CSC 403 OPERATION RESEARCH (OR)

Introduction
Operation Research is a relatively new discipline. The contents and the boundaries of the OR
are not yet fixed. Therefore, to give a formal definition of the term Operations Research is a
difficult task. The OR starts when mathematical and quantitative techniques are used to
substantiate the decision being taken. The main activity of a manager is the decision making. In
our daily life we make the decisions even without noticing them. The decisions are taken simply
by common sense, judgment and expertise without using any mathematical or any other model in
simple situations. But the decision we are concerned here with are complex and heavily
responsible. Examples are public transportation network planning in a city having its own layout
of factories, residential blocks or finding the appropriate product mix when there exists a large
number of products with different profit contributions and production requirement etc.

Operations Research can also be treated as science in the sense it describing, understanding and
predicting the systems behaviour, especially man-machine system. Thus O.R. specialists are
involved in three classical aspect of science, they are as follows:
i) Determining the systems behaviour
ii) Analyzing the systems behaviour by developing appropriate models
iii) Predict the future behaviour using these models

As stated earlier defining O. R. is a difficult task. The definitions stressed by various experts and
Societies on the subject together enable us to know what O.R. is, and what it does. They are as
follows:
1. According to the Operational Research Society of Great Britain (OPERATIONAL
RESEARCH QUARTERLY, l3(3):282, l962), Operational Research is the attack of
modern science on complex problems arising in the direction and management of large
systems of men, machines, materials and money in industry, business, government and
defense. Its distinctive approach is to develop a scientific model of the system,
incorporating measurements of factors such as change and risk, with which to predict and
compare the outcomes of alternative decisions, strategies or controls. The purpose is to
help management determine its policy and actions scientifically.
2. Randy Robinson stresses that Operations Research is the application of scientific
methods to improve the effectiveness of operations, decisions and management. By
means such as analyzing data, creating mathematical models and proposing innovative
approaches, Operations Research professionals develop scientifically based information
that gives insight and guides decision making. They also develop related software,
systems, services and products.
3. Morse and Kimball have stressed O.R. is a quantitative approach and described it as “ a
scientific method of providing executive departments with a quantitative basis for
decisions regarding the operations under their control”.
4. Saaty considers O.R. as tool of improving quality of answers. He says, “O.R. is the art of
giving bad answers to problems which otherwise have worse answers”.
5. Miller and Starr state, “O.R. is applied decision theory, which uses any scientific,
mathematical or logical means to attempt to cope with the problems that confront the
executive, when he tries to achieve a thorough-going rationality in dealing with his
decision problem”.
 6. Pocock stresses that O.R. is an applied Science. He states “O.R. is scientific methodology
(analytical, mathematical, and quantitative) which by assessing the overall implication of
various alternative courses of action in a management system provides an improved basis
for management decisions”.

1.3 Stages of Development of Operations Research

The stages of development of O.R. are also known as phases and process of O.R, which
has six important steps. These six steps are arranged in the following order:
Step I: Observe the problem environment
Step II: Analyze and define the problem
Step III: Develop a model
Step IV: Select appropriate data input
Step V: Provide a solution and test its reasonableness
Step VI: Implement the solution
Step I: Observe the problem environment
The first step in the process of O.R. development is the problem environment observation. This
step includes different activities; they are conferences, site visit, research, observations etc.
These activities provide sufficient information to the O.R. specialists to formulate the problem.

Step II: Analyze and define the problem

This step is analyzing and defining the problem. In this step in addition to the problem definition
the objectives, uses and limitations of O.R. study of the problem also defined. The outputs of this
step are clear grasp of need for a solution and its nature understanding.

Step III: Develop a model

This step develops a model; a model is a representation of some abstract or real situation. The
models are basically mathematical models, which describes systems, processes in the form of
equations, formula/relationships. The different activities in this step are variables definition,
formulating equations etc. The model is tested in the field under different environmental
constraints and modified in order to work. Sometimes the model is modified to satisfy the
management with the results.

Step IV: Select appropriate data input

A model works appropriately when there is appropriate data input. Hence, selecting appropriate
input data is important step in the O.R. development stage or process. The activities in this step
include internal/external data analysis, fact analysis, and collection of opinions and use of
computer data banks. The objective of this step is to provide sufficient data input to operate and
test the model developed in Step III.

