
certain requirements to me met.
(a) There should be an objective which should be clearly identifiable and measurable in
quantitative terms. It could be, for example, maximisation of sales, of profit, minimisation of
cost, and so on.
(b)The activities to be included should be distinctly identifiable and measurable in quantitative
terms, for instance, the products included in a production planning problem.
(c)The resources of the system which arc to be allocated for the attainment of the goal should also
be identifiable and measurable quantitatively. They must be in limited supply. The technique would
involve allocation of these resources in a manner that would trade off the returns on the
investment of the resources for the attainment of the objective.
(d) The relationships representing the objective as also the resource limitation considerations,
represented by the objective function and the constraint equations or inequalities,
respectively must be linear in nature.
(e) There should be a series of feasible alternative courses of action available to the decision
makers, which are determined by the resource constraints.

When these stated conditions are satisfied in a given situation, the problem can be expressed in
algebraic form, called the Linear Programming Problem (LPP) and then solved for optimal
decision. We shall first illustrate the formulation of linear programming problems and then consider
the method of their solution.

Additional info:
A large number of decision problems faced by a business manager involve allocation of
resources to various activities, with the objective of increasing profits or decreasing costs, or
both. When resources arc in abundance no difficulty is experienced. But such cases are very
rare. Practically in all situations, the management is confronted with the problem of scarce
resources. Normally, there are several activities to perform with limitations of either of the
resources or their use prevents each activity from being performed to the desired level. Thus,
the manager has to take a decision as to how best the resources be allocated among the
various activities.
The decision problem becomes complicated when a number of resources are required to be
allocated. There are several activities to perform. Rule of thumb, even for an experienced
manager, in all likelihood may not provide the right answer in such cases. The decision
problems can be formulated, and solved using mathematical programming techniques.
Mathematical programming involves optimisation of a certain function, called the objective
functions subject to certain constraints. For example, a manager may be faced with the
problem of deciding the appropriate product mix of the four products. With the profitability of
the products along with the requirements of raw materials, labour etc. known, his problem
can be formulated as a mathematical programming problem taking the objective function as
the maximisation of profits obtainable from the resources keeping in view the various constraints
—the availability of raw materials, labour supply, market and The methods of mathematical
programming can be divided into three groups: linear, integer, and non-programming.
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ASSUMPTIONS OF LINEAR PROGRAMMING

The following four basic assumptions are necessary for all linear programming models.

Certainty: In all LP models, it is assumed, that all model parameters such as availability of
resources, profit (or cost) contribution of a unit of decision variable and consumption of
resources by a unit of decision variable must be known and is constant. In some cases, these may
be either random variables represented by a known distribution (general or may be statistical) or
may tend to change, then the given problem can be solved by a stochastic LP model or
parametric programming. The linear programming is obviously deterministic in nature.

Divisibility (or continuity): The solution values of decision variables and resources are
assumed to have either whole numbers (integers) or mixed numbers (integer and fractional).
However, if only integer variables are desired, e.g. machines, employees, etc. the integer
programming method may be applied to get the desired values.
It is also an assumption of a linear programming model that the decision variables are
continuous. As a consequence, combinations of output with fractional values, in the context of
production problems, are possible and obtained frequently. For example, the best solution to a
problem might be to produce 5 2/3 units of product A and 10 1/3 units of product B per week.
Although in many situations we can have only integer values, but we can deal with the fractional
values, when they appear, in the following ways. Firstly, when the decision is a one-shot decision,
that is to say, it is not repetitive in nature and has to be taken only once, we may round the
fractional values to the nearest integer values. However, when we do so, we should evaluate the
revised solution to determine whether the solution represented by the rounded values is a
feasible solution and also whether the solution is the best integer solution. Secondly, if the
problem relates to a continuum of time and it is designed to determine optimal solution for a given
time period only, then the fractional values may not be rounded. For instance in the context of
a production problem, a solution like the one given earlier to make 5 2/3 units of A and 10 units
of B per week, can be adopted without any difficulty. The fractional amount of production would
be taken to be the work-in-progress and become a portion of the production of the following
week. In this case an output of 17 units of A and 31 units of B over a three-week period would
imply 5 2/3 units of A and 10 units of B per week. Lastly, if we must insist on obtaining only
integer values of the decision variables, we may restate the problem as an integer programming
problem, forcing the solutions to be in integers only.

Additivity: The value of the objective function for the given values of decision variables and the
total sum of resources used, must be equal to the sum of the contributions (profit or cost) earned
from each decision variable and the sum of the resources used by each decision variable,
respectively. For example, the total profit earned by the sale of two products A and B must be equal
to the sum of the profits earned separately from A and B. Similarly, the amount of a resource
consumed by A and B must be equal to the sum of resources used for A and B individually.
This assumption implies that there is no interaction among the decision variables (interaction
is possible when, for example, some product is a by-product of another one).

Finite choices A linear programming model also assumes that a limited number of
choices are available to a decision-maker and the decision variables do not assume
negative values. Thus, only non-negative levels of activity are considered feasible. This
assumption is indeed a realistic one. For instance, in the production problems, the output
cannot obviously be negative, because a negative production implies that we should be able to
reverse the production process and convert the finished output back into the raw materials!

Linearity (or proportionality): All relationships in the LP model (i.e. in both objective function
and constraints) must be linear. In other words, for any decision variable j, the amount of
particular resource say i used and its contribution to the cost one in objective function must be
proportional to its amount. For example, if production of one unit of a product uses 5 hours of a
particular resource, then making 3 units of that product uses 3 x 5 = 15 hours of that resource.
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ADVANTAGES OF LINEAR PROGRAMMING

Following are certain advantages of linear programming.


1.Linear programming helps in attaining the optimum use of productive resources. It also
indicates how a decision-maker can employ his productive factors effectively by selecting and
distributing (allocating) these resources.
2.Linear programming techniques improve the quality of decisions. The decision-making
approach of the user of this technique becomes more objective and less subjective.
3.Linear programming techniques provide possible and practical solutions since there might
be other constraints operating outside the problem which must be taken into account. Just
because we can produce
so many units docs not mean that they can be sold. Thus, necessary modification of its
mathematical solution is required for the sake of convenience to the decision-maker.
4.Highlighting of bottlenecks in the production processes is the most significant advantage of
this technique. For example, when a bottleneck occurs, some machines cannot meet demand
while other remains idle for some of the time.
5.Linear programming also helps in re-evaluation of a basic plan for changing conditions. If
conditions change when the plan is partly carried out, they can be determined so as to adjust
the remainder of the plan for best results.

