Operations Research Applications and Objectives

Operations Research
PUBLIC SERVICE COLLEGE OF OROMIA
Operations Research
Public Service College of Oromia Page 1

Operations Research
1. Definition, Application and Objectives of Operations Research
1.1. The Meaning of Operations Research

Operations Research (often referred to as management science) is simply a scientific approach to
decision making that seeks to best design and operates a system, usually under conditions requiring the
allocation of scarce resources.
By a system, we mean an organization of interdependent components that work together to accomplish

the goal of the system. For example, Ford Motor Company is a system whose goal consists of
maximizing the profit that can be earned by producing quality vehicles.
There are various definitions of operations Research. The earliest definition given by Mores and
Kimball is operations research is a scientific method of providing operations quantitative basis for
executives to take decisions under their control.
According to Miller and Starry operations research is defined as the application of decimal theory. It
uses a scientific, mathematical, or logical means to cope with the problems that confront the executive
when he tries to achieve the objective going rationally in dealing with his decision problems.
The operations Research of America also defined Operations Research as an experimental and applied
science devoted to observing, understanding and predicting to behavior of purposeful man machine
systems, and operation research workers are actively engaged in applying this knowledge to practical
problem in business, Government and society.
The common ideas emerged out of all such definitions are:
 the use of the scientific method,
 study of the complex relationships, and
 provision of a basis for decision making.
By combining these main attributes it can be possible to a generate a definition as operation Research
values the planned approach scientific method and an inter disciplinary term in order to represent

Operations Research
complex functional relationships using mathematical models or the purpose of providing a quantitative
basis for decision making and uncovering new problem for quantitative analysis.
1.2. The Nature and Significance of Operations Research

The application of operations Research is different for the different fields. On the basis specific
applications of the different fields appropriate operations Research techniques is used to attain the
desired solution. Operations Research is useful in every field of human activities, where optimize of
resources is required some of the typical areas where operation research is extensively used are listed
below:
National planning and Budgeting

Annual budget, forecasting income and expenditure, scheduling major projects of national importance,
Estimating GNP, GDP, population, employment, etc
Defense services Operations

Optimization of cost and time in defense projects tender evaluation techniques site and layout of
defense factories, Assessment of threat analysis form enemy, Effective battle strategy and tactics,
Transpiration problem during mobilization, operations and mock simulation exercise, deal locations of
supply depots to support operational unit, purchasing, bid and vendor evaluation, inventory control,
etc.
Industrial Activities
Industrial plant location and sister selections, finance planning, product and process planning,
purchasing, bid and vendor evaluation, Inventory control, maintenance management and replacement,
etc.
Engineering Activities
Technology forecasting, evaluation and management, project management of Turnkey projects, system
evaluation and preparation of tender, value engineering and selection of components, time study and
activity sampling, etc.
Business Management and Completion

Operations Research
Taking business decision under risk, complete certainty and under uncertainty, capital investment and
return, selection of business and area of operations, Decision making under completion, Business
strategy formation, Optimum advertisement outlay, optimum sales force and their distribution, market
survey and analysis, etc
Agriculture and Irrigation
Proper management of irrigation projects and dams, construction of major dams with minimum cost,
optimum distribution of irrigation canals, optimum mix of fertilizers, etc
Education and Training

Optimum number of schools and their locations, optimum mix of student to teacher ration, optimum
financial outlay to meet national objectives, Demand and supply of text books and stationary, etc.
Transportation and Communication

Optimum routing of buses to maximize utilities, Railway network distribution, Estimate or forecast of
telephone demand, optimum location of exchange, etc
Home management and Budgeting

Control of expenses to maximize saving, Optimum number of purchase of provisions, time
management, preparation of budgets item wise, Investment of surplus income to earn maximum profit,
Estimate of depreciation and optimum premium of insurance, etc.
1.3. The Scope and Functions of operations Research
Scope of operations Research
The major scopes of operations research are:
 Aid to decision making and improve its quality,
 Integrating the system as a whole,
 Improve objectivity of analysis and clarity of thought.
 Minimize the cost and maximize the profit.
 Improve proclivity and efficiency, and success in competitions and market leadership.
Functions of operations Research

In order to preserve and accomplish the above objectives, one has to think about the implementation of
the following utilities or functions of OR:

Operations Research
Provision of scientific Basis to Decision Making

Operation Research is known in its implementation of scientific methods in the analysis and
interpretation of facts and data. This will enable managers to take decisions based on facts using the
scientific methods as a result it will improve the objectivity of analysis and assessment of situations.
Conversion of complex problems into simple problems

Operations Research techniques can reduce complex problems into a number of simple problems that
can be easily created in your mind and solved. This will improve the quality of the manager’s decision.
Work for Trade-Offs

Management often comes across situations in which it has to satisfy objectives of a given system that
are conflicting with one another. For example, the production manager in a production firm would like
to see all his raw material and components are stocked, in sufficient quantities and well in time, so that
there is no fear of stock-outs contrary to this, the finance manager of this same firm would recommend
course to order minimum quantity at time and hold it in stores for the minimum time period. If quantity
per order is increased to reduce the number of orders and thereby the order costs, it will intern increase
the inventory carrying cost. The optimum quantity lies between these two contradictory objectives as
seen by the precaution manager and the fiancé manager separately. This is a trade off decision.
Operations research finds the trade off takes place when total cost is the minimum. For this economic
larder quantity EOQ model is used
Provision of system integration
The main advantage of realizing operation Research is integration of the system. In systems approach
the problem is seen as a whole and not as parts. In a holistic approach, the main system consists of a
number of sub-systems, and all the sub-systems must be fully integrated into the main system and work
as a single system to convene the same objectives. In order to achieve optimization of the whole system
sub-optimization of the sub-system may be found necessary on trade-off considerations.
Optimization of resource use
It is often observed that resources are scarce in most of the economic activities. Conservation and
optimization of these scarce resources are the main objectives of management. Operation Research
helps to do this. Operations research techniques are used in the functional analysis of materials to find
better utilization.

Operations Research
Modern concept of management has recognized time as one of the most important resources. Time cost
money operations research techniques are developed to minimize the time taken in some economic
activities. For example, the technique PERT is delivered to minimize time in project management,
Queuing theory as developed to optimize waiting and servicing time, transpiration algorithms can also
be taken as one commonly applied technique in OR to minimize time in transportation problems.
Minimization of cost
Primary concern of management is to minimize cost. Various operation Research techniques are
developed to meet this some of these techniques are linear programming (LP), assignment Algorithm,
transpiration algorithm, etc.
Maximization of profit
Success and survival of industry and business depend on their ability to make profit. Operation
Research has recognized this function and accordingly developed a number of techniques. For instance,
some of them are Linear programming (LP), assignment Algorithm, transportation algorithm, etc.
Selection of Best Alternatives

Most of the problem in management will have a number of alternative solutions. When such
alternatives have different parameters, it very difficult to select the best alternative it requires the
proper application of by operations Research techniques. When different alternatives with different
parameters are available, OR techniques will enable to rank them in the order of priority as per the
corresponding parameter attached. The typical example is making a managerial decision when two or
more alternatives and the assonated states of nature are given.
Provision of solutions to problems having special issues

One of the functions of the operations research is providing answers to problems having special issues.
Some of the examples are selection of appropriate machine in assignment, selection of appropriate
route in transpiration problem, etc.
2. Operations Research Approach to Problem Solving and Model Building

Operations Research
2.1. Operations Research-Quantitative Approach to Decision Making
The operations Research approach to problem solving can be considered to contain the following seven
fundamental stages.
1. Understand and formulate the problem

This is an important step because the accuracy of solution depends to a great extent on the correct
formulation of the problem with regard to definition of terms, working environment, influences of
internal and external environmental factors, and assumptions mad, intentions, objectives, constraints,
etc.
2. Determine assumptions
It is advisable to clearly identify the basic assumption, which would be considered in the given
problem, before the formulation of a mathematical frame work. These assumptions are usually
generated on the basis of the terms listed below:
 input, pout, processor objectives, constraints,
 Independent variables, which are uncontrollable and they are considered the predictors of the
objective of the problem.
 Dependent variables, which are controllable,
3. Formulate the problem in a mathematical frame work

Mathematical models are often built up in this stage, which give information on the relationship
between inputs and outputs, the constraints under which operations takes place, and the objective
function of the problem.
4. Solve the model of the problem

In this stage the model developed in step 3 is solved through scientific methods. Solution must satisfy
the objective faction as well as the constraints of the model. There are various scientific methods
available such as Linear programming (LP), transportation and Assignment algorithms, Queuing
theory, Statistical Methods, probability Theory, etc.
5. Interpret the Results of the model

Operations Research
Solutions are derived from the model for a set of environmental conditions interpretation and feedback
of the results are necessary so that the required control can be applied to make the solution within
acceptable limits.
6. Validate the model

A model is said to be valid if it gives a reliable result (output) for a set of inputs under the given
condition. Such validation is possible for a limited period of time. As the time changes original
assumptions and conditions, in which the model was developed, might also change. Hence, it is very
important to check for the validity of the model form time to time.
7. Implement the model - predict and decide

Implementation of the solution is very important step because the proof of pudding is the eating the
method of operations and procedure along with precautions and corrective mechanisms wherever
applicable must also be laid down in clear terms.
2.2. Basic Mathematical Programming Models
Models are techniques by which various aspects of an object or problem or a situation are represented
as faithfully as possible in appearance, size, other attributes and functions through symbols, signs,
relations and objects.
Significance and advantage of using models
Some of the major advantages to be gained from using models are:
 they assist in the understanding of the problem;
 they give a clear picture of the problem;
 they assist to modify the existing design or system;
 they specify inputs, outputs, objectives and constraints of the problem;
 models can be more easily manipulated and analyzed the real system;
 they provide an indication of the information flow and gaps therein; and
 They are fundamental tools in decision making a tool to help managers to decide on what
questions to ask themselves.
Characteristics and Types of Models
Characteristics of Models

Operations Research
As previously mentioned, the dominant characteristic of the operations Research approach to problem
solving is that it constructs and uses mathematical representations models to analyze and study
problems. Some of the properties or characteristics of these representations Models are:
 faithful production or representation of real situation
 flexible enough to incorporate modification and charges
 simple and easy to understand
 Capable of manipulation by changing, inputs and other parameters and getting corresponding
outputs.
 Minimum number of assumptions and variables, and
 Clear definition of parameters including assumptions.
Types of Models
There are four basic types of model used in operations Research, namely physical [Iconic] models,
analogue models, symbolic [mathematical] models, and characteristic models.
Physical [Iconic] Models

Iconic models can be either smaller or larger physical representations of the phenomena under analysis.
Common examples are model aircraft which are used in wind tunnel experiment, drawing of a factory,
photograph of a machine. They can give only up to a limited degree the details of the parameters like
input, output and processor. They often fail to represent factors such as working environment,
objectives and various constraints. Typically, iconic models are built with a specific purpose in mind
and they are not suitable for manipulation or experimentation.
Analogue Model
These models use one set of properties to represent another set of properties. They are abstract models
mostly reveling inter and intra relationships between two or more parameters. For example, an
economic system can be modeled by the use of a hydraulic system, where the flows represent the
dynamic nature of the real system. Some examples are histograms, frequency tables, is Chichewa cause
effect diagrams, flow charts, string diagrams, an others they are also called dynamic models because
output dependent variable changes when imputes independent variables are altered. Analogue models
are preferred to iconic models because they permit a degree of manipulation and experimentation.
Symbolic [Mathematical] models

Operations Research
These models are sometimes phrased to make use of mathematical and statistical notations to represent
the problem under analysis. They are also called abstract models. For example, the time required to
undertake the journey from home to the office could be simply modeled as:
T= a + b + c
Where a = time to remove car form garage,
b = the actual journey time form home to office car park, and
c = time to walk form car park to the office.
Characteristic Models
These are models based on a certain character which under focus. There are several types under
characteristic models. These are explained briefly below:
Combination model
This is a combination of two or three models discussed above viz, physical plus analogue, physical plus
symbolic, analogue plus symbolic, or the combination of physical, analogue, and symbolic, variance
analysis table using frequency distribution and probability formulae is an example of the combination
model of all the three models discussed above.
Quantitative model
Here outputs are calculated for various inputs an both are shown against each other in physical form.
For example, Clarks table, here the physical quantities are exhibited and hence the name.
Qualitative model
Here the parameters and attributes are measured not in quantitative form but in qualitative form. A
typical example is the Go and Not go gauge.
Functional model
Here the models are built up based on certain functions or purposes. Examples are Economic model of
two year plan, business model of corporate plan, Blue print of a building; Circuit diagram of a design,
etc.
Simulation model
Models built up on simulation are as simulation mode. Examples are Markov chain in market forecast
and Monte carol simulation in queuing theory.
Static and dynamic model

Operations Research
Physical models are examples of static models. Dynamic models are those which are capable of
movement. Dynamic model focuses not the movement and not on the object which is moving. For
example, in a rail traffic network when we focus on the nature of the traffic or railway network, the
model becomes dynamic. When we focus our attention on physical objects representing the train, then
the model becomes static.
Stochastic and deterministic models

Models built on parameters which are uncertain are called stochastic models. Examples are models on
sales forecast demand forecast weather forecast etc. these are made based on probability theory.
Deterministic models are made based on known parameters. For example, we can take linear
programming models.
2.3. Methodology and Techniques in Operations Research

Methodology in Operations Research
Basically there are three methods used in operations research problem. These are analytical methods,
and trial and Error method, and simulation Method.
Analytical Method [Deterministic Method]
In this method, the operations Research re developed mostly based on mathematical modeling. The
method of finding solution depends on classical steps and techniques in mathematics, like use of
calculus differentiation and integration, set theories, matrix and vector algebra, and coordinate
geometry. The classical example of analytical method is graphical solution of a product mix through
linear programming.
Trial and Error Method

Analytical method of finding a solution in operations Research has its limitations. Some problems and
models fail to yield a solution through classical, mathematical or graphical approaches. Trial and error
method is used here. In this method a certain algorithm is developed. One starting point is an initial
solution which is the first approximation. The method is repeated with a certain set of rules so that
initial solution is gradually modified at each subsequent step till optimal solution is obtained. There are
certain criteria laid down to check whether the solution has become an optimal solution or not. This
trail solution is called iterations and the process is called iterative process. The classical example of
trail and error method is linear programming problem.
Simulation Method [Stochastic Method]

Operations Research
Solution of operations Research method using the principles of statistics, sampling and probability is
called simulation method. This method is applied where the data is insufficient, or where the situation
is quite uncertain or when it is impossible to generate data by direct measurement. In such situations,
samples are created as faithfully as possible to represent the real situation called the process or
universe. In order to create the random nature of events random tables, mechanical devices and
electronic computers are used. The typical example of simulation method is Monte carol simulation in
Queuing problem.
Techniques used in Operations Research

There are various techniques used in Operations Research. Some of these techniques are listed here:
Probability theory, Statistical Methods. Frequency Distribution, Graphical Solutions of Linear
Programming Problems, Simplex Solutions of Liner Programming Problems, Transpiration Algorithm,
Assignment Algorithms, Game Theory, Decision Tree, Queuing Theory, Replacement Theory,
Simulation Model, Program Evolution and Review Technique [PERT], Critical Path Method [CPM]
Break Even Analysis, Discount Cash Flow [DCF] and Net Present Value [NPV], Trend Analysis and
Time Series, Correlation Techniques, Variance Analysis, Statistical Quality Control [SQC] Techniques,
Dynamic Programming etc.
2.4. Appropriateness and Limitations of Operations Research

Appropriateness of Operations Research
Operations Research techniques are application specific. Maximum benefit can be derived from
selecting most appropriate techniques for each specific area work problem. In all such areas, the ability
of the manager is tested in appropriate selection of operations research endue. Some examples per
functional areas are given below. Note that these are by no means exhaustive.
Production Management
Some of the specific problems observed under this functional area are sitting and location factory
layout, product planning ,process planning, technology selection, facility planning work station design,
capacity planning product mix and precaution planning and control. The respective applications of
operations research techniques of the above problems are location dynamics, Break even analysis, and
Transpiration, routing, Travel charts, profitability analysis, product line analysis, line of Balance LOB
Routing, forced design matrix bid evolution capital investment, selection of plant, line balancing Break
even analysis Decision tree, LP simplex and LP graphic sequence assignment scheduling.

Operations Research
Materials Management
Some of the specific problems observed under material management are ware house layout inventory
control vendor rating and value engineering make and buy decision. The respective applications of
operations Research Techniques of the above problems are Transportation algorithm E.O.Q analysis,
factor analysis, functional analysis, and Break even, deign tree.
Quality Management
Some of the specific problems observed under quality management are inward goods, inspection of
outward goods, process inspection. The respective applications of operations Research Techniques of
the above problems are statistical and probability curves, statistical and probability curves, and
statistical frequency distributions.
Service Industry
Some of the specific problems observed under service industry are optimum efficiency and aiding time
saving. The respective applications of operations Research Techniques of the above problems are
queuing theory, and Monte carol simulation.
Maintenance Management
Some of the specific problems observed under maintenance management are maximization of
utilization and minimization of cost. The respective applications of operations Research Techniques of
the above problems are Replacement theory and statistical DCF.
Project Management
Some of the specific problems observed udder this functional areas are time estimate, minimization of
time, and maximization of cost. The respective applications of operations Research Techniques of the
above problems are statistics and frequency distribution, PERT and CPM.
Limitations of Operations Research
Information Gap
Operations research involves lots of mathematical manipulations, uses various theories like game
theory, probability theory, queuing theory, etc. unless the manager has specific knowledge in
mathematics, he or she will not be able to appreciate and understood the philoshy and working based
on operations research rules and principles. Hence there is an inaction gap existing between most
managers and operations Research.

Operations Research
Quantification Techniques
Operations Research works on quantifiable terms and figures. All factors like goodwill, attitude,
expectations, etc. cannot be quantified. Hence, the solution ignores all such basic factors which are
important in managerial activates.
Finite Variables
Operations Research deals with finite number of variables. Most of them are concerned on two sets of
variables namely independent variables decision variables or parameters and dependent variables
decision or predictor variables in actual situation there are a huge number of variables which influence
the input the processor and consequently the output, which are not usually considered.
Limited Number of Constraints
Operations Research can solve problems having a limited number of constraints. In practices there are
unlimited numbers of constraints.
Single Objective Function
Operations Research deals with a single objective function. It does not focus on sub optimizations. In
practice more than one objective function exists.

Operations Research
CHAPTER TWO
FURTHER ON LINEAR PROGRAMMING PROBLEM
2.1 Linear Programming Problem: The Graphic Procedure
Linear programming is the one that is concerned with finding the maximum or minimum value of a
linear objective function of the form:
Z  c1 x1  c 2 x 2     c n x n
And a set of inequalities and/or equations, called constraints of the form:

a11 x1  a12 x 2      a1n x n  b1
a 21 x1  a 22 x 2      a 2 n x n  b2
.................................................
a m1 x1  a m 2 x1      a mn x1  bm
x1 , x 2 ,    , x n  0
where x1 , x 2 ,    , x n are decision variables that represent unknowns of the problem. Decision
variables are defined in terms of numbers, amount or quantities subject problem constraints in the form
of linear inequalities and equations.
It is the system constraints that define the feasible solution and the objective function will be used in
evaluating them for the purpose of selecting the optimum solution.
In general every linear programming problem has two components, namely:

1. a linear objective function to be maximized or minimized
2. A collection of linear inequalities or equations that must be satisfied simultaneously.
The feasible solution where optimizes the objective function is called an optimal solution and value of
Z for optimum solution is called optimum value. If a linear programming problem has an optimal
solution this solution must occur at one or more of the corner points of the feasible solution space.
Existence of Solution

Operations Research
Given a linear programming problem with feasible solution space S and objective function of the form
Z  c1 x1  c 2 x 2     c n x n
 If S is bounded, then Z is said to have both a maximum and a minimum values over space s.
 If S is unbounded and all the coefficient of the decision variables in the objective function Z are
positive, then the objective function Z is said to have a minimum value over S but no minimum
value over S.
A geometric approach to linear programming problems is a relatively clear cut technique for
determining the optimal solution to a certain linear programming problem [LPM]. Practically, this
method can be used to solve problems that involve two decision variables. However, most LP
applications involve stations that have more than two decision variables, so graphical LP approach
cannot be used to solve them. Even so, much can be gained from studying this approach. It provides a
visual portrayal of many important concepts of models and solutions.
1.1. Maximization Problem

In order to demonstrate the graphical approach for maximization problem, let us bring into play the
example given below:
Example 1.1.1:
A retired couple has up to Br. 30,000 they wish to invest in fixed income securities. Their broker
recommends investing in two funds. Growth Mutual Fund [GMF] yielding 12% and the other Bond
Mutual Fund [BMF] paying 15% After some considerations he couple decide to invest at most Br.
12,000 in the Bond Mutual Fund and at least Br. 6000 in the Growth mutual fund. They also want the
amount invested in the Growth Mutual Fund to exceed or equal to the amount invested in the second
fund. What should the broker recommend if the couple quite naturally want to maximize their return on
this investment?
Solution:
The problem above is typical of a linear programming problem. It requires that a certain linear
expression, the return, be maximized. Furthermore, the problem requires that the maximum be
achieved under certain restrictions or constrains, each of which are linear inequalities involving the
variables.