LIMITATIONS OF LINEAR PROGRAMMING

In spite of having many advantages and wide areas of applications, there arc some limitations
associated with this technique. These are given below. Linear programming treats all relationships
among decision variables as linear. However, generally, neither the objective functions nor the
constraints in real-life situations concerning business and industrial
problems are linearly related to the variables.
1.While solving an LP model, there is no guarantee that we will get integer valued solutions.
For example, in finding out how many men and machines would be required lo perform a
particular job, a non-integer valued solution will be meaningless. Rounding off the solution to
the nearest integer will not yield an optimal solution. In such cases, integer programming is
used to ensure integer value to the decision variables.
2.Linear programming model does not take into consideration the effect of time and
uncertainty. Thus, the LP model should be defined in such a way that any change due to
internal as well as external factors can be incorporated.
3.Sometimes large-scale problems can be solved with linear programming techniques even
when assistance of computer is available. For it, the main problem can be fragmented into
several small problems and solving each one separately.
4.Parameters appearing in the model are assumed to be constant but in real-life situations,
they are frequently neither known nor constant.
It deals with only single objective, whereas in real-life situations we may come across conflicting
multi-objective problems. In such cases, instead of the LP model, a goal programming model is
used to get satisfactory values of these objectives.
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APPLICATION AREAS OF LINEAR PROGRAMMING


Linear programming is the most widely used technique of decision-making in business and Industry
and in various other fields. In this section, we will discuss a few of the broad application areas of
linear programming.
Agricultural Applications
These applications fall into categories of farm economics and farm management. The former deals
with agricultural economy of a nation or region, while the latter is concerned with the problems of
the individual farm.
The study of farm economics deals with inter-regional competition and optimum allocation of
crop production. Efficient production patterns can be specified by a linear programming model
under regional land resources and national demand constraints.
Linear programming can be applied in agricultural planning, e.g. allocation of limited
resources such as acreage, labour, water supply and working capital, etc. in a way so as to
maximise net revenue.

Military Applications
Military applications include the problem of selecting an air weapon system against enemy so as
to keep them pinned down and at the same time minimising the amount of aviation gasoline
used. A variation of the transportation problem that maximises the total tonnage of bombs dropped
on a set of targets and the problem of community defence against disaster, the solution of which
yields the number of defence units that should be used in a given attack in order to provide the
required level of protection at the lowest possible cost.
Production Management
(i) Product mix A company can produce several different products, each of which requires
the use of limited production resources. In such cases, it is essential to determine the
quantity of each product to be produced knowing its marginal contribution and amount of
available resource used by it. The objective is to maximise the total contribution,
subject to all constraints.
(ii) Production planning This deals with the determination of minimum cost production plan
over planning period of an item with a fluctuating demand, considering the initial number of
units in inventory, production capacity, constraints on production, manpower and all
relevant cost factors. The objective is to minimise total operation costs.
(iii) Assembly-line balancing This problem is likely to arise when an item can be made by
assembling different components. The process of assembling requires some specified
sequcnce(s). The objective is to minimise the total elapse time.
(iv) Blending problems These problems arise when a product can be made from a variety of
available raw materials, each of which has a particular composition and price. The
objective here is to determine the minimum cost blend, subject to availability of the raw
materials, and minimum and maximum constraints on certain product constituents.
(v) Trim loss When an item is made to a standard size (e.g. glass, paper sheet), the
problem that arises is to determine which combination of requirements should be
produced from standard materials in order to minimise the trim loss.
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Financial Management
(i) Portfolio selection This deals with the selection of specific investment activity
among several other activities. The objective is to find the allocation which maximises
the total expected return or minimises risk under certain limitations.
(ii) Profit planning This deals with the maximisation of the profit margin from investment in
plant facilities and equipment, cash in hand and inventory.
Marketing Management
(i) Media selection Linear programming technique helps in determining the advertising
media mix so as to maximise the effective exposure, subject to limitation of budget,
specified exposure rates to different market segments, specified minimum and maximum
number of advertisements in various media.
(if) Travelling salesman problem The problem of salesman is to find the shortest route from a
given city, visiting each of the specified cities and then returning to the original point of
departure, provided no city shall be visited twice during the tour. Such type of problems
can be solved with the help of the modified assignment technique.
Cm) Physical distribution Linear programming determines the most economic and efficient
manner of locating manufacturing plants and distribution centres for physical
distribution.
Personnel Management
a) Staffing problem Linear programming is used to allocate optimum manpower to a
particular job so as to minimise the total overtime cost or total manpower.
b) Determination of equitable salaries Linear programming technique has been used in
determining equitable salaries and sales incentives.
c) Job evaluation and selection Selection of suitable person for a specified job and
evaluation of job in organisations has been done with the help of linear programming
technique.

Other applications of linear programming lie in the area of administration, education, fleet
utilisation, awarding contracts, hospital administration and capital budgeting, etc.
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GRAPHICAL SOLUTION
Extreme point enumeration approach
Convex Polyhedron

TYPES OF SOLUTION

(a)Solution. Values of decision variables xj (j = 1, 2, 3, ….n) which satisfy the constraints of the
general L. P. P., is called the solution to that L. P. P.
(b)Feasible solution. Any solution that also satisfies the nonnegative restrictions of the general L.
P. P. is called a feasible solution.
(c)Basic Solution. For a set of m simultaneous equations in n unknowns (n> m). a
solution obtained by setting (n - m) of the variables equal to zero and solving the remaining m
equations in m unknowns is called a basic solution. Zero variables (n - m) are called non-basic
variables and remaining m are called basic variables and constitute a basic solution.
(d)Basic Feasible Solution. A feasible solution to a general L.P.P. which is also basic
solution is called a basic feasible solution.
(e)Optimum Feasible Solution. Any basic feasible solution which optimizes (maximizes or
minimizes) the objective function of a general L.P.P. is known as an optimum feasible solution to
that L.P.P.
(f)Degenerate Solution. A basic solution to the system of equations is called degenerate if one or
more of the basic variables become equal to zero.

SPECIAL CASES IN LINEAR PROGRAMMING


Alternative (or Multiple) Optimal Solutions
So far we have seen that the optimal solution of any linear programming problem occurs at an
extreme point of the feasible region and the solution is unique, i.e. no other solution yields the
same value of the objective function. However, in certain cases, a given LP problem may have
more than one solution yielding the same optimal objective function value. Each of such optimal
solutions is termed as alternative optimal Solution.
There are two conditions that should be satisfied for an alternative optimal solution to exist:
(i) The given objective function is parallel to a constraint that forms the boundary (or
edge) of the feasible solutions region. In other words, the slope of the objective
function is same as that of the constraint forming the boundary of the feasible
solutions region, and
(ii) The constraint should form a boundary on the feasible region in the direction of optimal
movement of the objective function. In other words, the constraint should be an active
constraint.
Remark: The constraint is said to be active or binding or tight, if at optimality, the left-hand side
of a constraint equals the right-hand side. In other words, an equality constraint is always active.
An inequality constraint may or may not be active.
Geometrically, an active constraint is one that passes through one of the extreme points of
the feasible solution space.