Operations Research
Step 1: Naming the decision variables
x1 = Amount invested in Growth mutual fund
x 2 = amount invested in bond mutual fund
Step 2: Construction the objective function and identify the conditions specified by the problem
[constraints]
The quantity to be maximized is return on investment, which will be denote by Z, is;
Z  0.12 x1  0.15 x 2
The conditions specified by the problem classified as problem and non negative contrarians are:
Up to Br. 30,000 available to invest x1  x 2  30,000
Investment at most Br. 12,000in Bond Mutual Fund x 2  12,000
Investment at most Br. 6,000in Growth Mutual Fund x1  6,000
Amount in the GMF must exceed or equal to in BMF x1  x 2
In addition we must have the conditions non-negative x1  0 and x 2  0
Generally, the problem is reduced to have the following format

Maximize Z  0.12 x1  0.15 x 2
Subject to the constraints

x1  x 2  30,000
x 2  12,000
x1  6,000
x1  x 2
x1  0 and x 2  0
Determine the optimal solution using the geometric approach.

Step 3: Building a system that contains all the problem and non negative constraints
 x1  x2  30,000
 x  12,000
 2
 x1  6,000

 x1  x2
 x1  0

 x 2  0

Operations Research
Step 4: Plot each of the constraints and determine the region or area feasible solution space that
contains all of the points that satisfy the entire system given in Step 3.
Step 5: Determine the optimal solution

Determining the values of the decision variable at each corner points and substitute these points into the
objective function sect the corner point with the highest value of the objective function for a
maximization problem or lowest value of the objective unction for a minimization problem as the
optimal solution.
Table 1.1.1: Extreme point solutions

Corner Points Values of the Objective Function [ Z  0.12 x1  0.15 x 2 ]
(6,000, 0) Br. 720
(6,000, 6,000) Br. 1,620
(12,000, 12,000) Br. 3,240
(18,000, 12,0000) Br. 3,960
(30,000, 0) Br. 3,600
Thus, the maximum return on investment is Br, 3,960 obtained by placing Br. 18,000 in the GMF and
Br. 12,000 in the BMF.
Example 1.1.2:
Maximize Z  60 x1  30 x 2

Assembly: 4 x1  10 x 2  100
Inspection: 2 x1  1x 2  22

Operations Research
Storage: 3x1  3 x 2  39
All variables ≥ 0
Determine the optimal solution using the graphic method.
Solution:
Step 1: Building a system that contains all the problem and non-negative constraints
4 x1  10 x 2  100
2 x  1x  22
 1 2
3x1  3x2  39
x  0
1
 x2  0
Step 2: Plot each of the constraints and determine feasible solution space that contains all of the
points that satisfy the entire system given in Step 1
Step 4: Determine the optimal solution.

Determining the values of the decision variable at each corner points and substitute these determining
the bales of the decision variable at each corner points and substitute these points into the objective
function. Select the corner point with the highest value of the objective function for a maximization
problem or lowest value of the objective unction for a minimization problem as the optimal solution.

Operations Research
Corner Points Values of the Objective Function [ Z  60 x1  30 x 2 ]
(0, 0) Br. 0
(0, 10) Br. 500
(5, 8) Br. 700
(9, 4) Br. 660
(11, 0) Br. 660
The profit at each corner point can be determined by substituting the coordinates of the corner points
into the objective function. The corner points (9, 4) and (11, 0) represents the optimal solution because
they yield the largest profit.
1.2. Minimization Problem

Graphical solutions to minimization problems are very similar to solutions of maximization problems.
There are few differences that will be tinted in this section. The main differences are in most cases the
constraints are given by a greater than or equal to verity, which causes the feasible solution space to be
restricted to an area away from the origin, instead of close to the origin, as in maximization problems.
In the case of minimization problems the optimum being the point with the smallest possible value of
the objective functions, instead of the largest.
This will be presented in the coming examples.
Example 1.2.1:
The reclamation of land for urban purposes cost Br. 400 per acre [1 acre = 4,046.86 m 2] and for
agricultural uses, Br 300 the primal problem is that the reclamation agency wishes to minimize the total
cost of reclaiming the land: Z  400 x1  300 x 2
Where x1 = the number of acres of urban land and x2 = the number of acres of agricultural land.
Although this equation can be minimized by setting both x1 and x2 at zero, that is, reclaiming
nothing, the problem derives from a number of constraints due to three different groups.
The first is an urban group, which insists that at least 4000 acres of land be reclaimed for urban
purposes. The second group is concerned with agriculture and says that at least 5000 acres of must be
reclaimed for agricultural uses. Finally, the third group is concerned only with reclamation and is quite

Operations Research
uninterested in the use to which the land will be put the third group, however, says that at least 10.000
acres of land must be reclaimed.
Solution:
The primal problem and the constants can, therefore, be written in full as follows:
Minimize Z  400 x1  300 x 2
1. x1  4000
2. x 2  5000
3. x1  x2  10000 , all variables ≥ 0
 x1  4000
 x  5000
 2
 x1  x2  10000
x  0
1
 x2  0
Step 3: Plot each of the constituents and determine feasible solution space that contains all of the
Step 4: Determine the optimal solution.

Operations Research
The above figure illustrates that the feasible solution space of the given problems not bonded.
However, the objective function contains non-negative coefficients for its decision variables, and
constraints include x1  0 and x 2  0 . We conclude that the objective function z does have a minimum
value on this solution space but no maximum value on this solution space but no maximum value. That
minimum must occur at one or more of the corner points of the feasible solution space.
(5000, 5000) Br. 3,500,000
(4000, 6000) Br. 3,400,000
If 4000 acres are devoted to urban purposes, 6000 acres of land to agriculture uses, the cost is
minimum, which is Br. 3,400,000.
Example 1.2.1:
The production manager of a company has developed this linear programming model:
Minimize Z  6 x1  9 x 2
Subject to
1. 10 x1  4 x 2  400
2. x 2  14
all variables ≥ 0
Graph the problem and determine where the optimal solution point is on the graph.
Solution:
Step 2: Building a system that constrains all the problem and non-negative constraints
10 x1  4 x2  400
 x  14
2

 x1  0
 x2  0
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The graph reveals that the feasible solution space has exactly two corner points with coordinates
(0,100) and (34.4, 14) by the rules discussed under the graphic methodology it is possible to test the
optimality of the objective function at the indicated cornet points. That is
(0,100) Br. 900
(34.4, 14) Br. 332.4
Thus, the optimal (minimum) value of the given objective function is obtained to be Br. 332.4 this
minimum value is obtained when x1 and x2 are taking on values 34.4 and 14, respectively.
1.3. Special Issues on Graphic Procedures

This lesson points out some special issues that may arise during the solution LP problems in a graphical
procedure. These issues are:
 Problems with no feasible solutions;
 Unbounded solution;
 Redundancy in constraints; and
 Problems with multiple optimal solutions.
Problems with No Feasible Solutions

It is impossible to formulate a problem for which it is impossible to satisfy the set of all constraints.
This situation sometimes occurs in problems that have a mix of greater than constraints, and less than
constraints, where in order to satisfy one of the constraints, another constraint must be violated. This
situation sometimes happens when the problem has been formulated incorrectly. When such an issue is
observed in an LP problem, the manager needs to give time to check one of the following errors. The
correctness of the coefficients of the constraints, if there is a plotting error, and if an inequality has the
wrong direction.

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Example 1.3.1:
Find the maximum value of Z  4 x1  3 x 2
A: x1  x 2  6
B: x1  2 x 2  4
All variables ≥ 0
Solution:
 x1  x2  6
x  2x  4
1 2

 x1  0
 x2  0
The graph reveals that no combination of x1 and x2 can simultaneously satisfy both constraints, and
there is no feasible solution space for the entire system. Hence, the problem is said to have no feasible
solution [Infeasible].

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Unbounded Problems
An unbounded problem exists when the value of the biactive function can be increased without limit.
This difficulty usually arises due to incorrectly maximizing the problem when the real goal is to
minimize an objective faction or suing relater that constraints when less than constraints are called for.
Example 1.3.2:
Maximize Z  3x1  2 x 2
1. x1  x 2  1
2. x1  x 2  3
All variables ≥0
Solution:
 x1  x2  1
x  x  3
1 2

 x1  0
 x2  0
Step 3: Plot each of the constraints and determine feasible solutions space that contains all of the
points that satisfy the entree system given is Step 2

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The graph reveals that the feasible solution space has exactly two corner points with coordinates. (2, 1)
and (0, 3) the rules discussed under the graphic methodology would be violated biases there are many
more points other than the above identified corner pints where the value of the objective is more. Since
the feasible solution space is unbounded we are able to locate points at infinity. Hence, the problem is
said to have no unbounded solution. That is, it has feasible solution but unbounded.
Redundancy in Constraints
In some cases a constraint does not form a unique boundary of the feasible solution space. Such a
constraint is known as a redundant constraint. Note that a constraint is said to be a redundant constraint
I meets the following test. Its removal would not change the feasible solution space.
Example 1.3.3:
1. 2 x1  3 x 2  60
2. 2 x1  x 2  20
3. x 2  25
All variables ≥0
Solution:
2 x1  3x2  60
2 x  x  20
 1 2

 x1  0
 x2  0
points that satisfy the entire system given in Step 2.

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The graph reveals that the second constraint of the given LP problem [ 2 x1  x 2  20 ] is more restrictive
than the other redundant constraints.
Multiple Optimal Solutions

Most LP problems have single optimal solution. However, in some LP problems, it might be observed
optimal solutions. That is, different combinations of values of the decision variables will yield the same
optimal value for the objective function. Just go back to Example 2.1.2 and see the solution. It was
revealed on the graph that the feasible solution space has exactly five corner points with coordinates
(0,0), (11,0), (9,4), (5,8) and (0,10). By the rules discussed under the graphic mythology it is possible
to test the optimality of the objective function at the indicated corner points. That is:
(0, 0) Br. 0
(0, 10) Br. 500
(5, 8) Br. 540
(9, 4) Br. 660
(11, 0) Br. 660
Thus the optimal maximum values of the given objective function are obtained to be Br. 660; this
maximum value is obtained at two different corner points of the feasible solution space, viz. (11, 0) and
(9, 4). This shows that the given problem has multiple optimal solutions. All the points that are found
between the two will yield the land undue of the objective function.
2.2. Linear Programming Problem: The Simplex Procedure
2.1. Maximization Problem with ≤ Constrains

General Simplex Notation

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Z  c1 x1  c 2 x 2     c n x n
Subject to
a11 x1  a12 x 2      a1n x n  b1
a 21 x1  a 22 x 2      a 2 n x n  b2
.................................................
a m1 x1  a m 2 x1      a mn x1  bm
x1 , x 2 ,    , x n  0
where x1 , x 2 ,    , x n are decision variables that represent unknowns of the problem.
In order to be able to refer the simplex tableau, the following notations will be used:
C j = coefficient of the jth variable in the objective function
a ij = coefficient of the jth variable in the ith constraint
th
bi = right hand side value of the i constraint
Now let’s see how the first simplex table is developed. We begin by drawing the outline of our tableau
and listing the variables in the model across the top of the tableau. Next, we fill in the parameters of the
model in the appropriate rows and columns. Note that there are m rows, one for each constraint. Next,
we add two columns on left side of the tableau. The first column is a list of the basic variables, it is
called the Basis. The other column indicates the corresponding coefficients of the basic variables in the
objective function. Note that the last column on the right is called the quantity or the current value. [See
Table 2.1.1]
It was recalled that in the course mathematics for management, to solve a maximization linear
programming problem using simplex method first one has to change the structural constraints to linear
equations by using Slack Variables and formulate a simplex table of the next kind.
Slack variables are positive constants added to operational constraints, which are linear inequalities, to
convert them to linear equations.
Table 2.1.1: General format of a simplex tableau

c1 c2 - cn 0 0 - 0
Basics C Quantity
x1 x2 - xn s1 s2 - sm

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s1 0 a11 a12 - a1n 1 0 - 0 b1
s2 0 a 21 a 22 - a2n 0 1 - 0 b2
- - - - - - - - - -
sm 0 a m1 am2 - a mn 0 0 - bm bm
Z 0 0 - 0 0 0 - 0
C–Z c1 c2 - cn 0 0 -
There are two rows needed at the bottom of the tableau in order to complete it. The first is a Z row and
the second is a C-Z row. The entries across the row Z are determined column by column. For each
column, the Z value is obtained by adding the product of each of the numbers in the column and their
respective entries in the column C. The values in the row C-z are calculated column by column. For
each column, the value in row Z is subtracted from the C value in the top row.
Now let me remember you the basic techniques of simplex method through Example 3.1.1.
Example 2.1.1:
A small company manufactures three different electronic components for computers. Component A
requires 2 hours of fabrication and 1 hour of assembly, component B requires 1 hour of fabrication and
2 hours of assembly; and component C requires 2 hours of fabrication and 2 hours of assembly. The
company has up to 1000 labor-hours of fabrication time and 800 labor-hours of assembly time available
per week. The profit on each component, A, B and C, is $7, $9 and $10, respectively. How many
components of each type should the company manufacture each week in order to maximize its profit?
What is the maximum profit?
Solution:
Step 1: Formulation of the mathematical model called LPM
Let x 1 = the number of A component:
x 2 = the number of B component; and
x 3 = the number of C component.
Thus, the mathematical model for this problem is:

Maximize p = 7 x 1 + 9 x 2 + 10 x 3 ,
Subject to:
2 x 1 + x 2 + 2 x 3  1000
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x 1 + 2 x 2 + 2 x 3  800
x 1  0, x 2  0, x 3  0
Step 2: Set conversion of the constraints and objected function and form a standardized system
of linear equations.
To convert our inequalities into equations, we need to introduce slack variables s1 and s 2 .
Transforming the original problem in to a standardized system gives us:
2 x 1 + x 2 + 2 x 3 + 1 s 1 + 0 s 2 = 1000
x 1 + 2 x 2 + 2 x 3 + 0 s 1 + 1 s 2 = 800
7 x 1 + 9 x 2 + 10 x 3 + 0 s1 + 0 s 2 = p
Step 3: Finding an initial solution and use an initial simplex tableau to show the relationship
between these variables and their corresponding values
We need to select the origin (0, 0) as our initial solution so that the decision variables x1 and x 2 are
our initial non basic variables, while the slack variables s1 and s 2 are our initial basic variables.
Thus, we have:
x1  x 2  0 with s1  1000, s 2  800 , and Z  0
Table 2.1.2: Initial simplex tableau

7 9 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
s1 0 2 1 2 1 0 1000
s2 0 1 2 2 0 1 800
Z 0 0 0 0 0 0
C–Z 7 9 10 0 0
Step 4: Checking for the optimality of the objective function and if not, choosing an incoming
and leaving variables
Note that for a maximization problem the objective function is said tot have an optimal maximum value
if all the entries along the row C-Z are non-positive.
Incoming Variable
The presence of positive figures along the row C – Z is a signal for the existence of an incoming
variable. A variable which is attached with the most positive value [a value that is far away form 0]
along the row C – Z is called an incoming variable and a column that contains an incoming variable is

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known as a pivot column. So the Column that contains the decision x3 of Table 3.1.2 will be
considered as a pivot column. Note that we should bring x3 in to the solution since every of one unit
in x1 , x 2 and x3 would add Br. 7, Br. 9 and Br. 10 to the objective function.
Leaving Variable
A variable which is attached with the smallest non negative ratio of the current values [Quantities] to
the corresponding pivot column values is called a leaving variable and the row that contains a leaving
variable is known as a pivot row. Note that this ratio represents the upper limits on the number of units
x3 we can introduce, we obviously must select the controlling one. From the standardized system we
have:
s 1 = 1000 - 2 x 1 - x 2 - 2 x 3
s 2 = 800 - x 1 - 2 x 2 - 2 x 3
Since x1 and x 2 are to remain at zero, we saw that the first and the second equation restricted the
increase of x3 to no more than 500 and 400, respectively because all our variables are constrained to
be non negative. The controlling condition, then was that x3 could not be by more than 400, so that
s 2 should leave the basis when x3 enters. This procedure for selection is shown in Table 3.1.3; the
shadowed row indicates the pivot row and the shadowed column indicates the pivot column. The point
of intersection of the pivot column and pivot row is said to be Pivotal Point.
Table 2.1.3:
7 9 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
s1 0 2 1 2 1 0 1000
s2 0 1 2 2 0 1 800
Z 0 0 0 0 0 0
C–Z 7 9 10 0 0
Step 5: Determining the new variable

Here we simply used the row operations associated with matrices to transform the pivotal point entry to
1 and transform all other entries in the pivotal column associated with the old basic variable to 0. We
first get a 1 at the pivotal point [ 1 2 [ s 2 ]  s 2 ]. Then we add -2 times the new pivot row to the
old s 1 row [that is,  2 x3  s1  s1 ]. The resultant second table is shown in Table 3.1.4.
Table 2.1.4: Secondary simplex tableau
Basics C 7 9 10 0 0 Quantity
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x1 x2 x3 s1 s2
s1 0 1 -1 0 1 -1 200
x3 10 1 2 1 1 0 1 2 400
Z 5 10 10 0 5 4000
C–Z 2 -1 0 0 -5
Returning to back Step 4:

Look again at the objective function in the Z row for improvement. Since there is positive value along
the row C – Z of the secondary simplex tableau, Table 3.1.4, we need to move forward to determine the
incoming and leaving variables as we did in Step 4.
x1 is the incoming variable because it is the variable which is attached with the most positive entry of
the row C – Z, and the column that contains the decision variable x1 of Table 3.1.4 will be considered
as a pivot column.
s 1 is the leaving variable because it is the only variable which is attached with the smallest non
negative ratio of the current values [Quantities] to the corresponding pivot column values, and the row
that contains s 1 of Table 3.1.4 will be considered as a pivot row.
Returning to back Step 5:

We first get a 1 at the pivotal point, as a matter of chance it is one. Then we add 1 2 times the
new pivot row to the old x3 row [that is,  1 2 x1  x3  x3 ]. See Table 3.1.5.
Table 2.1.5: Third simplex tableau
7 9 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
x1 7 1 -1 0 1 -1 200
x3 10 0 3 2 1 1 2 1 300
Z 7 8 10 2 3 4400
C–Z 0 1 0 -2 -3
Returning to back Step 4 and 5:

Since there is positive value along the row C – Z of the third simplex tableau, Table 3.1.4, we have to
identify the incoming and leaving variables.

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x 2 is the incoming variable and the column that contains x 2 will be considered as a pivot column. x3
is the leaving variable, and the row that contains x3 will be considered as a pivot row. Now let’s get a
1 at the pivotal point [ 2 3[ x3 ]  x3 ]. Then we add 1 times the new pivot row to the old x 1 row
[that is, 1x 2  x1  x1 ]. See Table 3.1.6.
Table 2.1.6: Final simplex tableau

7 9 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
x1 7 1 0 2 3 2 3 1 3 400
x2 10 0 1 2 3 1 3 2 3 200
Z 7 10 34 3 4 3 13 3 4800
-
C–Z 0 -1 4 3 4 3
13 3
We have now reached at the optimal solution. The maximum profit is $4800, and this maximum is
sad to be maintained when 400 A components, 200 B components, and 0 C components are
manufactured and sold.
Note that since x3 , s1 , and s 2 are non basic variables , we have:
x3  s1  s 2  0
2.2. Maximization Problem with Mixed Constraints

The simplex procedure require that all constraints in what is called. That is, constraints that involve ≤
sign need to be rewritten in a standard form by adding slack variables. Constraints that involve = and ≥
signs are handled a bit differently.
Example 2.2.1:
Subject to:
1. x1  x 2  7
2. 9 x1  5 x 2  45
3. 2 x1  x 2  8
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All variables ≥ 0
Solution:
Step 1: Put the original model in the standard format for maximization problem
That is, convert all the constraints except the non negative constraints into constraints involving ≤ sign.
To do this, we merely multiply the first and the third constraints by –1. This would finally yields:
1.  x1  x 2  7
2. 9 x1  5 x 2  45
3.  2 x1  x 2  8
Step 2: Form a standardized system of linear equations
 x1  x2  1s1  0s2  0s3  7

9 x  5 x  0s  1s  0s  45
 1 2 1 2 3

 2 x1  x2  0s1  0s2  1s3  8
20 x1  15x2  0s1  0s2  0s3  Z
Step 3: Finding an initial solution and use an initial simplex tableau to show the relationship
between these variables and their corresponding values
We need to select the origin (0, 0) as our initial solution so that the decision variables x1 and x2 are our
initial non basic variables, while the sack variables s1 and s2 and s3 are our initial basic variables.
Thus, we have:
x1  x 2  0 with s1  7, s 2  45 and s3  8
Table 2.2.1: Initial simplex table

20 15 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
s1 0 -1 -1 1 0 0 -7
s2 0 9 5 0 1 0 45
s3 0 -2 -1 0 0 1 -8
Z 0 0 0 0 0 0
C–Z 20 15 0 0 0
Step 4: Determine whether phase I or phase II applies

Phase I is used whenever negative entries appear in the right hand side [quantity column’;
Phase II operation is used whenever all the entries in the right hand side quantity column are non
negative. In determining whether phase I or phase II applies, the C-Z row entries are ignored.