Unbounded Solution
Sometimes an LP problem will not have a finite solution. This means when one or more decision
variable values and the value of the objective function (maximisation case) are permitted to
increase infinitely without violating the feasibility conditions, then the solution is said to be
unbounded. It is important to note that there is the difference between a feasible region being
unbounded and an LP problem being unbounded. It is possible for a feasible region to be
unbounded but LP problem not to be unbounded, that is an unbounded feasible region may yield
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some definite value of the objective function. The general cause for an unbounded LP problem is
a mistake in mathematical model formulation.

Infeasible solution
It has already been stated that a solution is called feasible if it satisfies all the constraints and the
non-negativity conditions. Sometimes it is possible that the constraints may be inconsistent so
that there is no feasible solution to the problem. Such a situation is called infeasibility. This
means, there is no unique (single) feasible region. Such a problem arises due to wrong model
formulation with conflicting constraints.
Infeasibility depends solely on the constraints as has nothing to do with the objective function.
In the graphic approach to the solution to an LPP, the infeasibility is evident if its feasible region is
empty so that there is no feasible region in which all the constraints may be satisfied
simultaneously.

Infeasibility vs Unboundedness
Both infeasibility and unboundedness have a similarity in that there is no optimal solution in either
case. But there is a striking difference between the two, while in infeasibility there is not a single
feasible solution, in unboundedness there are infinite feasible solutions but none of them can be
termed as the optimal.

Redundancy
A redundant constraint is one that does not affect the feasible solutions region (or space) and thus
redundancy of any constraint does not cause any difficulty in solving an LP problem graphically.
In other words constraint appears redundant when it may be more binding than another.
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SIMPLEX
Define l.p.p. (mathematical)

Explain the summary procedure for the maximization case of the simplex method.

Step 1 Formulate the problem


 Translate the technical specifications of the problems into inequalities, and make a precise
statement of the objective function.
 Convert the inequalities into equalities by the addition of nonnegative slack variables. These
inequalities should be symmetric or balanced so that each slack variable appears in each
equation with a proper coefficient.
 Modify the objective function to include the slack variables.

Step 2 Design an initial program (A basic feasible solution)


 Calculate the net evaluation row: To get a number in the net evaluation row under a column,
multiply the entries in that column by the corresponding numbers in the objective column, and
add the products. Then subtract this sum from the number listed in the objective row at the top
of the column. Enter the result in the net evaluation row under the column.
 Test : Examine the entries in the net evaluation row for the given simplex tableau. If all the
zero or negative, the optimal solution has been obtained. Otherwise, the presence of any
positive entry in the net-evaluation row indicates that a better program can be obtained.

Step 3 Revise the program


 Find the key column. The column under which falls the largest positive net-evaluation- row
entry is the key column.
 Find the key row and the key number. Divide the entries in the “quantity” column by the
corresponding nonnegative entries of the key column to form replacement ratios, and compare
these ratios. The row in which falls the smallest replacement ratio is the key row. The number
which lies at the intersection of the key row and the key column is the key number.
 Transform the key row. Divide all the numbers in the key row (starting with and to right of the
“quantity” column) by the key number. The resulting numbers form the corresponding row of
the next tableau.
 Transform the non-key rows. Subtract from the old row number of a given key row (in each
column ) the product of the corresponding key-row number and the corresponding fixed ratio
formed by dividing the old row number in the key column by the key number. The result will
give the corresponding new row number. Make this transformation for all the non-key rows.
 Enter the results of (3) and (4) above in a tableau representing the revised program.

Step 4 Obtain the optimal program


Repeat steps 3 & 4 until a program has been derived.

[ Linear-programming problems involving the minimization of an objective function usually contain


structural of the “greater than equal to” type. They can also be solved by the simplex method. The
simplex procedure for solving a linear-programming problem in which the objective is to minimize
rather than maximize a given function, although basically the same as above, requires sufficient
modifications to deserve the listing of a separate summary. ]

9. Summary procedure for the simplex method (minimization case)

Step 1 Formulate the problem


 Translate the technical specification of the problem into inequalities, and make a precise
statement of the objectivity function.
 Convert the equalities into inequalities by the subtraction of nonnegative slack variables. Then
modify these equations by the addition of nonnegative artificial slack variables. These
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equations should be asymmetric or balanced so that each slack and artificial slack variable
appears in each equation with a proper coefficient.
 Modify the objective functions to include all the slack artificial slack variables.

Step 2 Design an initial program (a basic feasible solution).


 Design the first program so that only the artificial slack variables are included in the
solution. Place the program in a simplex tableau. In the objective row, above each column
variable, place the corresponding coefficient of that variable from step 1.c.In particular,
place a zero above each column containing an artificial slack variable.

Step 3 Test and revise the program.


 Calculate the net evaluation row. Toto get a number in the net evaluation row under a column,
multiplying the entries in that column by the corresponding number in the objective column,
and add the products. Then subtract the sum from the number listed in the objective row
above the column. Enter the result in the net-evaluation row under the column.
 Test. Examine the entries in the net-evaluation row for the given simplex tableau. If all the
entries are zero or positive, the optimum solution has been obtained. Otherwise, the presence
of any negative entry in the net-evaluation row indicates that a better program can be
obtained.
 Revise the program.
 Find the key column. The under which falls the largest negative net-evaluation-entry is the key
column.
 Find the key row and the key number. Divide the entries in the “Quantity” column by the
corresponding nonnegative entries in the key column to form replacement ratios, and compare
these ratios. The row in which the smallest replacement ratio falls is the key row. The number
which lies at the intersection of the key row and the key column is the key number.
 Transform the key row. Divide all the numbers in the key row (staring with and to the right to
the of the “Quantity” column by the key number. The resulting numbers form the
corresponding row of the next tableau.
 Transform the non-key rows. Subtract from the old row the number of a given non-key row (in
each column) the product of the corresponding fixed ratio formed by dividing the old row
number in the key column by the number. The result will give the corresponding new row
number. Make the transformation for all rows.
 Enter the results of (3) and (4) above in a tableau representing the revised program.

Step 4 Obtain the optimal program.


Repeat steps 3and 4 until an optimal program has been derived.

We repeat the following comments comparing the maximization and minimization


problems as solved by the simplex method.
The procedure for calculating the net-evaluation row is the same in both cases. However,
whereas the largest positive value is chosen to identify the incoming product in a maximization
problem, the most negative value is chosen in a minimization problem. The rest of the mechanics,
namely, the transformation of the key and the non-key rows, is exactly the same. The decision rule
identifying the optimal solution is the absence of any positive value in the non-evaluation row in
the maximization problem, and the absence of any negative value in the minimization problem.

Algorithm, degeneracy
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DUAL SIMPLEX
In ordinary simplex method we start with feasible but non-optimal solution while in Dual Simplex
Method, we start with infeasible but optimal solution. Successive iterations will maintain optimality
to remove infeasibility of the solution. The following steps are followed to arrive at optimal feasible
solution.

(1)Write down objective function as maximization and all constraints as ≤ or =.