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Step 5: Selecting the pivot elements
Phase I: A variable which is attached with the most negative value in the right hand side column is
called a leaving variable and the row that contains the leaving variable is known as a pivot
row.
A variable which is attached with the most negative entry in the pivot row is called an
incoming variable and a column that contains an incoming variable is known as a pivot
column.
Phase II: Follow the pivoting strategy given earlier in Subsection 2.1.
For our example, we use phase I the pivot tow is the row that contains the leaving variable s 3 [due to
the -8]. To find the pivot column we choose the most [smallest] negative entry along the given pivot
row, which is -2. Thus, the pivot column is a column that contains the incoming variable x 1 .
This has been seen in Table 2.2.2.
Table 2.2.2:
20 15 0 0 0
Basics C Quantity
x 1 x2 s1 s2 s3
s1 0 -1 -1 1 0 0 -7
s2 0 9 5 0 1 0 45
s3 0 -2 -1 0 0 1 -8
Z 0 0 0 0 0 0
C–Z 20 15 0 0 0
Step 6: Determining the new solution
Here we simply used the row operations associated with matrices to transform the pivotal point enter
into 1 and transform all other entries in the pivot column associated with the old basic variables into 0.
We first get a 1 at the pivotal point [  1 2 [ s 3 ]  s3 ]. Then we add 1 times the new pivot row and -9
times the new pivot row to the old s 1 and s 2 , respectively, that is
1[ x1 ]  s1  s1 and  9[ x1 ]  s 2  s 2 . [See Table 2.2.3]
Table 2.2.3: Second Simplex Tableau

20 15 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
s1 0 0 1 2 1 0 1 2 -3
s2 0 0 1 2 0 1 9 2 9
x1 20 1 1 2 0 0 1 2 4
Z 20 10 0 0 -10 80
C–Z 0 5 0 0 10

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Go back to step 4 unless a final simplex tableau has been reached
Step 4: Phase 1 applies
Step 5: The pivot row is the row that contains s 1 due to the most negative quantity across the last
column and the pivot column is the one that contains x 2 due to the most negative enter along the
selected pivot row.
 2[ s1 ]  s1
 1 2 [ x 2 ]  s 2  s 2 and  1 2 [ x 2 ]  x1  x1
After pivoting we get the third simplex tableau Table 2.2.4.

20 15 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
x2 15 0 1 -2 0 1 6
s2 0 0 0 1 1 4 6
x1 20 1 0 1 0 -1 1
Z 20 15 -10 0 -5 110
C–Z 0 0 10 0 5
Step 4: Phase II applies.

Step 5: The pivot column is the column that contains s 1 due to the most positive entry across row C-Z
and the pivot row is the row that contains x 1 due to the smallest non negative ratio of quantities to
corresponding values along the selected pivot column.
 1[ s1 ]  x 2  x 2 and 2[ s1 ]  s 2  s 2
After pivoting we get the fourth simplex tableau, Table 2.2.5.
Table 2.2.5: Fourth simple tableau

20 15 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
x2 15 2 1 0 0 -1 8

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s2 0 -1 0 0 1 5 5
s1 0 1 0 1 0 -1 1
Z 30 15 0 0 -15 120
C–Z -10 0 0 0 15
Step 5: The pivot column is the column that contains s 3 due to the most positive entry across row C-Z
and the pivot row is the row that contains s 2 due to the smallest non negative ratio of quantities to
corresponding values along the selected pivot column.
1 5[ s 2 ]  s 2
1[ s3 ]  x 2  x 2 and 1[ s3 ]  s1  s1
After pivoting, we get the fifth simplex tableau, Table 2.2.6.
Table 2.2.6: Fifth simplex tableau

20 15 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
x2 15 9 5 1 0 1 5 0 9
s3 0 1 5 0 0 1 5 1 1
s1 0 4 5 0 1 1 5 0 2
Z 27 15 0 3 0 135
C–Z -7 0 0 0 0
This is our final tableau. The maximum value of the objective function is 135, and it is achieved when
x  0, x 2  9, s1  2, s 2  0 and s3  1.

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2.3. Minimization Problem with ≥ Constraints

A minimum problem can also be charged to maximum problem by realizing that in order to minimize Z
we must maximize Z* = -Z. The following example illustrates this method:
Example 2.3.1:
Minimize Z  5 x1  4 x 2  3x3
1. x1  x 2  x3  100
2. 2 x1  x 2  50
All variables ≥ 0
Solution:
We need to change the problem from
Minimizing Z  5 x1  4 x 2  3x3
to
Maximizing Z *  5 x1  4 x 2  3x3
Step 1: Put each problem constraint with ≤
 x1  x 2  x3  100
 2 x1  x 2  50
Step 2: Introduce non negative slack variables to form the standardized system of equations
After the slack variables s1  0 , and s2  0 have been introduced the system would be obtained as:
 1x1  1x2  1x3  1s1  0s 2  100


 2 x1  1x2  0 x3  0s1  1s 2  50
 5 x  4 x  3 x  0 s  0 s  Z *
 1 2 3 1 2
Step 3: Set up the initial simplex tableau

The initial simplex tableau of the problem has been shown in table 2.3.1.

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-5 -4 -3 0 0
Basics C Quantity
x1 x2 x3 s1 s2
s1 0 -1 -1 -1 1 0 -100
s2 0 -2 -1 0 0 1 -50
Z 0 0 0 0 0 0
C–Z -5 -4 -3 0 0
Step 4: Phase I applies

column, and the pivot column is the column that contains x3 due to the most negative entry along the
selected pivot row and the entrance of this variable has the highest effect on increasing the objective
function’s value.
 1[ s1 ]  s1
After pivoting, we get the second simplex tableau,
Table 2.3.2: Second simplex tableau

-5 -4 -3 0 0
Basics C Quantity
x1 x2 x3 s1 s2
x3 -3 1 1 1 -1 0 100
s2 0 -2 -1 0 0 1 -50
Z -3 -3 -3 3 0 -300
C–Z -2 -1 0 -3 0
Step 4: Phase I applies

column, and the pivot column is the column that contains x 1 due to the most negative entry along the
selected pivot row.
 1 2[s2 ]  s2
 1 [ x1 ]  x3  x3

-5 -4 -3 0 0
Basics C Quantity
x1 x2 x3 s1 s2

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x3 -3 0 ½ 1 -1 ½ 75
x1 -5 1 ½ 0 0 -½ 25
Z -5 -4 -3 3 1 -350
C–Z 0 0 0 -3 -1
This is the final simplex tableau. Since the maximum value of Z* = -350, the minimum value of the
objective function Z = 350. This occurs when:
x1  25, x 2  0, and x3  75
2.4. Minimization Problem with Mixed Constraints and the Big M Method
Earlier we presented a method to solve minimization problems. Similarly, it possible to carry out
computation for minimization problem with mixed constraints.
The simplex method requires that all constraints be in what is called standard form. For constraints that
are ≤ can be put into standard form by adding non negative slack variables on the lesser part.
Constraints with=and ≥can also be handled without changing them in a standard form a bit differently.
Note that we saw in the previous sections, origin serves as a convenient starting point for the formation
of initial solution in for some LP problems. Hence there is a conflict between using the origin as a
starting point and a constraint with= which do not permit any slack variable. This disparity is avoided
in simplex a procedures by the introduction of non negative Artificial Variables. These variables are
somewhat analogous to slack variables in that they are added equality constraints. However, they have
no physical interpretation; they merely serve as a device to enable us to use the simplex process.
During the simplex process, any artificial variables are quickly eliminated from the solution. This will
be illustrated in the subsequent examples.
Unlike a ≤ constraint, a ≥ constraint is never allowed to have a value that is less than the minimum
amount designated by the constraints. However, it can have a value that exceeds the designated
amount. That excess can be thought of as a surplus. To allow for that possibility, a non negatives
Surplus Variable is subtracted from each ≥ constraint. This will be illustrated in the following two
examples.
Note that with the surplus variable subtracted, the constraint becomes equality. As before, to allow for
initial solutions that will be less than that amount, an artificial variable must also be introduced. This
will be illustrated in the coming examples.

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Generally, in dealing with problems that have mixed constraints, some combination of slack, surplus,
and artificial variables will be called for.
A vital issue in incorporating surplus and artificial variables in LP problems is how they are represented
in the objective function. Surplus variables are handled in exactly the same that slack variables are.
They are assigned coefficients of zero in the objective function. Assignment of coefficient for artificial
variables depends on the type of the problem [maximization or minimization]. In either case, we are
using artificial variables to facilitate solution and we do not want them to appear in the final solution.
Consequently, assigning objective function coefficients for artificial variables depends on whether the
goal is to maximize or minimize. In maximization problems, assigning a large negative contribution
will ensure that artificial variable will not appear in the optimal solution mix. Conversely, in a
minimization problem, assigning a large positive cost will have a similar effect. Although it would be
acceptable to arbitrarily select a large negative or positive coefficient for the artificial variable in the
objective function, it is more common to simply designate the coefficient with large M this will be
illustrated in the following examples.
Example 2.4.1:
1. x 2  4
2. x1  x 2  9
3. 6 x1  2 x 2  24
All variables ≥ 0
Step 1: Introduce non negative slack, surplus, and artificial variables to form the standardized
system of equations
After that slack variable s1  0 , artificial variable A2  0 , surplus variable s 3  0 and artificial
variable A3  0 have been introduced, the system would be obtained as:

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0 x1  1x2  1s1  0s3  0 A2  0 A3  4
1x  1x  0s  0s  1A  0 A  9
 1 2 1 3 2 3

6 x1  2 x2  0s1  0s3  0 A2  1A3  24
6 x1  8 x2  0s1  0s3  MA2  MA3  Z
Note: Coefficient of an artificial variable in an objective function for a maximization problem is –M.

6 8 0 0 -M -M
Basics C Quantity
x1 x2 s1 s3 A2 A3
s1 0 0 1 1 0 0 0 4
A2 -M 1 1 0 0 1 0 9
A3 -M 6 2 0 -1 0 1 24
Z -7M -3M 0 M -M -M -33M
C–Z 6+7M 8+3M 0 -M 0 0

Step 4: The pivot column is the column that contains x 1 due to the most positive value across the row
C-Z and the pivot row is the row that contains A3 due to the smallest non negative ratio of the last
column values to the corresponding entries of the pivot column.
1 6 [ A3 ]  A3
 1 [ x1 ]  A2  A2
After pivoting, we get the second simplex tableau, Table 2.4.2.

6 8 0 0 -M
Basics C Quantity
x1 x2 s1 s3 A2
s1 0 0 1 1 0 0 4
A2 -M 0 2/3 0 1/6 1 5
x1 6 1 1/3 0 -1/6 0 4

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Z 6 [6-2M]/3 0 [-6-M]/6 -M 24-5M
C–Z 0 [18+2M]/3 0 [3+M]/3 0
Step 3: Phase II applies

C-Z and the pivot row is the row that contains s 1 due to the smallest non negative ratio of the last
 2 3 [ x 2 ]  A2  A2 and  1 3 [ x 2 ]  x1  x1
After pivoting, we get the third simplex tableau, Table 2.4.3.

6 8 0 0 -M
Basics C Quantity
x1 x2 s1 s3 A2
x2 8 0 1 1 0 0 4
A2 -M 0 0 -2/3 1/6 1 7/3
x1 6 1 0 -1/3 -1/6 0 8/3
Z 6 8 [-18+2M]/3 -1-M -M 48-[7/3M]
C–Z 0 0 [18-2M]/3 1+M 0

Step 4: The pivot column is the column that contains s 3 due to the most positive value across the row
6 A2  A2 and 1 6 [ s 3 ]  x1  x1
After pivoting, we get the final simplex tableau, table 2.4.4.
Table 2.4.4: The final simplex tableau

6 8 0 0
Basics C Quantity
x1 x2 s1 s3
x2 8 0 1 1 0 4
s3 0 0 0 -4 1 14
x1 6 1 0 -1 0 5
Z 6 8 2 0 62
C–Z 0 0 -2 0

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This is the final simplex tableau and the maximum value of the objective function is obtained to be
Z = 62. This occurs when x1  5, x 2  4, s1  0, and s3  14
Example 2.4.2:
Solve the cost minimization problem for the optimal solution
Minimize Z  20 x1  12 x 2  16 x3
1. x1  x 2  25
2. x 2  x3  0
3. x3  5
All variables ≥ 0
Step 1: Introduce non negative surplus, and artificial variables to form the standardized system
of equations
After the surplus s1  0 , artificial A1  0 , artificial A2  0 , surplus s 3  0 and artificial A3  0
variables have been introduced the system would be obtained as:
1x1  1x2  0 x3  1s1  0s3  1A1  0 A2  0 A3  25

0 x  1x  0 x  0s  0s  0 A  1A  0 A  0
 1 2 3 1 3 1 2 3

0 x1  0 x2  1x3  0s1  1s3  0 A1  0 A2  1A3  5
20 x1  12 x2  16 x3  0s1  0s3  MA1  MA2  MA3  Z
Note: coefficient of an artificial variable in an objective function for a minimization problem is +M.
20 12 16 0 0 M M M
Basics C Quantity
x1 x2 x3 s1 s3 A1 A2 A3
A1 M 1 1 0 -1 0 1 0 0 25
A2 M 0 1 -1 0 0 0 1 0 0
A3 M 0 0 1 0 -1 0 0 1 5
Z M 2M 0 -M -M M M M 30M
C–Z 20-M 12-2M 16 M M 0 0 0

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Step 4: The pivot column is the column that contains x 2 due to the most negative value across the row
 1 [ x 2 ]  A1  A1
After pivoting, we get the second simplex Tableau. Table 3.5.6

20 12 16 0 0 M M
Basics C Quantity
x1 x2 x3 s1 s3 A1 A3
A1 M 1 0 1 -1 0 1 0 25
x2 12 0 1 -1 0 0 0 0 0
A3 M 0 0 1 0 -1 0 1 5
Z M 12 -12+2M -M -M M M 30M
C–Z 20-M 0 28-2M M M 0 0

Step 4: The pivot column is the column that contains x3 due to the most negative value across the row
C-Z, and the pivot row is the row that contains A3 due to the smallest non negative ratio of the last
 1 [ x3 ]  A1  A1 and 1 [ x3 ]  x 2  x 2
After pivoting, we get the third simplex tableau, table 2.4.7.

20 12 16 0 0 M
Basics C Quantity
x1 x2 x3 s1 s3 A1
A1 M 1 0 0 -1 1 1 20
x2 12 0 1 0 0 -1 0 5
x3 16 0 0 1 0 -1 0 5
Z M 12 16 -20 -8 M 140 + 20M
C–Z 20-M 0 0 20 8 0

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Step 4: The pivot column is the column that contains x 1 due to the most negative value across the row
C-Z, and the pivot row is the row that contains A1 due to the smallest non negative ratio of the lat
After pivoting, the final simplex table is obtained to be:

20 12 16 0 0
Basics C Quantity
x1 x2 x3 s1 s3
x1 20 1 0 0 -1 1 20
x2 12 0 1 0 0 -1 5
x3 16 0 0 1 0 -1 5
Z 20 12 16 -20 -8 540
C–Z 0 0 0 20 8
The maximum value of the objective function Z = 540 this occurs when x1  20, x 2  5 and x3  5
2.5. Special Issues on Simplex Procedures
Sometimes in solving LP problems various conditions, which are relatively easy to recognize them in a
simplex procedure, occur that make the problem unusual, and in some cases, impossible to solve. In
this sub section the special issues, viz. unbounded solutions, degeneracy, multiple optimal solutions,
and infusibility on simplex procedures will be presented.
Unbounded Solutions
A solution is unbounded if the objective function can be improved without limit. Recall that when are
trying to identify a leaving variable using the phase II pivoting strategy in a simplex procedure, we
make use of the rations of the current values to the corresponding entries of the pivot column. a
variable which is attached with smallest non negative ratio will leave the solution mix. the issue of
unbounded solution arises when there are no positive rations. a negative ratio means that increasing the
variable which is attached with that negative ratio would increase resource. A zero ratio means that
increasing the variable which is attached with that negative ratio would not use any resource.
Example 2.5.1:
Maximize Z  2 x1  3x 2

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1. x1  x 2  10
2. 2 x1  x 2  40
All variables ≥ 0
Solution:
After the slack variables, say s1  0 and s 2  0 have been introduced, the standardized system of
equations will be obtained as:
1x1  1x2  1s1  0s2  10


2 x1  x2  0s1  1s 2  40
2 x  3x  0s  1s  Z
 1 2 1 2

2 3 0 0
Basics C Quantity
x1 x2 s1 s2
s1 0 1 -1 1 0 10
s2 0 2 -1 0 1 40
Z 0 0 0 0 0
C–Z 2 3 0 0

Step 4: The pivot column is the column that contains x 2 because of the most positive value across the
row C-Z. Establishing the pivoting strategy for identifying the leaving variable cannot be possible. This
is because all the ratios of the last column values to the corresponding entries of the pivot column
become negative. Hence, the given problem is said to have unbounded solutions.
Degeneracy
The basic logic of simplex method is to improve the solution in subsequent iteration. When subsequent
iteration shows limitation of existing rule to proceed further we say Degeneracy has occurred.
Degeneracy might occur right in the initial simplex tableau. This normally happens when the number of

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constraints is less than the number of decision variables in the objective function. The problem can be
overcome by trial and error method.
In the process of developing the next simplex tableau for a tableau that is not optimal, the leaving
variable must be identified. A variable which is attached with smallest non negative ratio will leave tae
solution mix. In some cases, the decision on selecting the pivot row becomes very difficult under the
following cases. Initial simplex tableau has zero current value for one of the initial basic variable or
there might be a tie for the lowest non negative ratio.
In the first case it is difficult to obtain optimum solution because the pivoting strategy does not change
the value of the objective function. In the second case it is sufficient to simply select one of the tied
leaving variables arbitrarily and keep on doing the computation.
If this doesn’t work and cycling occurs apply the following rules:
1. Re-arrange the coefficients of all the variables in the constraints in the initial simplex tableau so
that the table starts with an identity matrix.
2. Recalculate minimum ration for each row by picking up a numerator, which the next value in
the row. Repeat the technique till smallest non negative ratio is obtained.
Example 2.5.2:
Maximize Z  2 x1  3 x 2  10 x3
1. x1  2 x3  0
2. x 2  x3  3
All variables ≥ 0
Solution:
After the slack variables, say s1  0 and s 2  0 have been introduced, the standardized system of
equations will be obtained as:

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1x1  0 x2  2 x3  1s1  0s 2  0

0 x1  1x2  1x3  0s1  1s2  1
2 x  3x  10 x  10s  0s  Z
 1 2 3 1 2
Step 2: Set up the initial simplex tableau table

2 3 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
s1 0 1 0 2 1 0 0
s2 0 0 1 1 0 1 1
Z 0 0 0 0 0 0
C–Z 2 3 10 0 0

Step 4: The pivot column is the column that contains x3 due to the most positive value across the row
C-Z and the pivot row is the row that contains s 1 due to the smallest non negative ratio of the list
column values to the corresponding entries of the pivot column. After pivoting, we get the second
simplex tableau, Table 2.5.3.

2 3 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
x3 10 0.5 0 1 0.5 0 0
s2 0 -0.5 1 0 -0.5 1 1
Z 5 0 10 5 0 0
C–Z -3 3 0 -5 0
The table reveals that the Z value has not improved. This is the indication of the existence of
degeneracy. This is happen because of the number of constraints which is less than the number of
decision variables in the objective function. Note that optimum solution will out one of the decision
variables as being zero.

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C-Z and the pivot row that contains s 2 due to the smallest non negative ratio of the last column values
to the corresponding entries of the pivot column. After pivoting, we get the final simplex tableau, Table
2.5.3.
2 3 10 0 0
Basics C Quantity
x1 x2 x3 s1 s2
x3 10 0.5 0 1 0.5 0 0
x2 3 -0.5 1 0 -0.5 1 1
Z 3.5 3 10 3.5 3 3
C–Z -1.5 0 0 -3.5 -3
The maximum value of the objective faction Z = 3 and it occurs when x1  0, x 2  1, and x3  0
Example 2.5.3:
Maximize Z  0.75 x1  150 x 2  0.02 x3  6 x 4
1. 0.25 x1  60 x 2  0.04 x3  9 x 4  0
2. 0.5 x1  90 x 2  0.02 x3  3x 4  0
3. x3  1
All variables ≥ 0
Solution:
After the slack variables, say s1  0 , s 2  0 and s 3  0 have been introduced, the standardized system
of equations will be obtained as:

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0.25 x1  60 x2  0.04 x3  9 x4  1s1  0s 2  0s3  0
0.5 x  90 x  0.02 x  3x  1s  0s  0s  0
 1 2 3 4 1 2 3

0 x1  0 x2  1x3  0 x4  0s1  0s2  1s3  0
0.75 x1  150 x2  0.02 x3  6 x4  0s1  0s 2  0s3  Z

Since two of the initial basic variables have the same zero variables first we need to re-arrange the
coefficients of all the variables in the constraints in the initial simplex tableau so that the table starts
with an identity matrix.
Step 3: Phase II pivoting rule tells us that x 1 is an incoming variable and a tie for leaving the solution
mix was observed in between the basics, s 1 and, see Table 2.5.4. This is because both of these
variables are attached with the smallest non negative ratio of the current values to the corresponding
entries of the pivot column, that is, 0. Hence, recalculation of minimum ratio for each row by picking
up a numerator [the next value in the row] will be needed.

0 0 0 .75 -150 .02 -6 Ratio Ratio
Basics C Quantity
s1 s2 s3 x1 x2 x3 x4 Q x1 Q s1
s1 0 1 0 0 35 -60 -.04 9 0 0 4
s2 0 0 1 0 .5 -90 -.02 3 0 0 0
s3 0 0 0 1 0 0 1 0 1 ∞
Z 0 0 0 0 0 0 0 0
C–Z 0 0 0 .75 -150 -02 -6
C-Z and the pivot row contains s 2 due to eh smallest non negative ratio of the s 1 column entries to
the corresponding entries of the pivot column. After pivoting, we can the second simplex tableau
shown below, Table 2.5.5.

Basics C 0 0 0 .75 -150 .02 -6 Quantity Ratio Ratio

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s1 s2 s3 x1 x2 x3 x4 Q x3 s 2 x3
s1 0 1 -.5 0 0 -15 -.03 7.5 0 0 16.7
x1 0.75 0 2 0 1 -180 -.04 6 0 0 -50
s3 0 0 0 1 0 0 1 0 1 1 0
Z 0 1.5 0 .75 -135 -.03 4.5 0
C–Z 0 -1.5 0 0 -15 .01 -10.5
Step 3: Tables 2.5.5 discloses that the z value has not improved. This indicates again that the existence
of Degeneracy. Phase II pivoting rule tells us that x3 is an incoming variable because it is the only
variable which is attaché with the most positive value across the row c-z and a tie for leaving the
solution mix was observed in between the basics s 1 and x 1 for these variables are attached with the
smallest non negative ratio of the current values to the corresponding entries of the pivot column, that
is, 0. Hence, recalculation of minimum ratio for each row by picking up a numerator [the next value in
the row] will be needed.
Step 4: The pivot column is the column that contains x3 due to the most positive value across the row
C-Z and the pivot row is the row that contains s 3 due to the smallest non negative ratio of the s 2
column entries to the corresponding entries of the pivot column. After pivoting we get the final simplex
tableau, table 2.5.6.

0 0 0 0.75 -150 0.02 -6
Basics C Quantity
s1 s2 s3 x1 x2 x3 x4
s1 0 1 -.5 .03 0 -15 0 7.5 .03
x1 0.75 0 2 .04 1 -180 0 6 .04
x3 0.02 0 0 1 0 0 1 0 1
Z 0 1.5 0.05 0.75 -135 0.02 4.5 0.05
C–Z 0 -1.5 -0.05 0 -15 .01 -10.5
The maximum value of the objective function Z = 0.05 and it is obtained when x 1 = 0.04
As we have seen under special issues on geometric procedures when an LP problem has an optimal
solution which is not unique, the problem is said to have multiple optimal solutions. In a graphical
method finding a multiple solution is obvious. In the case of simplex method the existence of multiple
optimal solutions can be discovered by examining the entries along the row C-Z of the final simplex
table. When all the non basic variables have zero values across the C-Z row of the final simplex table,
it can be considered as a signal for the existence of a multiple optimal solution. The presence of these
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zeros implies that the variables can be brought into the solution mix without increasing or decreasing
the value of the objective function.
The other optimal solution of the problem can simply be determined by given a chance for those non
basic decision variables to come into the solution mix and then, finding the leaving variable as usual.
Example 2.5.4:
Given below are the LP model and its associated final simplex table. Determine the alternate optimal
solution of the problem.
1.  2 x1  x 2  2
2. x1  x 2  2 x1-x2≤2
3. 3 x1  2 x 2  9
All variables ≥ 0
6 4 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
s1 0 0 0 1 1.4 0.2 6.6
x1 6 1 0 0 0.4 0.2 2.6
x2 4 0 1 0 -0.6 0.2 0.6
Z 6 4 0 0 2 18
C–Z 0 0 0 0 -2
Solution:
Because there is a zero in row C-Z along the non basic variable s 2 column, it is an indication for the
existence of an alternate optimal solution.
Hence, we can consider s 2 as incoming variable and look forward in determining the leaving variable
using the phase II pivoting strategy. The leaving variable becomes s 1 due to the smallest non negative
ratio of the quantities to s 2 column entries. After pivoting, we can get the alternate optimal solution
simplex tableau, Table 2.5.8.
Table 2.5.8: Alternate final simplex tableau
6 4 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
s1 0 0 0 0.71 1 0.1 4.17

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x1 6 1 0 -0.28 0 0.16 0.72
x2 4 0 1 0.43 0 0.26 3.43
Z 6 4 0 0 2 18
C–Z 0 0 0 0 -2
Infeasibility
This is the case in which we get minimum or maximum value of the objective function even before all
the decision variables are taking a placement in the basic variables column Basics. The optimal
solutions obtained at such a situation are called Optimum Basic Infeasible Solutions. Conversely,
when optimum is reached in which the all the decision variables are place along the basic variable
column, the situation is said to be Optimum Basic Feasible Solution.
Note that in a big m method infeasibility is said to exist when artificial variables presented in the final
simplex tables across the basic variable column.
Given below is the LP model show that the solution obtained at the end of the optimality analysis is
Optimum Basic Infeasible Solutions [OBIS]
1. 3x1  4 x 2  6
2. 5 x1  6 x 2  15
All variables ≥ 0
Solution:
Left as an exercise

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CHAPTER THREE
POST OPTIMALITY ANALYSIS AND DUALITY
Introduction
one of the most important discoveries in the early development of linear programming were the
concept of duality and its many important ramifications. This discovery revealed that every linear
programming problem has associated with it another linear programming problem called the dual. The
relationships between the dual problem and the original problem (called the primal) prove to be
extremely useful in a variety of ways.
3.1 Sensitivity analysis
Sensitivity analysis or post optimality carries the LP analysis beyond the determination of the optimal
solution it begins with the final simplex tableau. Its purpose is to explore how changes in any of the
parameters of a problem, such as the coefficients of the constraints, coefficients of the objective
function, or the right hand side values, would affect the solution. This kind of analysis can be quite
beneficial to a decision maker in a number of ways. For instance, a manager may want to consider
obtaining an additional amount of some scarce resource that might be available, in which case the
manager would want to know the answers to questions such as:
 Will an increase in the right hand side of these constraints affect the objective function?
 If so, how much of the resource can be used?
 Given the answer to the preceding question, what will be the received optimal solution?
Conversely, the decision maker might be facing a situation in which the amount of a scarce
resource available is less than the original amount, in which case the issue would be:
 Will the decrease level of the resource have an impact on the value of the objective function?
 If yes, how much of an impact will it have, and what will be the revised optimal solution?
3.1.1. A change in the Right Hand Side [RHS] Values of a Constraint

The first step in determining how a change in the RHS values of a constraint that would influence the
optimal solution is to examine the shadow prices in the final simplex tableau of the optimality analysis.
Shadow prices are the coefficients of the slack variable in the Z row of the final simplex tableau.
A shadow price is a marginal value; it indicates the impact that a one unit change in the RHS value of a
problem constraint would have on the value of the objective function. That is, shadow rice reveals the

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amount by which the value of the objective function would increase if the level of the RHS value of a
given problem constraint was increased by one unit. What shadow price do not tell us is the extents to
which the level of a scarce resource can be changed and still have the same impact per unit. Hence, we
need to determine the range over which we can change the RHS quantity of a problem constraint given
that there is the same shadow price. This range is called Range of Feasibility or the Right Hand Side
Range.
Therefore, the second step is to construct a range of feasibility for each and every RHS values of the
existing constraints of the LP model. The key to computing the range of feasibility for the constraints
lies in the final simplex table of the optimal analysis. Purposely, the entries in the body of the final
simplex tableau in each slack column must be used to compute the range of feasibility for the
corresponding constraint.
In forming the range we need to consider the following.

 The entries in the associated slack column should be identified.
 Ratios of current values to corresponding entries of the slack column should be determined.
This would be carried out when the entries in the associated slack column have been divided
into the corresponding values in the current value column.
 The lower and upper limits of the range should be determined using.
For a maximization problem
Lower limit = current level of the constraint minus the positive ratio nearer to zero.
Upper limit = current level of the constraint minus the negative ratio nearer to zero.
For a minimization problem

Lower limit = current level of the constraint minus the negative ratio nearer to zero.
Upper Limit = current level of the constraint minus the positive ratio nearer to zero.
Example 1.1.1:
Given below is the LP model and the associated final simplex tableau of the optimality analysis Table
1.1.1. Identify the shadow prices and determine the range of feasibility.
1. 3 x1  5 x 2  15
2. 2 x1  x 2  8
3. x 2  2
All variables ≥ 0
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3 4 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
x1 3 1 0 -0.143 0.714 0 3.57
s3 0 0 0 -0.286 0.428 1 1.143
x2 4 0 1 0.286 -0.428 0 0.857
Z 3 4 0.714 0.428 0 14.138
C–Z 0 0 -0.714 -0.428 0
Solution:
The shadow prices are entries along row Z which fall under the three slack variables s 1 , s 2 and s 3 .
These values are 0.714, 0.428, and 0, respectively.
0.714 is marginal value; it indicates the impact that a one unit change in the RHS value [15] of the first
problem constraint would have on the value of the objective function. That is, the value of the objective
function [14.138] would be increased into 14.138 + 0.714 = 14.852 if the level of RHS value of the first
problem constraint is increased by one unit.
Analysis on the RHS of the first constraint:
Quantity = Q s1 Q s1
3.57 -0.143 -24.6
1.143 -0.286 -3.99
0.857 0.286 3.00
The lower and upper limit of the range of feasibility over which the RHS of the first constraint can
change is given as follows:
Lower Limit = 15 – 3 = 12. This indicates the THS value of the first constraint can be decreased by 3
units before it hits the lower limit of the range of feasibility.
Upper Limit = 15 – [-3.99] = 18.99. This indicates the THS value of the first constraint can be
increased by 3.99 units before it reaches the upper limit of the range of feasibility.
Therefore, 12 ≤ b1 ≤ 18.99 is said to be the range of resource 1 over which the shadow price 0.714 per
unit is valid.
Analysis on RHS of the second constraint:

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Quantity = Q s2 Q s2
3.57 0.714 5
1.143 -0.428 2.67
0.857 0.428 -2
The lower and upper limit of the range of feasibility over which the THS of the second constraint can
change is obtained to be:
Lower Limit = 8 – 2.67 = 5.33. This indicates the RHS value of the second constraint can be decreased
by 2.67 units before it hits the lower limit of the range of feasibility.
Upper Limit = 8 – [-2] = 10. This indicates the RHS value of the second constraint can be increased by
2 units before it reaches the upper limit of the range of feasibility.
Therefore, 5.33 ≤ b2 ≤ 10 is said to be the range of resource 2 over which the shadow price 0.428 per
unit is valid.
Find the range of feasibility over which the right hand side value of the third constraint would change
and give a brief explanation on the resulting figure.
Note that the third constraint is not scarce. It is not important to construct the ROF for this one since
the shadow price is zero.
3.1.2. A Change in an Objective Function Coefficient

A decision maker often finds it is useful to know how much the contribution of a given decision
variable to the objective function can change without changing the optimal solution.
There are two cases to consider: changes for the coefficient of a decision variable that is not currently
in the solution mix [Non Basic Decision Variable], and changes for the coefficient of decision variable
that is currently in the solution mix [Basic Decision Variable].
Range of Insignificance
If a decision variable is not currently in solution mix in maximization problem, its coefficient in the
objective function would have to increase by an amount that exceeds its corresponding value along the
Z row in the final simplex tableau in order for it to end up as a basic variable in the optimal solution
mix. That is, in order for the variable to be included in the optimal solution, its coefficient in the
objective function will have to change from the existing coefficient to a new coefficient level. The new
coefficient level should always exceed the corresponding value of the non basic decision variable along
the row Z.

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Hence, the range over which the coefficient of a non basic decision variable in the objective function
can change without causing the optimal solutions of the basic decision variables is said to be Range of
Insignificance.
The upper limit of such arrange is given in the Z-row under the non basic decision variable column,
which is 0 ≤ C j [new] ≤ Z j
Where
C j [new] is the new coefficient of the jth non basic decision variable, and
Zj is the corresponding value of the jth non basic decision variable column along the Z row.
Example 1.1.2;
Given the final simplex tableau in Table 1.1.2, determine the range over which the coefficient of the
non basic decision variable x 2 in the objective function could change without changing the optimal
solution mix.
Table 1.1.2: Final Simplex Tableau

5 4.5 1 0 0 0
Basics C Quantity
x1 x2 x3 s1 s2 s3
x1 5 1 1.053 0 0.067 0 0 10
x3 1 0 0.67 1 -0.022 0.067 0 1.8
s3 0 0 1.924 0 0.258 -0.773 1 15.12
Z 5 5.342 1 0.311 0.067 0 51.80
C–Z 0 -0.842 0 -0.311 -0.067 0
Solution:
Because x2 is not in the solution mix, its coefficient in the objective function would need to increase in
order for it to come into solution. The amount of increase must be greater than its corresponding value
along the row C-Z, which -0.842.
Therefore, its existing coefficient in the objective function must be increase by more than Br.0.842.
Because its current value is Br. 4.5, as indicated at the top of Table 4.2, the current solution mix will
remain optimal as long as its coefficient in the objective function does not exceed Br. 4.5 + Br. 0.842,
or Br. 5.342. For the reason that an increase would be needed to bring it into the solution mix, any
lesser value than Br. 5.342 of its coefficient in the objective function would keep it out of the solution
mix. Hence, the range of insignificance for x2 is Br. 5.342 or less. That is - <C2[new] <5.342.

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Not, however, that, in order for the variable to be included in the optimal solution, its coefficient in the
objective function will have to change from the existing coefficient Br.4.5 into the new level, which
should exceed the corresponding value of this variable along the row ZBr.5.342.
Range of Optimality
The range over which the coefficient of a basic decision variable can change without shifting the
optimal solutions of the basic decision variables is called its Range of Optimality.
For variables which are in the solution mix, the determination of the range of optimality requires the
entries along the row C – Z and the corresponding row values of the basic decision variable in question
in the body of the final simplex tableau. In order to form the range of optimality one has to carefully
consider the following events:
 The entries along the row C – Z should be indentified;
 The values in row C – Z must be divided by the corresponding row values of the basic decision
variable in question. The will result in a series of ratios. The positive ratio closest to zero will
indicate the amount of allowable increase to the current value and the negative ratio closest to
zero will indicate the amount of allowable decrease from the current value and
 Finally, the lower and upper limits of the range should be determined accordingly this rule
applies for both Maximization and Minimization problem.
Lower Limit = Existing coefficient of the basic decision variable in question plus the negative
ratio nearer to zero.
Upper Limit = Existing coefficient of the basic decision variable in question plus the positive
ratio nearer to zero.
Example 1.1.3:
A firm makes four products. Each product requires material, labor, and machine time. A LP model has
been developed to describe the situation: Determine the range of optimality for the decision variables in
the solution mix.
Maximize 12 x1  10 x 2  15 x3  11x 4
Subject to
A: 5 x1  3x 2  4 x3  2 x 4  240 pounds [Material]
B: 6 x1  8 x 2  2 x3  3x 4  240 6 hours [Machine]
C: 2 x1  3 x 2  3 x3  2 x 4  180 hours [Labor]
All variables ≥ 0

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Table 1.1.3: Optimal simplex tableau of the firm
12 10 15 11 0 0 0
Basics C Quantity
x1 x2 x3 x4 s1 s2 s3
x3 15 -1.2 -1.4 1 0 0 -0.4 0.6 12
s1 0 4.2 1.4 0 0 1 0.4 -1.6 48
x4 11 2.86 3.6 0 1 0 0.6 -0.4 72
Z 12.8 18.6 15 11 0 0.6 4.6 972
C–Z -0.8 -8.6 0 0 0 -0.6 -4.6
Solution:
For variables which are in the solution mix, the determination of the range of optimality requires the
entries along the row C – Z and the corresponding row values of the basic decision variable in question
in the body of the final simplex tableau.
Analysis on the coefficient of x3 in the objective function:
x1 x2 x3 x4 s1 s2 s3
C–Z -0.8 -8.6 0 0 0 -0.6 -4.6
x3 -1.2 -1.4 1 0 0 -0.4 0.6
C  Z x3 0.67 6.14 0 Undefined Undefined 1.5 -7.67
The lower and upper limit of the range of optimality over which coefficient of the basic decision
variable x3 can change is obtained to be:
Lower Limit = 15 + [-7.67] = 7.33. This indicates the coefficient of x3 can be decreased by Br. 7.67
before it hits the lower limit of the range of optimality.
Upper Limit = 15 + [0.67] = 15.67. This indicates the coefficient of x3 can be increased by Br. 0.67
before it reaches the upper limit of the range of optimality.
Therefore, 7.33 ≤ C 3 ≤ 15.67 is said to be the range of optimality over which the profit per unit of
product three is valid.
Analysis on the coefficient of x3 in the objective function:

x1 x2 x3 x4 s1 s2 s3
C–Z -0.8 -8.6 0 0 0 -0.6 -4.6
x4 2.8 3.6 0 1 0 -0.6 -0.4
C  Z x4 -0.29 -2.39 Undefined 0 Undefined -1 11.5
The lower and upper limit of the range of optimality for which the coefficient of the basic decision
variable x 4 in an objective function can change is found to be:

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Lower Limit = 11 + [-0.29] = 10.71. This indicates the coefficient of x 4 can be decreased by Br. 0.29
before it hits the lower limit of the range of optimality.
Upper Limit = 11 + [11.5] = 22.5. This indicates the coefficient of x 4 can be increased by Br. 11.5
before it reaches the upper limit of the range of optimality.
Therefore, 10.71 ≤ C 4 ≤ 22.5 is said to be the range of optimality over which the profit per unit of
product three is valid.
3.2 Duality
Every Linear Programming problem [LP problem] can have two forms and each LP problem is
associated with another LP problem which is called the dual of the original LP problem. The original
LP problem is called the Primal. If the Dual is stated as a given problem the Primal becomes its Dual
and vice-versa.
The solution of one contains the solution of the other. In other words when optimum solutions of
Primal is known, the solution of Dual is also obtained from the very same optimum tableau.
Analysis of the Dual will enable a manager to evaluate the potential impact of a new product, and it can
be used to determine the marginal values of resources [that is, constraints]. In relation to a new product,
a manager would want to know what impact adding a new product would have on the solution mix and
the profits impact. Similarly, a manager can refer to a Dual solution to determine how much profit
would be represented by one unit of each resource.
3.2.1. Formulation of the Dual
All LP problems formulated directly from the descriptions of the original problem can be classified as
Primal problems. On the other hand, an alternative formulation of the problem that requires the
existence of the Primal is known as the Dual.
Analysis of the Dual can enable manager to evaluate a potential of a new product, and it can be used to
determine the marginal value of recourses [constraints]. It also helps the manager to decide which of
several alternative uses of resources is more profitable.
Let’s know consider how the Dual problem can be formulated from the Primal.
Table 2.1.1 Transforming the Primal into its Dual

Prime Form Dual Form
Maximize Minimize
Z  c1 x1  c 2 x 2     c n x n Z *  b1 s1  b2 s 2     bn s n
Subject to the constraints Subject to the constraints

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s1 : a11 x1  a12 x 2  a13 x3      a1n x n  b1 x1 : a11 s1  a12 s 2  a13 s3      a1n s n  c1
s2 : a 21 x1  a 22 x 2  a 23 x3     a 2 n x n  b2 x2 : a 21 s1  a 22 s 2  a 23 s3     a 2 n s n  c 2
s3 : a31 x1  a32 x 2  a33 x3     a3n x n  b3 x3 : a 31 s1  a 32 s 2  a 33 s3     a 3n s n  c3
................................................. .................................................
s m : a m1 x1  a m 2 x1  a m3 x3      a mn x1  bm x m : a m1 s1  a m 2 s1  a m 3 s3      a mn s1  c m
x1 , x 2 ,    , x n  0 s1 , s 2 ,    , s n  0
The characteristics of the Dual formulation illustrated in Table 4.2.1 are expressed in the following
words:
1. If the Primal is maximization problem, the Dual will be a minimization problem and vice versa.
2. Right Hand Side values of the constraints in the primal become coefficients of the objective
function in the Dual and vice-versa.
3. Coefficients of the constraints of the Dual are the TRANSPOSE of coefficients of constraints in
the Primal and vice-versa. That is, column a ij of the Primal become row a ij of the Dual.
4. The ≤ problem constraints of the Primal become ≥ problem constraints of the Dual and vice-versa.
5. If the Primal is a maximization problem, then the decision variables of the Primal problem
become the surplus variables in the Dual problem and vice-versa.
6. If the Primal is a minimization problem, then the decision variables of the Primal Problem
become the slack variable in the Dual problem.
Note that in order to transform a Primal problem in to its Dual, it is easier if all constraints in a
maximization problem are of the ≤ type, and in a minimization problem every constraints is or the ≥
type.
Example 2.1.1: Formulate the dual of the Primal problem given below:
Maximize
Z  60 x1  50 x 2

2 x1  x 2  22
4 x1  10 x 2  100
3 x1  3 x 2  39
All variables ≥ 0
Solution:
First let’s lay down the given primal problem as it was set in the standard form show in Table 2.1.1.
Then, it advisable to carefully follow the characteristics listed above to form the corresponding Dual
problem.