(2)Construct first dual simplex table from the given problem in usual manner.
(3)The leaving variable is the basic variable having the most negative value (Break ties, if any,
arbitrarily). If all the basic variables are non-negative, the process ends and the feasible
(optimal) solution is reached.
(4)To determine the entering variable take ratios of the coefficients of non-basic variables in the
objective function to the corresponding coefficients in the row associated with the leaving variable.
Ignore the ratios with positive or zero denominators. The entering variable is the one with the
smallest absolute value of the ratio. (Break ties, if any, arbitrarily). If all the denominators are zero
or positive, the problem has no feasible solution.

After selecting the entering and leaving variables, row operations are applied as usual to
obtain the next table.

Application of this Dual Simplex Method is useful in Sensitivity Analysis. For example,
suppose a new constraint is added to the problem after the optimal solution is reached. If this
constraint is not satisfied by the optimal solution, the problem remains optimal but it becomes
infeasible. The Dual Simplex Method is then used to clear the infeasibility in the problem.

Example : Minimize Z = 2x1 + x2 subject to 3x1 + x2 ≥ 3, 4xx + 3x2 ≥ 6,


x1 + 2x2 ≤ 3, x1, x2 ≥ 0.
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CPM and PERT


CRITICAL PATH ANALYSIS

Advantages of critical path analysis

1. It allows for a comprehensive view of the entire project. Because of the sequential and
concurrent relationships, time scheduling becomes very effective. Identifying the critical
activities keeps the executive alert and in a state of preparedness, with alternative plans
ready in case these are needed. Breaking down the project into the smaller components
permits better and closed control.
2. Critical path analysis offers economic and an effective system of control based on the
principle of management by exception. That is need for corrective action arises only in
exceptional situations and in most other cases; performance is in conformity with the
plans.
3. It is a dynamic pool of management which calls for a constant review, early formulation of
the network, and finding the current path of relevance and optimum resources allocation.

Events

The beginning and ending points of an activity or a group of activities are called events, aka nodes
and connectors. It is often graphically represented by a numbered circle. All activities in the
network must commence from some event. Such events are called the tail event. Similarly all
activities in the network must our terminal point called the head event.
In the network, symbol "i" is used for the tail event, also called the preceding event and "j" for the
head event also called the succeeding event of an activity.
The activity is then denoted by "i-j".

Conventions adopted in drawing networks

There are two conventions normally adopted while drawing networks. They are
• Time flows from left to right.
• Head events always have a number higher than that of tail events.

Graphical representation of events and activities

Events are represented by numbers within circles. Activities are represented by arrows; the
arrowheads represent the completing of the activities. Lengths and orientation of the arrow are of
no significance and are only chosen for convenience.

Fundamental properties governing the representation of events and activities

The representation of events and activities is governed by one simple dependency rule which
requires that an activity which depends on another activity is shown to emerge from the head
event of the activity upon which depends and that only dependent activities are drawn in this way.

Errors and logical sequence: two types of errors in logic may arise when drawing network,
particularly when it is a complicated one. These are known as looping and dangling.
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Looping: Normally in the network, the arrow points from left to right. This convention is to be
strictly adhered, as this would avoid the illogical looping, as shown wrongly below.

1 2 3 4

Dangling: The situation represented by the following diagram is also at fault, since the activity
represented by the dangling arrow 9-11 is undertaken with no result.

6 7 9

To overcome problems arising due to dangling arrows, we must make sure that
• All events except the first and the last must have at least one activity entering and one
activity leaving them.
• All activities must start to finish within event.

Duplicate activities: consider the following figure

6 7 8

Here A and B are known as duplicate activities because they have the same head and tail events.
A remedy the situation is introduction of a dummy activity.

Dummy activity: it is a hypothetical activity which consumes known source or time. It is


represented by a dotted line and inserted in the network to clarify activity that turn on the following
situations
(i) it is created to make equities with, starting and finishing events distinguishable,
(ii) to identify and maintain the proper precedence relationship between activities that are not
connected by events
(iii) to bring all "loose ends" to single initial and a single terminal event in each network using
dummies if necessary.

For example the problem of duplicate activities may be circumvented as shown:


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6 8

7 B

Numbering the events

The event numbers in the network should in some respects reflects the logical sequences. When
a complicated network has been drawn when the problem of assigning numbers to the events
involved in the network arises. A rule devised by D. R. Fulkerson, involving the following steps
may be followed to resolve the problem of numbering events.
1. And initial event is one which has arrow/arrows coming out of it and none of the arrow
entering it. In a network there will be only one such event. Call it 1.
2. Delete all arrows coming of from the event 1. This will give us at least one more initial
event.
3. Numbers these events as 2,3…
4. delete all emerging arrows from these numbered events which will create new initial
events. Then follow steps 3.
5. Continue the above steps the last event is obtained which has no arrows coming out of it.

Consider the numbering of events in the following figure:

Y 5

1 2 4 6 7 8

X 3

Here we proceed from left to right. The event with the least x coordinate is assigned the smallest
integer, say 1. Other events are assigned progressively higher integers with regard to x
coordinate. If two were more events such as 4 & 5 have the same x coordinate the one towards
the arrow should have a higher number.
It is better to number of the events as 10, 20, 30.... to afford insertions of more activities and
events omitted by oversight.

Concurrent activities

Activities may not always be discreet that is, they may be done in part allowing the subsequent
activities to commence before the preceding activity is fully completed. Activities of this kind are to
be frequently encountered in batch production. If, for example, a batch of 50 spindles is to be
processed onto machines obviously it is not necessary to process all the items of the batch on the
first machines and then transfer these to the next machines. A few items processed on the first
machines may be transferred to the second machine before completion of the entire batch on the
first machine. Concurrent activities are to be encountered in sewage work, trenching, laying pipe,
welding pipe, and backfilling all going on simultaneously with suitable lags on construction work.
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Forward pass computations

As stated above, the purpose of the forward pass is to compute the earliest start (EST)
and finish time (EFT) for each activity. The EST time indicates the earliest time that a given
activity can be scheduled. Earliest finish time for an activity indicates the time by which the activity
can be completed, at the earliest. To compute these time estimates, we will first of all compute the
earliest allowable occurrence time for various events of the network.

It is a convention to keep the earliest allowable occurrence time of the START event as zero.