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Table 2.1.2: Transforming the Maximization Primal into its Dual
Maximize Minimize
Z  60 x1  50 x 2 Z *  22s1  100s 2  39s 3

s1 : 2 x1  x 2  22 x1 : 2s1  4s 2  3s 3  60
s 2 : 4 x1  10 x 2  100 x 2 : 1s1  10 s 2  3s3  50
s3 : 3x1  3x 2  39
All variables ≥ 0
All variables ≥ 0
Example 2.1.2: Formulate the dual of the Primal problem given below
Minimize Z  50 x1  80 x 2
3x1  5 x 2  45
4 x1  2 x 2  16
6 x1  6 x 2  39
All variables ≥ 0
Solution:
Note that to change the direction of a constraint, multiply both side of the constraint by –
For example, we have
1. 3x1  5 x 2  45  3 x1  5 x 2  45
6x1  6x2  39  6x1  6x2  39

 
2. 6x1  6x2  39  and  and
6x  6x  39 6x  6x  39
1 2 1 2
The set the given primal problem as it was lay down in Table 2.1.1
Table 2.1.3: Transforming the Minimization Primal into its Dual

Minimize Maximize
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Z  50 x1  80 x 2 Z *  45s1  16s 2  39s 3  39s 4

s1 :  3 x1  5 x 2  45 x1 :  3s1  4 s 2  6 s3  6 s 4  50
s2 : 4 x1  2 x 2  16 x2 :  5s1  2 s 2  6 s3  6 s 4  80
s3 :  6 x1  6 x 2  39
All variables ≥ 0
s4 : 6 x1  6 x 2  39
All variables ≥ 0
3.2.2. Comparison of the Primal and Dual simplex Solutions

The flip-flopping of values between the Primal and Dual problems carries over to their final simplex
tableau. Table 2.2.1 contains the final tableau of the Dual and Table 2.2.2 contains the final Tableau of
the Primal for the LP problem given in Example 2.1.1.
Table 2.2.1: Final Simplex Tableau of the Dual Solution

100 22 39 0 0
Basics C Quantity
s1 s2 s3 x1 x2
s3 39 5.33 1 1 0.33 -0.67 13.33
s2 22 -6 0 0 -1 1 10
Z 76 22 39 -9 -4 740
C–Z 24 0 0 9 4
Table 2.2.2: Final Simplex Tableau of the Primal Solution
60 50 0 0 0
Basics C Quantity
x1 x2 s1 s2 s3
s1 0 0 0 1 6 -5.33 24
x1 60 1 0 0 1 -0.33 9
x2 50 0 0 0 -1 0.67 4
Z 60 50 0 10 13.33 740
C–Z 0 0 0 -10 -13.33
From the above tables one can easily identify:

1. The optimal value of the objective functions of both the Dual and the Primal problems,
problems are found to be the same and
2. The shadow prices observed at the Final Simplex Tableau of Dual Solution are found to be the
current solutions at final simplex tableau of the Primal Solution and vice-versa.
3.2.3. Economic Interpretation of the Primal and Dual
Standard Price

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While Primal decision variables represent the quantity, Dual decision variables shadow prices. Shadow
prices measure the value or worth of relaxing a constraint by acquiring and additional unit of the
constraint for production. For instance, the Final Simplex Tableau of the Dual Solution (Table 2.2.1)
revealed that a one unit increase of the RHS value of second constraint would result Br. 10 worth of
increased profitability, and a one unit increase of the RHS value of the third constraint would result Br.
13.33 worth of increased profitability.
Opportunity Cost
In a minimization problem slack variables in Dual [namely x1 and x 2 of Example 2.1.2] measures the
opportunity loss involved in producing items [ x1 and x 2 of Example 2.1.2] in Primal.
C – Z Row against Decision Variable

C – Z row entries against the decision variables indicate opportunity losses if one unit of the decision
variable in included in the solution. If these values are zero, they indicate the opportunity loss of
introducing this unit is nothing, meaning, it is desirable to produce them. In a maximization Primal
problem if we find these entries are zero or positive against the decision variables, say x1 and x 2 , the
indication is that taking this up this product will not cause reduction in profit. Otherwise, this
production is said to be not OK.
C – Z Row against Slack Variables

The C – Z values appearing against slack variables indicate the shadow prices indicating additional
profit if one unit of that slack variable is added. If we find zero values against slack variables it shows
the capacity is underutilized and no need to increase facilities or investment in improving in this area.

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CHAPTER FOUR
TRANSPORTATION AND ASSIGNMENT PROBLEMS
4.1 Transportation Problems

The Transportation Problem is a particular case of a Linear Programming Problem. A transportation
problem can also be formulated and solved and a Linear Programming Model with an objective
function and some sets of constrains and non negative requirements. It can also be solved using the
usual technique of solving LP problem with three or more decision variables, called Simplex. In
addition to the Simplex approach, there is technique, which will be designed to determine both optimal
solution and optimal value of the problem for any transportation problem, called Transportation
Technique.
The technique which will be implemented in finding the optimal solutions and optimal value for a
transportation problem is very similar to simplex method. The overview of the method of finding
optimality is reviewed as shown below:
 Constructing a transportation model.
 Find an initial feasible solution. Initial feasible solution can be determined via North West
Corner Rule (method) Row Minimum Rule Method, Column Minimum Rule Method. Table
Minimum Rule (Method, minimum cost method) or Vogel’s Assumption method.
 Checking for optimality. Optimality will be checked using one of the methods listed below:
Stepping Stone method or Modified Distribution [MoDi] method;
 If initial feasible solution is optimal, stop computing. Otherwise, find improved solution; and
 Repeat 3 and 4 still you get the optimal solution and value.
Transportation techniques have several advantages, among these some of them are: Reduce distribution
and transportation costs; Improve competitiveness of products; Assist proper location of ware houses,
new production plants, and etc.
Transportation problems are usually applied to distribution type problems, in which supplies of goods
that are found at different origins are to be distributed to different destination. It involves a set of
sending locations, which are referred to Origins, and a set of receiving locations that are refereed to as
Destinations.
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4.1.1. Formulation of the Transportation Models
In order to design a transportation technique one needs to have the following fundamental information,
namely:
 Maximum availability of quantity [capacity] at various origins;
 Maximum requirements of quantity [order] at different destination; and
 Cost or profit of transportation of a unit item from each origin to every destination.
A table that reveals a clear relationship between the above three information is a Transportation Table.
In any transportation table one can easily perceive that there are sections for the origins [capacities], for
the destinations [orders, and unit transportation costs of each origin – destination routes.
Examples 1.1.1:
HHH Company has 3 factories A.B and C which supply items to retailers X, Y and Z. Monthly factory
capacities are 50, 15 and 55 at Factory A, Factory B, and Factory C, respectively. Monthly retailers
requirements at X, Y and Z are 25, 50 and 45, respectively. Unit item transportation costs in Birr are
given below in Table 1.1.1.
Table 1.1.1: Transportation costs per unit item
To
Retailer X Retailer Y Retailer Z
From
Factory A Br. 12 Br. 20 Br. 15
Factory B Br. 9 Br. 11 Br. 4
Factory C Br. 20 Br. 14 Br. 8
The transportation table of the above problem would be designed to relate the capacities of the factories
[origins], monthly requirements of the retailers [destinations] and the unit transportation costs, and it
will have the following shape:
Table 1.1.2: Transportation table for the HHH Company

To Supply
From Quantity
Factory A Br. 12 Br. 20 Br. 15 50
Factory B Br. 9 Br. 11 Br. 4 15
Factory C Br. 20 Br. 14 Br. 8 55
Demand Quantity 25 50 45 120
Note that the above transportation table is said to have 3 times 3 or 9 routes each of these routes are
uniquely represented by their associated cells. For instance, a cell having a unit transportation cost of
Br. 11 is representing the route which begins at Factory B and ends at Factory Y.

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A solution in a transportation problem consists of quantities that are assigned to the different routes or
cells of the transportation table. These values can range from zero [when no units will be shipped over
the route] to the smaller quantity of the corresponding row supply and the corresponding column
demand.
In order to formulate an LP model for such a transportation problem first we need a variable to each
cell of the table to represent quantity on every route. For an HHH Company this can be illustrated in
Table 1.1.3.
Table 1.1.3: Transportation table showing xij quantities shipped from Origin I to destination j
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
x.11 x.12 x.13
Br. 12 Br. 11 Br. 15
Factory B 15
x.21 x.22 x.23
Br. 12 Br. 14 Br. 15
Factory C 55
x.21 x.32 x.33
The main objective of this transportation problem is minimizing the total transportation cost.
Accordingly, the objective function of the problem is mathematically given as:
T = 12x11 + 20x12 + 15x13 + 9x21 + 11x22 + 4x23 + 20x31 + 14x32 + 8x33

Subject to:
Seeing the constraints, it is clear that the sum of quantities in any row or column must be the same as to
the row or the column total, respectively. Consequently, each of the constraints will be presented as
follows:
Supply Constraints: Demand Constraints:
x11 + x12 + x13 = 50 x11 + x21 + x31 = 25
x21 + x22 + x23 = 15 x12 + x12 + x32 = 45
x31 + x32 + x33 = 55 x13 + x23 + x33 = 50
All variables >0
4.1.2. Deciding an Initial Feasible Solution Using a Transportation technique

A solution in a transportation problem is said to be feasible when assignments are made in such a way
that all supply and demand requirements are satisfied. At feasible solution the total number of

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allocations should be one less than the sum of the number of origins and destinations in a transportation
table. For example, the above HHH Company is said to be obtained its feasible solution when the total
number completed cells equals 5, which is [n (Origins) + n (Destination) -1].
A number of different approaches can be used to determine an initial feasible solution. Five of these
methods are described below:
1. The North – West Corner – Rule (Method)

This method is very simple and easy to understand. The major disadvantage is that it does not take
transportation costs in to account in making the allocation. The following steps are involved in this
method:
1. Make the first assignment to the upper left-hand cell which is called North-West corner of the
transportation table. The quantity allocated should be the lesser of the row supply and the
column demand. Amend the row and column totals accordingly.
2. Remain in a row or column until its supply or demand is completely allocated. Assign the
maximum number of units to every cell in turn until all supply is allocated and all demand has
been satisfied.
Example 1.2.1: Find an initial feasible solution to the transportation problem given above in the HHH
Company using North-West Corner method.
Solution:
The sequence of the allocation using the North-West Corner method would be presented as:
 Begin with cell A – X , allocate 25 units that is the lower of the row supply 50 units and the
column demand 25 units;
 Stay in Row A and move to the next RHS cell A – Y, where the current row supply is 25 units
and column demand is 50 units, allocate 25 units to this cell, which exhaust the current row
supply and leave 25 units in the total of Column Y.
 Stay in Column Y and move down to the cell B – Y, where the row supply is 15 units and the
current column demand 25 units, allocate 15 units [the lower of the two], which exhaust the row
supply and leave 10 units in the total of Column Y;
 Stay in Column Y and move down to the cell C – Y, where the row supply is 55 units and the
current column demand 10 units, allocate 10 units [the lower of the two], which exhaust the
column demand and leave 45 units in the total of Row C; and

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 Stay in Row C and move to the next RHS cell C – Z, where the current row supply is 45 units
and the column demand and leave 45 units, allocate 45 units [the lower of the two], which
exhaust both the row supply and the column demand.
Table 1.2.1: Initial Feasible Solution for HHH Co. using the North – West Corner method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B rd
15
15 [3 ]
Br. 20 Br. 14 Br. 8
Factory C th th
55
10 [4 ] 45 [5 ]
Multiplying the quantities in the completed cells by the corresponding cell’s unit transportation costs
and then adding them will yield the total transportation cost of the problem. That is, Total
Transportation Cost, T is given by:
T = 12(25) + 20(25) + 11(15) +14(10) +8(45)
= Br. 1465
2. Row – Minimum Rule Method

The following set of principles guides the allocations:
1. Locate a cell with the smallest unit transportation cost in the first row and allocate a quantity
that is equal to the lower of the available row supply and column demand;
2. Delete or cross out the cells in the row or column that has been exhausted [or both, if both have
been exhausted], and adjust the remaining row or column total accordingly; and
3. Repeat 1 and 2 till all allocations are made.
Example 1.2.2: Find an initial feasible solution to the transportation problem given in the HHH
Company using the Row – Minimum Rule method.
Solution:
The sequence of the allocation using the Row-Minimum Method would be presented as follows
The cell with lowest cell in the first row is A – X. Consequently, we need to allocate 25 units [the lesser
of the row supply and the column demand] to this cell. Because this exhausts the demand of Retailer X,
we cross out the cells in that column and adjust the remaining row and column total. This has been
illustrated in Table 1.2.2a.

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Table 1.2.2a: 25 units are allocated to cell A-X using the Row – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [1st]
Br. 9 Br. 11 Br. 4
Factory B 15
Br. 20 Br. 14 Br. 8
Factory C 55
Demand Quantity 25 0 50 45 95
Of the remaining rows, cell A – Z has the lowest unit cost along the first row. Consequently, we need to
allocate 25 units [the lesser of the row supply and the column demand] to this cell. Because this
exhausts the supply capacity of Factory A, we cross out the cells in that row and adjust the remaining
row and column total. This has been illustrated in Table 1.2.2b.
Table 1.2.2b: 25 units are allocated to cell A – Z using the Row – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25 0
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B 15
Br. 20 Br. 14 Br. 8
Factory C 55
Demand Quantity 25 0 50 45 20 70
Of the remaining rows, cell B – Z has the lowest unit cost along the first row. Consequently, we need to
allocate 15 units [the lesser of the row supply and the column demand] to this cell. Because this
exhausts the supply capacity of Factory B, we cross out the cells in that row and adjust the remaining
row and column total. This has been illustrated in Table 1.2.2c.
Table 1.2.2c: 15 units are allocated to cell B – Z using the Row – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25 0
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B rd
15 0
15 [3 ]
Br. 20 Br. 14 Br. 8
Factory C 55
Demand Quantity 25 0 50 45 20 5 55

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Of the remaining row, cell C – Z has the lowest unit cost. Consequently, we need to allocate 5 units [the
lesser of the row supply and the column demand] to this cell. Because this exhausts the demand of
Retailer Z, we cross out the cells in that column and adjust the remaining row and column total. This
has been illustrated in Table 1.2.2d.
Table 1.2.2d: 5 units are allocated to cell C – Z using the Row – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25 0
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B rd
15 0
15 [3 ]
Br. 20 Br. 14 Br. 8
Factory C th
55 50
5 [4 ]
Demand Quantity 25 0 50 45 20 5 0 50
Finally, we remain with one cell viz. cell C – Y. Consequently, we need to allocate 50 units [the lesser
of the row supply and the column demand] to this cell. Because this exhausts both the supply Factory C
and demand of Retailer Z, we cross out the cells in that row and column. Adjusting the remaining row
and column total gives the final table, Table 1.2.2e.
Table 1.2.2e: 50 units are allocated to cell C – Y using the Row – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25 0
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B rd
15 0
15 [3 ]
Br. 20 Br. 14 Br. 8
Factory C th th
55 50 0
50 [5 ] 5 [4 ]
Demand Quantity 25 0 50 0 45 20 5 0 0
Table 1.2.2: Initial Feasible Solution for HHH Co. using the Row – Minimum method
To Supply
From Quantity

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25 [1st] 25 [2nd] 50
Br. 9 Br. 11 Br. 4
Factory B 15
15 [3rd]
Br. 20 Br. 14 Br. 8
Factory C th th
55
50 [5 ] 5 [4 ]
Thus, the Transportation Cost, T is given by:
T = 12(25) + 15(25) +4(15) + 14(50) + 8(5) =

= Br. 1475
3. Column – Minimum (Method)
The following set of principles guides the allocations:
1. Locate a cell with the smallest unit transportation cost in the first column and allocate a quantity
that is equal to the lower of the available row supply and column demand;
2. Delete or cross out the cells in the row or column that has been exhausted [or bot, if both have
been exhausted], and adjust the remaining row or column total accordingly; and
3. Repeat 1 and 2 still all allocations are made.
Example 1.2.3:
Find an initial feasible solution to the transportation problem given in the HHH Company using the
Column – Minimum Rule method.
Solution:
The sequence of the allocation using the Column-Minimum method would be presented as follows:
The cell with the lowest cell in the first column is A – X. Consequently, we need to allocate 25 units
[the lesser of the row supply and the column demand] to this cell. Because this exhausts the demand of
Retailer X, we cross out the cells in that column and adjust the remaining row and column totals,
accordingly. This has been illustrated in Table 1.2.3a.
Table 1.2.3a: 25 units are allocated to cell C-Y using the Column – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [1st]
Br. 9 Br. 11 Br. 4
Factory B 15
Br. 20 Br. 14 Br. 8
Factory C 55

Operations Research
Of the remaining columns, cell B-Y has the lowest unit cost along the first column. Consequently, we
need to allocate 15 units [the lesser of the row supply and the column demand] to this cell. Because this
exhausts the demand of Factory B, we cross out the cells in that column and adjust the remaining row
and column total. This has been illustrated in Table 1.2.3b.
Table 1.2.3b: 15 units are allocated to cell B-Y using the Column – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [1st]
Br. 9 Br. 11 Br. 4
Factory B nd
15 0
15 [2 ]
Br. 20 Br. 14 Br. 8
Factory C 55
Of the remaining columns, cell C-Y has the lowest unit cost along the first column. Consequently, we
need to allocate 35 units [the lesser of the row supply and the column demand] to this cell. Because this
exhausts the demand of Retailer Y, we cross out the cells in that column and adjust the remaining row
and column total. This has been illustrated in Table 1.2.3c.
Table 1.2.3c: 35 units are allocated to cell C-Y using the Column – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [1st]
Br. 9 Br. 11 Br. 4
Factory B nd
15 0
15 [2 ]
Br. 20 Br. 14 Br. 8
Factory C nd
55 20
35 [2 ]
Of the remaining column, cell C – Z has the lowest unit cost. Consequently, we need to allocate 20
units [the lesser of the row supply and the column demand] to this cell. Because this exhausts the
supply of Factory C, we cross out the cells in that row and adjust the remaining row and column total.
This has been illustrated in Table 1.2.3d.
Table 1.2.3d: 20 units are allocated to cell C-Z using the Column – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [1st]
Br. 9 Br. 11 Br. 4
Factory B nd
15 0
15 [2 ]

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Br. 20 Br. 14 Br. 8
Factory C rd th
55 20 0
35 [3 ] 20 [4 ]
Demand Quantity 25 0 50 35 0 45 25 25
Finally, we remain with one cell viz. cell A – Z. Consequently, we need to allocate 25 units [the lesser
of the row supply and column demand] to this cell. Because this exhausts both the supply Factory A
and demand of Retailer Z, we cross out the cells in that row and column. Adjusting the remaining row
and column total gives the final table, Table 1.2.3e.
Table 1.2.3e: 25 units are allocated to cell A – Z using the Column – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25 0
25 [1st] 25 [5th]
Br. 9 Br. 11 Br. 4
Factory B nd
15 0
15 [2 ]
Br. 20 Br. 14 Br. 8
Factory C rd th
55 20 0
35 [3 ] 20 [4 ]
Demand Quantity 25 0 50 35 0 45 25 0 0
Table 1.2.3: Initial Feasible Solution for HHH Co. using the Column – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 [1st] 25 [5th]
Br. 9 Br. 11 Br. 4
Factory B nd
15
15 [2 ]
Br. 20 Br. 14 Br. 8
Factory C rd th
55
35 [3 ] 20 [4 ]
Thus, the Transportation Cost, T is given by:

T = 12(25) + 15(25) +11(15) +14(35) +8(20)
= Br. 1490
3. Table Minimum – Rule (Method) [Intuitive Method]

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This method also known as minimum cost method. The method uses the cell with the lowest none zero
unit cost in the entire table as a basis for allocating quantities.
The following set of principles guide the allocations:

1. Locate a cell with the smallest unit transportation cost in the table and assign a quantity that is
equal to the lower of the available row supply and column demand;
2. Delete or cross out the cells in the row or column that has been exhausted [or both, if both have
been exhausted], and adjust the remaining row or column total accordingly;
3. Repeat 1 and 2 till all allocations are made.
Example 5.2.4:
Find an initial feasible solution to the transportation problem given in the HHH Company using the
Table – Minimum Rule (method).
Solution:
The sequence of the allocation using the table – Minimum method would be presented as follows:
The cell with lowest cost in the table is X – A. Consequently, we allocate 15 units [the lesser of the row
supply and the column demand] to this cell. Because this exhausts the supply capacity of factory B, we
cross out the cells in that row and adjust the remaining row and column total. This has been illustrated
in Table 1.2.4a.
Table 1.2.4a: 15 units are allocated to cell B – Z using the Table – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
Br. 9 Br. 11 Br. 4
Factory B st
15 0
15 [1 ]
Br. 20 Br. 14 Br. 8
Factory C 55
Of the remaining cells, cell C – Z has the lowest unit cost. Consequently, we need to allocate 30 units
Retailer Z, we cross out the cells in that column and adjust the remaining row and column total. This
has been illustrated in Table5.2.4b.
Table 1.2.4b: 30 unit are allocated to cell C - Z using the Table – Minimum method
To Supply
From Quantity

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Br. 12 Br. 20 Br. 15
Factory A 50
Br. 12 Br. 20 Br. 4
Factory B st
15 0
15 [1 ]
Br. 9 Br. 20 Br. 8
Factory C nd
55 25
30 [2 ]
Of the remaining cells, cell A – X has the lowest unit cost. Consequently, we need to allocate 25 units
Retailer X, we cross out the cells in that column and adjust the remaining row and column total. This
has been illustrated in Table 1.2.4c.
Table 1.2.4c: 25 units are allocated to cell A – X using the Table – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [1st]
Br. 9 Br. 11 Br. 4
Factory B st
15 0
15 [1 ]
Br. 20 Br. 14 Br. 8
Factory C 55 25
30 [2nd]
Of the remaining cells, cell C – Y has the lowest unit cost. Consequently, we need to allocate 25 units
[the lesser of the row supply and the column demand] to this cell. Because this exhausts the supply
capacity of Factory C, we cross out the cells in the row and adjust the remaining row and column total.
This has been illustrated in Table 5.2.4d.
Table 1.2.4d: 25 units are allocated to cell C – Y using the Table – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25
25 [3rd]
Br. 9 Br. 11 Br. 4
Factory B st
15 0
15 [1 ]
Br. 20 Br. 14 Br. 8
Factory C th nd
55 25 0
25 [4 ] 30 [2 ]
Demand Quantity 25 0 50 25 45 30 0 25
Finally, we remain with one cell viz. cell A – Y. Consequently, we need to allocate 25 units [the lesser
of the row supply and the column demand] to this cell. Because this exhausts both the supply capacity