To understand, how this time estimate for other events is computed, let us consider the
following network diagram.
E3= 14
L3= 16

3
8 6

16
6 5 6
1 2 0

E1 = 0 E2 = 6 20 E5= 36 E6= 52
L1 = 0 L2 = 6 L5= 36 L6= 52
10
4

E4= 16
L4= 16

Earliest allowable occurrence time

In the network shown above, event 1 stands for the beginning of the activity 1 – 2 and we
can say that it occurs at the time zero i.e. E1 = 0. Event 2 stands for the finish of the activity 1 – 2 ,
thus event 2 can occur at the earliest time E2 which is computed as

E2 = 0 + D 12 = 0 + 6 = 6

Where D12 stands for the duration of activity 1 – 2

Event 3 stands for finish of the activity 2 –3 and its earliest time is

E3 = E2 + D23 = 6 + 8 = 14

The event 4 can occur either at the end of the activity 3-4 or at the finish of activity 2 – 4.
In this case, there will be two time estimates as follows:

E4 = E2 + D34 = 14 + 0 = 14

E4 = E2 + D24 = 6 + 10 = 16
In case, two or more time estimates exist for a particular event, then the time
estimate with maximum value is retained as the earliest event time and other values are
discarded. This maximum value represents the completion of all the activities ending at the event
under consideration. In the above example, the earliest event time for event 4 will be 16.

A general rule can also be given here for determining the earliest event time as below:

E1 = Max (Ei + Dii)


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When E1 is the earliest time for even j, Ei is the earliest time for event I and Dii is the
duration of the activity i-j.

Earliest start and finish times of an activity

After computing the earliest event time of various events, one can easily compute the
earliest start and finish times of all the activities on the network. The earliest start time of an
activity is given by the earliest allowable occurrence time of the tail even of that activity.
Thus, in our example, the earliest start time of the activity 1-2 will be given by the earliest time of
the event 1 i.e. it will be 0. The earliest start time for the activities 2-3 and 2-4 will be given by the
earliest time of event 2 which is equal to 6. The earliest time for the activities 3-4 and 3-5 will be
14 which is the earliest time for the event 3 and so on.

The earliest finish time of an activity will be simply equal to the earliest start time of
the activity plus the duration of that activity. Hence, in our example, earliest finish time of
activity 1-2 will be 0 + 6 = 6, for activity 2-3, it will be 6 + 8 = 14 and for activity 2-4, it will be 6 + 10
= 16 and so on.

The complete computations for all the activities are shown in columns (3) and (4) of Table 1.

1.4.3 Backward pass computations

The purpose of the backward pass is to compute latest start and finish times for each activity.
These computations are precisely a “mirror image” of the forward pass computations. The term
“latest allowable occurrence” of an even (denoted by L1) is used in the sense that the project
terminal event must occur on or before some arbitrary scheduled time. Thus, the backward
pass computations are started rolling back by arbitrarily specifying the latest allowable
occurrence time for the project terminal event. If no schedule date for the completion of the
project is specified, then the convention of setting the latest allowable time for the terminal event
equal to its earliest time, determined in the forward pass, is usually followed i.e. L = E for the
terminal event of the project. This convention is called the zero slack convention. Following
this, one can also interpret the latest allowable activity finish time (LFT) as the time to which
the completion of an activity can be delayed without directly causing any increase in the
total time to complete the project.

To explain the computation, let us again consider the network diagram in figure 24. The
terminal even is 6 so we set L6 = E6 = 52 and we start rolling back. The latest allowable
occurrence time for the events 5 and 4 are L5 = 52 – 16 = 36 and L4 = 36 – 20 = 16 respectively.
It may be noted here that can roll back to event 3 via activity 3 –5 as well as activity 3 – 4. So
there are two latest allowable occurrence times for the event 3 as given below:

L3 = L4 – D34 = 16 – 0 = 16
L3 = L5 – D35 = 36 – 6 = 30

We retain the minimum value as the latest occurrence time for the event 3 and ignore
other values. Therefore, the latest allowable occurrence time for the event 3 is 16. Similarly

L2 = L3 – D23 = 16 – 8 = 8
L2 = L4 – D24 = 16 – 10 = 6

The latest occurrence time for the event 2 is thus 6 and the latest occurrence time for the
event 1 is equal to its earliest time i.e. zero.

In general, latest allowable occurrence time of an event can be calculated by selecting an


appropriate formula among the following two:

Li = Li – Dii or
Li = minimum (Li – Dii)
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The second formula is used for the event having two or more latest allowable occurrence
time estimates.

Latest start and finish times of an activity

After computing latest allowable occurrence time for various events, one can compute the
latest start and finish times of an activity. The latest finish time of an activity is equal to the
latest allowable occurrence time of the head event of that activity.

i.e. LFT (i-j) = Lj

The latest start time of an activity is equal to its latest finish time minus its duration.
i.e. LST (i-j) = LFT (i-j) – Dij

These computations are shown in column (4) and column (6) of Table 1, given below:-

Table 1
Start Finish
Activity Duration Earliest time Latest time Earliest time Latest time
(1) (2) (3) (4) (5) (6)
1-2 6 0 0 6 6
2-3 8 6 8 14 16
2-4 10 6 6 16 16
3-4 0 14 16 14 16
3-5 6 14 30 20 36
4-5 20 16 16 36 36
5-6 16 36 36 52 52

The critical path determination

After having computed various time estimates, we are now interested in finding the critical Path of
the network. A network will consist of a number of parts. A path is a continuous series of activities
through the network that leads from the initial event (or node) of the network to its terminal event.
For finding the critical Path, we list out all possible paths through a network along with their
duration. In the network under consideration, various paths have been listed as follows:
Path length in days
1-2-3-5-6 36
1-2-4-5-6 52
1-2-3-4-5-6 50

Critical Path: a path in a project network is called critical if it is the longest Path. The activities
lying on the critical Path are called the critical activities.
In the above example, the Path 1-2-4-5-6 with the longest duration of 52 days is the critical Path
and the activities 1-2,2-4, 4-5 and 5-6 are the critical activities.

Calculation of floats

It may be observed that for every critical activities in a network, the earliest start and latest start
times are the same. This is so since the critical activities cannot be scheduled later than the
earliest scheduled time without delaying the total project duration, they do not have any flexibility
in scheduling. However, noncritical activities do have some flexibility. That is these activities can
be delayed for sometime without affecting the project duration. This flexibility is termed as slack in
case of an event and as floats in case of an activity.
Some people do not make any distinction between a slack and a float.
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Slack time for an event

The slack time or slack of an event in a network is the difference between the latest event time
and the earliest event time.
Mathematically it may be calculated using the formula Li – Ei where Li is the latest allowable
occurrence time and Ei is the earliest allowable occurrence time of an event i.

Total float of an activity

The total activity float is equal to the difference between the earliest and latest allowable start or
finish times for the activity in question. Thus, for an activity (i-j), the total float is given by:

TFij = LST – EST or TFij = LFT – EFT

In other words, it is the difference between the maximum time available for the activity and the
actual time it takes to complete. Thus, total float indicates the amount of time by which the actual
completion of an activity can exceed its earliest expected completion time without causing any
delay in the project duration.

Free float

It is defined as that portion of the total float within which an activity can be manipulated without
affecting the float of the succeeding activities. It can be determined by subtracting the head event
slack from the total float of an activity.

i.e. FFij = TFij – (slack of event j)

The free float indicates the value by which an activity in question can be delayed beyond the
earliest starting point without affecting the earliest start, and therefore the total float of the activities
following it.

Independent float

It is defined as that portion of the total float within which an activity can be delayed for start without
affecting float of the preceding activities. It is computed by subtracting the tail event slack from the
free float.

i.e. IFij = FFij – (slack of event i)

The independent float is always either equal to a less than the free float of an activity. If a negative
value is obtained, the independent float is taken to be 0.

Interfering float

Utilisation of the float of an activity can affect the float of subsequent activities in the network.
Thus, interfering float can be defined as that part of the total float which causes a reduction in the
float of the successor activities. In other words, it can be defined as the difference between the
latest finish time of the activity under consideration and the earliest start time of the following
activity, or 0, whichever is larger. Thus, interfering float refers to that portion of the activity float
which cannot be consumed without affecting adversely the float of the subsequent activity or
activities.
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Example
Activity Duration
1.2 4 days
1.3 12 days
1.4 10 days
2.4 8 days
2.5 6 days
3.6 8 days
4.6 10 days
5.7 10 days
6.7 0 days
6.8 8 days
7.8 10 days
8.9 6 days

With the help of the activities given above draw a network. Determine its critical path, earliest start
time, earliest finish tine, latest start time, latest finish time, total float, free float and independent
float.
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PROGRAMME EVALUATION AND REVIEW TECHNIQUE

(a) The optimistic time estimate: this is the estimate of the shortest possible time in which an
activity can be completed on the ideal conditions. For this estimate, no provision for delays of
setbacks are made. We shall denote this estimate by to.

(b) The pessimistic time estimate: this is the maximum possible time equity to accomplish the job.
If everything went long and normal situations prevailed, this would be the time estimate. It is
denoted by tp.

(c) The most likely time estimate: this is the time which lies between the optimistic and pessimistic
time estimates. It assumes that things go in a normal way with few setbacks. It is represented by
tm .

Beta distribution is found to give fairly satisfactory results for most of the activities. For distribution
of this type the standard deviation is approximately 1/6 of the range.

t p − to
i.e St =
6
2
 t − to 
The variance, therefore is S =  p
t
2

 6 
Expected time:

The expected time (te) is the average time taken for the completion of the job. By using beta
distribution, the expected time can be obtained from the following formula.

 t + 4tm + t p 
te =  o 
 6 
Probability of achieving completion date

Suppose we wish to find out the probability that the project will be completed within the scheduled
completion time. The time te as determined by beta distribution after taking into account the time
estimates viz. to, tp, tm only represents a 50% chance that the activity will be completed within time
te .

In general are project consisting of several activities will have a normal distribution, that is for the
project as a whole, the distribution curve will be a normal curve and the probability of competing
project in time equal to the mean value Te which is ½.

A standardised normal curve has an area equal to 1 and the standard deviation of 1. Further, it is
symmetrical about the mean value te. Hence the area under the curve AC is 50% of the total area
under the curve ACB. The area under the curve ACD depends on the location of Ts along the time
axis. The point te can be taken as the reference point and the distance (te- Ts) can be expressed in
terms of standard deviation. For example, if Ts is on the right of te at a distance of one standard
deviation in the enclosed by ACD is 84.1%. If Ts is on the left of te at a distance of one standard
deviation then the area enclosed is 15.9%.
A distance of +1 corresponds to 84.1% probability and a distance of -1 corresponds to 15.9%
probability.
We calculate the value of the standard normal variate (Z) as follows:
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T1 − Tcp
Z=
S .D.
Where T1 denotes the duration in which we wish to complete the project and Tcp represents the
duration of the critical path, S.D. stands for standard deviation of the earliest finish of a network.

2
Computed variance Vt (= St ) of all the activity durations of the critical path. Sum up these and
take the square root. This yields the S.D. of the earliest finish time of a network. Let the critical
path duration the designated by Tcp assuming normal distribution for the total duration, you should
be in a position to find the confidence interval for Tcp. Look at the standard normal probability
distribution tables for the probability of competing project within the given duration of T1.

Examples 10. PERT calculations yield a project length of 60 weeks with the variance of 9. Within
how many weeks we expect the project to be completed with the probability of 0.99? (That is the
project length that he would expect to be exceeded only by 1% of the time if the project were
repeated many times in an identical manner).
Solution
Tcp = 60 S.D. = 9 = 3
60 + (3 x 2.3) = 67

A few comments on assumptions of PERT AND CPM

1. Beta distribution may not always be applicable.


2. The formula for the expected duration and S. D. are simplifications. Maccrinnon and
Ryavec reached the conclusion that in certain cases the errors, because of these
assumptions may even be to the tune of 33 percent.
3. The errors owing to the aforesaid simplification and assumptions may be compounded or
may cancel each other to an extent.
4. In computing the S. D. of the critical path, independence of activities is implied. Limitations
of resources may invalidate the independence which exists by the very definition of an
activity.
5. It may not always be possible to sort of completely identifiable activities and state where
they begin and where they end.
6. In projects fraught with uncertainty it is natural that the existing alternatives with differing
outcomes. For example for particular hardness is not obtained in a metal, an alloy might
have to be used that is more expensive and also inferior on certain technical
considerations. There have been theoretical developments in this regard, and it may be
worthwhile to incorporate the concept of decision tree analysis depending on the situation.
7. Time estimates have an element of subjectiveness and, to that extent, the techniques
could be weak. The contractors reacts with this weakness shrewdly whilst bidding. If there
are cost plus contracts they would deliberately underestimate the time for chances of
being awarded the contract. Incentive type contracts might lead to an opposite bias.
8. Cost-time trade-offs, for deriving the cost curve slopes, are subjective again and call for
ability of expertise of the technology as well as genuine effort to estimate. Often the
engineers tend to be lax here; occasionally with the honest deliberation even, their
guesses may be wide off the mark.
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Distinctions between PERT and CPM

The PERT and CPM models are similar in terms of their basic structure, rationale and mode of
analysis. However, there are certain distinctions between pert and CPM networks which are
ennumerated below.

1. CPM is activity oriented that is CPM network is built on the basis of activities. Also results
of various calculations are considered in terms of activities of the project. On the other
hand, PERT is event oriented.
2. CPM is a deterministic model that is it does not take into account the uncertainties
involved in the estimation of time for execution of a job or an activity. It completely ignores
the probabilistic element of the problem. Pert, however is the probabilistic model. It uses
three estimates of the activity time; optimistic, pessimistic and most likely; with a view to
take into account time uncertainty. Thus, the expected duration of each activity is
probabilistic and expected duration indicates that there is 50% probability of getting the
job done within that time.
3. CPM places dual emphasis on time and cost and evaluates the trade-off between project
cost and project time. By deploying additional resources, it allows the critical path project
manager to manipulate project duration within certain limits so that project duration can be
shortened at an optimal cost. On the other hand, pert is primarily concerned with time. It
helps the manager to schedule and coordinate various activities so that the project can be
completed on schedule time.
4. CPM is commonly used for those projects which are repetitive in nature and where one
has prior experience of handling similar projects. What is generally used for those projects
with time required to complete various activities are not known before hand. Thus, pert is
widely used for planning and scheduling research and development projects.