Operations Research
of Factory A and demand of Retailer Y, we cross out the cells in that row and column. Adjusting the
remaining row and column total gives the final table, Table 5.2.4e.
Table 1.2.4e: 25units are allocated to cell C – Y using Table – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50 25 0
25 [3rd] 25 [5th]
Br. 9 Br. 11 Br. 4
Factory B st
15 0
15 [1 ]
Br. 20 Br. 14 Br. 8
Factory C 55 25 0
25 [4th] 30 [2nd]
Demand Quantity 25 0 50 25 0 45 30 0 0
Table 1.2.4: Initial Feasible solution for HHH Co. using the Table – Minimum method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 [3rd] 25 [5th]
Br. 9 Br. 11 Br. 4
Factory B 15
15 [1st]
Br. 20 Br. 14 Br. 8
Factory C th nd
55
25 [4 ] 30 [2 ]
Thus, the total Transportation Cost, T is given by:

T = 12(25) +20(25) +4(15) +14(25) +8(30)
= Br. 1450
5. Penalty Rule Method

This method also known as Vogel’s Approximation Method [VAM]; it uses cells with the lowest none
zero unit cost and the next lowest non zero unit cost across each and every row of column for allocating
quantities and identifying the route. The following set of principles guides the allocations:
1. Locate cells with the smallest unit transportation cost and the next smallest unit transportation
cost in a row or column and find the difference between the two. The difference between the
two is called penalty or Opportunity Cost. It is an additional cost that would be incurred if the
lowest cost allocation of quantity was not made per the selected row or column;

Operations Research
2. Select the row or column having the minimum Penalty; assign a quantity that is equal to the
lower of the available row supply and column demand on the cell having the the maximum
Opportunity Cost. Delete or cross out the cells in the row or column that has been exhausted [or
both, if both have been exhausted] and adjust the remaining row or column total accordingly;
3. Repeat 1` and 2 till all allocations are made.
Find an initial feasible solution to the transportation problem given in there HHH Company using the
Penalty Rule method.
[Hint: Use each row minimum and the next minimum costs to create your penalties]
4. 1.3 Evaluating an Initial Feasible Solution for Optimality

In this section we will discuss how one can obtain the optimal solution and optimal value of the given
transportation problem. The optimality test for a feasible solution absorbs a cell cost evaluation of
empty cells. This will carried our through either the Stepping Stone Method or Modified
Distribution [MoDi] method.
1. Stepping Stone Method of Cell Cost Evaluation

A. Charnes developed stepping method for solving transportation problems. Successive improvement
leads to the development of MoDi method. The stepping stone method involves tracing a series of
closed paths in a transportation table, using one such path for each and every empty cell. The path
represents the reallocation of one unit into an empty cell, and it enables to observe its impact on the
total transportation cost obtained at an initial feasible solution.
Rules for tracing the Stepping Stone Paths

 All unoccupied cells must be evaluated. Evaluate cells one at a time;
 Except for the cell being evaluated, only add or subtract in completed cells. It is possible to skip
over occupied cells to complete the path;
 A path will consist of only horizontal and vertical, moves, starting and ending with the empty
cell that is being evaluated; and
 Alternate Plus and Minus signs, beginning with a plus sign in the cell being evaluated.
Example 1.3.1:
Consider an initial feasible solution obtained using the North West Corner Rule Method for the HHH
Company. Apply the Stepping Stone Method to evaluate the solution for optimality. Is the solution
optimal?

Operations Research
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B rd
15
15 [3 ]
Br. 20 Br. 14 Br. 8
Factory C 55
10 [4th] 45 [5th]
Solution:
We know that the solution is not optimal because the table Minimum Rule and the Vogel’s Assumption
methods have generated initial feasible solutions that have a lower total transportation cost. Hence, it
will be advisable to evaluate the North – West Corner solution for optimality. Note that only the
unoccupied cells should be evaluated.
Table 1.3.2: Evaluation Path for the empty cell A-Z

To Supply
From Quantity
Br. 12 Br. 20 Br. 15 50
Factory A 25 [1st]
- 25 [2 ] nd
+
Br. 9 Br. 11 Br. 4
Factory B rd
15
15 [3 ]
Br. 20 Br. 14 Br. 8
55
Factory C
+ 10 [4 th
] - 45 [5 ]
th
Let’s begin with the empty cell A-Z. We start by placing a + sign in the cell, which indicates for the
reallocation of one unit to the cell. In order to maintain the column total 45 units, we must subtract one
unit from the occupied cell C-Z. This has been showed by – sign in the cell. Since we have taken away
one unit from row C, we need to compensate by adding one unit in the occupied cell C- Y. This will be
designated by a + sign in the cell. Similarly, we need to compensate for the addition of one unit to
column Y by subtracting a unit from cell A-Y. This will be designated by-sign in the cell. Because we
initially added a unit to cell A-Z, this subtraction compensates the row total 50 units. Then, we can
trace a completed path as shown above.

Operations Research
Note that the net impact of such a one unit reallocation can be viewed by adding the cell costs with the
attached signs and making a note of the resulting value.
Therefore, the cell cost evaluation of empty cell A-Z yields a net change of +1 on the initial total
transportation cost.
Table 1.3.3: Cell cost evaluation of the empty cell A-Z
+Effect -Effect
Br. 20 Br. 20
Br. 9 Br. 8
+ Br. 29 -Br. 28
That is, net impact +Br. 29 – Br. 28 = +1. This means that reallocation of a unit item to the empty cell
A-Z would cause the initial transportation cost to increase by Br. 1. Consequently, such a reallocation
would not be desirable.
Similarly, the cell cost evaluations of the remaining empty cells are obtained and shown in the
following successive tables.
Table 1.3.4: Cell cost evaluation of the empty cell B-X
+Effect -Effect
Br. 20 Br. 12
Br. 9 Br. 11
+ Br. 29 Br. 23
That is, net impact + Br. 29 – Br. 23 = +6. This means that each reallocation of unit item to the empty
cell B – X would cause the initial transportation cost to increase by Br. 6. Consequently, such a
reallocation would not be desirable.
Table 1.3.5: Cell cost evaluation of the empty cell B – Z

+Effect -Effect
Br. 14 Br. 11
Br. 4 Br. 8
+ Br. 18 -Br. 19
That is, net impact + Br.18 – Br. 19 = -1. This means that each reallocation of a unit item to the empty
cell B – Z would cause the initial transportation cost to decrease by Br. 1. Consequently, such a
reallocation would be advisable.
Table 1.3.6: Cell cost evaluation of the empty cell C-X
+Effect -Effect
Br. 20 Br. 14
Br.20 Br. 12

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+ Br. 40 -Br. 26
That is, net impact + Br. 40 – Br. 26 = + 14. This means that each reallocation a unit item to the empty
cell C – X would cause the initial transportation cost to increase by Br. 14. Accordingly, such a
reallocation would not be desirable.
The negative values of the cell cost evaluations of the empty cells A-Z, B-Y and B-Z indicate that
modified solution is possible.
2. Modified distribution [MoDi] Method of Cell Cost Evaluation

This method involves the use of index numbers, which are established for the rows and columns. There
is one index number for each row and one for each column. The index number can be established in
such a way that for any occupied cell.
ri  k j  c ij
Where
ri = the index number of the ith row;
kj = The index number of the jth column; and

cij = The unit transportation cost of a completed cell found along the ith row and the jth column.
Note that the process of assigning index numbers always begin by assigning a value zero as an index
number for the first row in a given transportation table.
We can now apply the following formula to determine the cell cost evaluation of an empty cell:
eij  cij  ri  k j
Where
eij = The cell cost evaluation of an empty cell found along the ith row and the jth column;
ri = the index number of the ith row;
k j = The index number of the jth column; and
cij = The unit transportation cost of an empty cell that is being evaluated.
Example 1.3.2: Consider an initial feasible solution obtained using the North West Corner Rule
Method for the HHH Company. Apply the MoDi Method to evaluate the solution for optimality.
To Supply
From Quantity
50

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25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B 15
15 [3rd ]
Br. 20 Br. 14 Br. 8
Factory C th th
55
10 [4 ] 45 [5 ]
Once the row index number of the first row is assumed to have a zero value, it will be very simple to
find the column index numbers for all occupied cells in that row and vice versa.
The index number for the first column [ k1 ] can be determined based on the fact r1  k1  c11 which
implies 0  k1  12 , so k1  12 . Similarly, using the occupied cell, A-Y, the index number of the
second column [ k 2 ] is determined to be, r1  k 2  c12 that implies 0  k 2  20 , k 2  20 . Knowing k 2
will enable us to determine the index numbers of the second row [ r2 ] and the third row [ r3 ] using
the completed cells B-Y and C-Y, respectively. Thus, r2  k 2  c 22  r2  20  11 , so r2  9 , and r3
r3  k 2  c32  r3  20  14 so that r3  6 . In the same the knowledge of r3 will also enable us to
determine the index number of the third column k 3 using the completed cell C-Z. Hence, r3  k 3  c33
  8  k 3  8 , k3  14 .
Table 1.3.8: Index number for initial North – West Corner solution to HHH Company
k1  12 k 2  20 k 3  14
To Supply
From Quantity
r1  0 Factory A
Br. 12 Br. 20 Br. 15
50
25 [1st] 25 [2nd]
r2  9 Factory B
Br. 9 Br. 11 Br. 4
15
15 [3rd ]
r3  6 Factory C
Br. 20 Br. 14 Br. 8
55
10 [4th] 45 [5th]
Cell cost evaluation will also be carried out using the formula eij  cij  ri  k j . Therefore, the cell cost
evaluation of the empty cell found along the first row and the third column, which is denoted by e13 ,
is obtained to be e13  c13  r1  k 3  e13  15  0  14  1 . Similarly, the cell cost evaluation of the
empty cell found along the second row and the first column, which is denoted by e21 , , is obtained to
be e21  c 21  r2  k1  e21  9  [9]  12  6 ; the cell cost evaluation of the empty cell found along
the second row and the third column, which is denoted by e23 , is obtained to be e21  c 23  r2  k 3 
e21  4  [9]  14  1 ; and the cell cost evaluation of the empty cell found along the third row and

Operations Research
the first column, which is denoted by e31 ,is obtained to be e31  c31  r3  k1 
e31  20  [ 6]  12  14 .
Note that these results agree with the cell cost evaluations computed earlier using the stepping stone
method. When all cell cost evaluations are positive or zero, an optimal feasible solution is said to be
obtained. If one or more negative cell cost evaluation is obtained, the empty cell with the most negative
cell cost evaluation will be brought into solution because that route has the largest potential for
improvement per unit.
4.1.4. Developing an Improved Feasible Solution

Improving an initial feasible solution involves reallocation of quantities from occupied cell to
unoccupied cell that has the most negative cell cost evaluation. The stepping stone path for that cell is
necessary for determining how many units can be reallocated while retaining the balance between the
capacity of the origins and the demand of the destinations.
The principle of reallocation will be reviewed as follows:

1. Identify all the cells involved in the stepping stone path with the most negative cell cost
evaluation; and
2. Subtract the smallest quantity of the negatively labeled cells in the path form all the cells
labeled by the - sign in the path, and add this same quantity on all the cells which are labeled
by the + sign in the path.
Example 1.4.1:
Consider an initial feasible solution obtained using the North West Corner (Rule) Method for the HHH
Company. Find the modified solution and apply the MoDi Method to evaluate the resulting solution for
optimality.
Table 1.4.1: Initial Feasible solution for HHH Co. using the North – West Corner method
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4
Factory B 15
15 [3rd ]
Br. 20 Br. 14 Br. 8
Factory C th th
55
10 [4 ] 45 [5 ]

Operations Research
Solution:
We know that the solution is not optimal because both the Stepping Stone and MoDi methods reveal
that one negative cell cost evaluation is obtained, namely the cell cost evaluation which corresponds to
the cell found along the row B and column Z. Hence, the empty cell with the given negative cell cost
evaluation will be brought into solution because that route has the largest potential for improvement per
unit.
Table 1.4.2: Evaluation Path for the empty cell B-Z
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 [1st] 25 [2nd]
Br. 9 Br. 11 Br. 4 15
Factory B
- 15 [3 rd
] +
Br. 20 Br. 14 Br. 8
55
Factory C
+10 [4 th
] - 45 [5 ]
th
From the entire occupied cell involved in the stepping stone path of cells with the negative cell cost
evaluation are cell B-Y and C-Z. Subtracting the smallest quantity of the minus sign labeled cells in the
path form all the cells labeled by the – sign in the path, and adding this same quantity on all the cells
which are labeled by the + sign in the path yields the reallocation which will be shown in Table 1.4.3.
Table 1.4.3: Distribution plan after reallocation of 15 units for HHH Company
To Supply
From Quantity
Br. 12 Br. 20 Br. 15
Factory A 50
25 25
Br. 9 Br. 11 Br. 4 15
Factory B
15
Br. 20 Br. 14 Br. 8
Factory C 55
20 30
Is the modified feasible solution minimum?

Once the row index number of the first row is assumed to have a zero value, it will be very simple to
determine the column index numbers for all occupied cells in that row, and vice versa. Applying the
techniques stated in the sub section 1.3 will help us in calculating indices observed in Table 1.4.4.
Operations Research
Table 5.4.4: Optimal feasible solutions of the HHH Company
k1  12 k 2  20 k 3  14
To Supply
From Quantity
r1  0 Br. 12 Br. 20 Br. 15
Factory A 50
25 25
r2  10 Br. 9 Br. 11 Br. 4 15
Factory B
15
r3  6 Br. 20 Br. 14 Br. 8
Factory C 55
20 30
Hence, the cell cost evaluation of the empty cell found along the first row and the third column, which
is denoted by e13 , is obtained to be e13  c13  r1  k 3  e13  15  0  14  1 . Similarly, the cell
cost evaluation of the empty cell found along the second row and the first column is obtained to be
e21  9  [10]  12  7 ; the cell cost evaluation of the empty cell found along the second row and the
second column is obtained to be e22  11  [10]  20  1 ; and the cell cost evaluation of the empty
cell found along the third row and the first column is obtained to e31  20  [6]  12  14 e31 = 20-(-
6)-12 = +14.
Hence, optimal feasible solution is said to be obtained because the MoDi method make known that cell
cost evaluations are positive.
4. 1.5. Special Issues on Transportation Problems
A number of special issues are discussed in this section in order to round out your understanding of the
transportation model.
Alternate Optimal Solution
In the case of transportation problem the existence of an alternate optimal solution is signaled by an
empty cell cost evaluation which is equal to zero. It is possible to find out the alternate solution of a
transportation problem if there is one by reallocating the maximum possible number of quantities
around the stepping stone path for the empty cell having a cell cost evaluation of zero.
Example 1.5.1: A company manufacturing T.V. sets has three plants with capacity of 100,200, and 200
units respectively. Company supplies T.V. sets to three show rooms which have demands of 50,150, and
300 respectively. The manager of the three plants has estimated the cost per unit to ship over each of
the possible routes as follow:
Table 5.5.1: Unit transportation costs of the T.V. Company

Operations Research
Cost per unit
Plants
Show Room I Show Room II Show Room III
A Br. 4 Br. 2 Br. 8
B Br. 5 Br. 1 Br. 9
C Br. 7 Br. 6 Br. 3
Determine an optimum shipping plan that minimize the total cost for the company and find alternate
optimal solutions.
Solution:First we need to construct a transportation table.
Table 1.5.2: Transportation table of T.V. Company

To
SR - I SR - II SR - III Supply
From
Br. 4 Br. 2 Br. 8
Plant A 100
Br. 5 Br. 1 Br. 9
Plant B 200
Br. 7 Br. 6 Br. 3
Plant C 200
Demand 50 150 300 500
Using intuitive Method one can easily obtain the following initial feasible solution.
Try to get an initial feasible solution using the techniques discussed above.
Table 1.5.3: Initial feasible solution of the T.V. Company using the intuitive Approach
To
From
Br. 4 Br. 2 Br. 8
Plant A 100
50 50
Br. 5 Br. 1 Br. 9
Plant B 200
150 50
Br. 7 Br. 6 Br. 3
Plant C 200
200
Demand 50 150 300 500
Both the Stepping Stone and MoDi methods of empty cell cost evaluations of the empty cells via.
A – II, B – I, C – I, and C – II, yields +2, 0, +8, and +11, respectively. Note that cell cost evaluations
are indicators of optimal solutions. At this stage possibly the manager knows that optimal solutions are
obtained, and the minimum cost of transportation is obtained to be:
C = (50 x 4) + (50x8) + (150x1) + (50x9) + (200x3) = Br. 1,800
Since the existence of a zero cell cost evaluation of an empty cell is a signal for an alternate optimal
solution, this problem is said to have other optimal solutions other than the earlier mentioned. This will

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be determined after reallocation was mad on an empty cell with a zero cell cost evaluation, that is cell
B – I. Hence, let us apply a stepping stone path method for determining the allowable allocation to this
empty cell.
Table 1.5.4: Stepping stone path for cell B-I
To
From
Br. 4 Br. 2 Br. 8
Plant A 100
- 50 50 +
Br. 5 Br. 1 Br. 9
Plant B 200
+ 150 50 -
Br. 7 Br. 6 Br. 3
Plant C 200
200
Demand 50 150 300 500
Note that the + signs in the path indicate units to be added and the – signs indicate units to be taken
away.
The allowable quantity reallocated to the empty cell B – I along this path will be determined based on
the limit on subtraction, which is the smallest quantity in a negative position along the cell path. There
are two quantities in negative position along the cell path 50 and 50. Thus, any one of these quantities
[since they are equal] should be shifted in the following manner: subtract 50 units from each cell on the
cell path with a – sign, and add this same amount on to the quantity of each cell on the path with a +
sign. The result is shown in Table 5.5.5.
Table 1.5.5: Distribution plan after reallocation of 50 units to the cell B-I
To
From
Br. 4 Br. 2 Br. 8
Plant A 100
100 +
Br. 5 Br. 1 Br. 9
Plant B 200
50 150
Br. 7 Br. 6 Br. 3
Plant C 200
200
Demand 50 150 300 500
As a check, note that the total transportation cost is the same as before, Br. 1800.
That is, C = (100x8) + (50x5) + (150x1) + (200x3) = Br. 1,800
Degeneracy
A transportation problem is said to be degenerate when there are too few number of occupied cells to
enable all the empty cells to be evaluated. In the stepping stone method degeneracy has been

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recognized when there is at least one empty cell for which an evaluation path cannot be constructed. In
the MoDi method it has been identified when it is impossible to determine all of the row and column
index numbers.
In order to check for optimality of a degenerate transportation problem some modification has to be
made. The modification is accomplished by treating some of the empty cells an occupied cell. This will
be carried out by placing a delta [] in one or some of the empty cells. The number of deltas needed for
completing some of empty will be obtained as the difference between [r + c - 1] and the actual number
of completed cells in a transportation table. The delta represents an infinitesimal quantity [like 0.00001
units] for the reason that the corresponding row supply and the column demand could not be affected
and the total cost will not change.
The purpose of delta is to enable evaluation of the remaining empty cells. The choice of location for the
delta on some empty cells may be unsuitable if they do not enable the cell cost evaluations of the
remaining empty cells. Moreover, the delta will not be placed in an empty cell which later turns out to
be in a negative position of the stepping stone path because it will remain the smallest quantity in the
negatively labeled cells of the path and shifting this extremely smallest quantity around the cell path to
determine the modified solution will leave the solution virtually unchanged.
The technique can be illustrated for degenerate alternate solution of the above example as follows:
Example 1.5.2: Show that the alternate solution of the T.V. Company stated above is degenerate, and
check whether this solution is optimal.
Solution:
A quick check of alternate solution of the above example [ Example 1.5.1] will reveal that the solution
is degenerate, and it can easily be checked out by comparing the number of the completed cells in the
alternate solutions table [See Table 1.5.5] and the sum of the number of rows and columns of the
transportation table.
By default feasible solution is said to basic if the number of completed cells of a transportation table is
one less than the sum of its number of rows and columns. In this particular case the number of occupied
cells is 4 while the required number of completed cells is [3+3-1].
Obviously some modification has to be made in order to determine if a given solution is optimal. The
modification is to treat the empty cell A-1 as a completed cell by placing a [].