PROJECT CRASHING

In some cases, there are compelling reasons to complete a project earlier than the originally
estimated time duration of the critical path computed on the basis of normal activity times, by
employing extra resources. An example would be introduction of a new project. The motives in
hastening the project might be to ensure that the competitors do not steal a march. Increase or
decrease in the total duration of the completion time for project is closely associated with cost
considerations. In such cases when the total time duration is reduced, the project cost increases,
but in some exceptional cases project cost is reduced as well. Production cost occurs in the cases
of those projects which make use of a certain type of resources for example a machine and whose
time is more valuable than the operator’s time.

Some definitions:

Activity cost: it is defined as the cost of performing and completing a particular activity or task.

Crash cost, Cc: this is the direct cost that is anticipated in completing an activity within the crash
time.

Crash time, Ct: This is the minimum time required to complete an activity.

Normal cost Nc: this is the lowest possible direct cost required to complete an activity.

Normal time Nt: this is the minimum time required to complete an activity at normal cost.

Activity costs slope: the costs slope indicates the additional cost incurred per unit of time saved in
reducing the duration of an activity.
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D E
Crash
cost

COST

F
Normal
cost
C

O B A
DURATION FOR THE JOB
Crash Normal
Time Time

Let OA represent the normal duration of completing a job and OC the normal cost involved to
complete the job. Assume that the management wish to reduce the time of completing the job to
OB from normal time OA. Therefore under such a situation the cost of the project increases and it
goes upto say OD (Crash Cost). This only amounts to saving that by reducing the time period by
BA the cost has increased by the amount CD. The rate of increase in the cost of activity per unit
decrease in time is known as cost slope and is described as follows.

CD OD − OC
Activity cost slope = =
AB OA − OB

Crash cos t − NormalCost


=
Normaltime − Crashtime
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Optimum duration: the total project cost is the sum of the direct and indirect
costs. In case the direct cost varies with the project duration time, the total cost
would have the shape as indicated in the above figure.

At Point A, the cost will be minimum. The time corresponding to this point Point A is called the
optimum duration and the cost as optimum cost for the project.

TOTAL PROJECT COST


A

COST DIRECT COST

INDIRECT COST

O
Crash Optimal Normal

TIME
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TRANSPORTATION
1. What is the transportation problem?

The transportation problem consists of three components. First we can formulate a linear
objective function, which is to be minimized. This function will represent the total shipping cost
of all the goods to be sent to all the destinations. Second we can write a table of constraints.
Of the seven constraints of this problem, three (one for each row) will give the relationships
between the origin capacities and the goods to be received by different destinations. These
are called capacity constraints. The other four constraints (one for each column) will
relationships between destination requirements and the goods to be shipped from different
origins. These are called as requirement constraints. Third we can specify a set of non-
negativity constraints for the structural variables xij. They will state that no negative shipments
be permitted. The general correspondence between a typical linear programming problem and
the transportation problem is thus complete.
Minimize

General Transportation Tableau

Destination (Di)
Origin D1 D2 ______ Dn Ai
(oj)
O1 C11 C12 C1n A1
X11 X12 X1n

O2 C21 C22 C2n A2


X21 X22 X2n

|
|
|

Om Cm1 Cm2 Cmn Am


Xm1 Xm2 Xmn

Req Bj B1 B2 -------- Bn m n

∑ Ai = ∑ B j
i =1 j =1

5.What are the methods to solve a transportation problem?

A. Procedure summary for the modified distribution method (minimization case)

Step 1 Obtain a basic feasible solution


An initial basic feasible solution for a given transportation may be obtained by following the
northwest corner rule, by the application of Vogel’s approximation method, or by simple
inspection.
Test for step 1: A basic feasible solution must include shipments covering m+n-1 cells. That is
number of occupied cells is 1 less than the number of rows and columns in the transportation
matrix.
If number is more then recheck the data. If the number of occupied cells is less than m+n-1
then this is a degenerate solution. To resolve the degeneracy, add one or more epsilons to
some “suitable” empty cells so that the number of occupied cells becomes equal to m+n-1.
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Step 2 Determine the opportunity costs of the empty cells (Opportunity costs = Implied costs –
Actual costs)
a) Determine a complete set of row and column numbers (values). When in a given
program, the number of occupied cells equals m+n-1, proceed to assign row and column
numbers in such a manner that for each occupied cell the relationship cij =ui+vj holds. To
start, a value of zero can be assigned to any row having an occupied cell. For each
occupied cell, the actual shipping cost per unit should equal the sum of its row and
column values.
b) Calculate the implied cost of empty cells. Once all the row and column values have been
assigned, the implied cost of a given empty cell can be calculated as follows :

Implied cost = row value + column value.

c) Determine the opportunity costs of empty cells. The opportunity cost of an empty cell is
determined by subtracting the actual cost of the empty cell from the implied cost. In other
words, opportunity cost, for each cell is given by
Opportunity cost = ui+ vj –cij.

If the opportunity costs of all the cells are non-positive, an optimal solution has been
obtained else a better program can be designed. Thus step 2 serves as a test for
optimality.

Step 3 Designed an improved program


Design a new program such that the empty cell having the largest opportunity cost is included in
the solution. This is accomplished in the following manner:
a) draw a loop of horizontal and vertical arrows in such a manner that it starts from the
cell to be filled, passes to an occupied cell in the same row or column as the empty
cell, and then, making a series of alternate horizontal and vertical turns through
occupied cells returns to the empty cell.
b) Place the plus (+) sign in the empty cell to be filled. Then alternately, place minus
signs and plus signs at the beginnings and ends of the connecting ends of the loops.
c) Examine those occupied cells in which the minus signs have been placed. Of these,
the cell having the least number is vacated by transferring these units to the empty
cell. This is accomplished by adding the same amount to all cells having plus signs
and subtracting it from all cells having minus signs. The improved program should
have the same number of occupied cells as the preceding program. If the number is
less then the problem becomes degenerate. In such a case , add epsilons to some
recently vacated cells such that the number of occupied cells again equals m+n-1.

Step 4: Repeat steps 2 and 3 until a program is achieved in which each empty cell has a
n opportunity cost value which is either zero or negative. This program will be an optimal
program.

B. Modified distribution method (maximization case)

Except for one transformation, a transportation objective is to maximize a given function


can be solved by the MODI algorithm as presented above. The transformation is made by
subtracting all the cij’s from the highest cij (profit) of the given transportation matrix. The
transformed cij’s give us the relative costs, and the problem then becomes a minimization
problem. Once an optimal solution to this minimization problem has been found, the value
of the objective function can calculated by inserting the original values of the cij’s for
those routes, which form the basis (occupied cells) in the optimal solution.

6.What is degeneracy? How can it be resolved?

The solution for non-degenerate basic feasible solution with exactly m+n-1 strictly positive
allocations in independent positions has been discussed so far. However, sometimes it is not
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possible to get such initial feasible solution to start with. Thus degeneracy occurs in the transport
problem whenever the number of occupied cells is less than m+n-1.
Degeneracy in transportation can occur in two ways:
Basic feasible solutions may be degenerate from the initial stage onward.
They may become degenerate at any intermediate stage.

Resolution of degeneracy during the initial stage.


To resolve degeneracy, allocate an extremely small amount of goods (close to zero) to one or
more of the empty cells so that the number of occupied cells becomes m+n-1. The containing this
small allocation, is of course, considered to be an occupied cell.
Rule: The extremely small quantity usually denoted by the Greek letter ∆(delta) is introduced in the
least cost independent cell subject to following rule. If the necessary, two or more ∆’s can be
introduced in the least and second least cost independent cells.

Resolution of degeneracy during the solution stages


The transportation problem may also become degenerate during solution stages. This happens
when most favorable quantity is allocated to the empty cell having the largest negative cell
evaluation resulting in simultaneous vacation of two or more of the currently occupied cells. To
solve degeneracy allocate ∆(delta) to one or more of recently vacated cells so that the no. of
occupied cells is m+n-1 in the new solution.

7. What is an unbalanced Transportation problem? Explain the procedure for balancing an


unbalanced TP.

If in a TP the sum of all available quantities is not equal to the sum of requirements, that is,
m n
Σ ai <> Σ bj
i=1 j=1

then such a problem is called an unbalanced transportation problem.

An unbalanced transportation problem can be modified to a balanced problem by introducing a


fictitious sink in the first case and a fictitious source in the second. The inflow from the fictitious
source to the sink represents the unfilled demand at that sink. Similarly the inflow from the source
to the fictitious sink represents the surplus at that source. For convenience the cost of
transportation of a unit from the fictitious source or to the fictitious sink as the case maybe is
assumed zero. Following is the procedure to balance a TP.

Balancing the given transportation problem


To solve a given transportation problem we must establish equality between the total capacities of
the origins and the total requirements of the destinations. Three cases can arise.
Case 1 : Σbi = Σdj
In this case, the total capacity of the origins equals the total requirements of the destinations. The
problem can be arranged in the form of a matrix, along with relevant cost data, and the
transportation algorithm may be applied directly to obtain a solution.
Case 2 : Σbi > Σdj
In this case, the total capacity of the origins exceeds the total requirement of the destinations. A
“dummy” destination can be added to the matrix to absorb the excess capacity. The cost of
shipping from each origin to this dummy destination is assumed to be zero. The adding of a
dummy destination establishes equality between the total origin capacities and the total
destination requirements. The problem is then amenable to solution by the transportation
algorithm.
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ASSIGNMENT
2. Define assignment problem.

The name assignment problem originates from the classical problems where the objective is to
assign a number of origins (jobs) to the equal number of destinations (persons) t a minimum cost
or at maximum profit. To explain the nature of assignment problem, suppose there are n jobs to be
performed and n persons are available for doing these jobs. Assume that each person can do
each job at a time, though with varying degree of efficiency. Let cij be the cost (payment) if the ith
person is assigned the jth job, the problem is to find the assignment (which job should be assigned
to which person) so that the total cost for performing all jobs is minimum. Problems of this kind are
known as assignment problems.

Further these types of problems ma consist of assigning men to offices, classes to rooms, drivers
to trucks, trucks to delivery routes etc. The assignment problem can be stated in the form of a n x
n matrix [cij] of real numbers as given in the table below.

JOBS
1 2 ……………………. j ………………
n

1 C 11 C12 ….. C 1j ……
C1n
2 C 21 C22 ….. C 2j ……
C2n
. . . .
.
. . . .
PERSONS i C i1 Ci2 …... C ij ……
Cin
. . . .
.
. . . .
.
n C n1 Cn2 …… C nj ……
Cnn
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3. Explain the mathematical formation of an assignment problem.

Mathematically the assignment problem can be stated as:


Minimize the total cost

n m n
Z= Σ Σ cij xij , i= 1,2,3,….. ∑ xij = 1 for all I (workers available)
i=1j=1 j=1
n
subject to restrictions of the form: ∑ xij = 1 for all j (job req)

xij = 1 : if ith person is assigned the jth job .


= 0 : if not
n
Σ xij +1 (one job is done by the ith person , j= 1,2,……. n )
j=1

n
and Σ xij =1 ( only one person should be assigned the jth job , j =1,2,3,……n )
i=1
where xij denotes that the jth job is to assign to the ith person.

• MINIMISE ( TOTAL COST ) m m


Z = ∑ ∑ cij xij
i= 1 j = 1
Subject to
n
∑ xij = ai j i= 1,2 …… m (capacity constraints)
j=1
m
∑ xij = bj ; j = 1,2 ….. n (req. constraint)

and xij ≥ 0 for all i & j

4. Explain the procedure summary for the assignment method for (a) minimization
case & (b) maximization case.

3(a) The minimasation case:

Step 1 Determine the total opportunity cost matrix


a) Arrive at a column opportunity cost matrix by subtracting the lowest entry of each column of
the given payoff matrix from all the entries in the column.
b) Then subtract the lowest entry of each row of the matrix obtained in (a) from all the entries
in its row.

The result of step 1b gives the total-opportunity-cost matrix.

Step 2 Determine whether an optimal assignment can be made


a) Cover all the zeroes of the current total-opportunity-cost matrix with the minimum possible
number of horizontal and vertical lines.
b) If the number of lines in step 2a equals the number of rows (or columns) of the matrix, the
problem can be solved. Make a complete assignment so that the total opportunity cost
involved in the assignment is zero.
c) if the number of lines drawn in step 2a is less than the number of rows (or columns ) of the
matrix, proceed to step 3.
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Step 3 Revise the total opportunity cost matrix


a) Subtract the lowest entry in the uncovered cells of the current total opportunity cost matrix
from all the uncovered cells.
b) Add the same lowest entry to only those cells in which the covering lines of step 2 cross.

The result of steps 3a and 3b is a revised total opportunity cost matrix.

Step 4
Repeat steps 2 and 3 until an optimal assignment having a total opportunity cost of zero can
be made.

Maximisation case

Except for one transformation, an assignment problem in which the objective is to maximize the
total payoff measure can be solved by the assignment algorithm presented above. The
transformation involves subtracting all the entries of the original payoff matrix from the highest
entry of the original payoff matrix. The transformed entries give us the “ relative costs “and the
problem then becomes a minimization problem. Once the optimal assignment for this transformed
minimization problem has been identified, the total value of the original payoff measure can be
found by adding the individual original entries for those cells to which the assignments have been
made.