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Can you check the optimality the alternate optimal solution of Example 1.5.1? Note that the index
numbers of the rows and columns are given below in Table 1.5.6.
Table 1.5.6: Alternation modified solution for degeneracy of T.V. Company

k1  4 k2  0 k3  8
To Supply
From Quantity
r1  0 Br. 4 Br. 2 Br. 8
Factory A 100
 +2 100
r2  1 Br. 5 Br. 1 Br. 9
Factory B 200
50 150 0
r3  5 Br. 7 Br. 6 Br. 3
Factory C 200
+8 +11 200
The resulting index numbers generated using MoDi method and the improvement potential for empty
cells based on  in cell A – I are shown in Table 1.5.6, and this confirms that the solution is optimal.
Prohibited Route Assignments

In some cases, certain origin – destination combinations may be unacceptable because of so many
reasons. In order to prevent that route from appearing in the final solution, the manager could assign a
new unit transportation cost [10 times the largest unit transportation cost in the table] to the cell of the
route that was enough to make the route uneconomical, and hence prohibits its occurrence.
Example 1.5.3: Consider the same example given above. Suppose that in the T.V. company problem A
– III was suddenly unavailable because of recent weather conditions. Prevent that route from appearing
in the final solution and develop an optimal solution for the problem.
Solution: One rule of thumb would be to assign a unit transportation cost that is 10 times the largest
cost in the table to the prohibited cell, A – III. Thus, since the largest cost is Br. 9, a new unit cost of Br.
90 could be assigned instead of the original unit cost Br. 8. Then, the revised problem could be solved
using one of the methods stated above for initial feasible solutions and checked for optimality using
MoDi method and carried our possible reallocations using stepping stone method for modified
solutions. Having done this leads us to have the optimal solutions shown in the following table, Table
1.5.7.
Table 1.5.7: Optimal solutions for T.V. Company problem with unacceptable route
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k1  4 k2  2 k 3  10
To Supply
From Quantity
r1  0 Br. 4 Br. 2 Br. 15
Factory A 100
50 50 +80
r2  1 Br. 5 Br. 1 Br. 4
Factory B 200
+2 100 100
r3  7 Br. 7 Br. 14 Br. 3
Factory C 200
+10 +11 200
Unequal Supply and Demand [Unbalanced Problem]

Some transportation problems have involved cases in which supply and demand were not equal. When
such a situation is encountered, it is necessary to modify the original problem so that supply and
demand are equal. This is achieved by adding either a dummy [fake] column or a dummy row. A
dummy row is added when total supplied quantity is greater than the total supplied quantity is less than
the total demanded quantity. The dummy is assigned unit costs of zeros for each cell, and it is given a
supply [if a row] or a demand [if a column] equal to the difference between total supply and total
demand.
Quantities in dummy routes in the optimal solution are not shipped. Rather, they serve to point out
which supplier will hold the excess supply, and how much, or which destination will not receive its
total demand, and how much it will be short.
Example 1.5.4: Let us consider the Y.V. Company Problem. Suppose that Plant C has experienced an
equipment breakdown, and it will be able to supply only 120 T.V. sets for a period of time. Hence, total
supply will be 80 units less than total demand. This will require adding a dummy origin with a supply
of 80 television sets. The modified transportation table is shown in Table 1.5.8, and the final solution in
Table 1.5.9. Note that in the case dummy the intuitive method considers the smallest non – zero unit
cost in the table.
Solution:
Table 1.5.8: A dummy origin is added to make up 80 units
To
From
Br. 4 Br. 2 Br. 8
Plant A 100
Plant B Br. 5 Br. 1 Br. 9

200

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Br. 7 Br. 6 Br.3
Plant C 200
Dummy Br. 0 Br. 0 Br. 0 80

Demand 50 150 300 500
Table 1.5.9: Solution using a dummy origin

To
From
Br. 4 Br. 2 Br. 15
Plant A 100
50 50
Br. 5 Br. 1 Br. 4
Plant B 200
150 50
Br. 7 Br. 14 Br. 3
Plant C 200
120
Br. 0 Br. 0 Br. 0
Dummy 80
80
Demand 50 150 300 500
The solution indicating that show room III will be short of 80 units until the equipment is repaired.
Maximization
Some transportation problem deal on profits or revenues rather than costs, in such cases, the objective
is to maximize. Such problems can be handled by adding one additional step at the start. Identify the
cell with the largest profit and subtract all the other cell profits from that value. Then replace all the cell
profits with the resulting values. These values reflect the opportunity loses that would be incurred by
using routes with unit profits that are less than the largest unit profit. Replace the original profits with
these lose and solve the problem in a usual way for a minimum opportunity loses solution.
Example 1.5.5: A steal company is concerned with the problem of distributing imported ore from four
ports to four steel mills situated thought the country. The supplies of ores arriving at ports, say I , II, III
and IV, in a week in tons are 125,250,175 and 100, respectively. The demand at the four steel miles, say
A.B,C, and D per week in tons are 100 ,400,90 and 60, respectively. Due to differences in row
materials and transportation costs, profit per unit [in thousands] differ, and given in Table 5.5.10.
Determine the maximum profit of the company.
Table 1.5.10: Unit profits of the Steal Company

Ports Profit per unit

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A B C D
I Br. 90 Br. 100 Br. 120 Br. 110
II Br. 100 Br. 105 Br. 130 Br. 117
III Br. 111 Br. 109 Br. 110 Br. 120
IV Br. 130 Br. 125 Br. 108 Br. 113
Solution:
First let’s construct a transportation table to show the clear relationship that we are given in between
the ports capacity, the demand which were asked by the steel miles, and unit profit across each and
every route. This has been presented in the table given below.
Table 1.5.11: Transportation table of Steal Company
To
Mill - A Mill - B Mill - C Mill - D Supply
From
Br. 90 Br. 100 Br. 120 Br. 110
Port I 125
Br. 100 Br. 105 Br. 130 Br. 117
Port II 250
Br. 111 Br. 109 Br. 110 Br. 120
Port III 275
Br. 130 Br. 125 Br. 108 Br. 113
Port IV 100
Demand 100 400 90 60 500
Now we are expected to construct transportation table contains opportunity loses in each and every
route. This would be carried out by subtracting all the other cell profits from the largest cell profit and
replacing all the resulting values. This has been shown in Table 1.5.12.
Table 1.5.12: Transportation table of Steal Company with opportunity losses

To
Mill - A Mill - B Mill - C Mill - D Supply
From
Plant I Br. 40 Br. 30 Br. 10 Br. 20
125
Plant II Br. 30 Br. 25 Br. 0 Br. 13

250
Plant III Br. 19 Br. 21 Br. 20 Br. 10

175
Port IV Br. 0 Br. 5 Br. 22 Br. 17 100
Demand 100 400 90 60 500
The set of assignment that minimizes the opportunity losses will also maximize the profit. The next
steps are the same steps that would be required if the problem was minimization.

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The degenerate initial feasible solution after it was applied the Penalty Method and the cell cost
evolutions of the empty cells are shown below [see Table 1.5.13].
Table 1.5.13: Degenerate feasible solution and cell cost evaluations

k1 = 28 k2 = 30 k3 = 5 k4 = 19
To
Mill Mill-B Mill-C Mill - D Supply
From
Br. 40 Br. 30 Br. 15 Br. 20
r1 = 0 Port I 125
+12 125 +80 +1
Br. 30 Br. 25 Br. 0 Br. 13
r2 = -5 Port II 250
+7 160 90 -1
Br. 19 Br. 21 Br. 20 Br. 10
r3 = -9 Port III 175
 115 +24 60
Br. 0 Br. 5 Br. 22 Br. 17
r4 = -40 Port IV 100
100 +15 +57 +38
Demand 100 400 90 60 500
The negative cell cost evolutions indicate that improved solutions are possible, and hence Cell II-D will
be brought into solution because that route has the largest potential for improvement per unit. The
improved optimal solution is presented in Table 1.5.14.
Table 1.5.14 Optimal feasible solution and cell cost evaluations

k1 = 28 k2 = 30 k3 = 5 k4 = 18
To
Mill Mill-B Mill-C Mill – D Supply
From
Br. 40 Br. 30 Br. 15 Br. 20
r1 = 0 Port I 125
+12 125 +5 +2
Br. 30 Br. 25 Br. 0 Br. 13
r2 = -5 Port II 250
+7 100 90 60
Br. 19 Br. 21 Br. 20 Br. 10
r3 = -9 Port III 175
 175 +24 60
Br. 0 Br. 5 Br. 22 Br. 17
r4 = -40 Port IV 100
100 +15 +57 +1
Demand 100 400 90 60 500
Note that the maximum profit of the company is obtained to be Br. 73,795. That is, P =
(124x100)+(100x105)+(90x130)+(60x117)+(175x109)+(100x130)= Br. 73,795
4.2 Assignment Problems

The assignment problem is a special type of linear programming problem where assignees are being
assigned to perform tasks. For example, the assignees might be employees who need to be given work
assignments. Assigning people to jobs is a common application of the assignment problem. However,
the assignees need not be people. They also could be machines, or vehicles, or plants, or even time slots
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to be assigned tasks. The first example below involves operators being assigned to bulldozers, so the
tasks in this case simply involve operating a machine.
To fit the definition of an assignment problem, these kinds of applications need to be formulated in a
way that satisfies the following assumptions. The number of assignees and the number of tasks are the
same. (This number is denoted by n.)
2. Each assignee is to be assigned to exactly one task.
3. Each task is to be performed by exactly one assignee.
4. There is a cost cij associated with assignee i (i = 1, 2, . . . , n) performing task j ( j = 1, 2, . . . , n).
5. The objective is to determine how all n assignments should be made to minimize the total cost.
Any problem satisfying all these assumptions can be solved extremely efficiently by algorithms
designed specifically for assignment problems.
The first three assumptions are fairly restrictive. Many potential applications do not quite satisfy these
assumptions. However, it often is possible to reformulate the problem to make it fit. For example,
dummy assignees or dummy tasks frequently can be used for this purpose. We illustrate these
formulation techniques in the examples.
4.2.1. Basic Assumption in Assignment Problems
Assignment problems are special cases of linear programming problems just like transportation
problems. Assignment problems are characterized by giving a task to most appropriate person so as to
optimize the objective function like minimizing a cost or maximizing a profit or revenue. Hence
assignment problems are highly dependent on a one for one matching.
Conditions for a problem to be considered as an assignment problem:

 Number of items in one group is equal to number of items in the other group in the one for one
matching;
 Each item of the first group is expected to be assigned to one and only one item of the second
group;
 Each item [party] of the first group is independently capable enough to be matched to any one
of the elements in the other group;
 Assignment criteria should be clearly stated in such a way that they fit with the objective
function of the problem; and
 The cost or profit at each and every possible assignment should be clearly specified.

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Example 2.1.1: A manager may be faced with the task of assigning four operators to four bulldozers,
one operator for one bulldozer. A manager has prepared a table that shows the operation cost of each
four bulldozers by each of the four operators as shown below. According to table 6.1.1 Bulldozer 1 will
cost Br. 70 if it is operated by Operator A, and so on. The manager has stated that his objective is to
develop a set of operator assignment that will minimize the total cost of getting all bulldozers operated.
It is further required that the bulldozers be operated simultaneously.
Table 2.1.1: Operator costs for each possible pairing

Bulldozer
1 2 3 4
Operator A Br. 70 Br. 80 Br. 75 Br. 64
Operator B Br. 55 Br. 52 Br. 58 Br. 54
Operator C Br. 58 Br. 56 Br. 64 Br. 68
Operator D Br. 62 Br. 60 Br. 67 Br. 70
Example 2.1.2: A manager may be faced with the task of assigning four jobs to four machines, one job
for one machine. A manager has prepared a table that shows the profit of performing each four jobs by
each of the four machines as it is given below. According to Table 6.1.2 Job 1 will raise the profit by
Br. 70 if it is performed by machine A, and so on. The manager has stated that his objective is to
develop a set of operator assignment that will minimize the total cost of getting all bulldozers operated.
It is further required that the bulldozers be operated simultaneously.
Table 2.1.2: Job profits for each possible pairing

Machine
A B C D
Job 1 Br. 70 Br. 80 Br. 75 Br. 64
Job 2 Br. 55 Br. 52 Br. 58 Br. 54
Job 3 Br. 58 Br. 56 Br. 64 Br. 68
Job 4 Br. 62 Br. 60 Br. 67 Br. 70
Example 2.1.3:A manager may be faced with the task of assigning four jobs to four machines, one job
for one machine. A manager has prepared a table that shows the profit of performing each four jobs by
each of the four machines as it is given below. According to table 6.1.2. job 1 will raise the profit by Br.
70 if it is performed by machine A, and so on. the manager has stated that his objective is to develop as
et of operator assignment that will minimize the total cost of getting all bulldozers operated. It is further
required that the bulldozers be operated simultaneously.

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Machine
A B C D
Job 1 Br. 15 Br. 20 Br. 18 Br. 24
Job 2 Br. 12 Br. 17 Br. 16 Br. 15
Job 3 Br. 14 Br. 15 Br. 19 Br. 17
Job 4 Br. 11 Br. 14 Br. 12 Br. 13
2.2. Formulation of the Assignment Models

A solution in an assignment problem consists of quantities that are assigned to the different pairings in
the assignment table. in order to formulate an LP model for such an assignment problem first we need a
variable to each pairing in the table to represent whether the assignment is done or not, if no
assignment is made the value that the variable takes on is 0, and if an assignment is made the value of
the variable becomes 1. For the assignment problem given in Example 6.1.1, this can be illustrated in
Table 2.1.4.
Table 2.1.4: Operator costs for each possible pairing

Bulldozer
1 2 3 4
Operator A x11 x12 x13 x14
Operator B x21 x22 x23 x24
Operator C x31 x32 x33 x34
Operator D x41 x42 x43 x44
Let xij of the above table represent the assignment of Operator i to Bulldozer j. If no assignment is made
xij = 0 , and if assignment is made xij = 1.
The main objective of this problem is minimizing the total assignment cost. Accordingly, the objective
function of the problem will mathematically be given as:
Minimize T = 70x11 + 80x12 + 75x13 + 64x12 + 55x21 + 58x22 + 54x24+. . .+ 62x41 + 60x42 + 70x44
Subject to:
Seeing the constraints, it is clear that the sum of quantities in any row or column must be the same as to
one because of one item of a group should be matched exactly with only one item of the other.
Consequently, each of the constraints will be presented as follows:
Row Constraints: Column Constraints:

x11 + x12 + x13 + x14 = 1 x11 + x21 + x31 + x41 = 1
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x21 + x22 + x23 + x24 = 1 x12 + x22 + x32 + x42 = 1
x31 + x32 + x33 + x34 = 1 x13 + x23 + x33 + x43 = 1
x41 + x42 + x43 + x44 = 1 x14 + x24 + x34 + x44 = 1
2.3. Finding the Optimal Solution of an Assignment Problem

Although the manager recognizes that the problem can be solved using the simplex method, there is
also another algorithm that we will consider in this section. This method is commonly known by its
name Hungarian Assignment Method.
The Hungarian Assignment method

This method is based on minimization of opportunity cost that would result from potential pairing.
Following are the steps involved and the procedures that would be considered in the steps in solving a
minimization problem:
Step 1: Row Reduction

 Identify the minimum value in each row;
 Subtract the minimum value in each row from all values in that row; and
 Use the resulting differences to develop a new assignment matrix.
Not that these procedures will finally lead us to identify the additional costs that would be incurred if
the lowest cost assignment is not made, in terms of the first group of items.
Step 2: Column Reduction

 Identify the minimum value in each column;
 Subtract the minimum value in each column from all values in that column; and
 Use the resulting figures to develop a new assignment matrix.
Note again that these procedures will show the way to identify the additional costs that would be
incurred if the lowest cost assignment is not made, in terms of the second group of items.
Step 3: Checking for Optimality

Draw horizontal or vertical lines to cover all the zeros appeared in the matrix obtained after the second
step. If the minimum number of the lines used to cover the zeros of the final matrix is equal to the
number of rows or the number of columns, because the matrix is a square matrix, and optimal
assignment is said to be obtained. Otherwise, further reduction is possible.
When further reduction are not possible because there is a zero in every row and column, we do the
following: subtract the minimum uncovered value of your final matrix from every other uncovered
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value, and add that same minimum amount on values lie at the point of intersections of two covering
lines.
Example 2.3.1 Consider the problem given in Example 2.1.1. Identify the optimal assignment using
the method stated above.
Table 2.3.1: Operator costs for each possible pairing [Cost Matrix]
Bulldozer Row
Minimum
1 2 3 4
Operator A Br. 70 Br. 80 Br. 75 Br. 64 Br. 64
Operator B Br. 55 Br. 52 Br. 58 Br. 54 Br. 52
Operator C Br. 58 Br. 56 Br. 64 Br. 68 Br. 56
Operator D Br. 62 Br. 60 Br. 67 Br. 70 Br. 60
Solution:
Identifying the minimum value in each row, subtract these values from all values in their corresponding
row, and developing a new assignment matrix using the resulting figures yields:
Table 2.3.2: Operator opportunity costs across the row for each possible pairing
Bulldozer
1 2 3 4
Column Minimum Br. 2 Br. 0 Br. 6 Br. 0

Identifying the minimum value in each column, subtract these values from all values in their
corresponding column, and developing a new assignment matrix using the resulting figures yields:
Table 2.3.3: Operator opportunity costs across the column for each possible pairing
Bulldozer
1 2 3 4

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Construct minimum number of horizontal or vertical lines to cover all the zeros appeared in the final
matrix and check whether the minimum number of horizontal or vertical lines used to cover the zeros
of the matrix is equal to the number of rows or not. Otherwise, go for further reduction.
Table 2.3.4: Line test for optimality of the assignment problem
Bulldozer
1 2 3 4
Since the minimum number of straight covering lines is equal to the number of rows or the number of
column of the matrix, optimal assignment is possible. It is possible to begin making assignment by
identifying a row or column that has only one zero. Note that doing this would avoid confusion in
making the assignment. Nominees are Row A, Column 3 and Column 4, because each has only zero.
Suppose we take Row A. We can denote the assignment of Operator A to Bulldozer 4 by shading the 0
opportunity cost at the intersection. Next we might select column 3. We can denote the assignment of
operator B to Bulldozer 3 by shading the zero opportunity cost at the intersection. Finally, we can shade
the remaining zero in columns 1 and 2, to complete the assignment. The assignments are shown in
Table 2.3.5.
Table 2.3.5: Optimal Assignments
Bulldozer
1 2 3 4
This is a case for alternate optimal assignment. Why?
The total cost of the assignments can be determined by referring to the original cost table, and hence, it
is obtained to be:
A–4 Br. 64
B–3 Br. 58
C–1 Br. 58
D–2 Br. 60
Br. 240
It is informative to note that this cost is equal to the sum of the row and the column reduction costs.
That is, the sum of the row reduction amounts was Br. 64 + Br. 52 56 + Br. 60 = Br. 231 [see Table

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2.3.1], and the sum of the column reduction amounts was Br. 2 + Br. 0 + Br. 6 + Br. 0 = Br. 8 [see
table 2.3.2]. Thus, the total reduction was Br. 232 + Br. 8 = Br. 240, which agrees with amount
presently determined.
Example 2.3.2: A manger has prepared a table that shows the cost of performing each of four jobs by
each of four employees [see Table 2.3.6]. According to this table, Job 1 will cost Br. 15 if done by
Employee A, Br 20 if it is done by Employee B, and so on. The manger has stated that his goal is to
develop a set of job assignments that will minimize the total cost of getting all four jobs done. It is
further required that the jobs be performed simultaneously, thus requiring one job being assigned to
each employee.
Table 2.3.6: Job costs for each pairing
Employee Row
A B C D Minimum
Job 1 Br. 15 Br. 20 Br. 18 Br. 24 15
Job 2 Br. 12 Br. 17 Br. 16 Br. 15 12
Job 3 Br. 14 Br. 15 Br. 19 Br. 17 14
Job 4 Br. 11 Br. 14 Br. 12 Br. 13 11
Solution:
Identifying the minimum value in each row, subtract these values from all values in their corresponding
row, and developing a new assignment matrix using the resulting figures yields:
Table 2.3.7: Job opportunity costs across the row for each possible pairing
Employee
A B C D
Job 1 Br. 0 Br. 5 Br. 3 Br. 9
Job 2 Br. 0 Br. 5 Br. 4 Br. 3
Job 3 Br. 0 Br. 1 Br. 5 Br. 3
Job 4 Br. 0 Br. 3 Br. 1 Br. 2
Column
0 1 1 2
Minimum

Identifying the minimum value in each column, subtract these values from all values in their
corresponding column, and developing a new assignment matrix using the resulting figures yields:
Table 2.3.8: Job opportunity costs across the column for each possible pairing
Employee
A B C D
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Job 1 Br. 0 Br. 4 Br. 2 Br. 7
Job 2 Br. 0 Br. 4 Br. 3 Br. 1
Job 3 Br. 0 Br. 0 Br. 4 Br. 1
Job 4 Br. 0 Br. 2 Br. 0 Br. 0
Employee
A B C D
Job 1 Br. 0 Br. 4 Br. 2 Br. 7
Job 2 Br. 0 Br. 4 Br. 3 Br. 1
Job 3 Br. 0 Br. 0 Br. 4 Br. 1
Job 4 Br. 0 Br. 2 Br. 0 Br. 0
Now, if the minimum number of covering lines is equal to the number of rows or the number of column
of the matrix, optimal assignment is possible. In this case, apparently, an optimal assignment is not
possible because only three lines were necessary.
We must, therefore, make further reductions. Further row and column reductions are not possible
because there is a zero in every row and column. To get around this, we do the following:
1. Subtract the smallest uncovered cost [Br. 1], from every other uncovered cost; and
2. Add that same amount to costs that lie at an intersection of two covering lines.
This is done in Table 2.3.10. The rationale for this is: subtracting the smallest uncovered cost reveals
the next smallest increment in opportunity costs, whereas adding that amount to intersections removes
those assignments from consideration.
Table 2.3.10: Further revision of the cost matrix
Employee
A B C D
Job 1 Br. 0 Br. 3 Br. 1 Br. 6
Job 2 Br. 0 Br. 3 Br. 2 Br. 0
Job 3 Br. 1 Br. 0 Br. 4 Br. 1
Job 4 Br. 1 Br. 2 Br. 0 Br. 0

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Employee
A B C D
Job 1 Br. 0 Br. 3 Br. 1 Br. 6
Job 2 Br. 0 Br. 3 Br. 2 Br. 0
Job 3 Br. 1 Br. 0 Br. 4 Br. 1
Job 4 Br. 1 Br. 2 Br. 0 Br. 0
Since the minimum number of straight covering lines is equal to the number of rows or the number of
column of the matrix, optimal assignment is possible. It is possible to begin making assignment by
identifying a row or column that has only one zero.
Table 2.3.12: Optimal assignment table
Employee
A B C D
Job 1 Br. 0 Br. 3 Br. 1 Br. 6
Job 2 Br. 0 Br. 3 Br. 2 Br. 0
Job 3 Br. 1 Br. 0 Br. 4 Br. 1
Job 4 Br. 1 Br. 2 Br. 0 Br. 0
The total cost of the assignment can be determined by refereeing to the original cost table. The total
cost is:
1–A Br. 15
2–B Br. 15
3–C Br. 15
4–D Br. 12
Br. 57
2.4. Special Issues on Assignment Problem

Certain situation can arise in which the model deviates slightly from that previously described. Amount
those situations are the following:
 Maximization Problem;
 Unequal Number of Rows and Columns;
 Multiple Optimal Solution; and

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 Undesirable matches
Maximization Problem
If the problem is to maximize rather than to minimize, one extra step must be added to the start of the
process.
Step 1: Construction of an Opportunity Loss Table
 Identify the maximum value in each column;
 Subtract all values in each column from the corresponding column maximum; and
 Use the resulting figures to develop an opportunity loss table.The above procedures will show
opportunity loses that would be incurred if the maximum profit maximize the profit. The set of
assignment that minimizes the opportunity losses will also maximize the profit. The next steps
are the same steps that would be required if the problem was minimization.

Not that these procedures will finally lead us to identify the opportunity costs that would be incurred if
the lowest loss assignment is not made, in terms of the rows.

Note that these procedures will show the way to identity the opportunity costs that would be incurred if
the lowest loss assignment is not made, in terms of the columns.
Determine minimum number of covering lines.
Example 2.4.1: Consider the problem given in example 6.1.12. Identify the optimal assignment.

Machine
A B C D
Job 1 Br. 15 Br. 20 Br. 18 Br. 24
Job 2 Br. 12 Br. 17 Br. 16 Br. 15
Job 3 Br. 14 Br. 15 Br. 19 Br. 17
Job 4 Br. 11 Br. 14 Br. 12 Br. 13
Column Maximum Br. 15 Br.20 Br. 19 Br. 24
Solution
Step 1: construction of an Opportunity Loss Table
Identifying the maximum value in each column, subtracting all values in each column form the
corresponding column maximum, the opportunity loss table is presented in Table 6.1.10

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Table 2.4.2: Job opportunity losses across the column for each possible pairing
Row
Machine
Minimum
A B C D
Job 1 Br. 0 Br. 0 Br. 1 Br. 0 Br. 0
Job 2 Br. 3 Br. 3 Br. 3 Br. 9 Br. 3
Job 3 Br. 1 Br. 5 Br. 0 Br. 7 Br. 0
Job 4 Br. 4 Br. 6 Br. 7 Br. 11 Br. 4
Perform the same steps that would be required if the problem was minimization because the modified
values represent opportunity losses.
After minimum value reduction across each row we will obtain Table 2.4.3.
Table 2.4.3: Opportunity costs across each row
Machine
A B C D
Job 1 Br. 0 Br. 0 Br. 1 Br. 0
Job 2 Br. 0 Br. 0 Br. 0 Br. 6
Job 3 Br. 1 Br. 5 Br. 0 Br. 7
Job 4 Br. 0 Br. 4 Br. 3 Br. 7

Since column reductions are not possible because there is a zero in every column, we immediately
move to Step 4, checking for optimality.
Step 4: Optimality Checking

Construct horizontal or vertical lines to cover all the zeros that appeared in the above matrix and check
whether the minimum number of lines used to cover the zeros of the matrix is equal to the number of
rows or not.

Machine
A B C D
Job 1 Br. 0 Br. 0 Br. 1 Br. 0
Job 2 Br. 0 Br. 0 Br. 0 Br. 6
Job 3 Br. 1 Br. 5 Br. 0 Br. 7
Job 4 Br. 0 Br. 4 Br. 3 Br. 7
Since the minimum number covering lines is equal to the number of rows of the matrix optimal
assignment is reached. It is possible to begin assignment by identifying a row or column that has only
one zero. Nominees are Column D, and Row 4, because each has only one zero. Suppose we take
Column D, we can denote the assignment of Machine D to Job 1 by shading the 0 opportunity loss at
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the intersection. Next we might select Row 4. We can don’t the assignment of Job 4 to Machine A by
shading the zero opportunity loss at the intersection. Finally, we can shade the remaining zero in
columns B and C, to complete the assignment. The assignments are shown in Table 2.4.5.
Machine
A B C D
Job 1 Br. 0 Br. 0 Br. 1 Br. 0
Job 2 Br. 0 Br. 0 Br. 0 Br. 6
Job 3 Br. 1 Br. 5 Br. 0 Br. 7
Job 4 Br. 0 Br. 4 Br. 3 Br. 7
The total profit of the assignments can be determined by referring to the original profit table, and
hence, it is obtained to be:
1–D Br. 24
2–B Br. 17
3–C Br. 19
4–A Br. 11
Br. 71
It is informative to note that this cost is equal to the sum of the column maximum profits minus the
sum of row reduction losses. That is, the sum of the column maximum amounts was Br. 15 + Br. 20
+ Br. 19 + Br. 24 = Br. 78 [see Table 2.4.1],and the sum of the row reduction losses was Br. 0 +
Br.3 + Br. 0 + Br. 4 = Br. 7 [ see Table 2.4.2]. Thus, the difference the two total was Br. 78 – Br. 7 =
Br. 71, which agrees with amount presently determined.
Note that it is also possible to arrive at, the same solution if we approach the problem as a minimization
problem after multiplying every entry of the matrix by negative one [-1]. Because Maximization Z =
Minimization [-Z]. Try this by yourself. Take the following matrix as your initial matrix.
Table 2.4.6: Job profits table after the entries are multiplied by – 1
Machine
A B C D
Job 1 - Br. 15 - Br. 20 - Br. 18 - Br. 14
Job 2 - Br. 12 - Br. 17 - Br. 16 - Br. 15
Job 3 - Br. 14 - Br. 15 - Br. 19 - Br. 17
Job 4 - Br. 11 - Br. 14 - Br. 12 - Br. 13
Unequal Number of Rows and Columns
The assumptions considered in the above sections require an equal number of rows and columns.
However, there are some problems having unequal number of rows and columns. To handle such a

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problem a dummy [fake] row [if rows are lesser] or column [if columns are fewer] must be added to
make them equal or balanced.
Example 2.4.2: A company is faced with the problem of assigning six different machines to five
different jobs. Costs [in hundreds thousands] are estimated as shown in Table 2.4.6.
Table 2.4.7: Costs for each possible pairing

Job
A B C D E
Machine 1 2.5 5 1 6 1
Machine 2 2 5 1.5 7 3
Machine 3 3 6.5 2 8 3
Machine 4 3.5 7 2 9 4.5
Machine 5 4 7 3 9 6
Machine 6 6 9 5 10 6
Solution:
Since the number of column is one less than the number rows we need to add a dummy column to
make balance number rows and columns. This is be presented in Table 2.4.8.
Table 2.4.8: Costs for each possible pairing after a dummy column inserted
Job
A B C D E F
Machine 1 2.5 5 1 6 1 0
Machine 2 2 5 1.5 7 3 0
Machine 3 3 6.5 2 8 3 0
Machine 4 3.5 7 2 9 4.5 0
Machine 5 4 7 3 9 6 0
Machine 6 6 9 5 10 6 0
Column Minimum 2 5 1 6 1 0

Since row reductions are not possible because there is a zero in every row, we move to Step 2.
After minimum value reduction across each and every column we will find Table 2.4.9.
Table 2.4.9: Opportunity costs across the column for each possible pairing
Job
A B C D E F
Machine 1 0.5 0 0 0 0 0
Machine 2 0 0 0.5 1 2 0
Machine 3 1 1.5 1 2 2 0

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Machine 4 1.5 2 1 3 3.5 0
Machine 5 2 2 2 3 5 0
Machine 6 4 4 4 4 5 0

Construct horizontal or vertical lines to cover all the zero that appeared in the above matrix and check
rows or not.

Job
A B C D E F
Machine 1 0.5 0 0 0 0 0
Machine 2 0 0 0.5 1 2 0
Machine 3 1 1.5 1 2 2 0
Machine 4 1.5 2 1 3 3.5 0
Machine 5 2 2 2 3 5 0
Machine 6 4 4 4 4 5 0
The solution is not optimal because the minimum number of covering lines is not equal to the number
of rows of the matrix. Hence, we need to find a modified solution. Since further reductions are not
possible because there is a zero in every row and column. Subtracting the minimum uncovered value,
which is 1, from every other uncovered value, and adding that same minimum amount on values lie at
point of intersections of two covering lines yield:
Table 2.4.11: Modified solutions
Job
A B C D E F
Machine 1 0.5 0 0 0 0 1
Machine 2 0 0 0.5 1 2 1
Machine 3 0 0.5 0 1 1 0
Machine 4 0.5 1 0 2 2.5 0
Machine 5 1 1 1 2 4 0
Machine 6 3 3 3 3 4 0
The modified solution is not optimal because the minimum number covering lines is not equal to the
number of rows of the matrix. Hence, we need to further reduce the matrix. Hence, we need to subtract
the minimum in covered value, which is still 1, from every other uncovered value, and add that same
minimum amount on values lie at the point of intersections of two covering lines.
Table 2.4.12: Second modified solutions

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Job
A B C D E F
Machine 1 1.5 1 1 0 0 2
Machine 2 0 0 0.5 0 1 1
Machine 3 0 0.5 0 0 0 0
Machine 4 0.5 1 0 1 1.5 0
Machine 5 1 1 1 1 3 0
Machine 6 3 3 3 2 3 0
The second modified solution is not optimal. Following the same procedure once again, we will arrive
at the following third modified solution.
Table 2.4.13: Modified solution

Job
A B C D E F
Machine 1 1.5 1 1 0 0 3
Machine 2 0 0 0.5 0 1 2
Machine 3 0 0.5 0 0 0 1
Machine 4 0.5 1 0 1 1.5 1
Machine 5 0 0 0 0 2 0
Machine 6 2 2 2 1 2 0
Now it is possible to begin assignment by identifying a row or column that has only one zero.
Nominees are Row 4 and Row 6, because each has only one zero. Suppose we take Row 4. We can
denote the assignment of Machine 4 to Job C by shading the 0 opportunity cost at the intersection. Next
we might select Row 6. We can denote the assignment of Machine 6 to Job F by shading the zero
opportunity loss at the intersection. Finally, we can shade the remaining zero in column B and C, to
complete the assignment. The assignments are shown in Table 2.4.14.
Job
A B C D E F
Machine 1 1.5 1 1 0 0 3
Machine 2 0 0 0.5 0 1 2
Machine 3 0 0.5 0 0 0 1
Machine 4 0.5 1 0 1 1.5 1
Machine 5 0 0 0 0 2 0

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Machine 6 2 2 2 1 2 0
The minimum total cost of the assignment can be determined by refereeing to the original cost table,
and hence, it is obtained to be:
1–D Br. 6
2–A Br. 2
3–E Br. 3
4–C Br. 2
5–B Br. 7
Br. 20
Consequently, Machine 6 was not assigned because it was assigned to imaginary job [Job F]
Example 2.4.3:
Prepare the assignment table so that the optimal assignment can be made using the previously
described procedure.
Table 2.4.15: Costs for each possible painting
Machine
A B C D
Job 1 Br. 15 Br. 19 Br. 12 Br. 16
Job 2 Br. 23 Br. 21 Br. 18 Br. 17
Job 3 Br. 20 Br. 16 Br. 11 Br. 19
Solution:
Table 2.4.16: Costs for each possible pairing after a dummy row inserted
Machine Row
A B C D
Minimum
Job 1 Br. 15 Br. 19 Br. 12 Br. 16 12
Job 2 Br. 23 Br. 21 Br. 18 Br. 17 17
Job 3 Br. 20 Br. 16 Br. 11 Br. 19 11
Dummy Br. 0 Br. 0 Br. 0 Br. 0 0

After minimum value reduction across each and every row we will find Table 2.4.17.
Table 2.4.17: Costs for each possible pairing after a dummy row inserted
Machine
A B C D
Job 1 Br. 3 Br. 7 Br. 0 Br. 4
Job 2 Br. 6 Br. 4 Br. 1 Br. 0

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Job 3 Br. 9 Br. 5 Br. 0 Br. 8
Dummy Br. 0 Br. 0 Br. 0 Br. 0

Since column reductions are not possible since there is a zero in every row, we move to

Construct horizontal or vertical lines to cover all the zeros appeared in the above matrix and check
rows or not.

Machine
A B C D
Job 1 Br. 3 Br. 7 Br. 0 Br. 4
Job 2 Br. 6 Br. 4 Br. 1 Br. 0
Job 3 Br. 9 Br. 5 Br. 0 Br. 8
The solutions are not optimal because the minimum number covering lines is not equal to the number
of rows of the matrix. Hence, we need to find a modified solution. Since further reductions are not
possible because there is a zero in every row and column. Subtracting the minimum uncovered value,
which is 3, from every other uncovered value, and adding that same minimum amount on values lie at
the point of intersections of two covering lines gives modified solution given below.

Machine
A B C D
Job 1 Br. 0 Br. 4 Br. 0 Br. 4
Job 2 Br. 3 Br. 1 Br. 1 Br. 0
Job 3 Br. 6 Br. 2 Br. 0 Br. 8
Nominees are Row 2, Row 3, and Column B because each has only one zero. Suppose we take Row 2.
We can denote the assignment of Job 2 to Machine D by shading the 0 opportunity cost at the

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intersection. Next we might select Row 3. We can denote the assignment of Job 3 to Machine C by
shading the zero opportunity cost at the intersection. Then we need to select
Column B. We can denote the assignment of machine B to Job 4 by shading the zero opportunity cost
at the intersection. Finally, we can shade the remaining zero in column A to complete the assignment.
The assignments are shown in Table 2.4.20.
Table 2.4.20: optimal Assignments

Machine
A B C D
Job 1 Br. 0 Br. 4 Br. 0 Br. 4
Job 2 Br. 3 Br. 1 Br. 1 Br. 0
Job 3 Br. 6 Br. 2 Br. 0 Br. 8
The minimum cost of the assignments can be determined by referring to the original cost table. And
hence it is obtained to be.
1–A Br. 15
2–D Br.17
3–C Br.11
Br.43
Subsequently, Job 4 was not assigned because it was assigned to imaginary machine 2.
It is possible to see now the obtained minimum cost is equal to the sum fo the row reduction costs, the
column reduction costs and the reduction amounts for the modified solutions. The sum of the row
reduction amounts was Br. 12 + Br. 17 + Br. 11 = Br. 40, the sum of the column reduction amounts was
Br. 0, and the sum of the reduction amounts for the modified solutions was Br. 3. Thus, the total
reduction was Br. 40 + Br.0 + Br.3 = Br.43, which agrees with amount presently determined.
In some cases, multiple optimal solutions is possible to a given assignment problem. This condition can
be easily recognized when making the optimal assignments. No unique zero will exist at some point,
resulting more than the choice for assignment. It should e noted that all alternate solutions yield the
same value for the objective function.
Example 2.4.4: Consider the optimal table of example 6.1.5. Determine the alternate optimal solution
of the problem and show whether those solutions yield the value of the objective factions or not.

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Job
A B C D E F
Machine 1 1.5 1 1 0 0 3
Machine 2 0 0 0.5 0 1 2
Machine 3 0 0.5 0 0 0 1
Machine 4 0.5 1 0 1 1.5 1
Machine 5 0 0 0 0 2 0
Machine 6 2 2 2 1 2 0
Original Optimal Solution and associated value Alternate Optimal Solution and associated value
1–D Br.6 1–D Br.6
2–A Br.2 2–B Br.5
3–E Br.3 3–E Br.3
4–C Br.2 4–C Br.2
5–B Br.7 5–A Br.4
Br.20 Br.20
Undesirable Assignment
In certain occasions, a particular mach is undesirable. When such a restraint is present a letter is often
placed in the assignment table in the position that would represent the pairing and the usually procedure
would be implemented except that the letter is ignored throughout the analysis.
Example 2.4.5: Determine the optimal set of assignments for the following cost table if the assignment
2-C is unacceptable.
Table 2.4.22: Costs for each possible paring
Employee
A B C D
Job 1 Br. 6 Br. 12 Br. 7 Br. 15
Job 2 Br. 11 Br. 8 Br. 11 Br. 7
Job 3 Br. 16 Br. 14 Br. 15 Br. 12
Job 4 Br. 9 Br. 9 Br. 11 Br. 6
Solution
Table 2.4.23: Costs for each pairing after a letter M is placed at the unacceptable pairing
Employee Row
A B C D Minimum
Job 1 Br. 6 Br. 12 Br. 7 Br. 15 Br. 6

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Job 2 Br. 11 Br. 8 M Br. 7 Br. 7
Job 3 Br. 16 Br. 14 Br. 15 Br. 12 Br. 12
Job 4 Br. 9 Br. 9 Br. 11 Br. 6 Br. 6

After minimum value reduction across each and every row we will find Table 2.4.24.
Table 2.4.24: Row opportunity costs for each pairing

Employee
A B C D
Job 1 Br. 0 Br. 6 Br. 1 Br. 9
Job 2 Br. 4 Br. 1 M Br. 0
Job 3 Br. 4 Br. 2 Br. 3 Br. 0
Job 4 Br. 3 Br. 3 Br. 5 Br. 0
Column Minimum Br. 0 Br.1 Br. 1 Br. 0
Step 2: column Reduction

After minimum value reduction across each and every column we will find table 2.4.25.
Table 2.4.25: Row opportunity costs for each pairing
Employee
A B C D
Job 1 Br. 0 Br. 5 Br. 0 Br. 9
Job 3 Br. 4 Br. 1 Br. 2 Br. 0
Job 4 Br. 3 Br. 2 Br. 4 Br. 0
Step 3: Checking for optimality

Construct horizontal or vertical lines to cover all the zeros appeared in the above matrix and check
rows or not.
Employee
A B C D
Job 1 Br. 0 Br. 5 Br. 0 Br. 9
Job 3 Br. 4 Br. 1 Br. 2 Br. 0
Job 4 Br. 3 Br. 2 Br. 4 Br. 0
The solutions are not optimal because the minimum number covering lines is not equal to the number
of rows of the matrix. Hence, we need to fine a modified solution. Since further reductions are not
possible because there is a zero in every row and column, subtracting the minimum uncovered value,
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which is 2, form every other uncovered value, and adding that same minimum amount on values lie at
the point of intersections of two covering lines gives modified solutions given below.
Employee
A B C D
Job 1 Br. 0 Br. 7 Br. 0 Br. 11
Job 3 Br. 2 Br. 1 Br. 0 Br. 0
Job 4 Br. 1 Br. 2 Br. 4 Br. 0
Nominees are Row 4, column A, and column b because each has only one zero. Suppose we take Raw.
4 we can denote the assignment of Job 4 to employee 4 by shading the 0 opportunity cost at the
interaction. Next we might select column a. we can denote the assignment of Employee A to Job 1 by
shading the zero opportunity cost at the intersection. Then we need to select column b. we can denote
the assignment of employee b to Job 2 by shading the zero opportunity cost at the intersection. Finally,
we can shade the remaining zero in columns B and C to complete that assignment. The assignments are
shown in Table 2.5.28.

Employee
A B C D
Job 1 Br. 0 Br. 7 Br. 0 Br. 11
Job 3 Br. 2 Br. 1 Br. 0 Br. 0
Job 4 Br. 1 Br. 2 Br. 4 Br. 0
The minimum cost of the assignments can be determined by referring to the original cost table, and
hence, it is obtained to be:
1–A Br. 6
2–B Br.8
3–C Br.15
4–D Br.6
Br.35
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Operations Research Applications and Objectives

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Operations Research

PUBLIC SERVICE COLLEGE OF OROMIA

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1. Definition, Application and Objectives of Operations Research

1.1. The Meaning of Operations Research

By a system, we mean an organization of interdependent components that work together to accomplish

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1.2. The Nature and Significance of Operations Research

National planning and Budgeting

Defense services Operations

Business Management and Completion

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Education and Training

Transportation and Communication

Home management and Budgeting

Functions of operations Research

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Provision of scientific Basis to Decision Making

Conversion of complex problems into simple problems

Work for Trade-Offs

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Selection of Best Alternatives

Provision of solutions to problems having special issues

2. Operations Research Approach to Problem Solving and Model Building

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1. Understand and formulate the problem

3. Formulate the problem in a mathematical frame work

4. Solve the model of the problem

5. Interpret the Results of the model

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6. Validate the model

7. Implement the model - predict and decide

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Physical [Iconic] Models

Symbolic [Mathematical] models

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Static and dynamic model

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Stochastic and deterministic models

2.3. Methodology and Techniques in Operations Research

Trial and Error Method

Simulation Method [Stochastic Method]

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Techniques used in Operations Research

2.4. Appropriateness and Limitations of Operations Research

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2.1 Linear Programming Problem: The Graphic Procedure

And a set of inequalities and/or equations, called constraints of the form:

In general every linear programming problem has two components, namely:

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1.1. Maximization Problem

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x 2 = amount invested in bond mutual fund

Investment at most Br. 12,000in Bond Mutual Fund x 2  12,000

Investment at most Br. 6,000in Growth Mutual Fund x1  6,000

Amount in the GMF must exceed or equal to in BMF x1  x 2

In addition we must have the conditions non-negative x1  0 and x 2  0

Generally, the problem is reduced to have the following format

Subject to the constraints

Determine the optimal solution using the geometric approach.