Step V: Provide a solution and test its reasonableness

This step is to get a solution with the help of model and input data. This solution is not
implemented immediately, instead the solution is used to test the model and to find there is any
limitations. Suppose if the solution is not reasonable or the behaviour of the model is not proper,
the model is updated and modified at this stage. The output of this stage is the solution(s) that
supports the current organizational objectives.
Step VI: Implement the solution
At this step the solution obtained from the previous step is implemented. The implementation of
the solution involves so many behavioural issues. Therefore, before implementation the
implementation authority has to resolve the issues. A properly implemented solution results in
quality of work and gains the support from the management. The process, process activities, and
process output are summarized in the following Table
Tools and Techniques in Operations Research
Operations Research uses any suitable tools or techniques available. The common frequently
used tools/techniques are mathematical procedures, cost analysis, electronic computation.
However, operations researchers given special importance to the development and the use of
techniques like linear programming, game theory, decision theory, queuing theory, inventory
models and simulation. In addition to the above techniques, some other common tools are non-
linear programming, integer programming, dynamic programming, sequencing theory, Markov
process, network scheduling (PERT/CPM), symbolic Model, information theory, and value
theory. There are many other Operations Research tools and techniques which also exist. The
brief explanations of some of the above techniques/tools are as follows:

Linear Programming:
This is a constrained optimization technique, which optimize some criterion within some
constraints. In Linear programming the objective function (profit, loss or return on investment)
and constraints are linear. There are different methods available to solve linear programming.

Game Theory:
This is used for making decisions under conflicting situations where there are one or more
players/opponents. In this, the motives of the players are dichotomized. The success of one
player tends to be at the cost of other players and hence they are in conflict.

Decision Theory:
Decision theory is concerned with making decisions under conditions of complete certainty
about the future outcomes and under conditions such that we can make some probability about
what will happen in future.

Queuing Theory:
This is used in situations where the queue is formed (for example customers waiting for service,
aircrafts waiting for landing, jobs waiting for processing in the computer system, etc.). The
objective here is minimizing the cost of waiting without increasing the cost of servicing.

Inventory Models:
Inventory model is used to make a decision that minimizes total inventory cost. This model
successfully reduces the total cost of purchasing, carrying, and out of stock inventory.

Simulation:
Simulation is a procedure that studies a problem by creating a model of the process involved in
the problem and then through a series of organized trials and error solutions attempt to determine
the best solution. Some times this is a difficult and time consuming procedure. Simulation is
used when actual experimentation is not feasible or solution of model is not possible.

Non-linear Programming:
This is used when the objective function and the constraints are not linear in nature. Linear
relationships may be applied to approximate non-linear constraints but limited to some range,
because approximation becomes poorer as the range is extended. Thus, the non-linear
programming is used to determine the approximation in which a solution lies and then the
solution is obtained using linear methods.
Dynamic Programming:
Dynamic programming is a method of analyzing multistage decision processes. In this, each
elementary decision depends on those preceding decisions and as well as external factors.

Integer Programming:
If one or more variables of the problem take integral values only then dynamic programming
method is used. For example number or motor in an organization, number of passenger in an
aircraft, number of generators in a power generating plant, etc.

Markov Process:
Markov process permits to predict changes over time information about the behavior of a system
is known. This is used in decision making in situations where the various states are defined. The
probability from one state to another state is known and depends on the current state and is
independent of how we have arrived at that particular state.

Network Scheduling:
This technique is used extensively to plan, schedule, and monitor large projects (for example
computer system installation, Research and Developments (R&D) design, construction,
maintenance, etc.). The aim of this technique is to minimize trouble spots (such as delays,
interruption, production bottlenecks, etc.) by identifying the critical factors. The different
activities and their relationships of the entire project are represented diagrammatically with the
help of networks and arrows, which is used for identifying critical activities and path. There are
two main types of technique in network scheduling, they are:

 Program Evaluation and Review Technique (PERT) – is used when activities time is
not known accurately/ only probabilistic estimate of time is available.
 Critical Path Method (CPM) – is used when activities time is known accurately.

Information Theory:
This analytical process is transferred from the electrical communication field to O.R. field. The
objective of this theory is to evaluate the effectiveness of flow of information with a given
system. This is used mainly in communication networks but also has indirect influence in
simulating the examination of business organizational structure with a view of enhancing flow of
information.

Applications of Operations Research

Today, almost all fields of business and government utilizing the benefits of Operations
Research. There are voluminous of applications of Operations Research. Although, it is not
feasible to cover all applications of OR in brief. The following are the abbreviated set of typical
operations research applications to show how widely these techniques are used today:

Accounting:
Assigning audit teams effectively Credit policy analysis
Cash flow planning Developing standard costs
Establishing costs for by products Planning of delinquent account strategy
Construction:
Project scheduling, monitoring and control Determination of proper work force
Deployment of work force Allocation of resources to projects

Facilities Planning:
Factory location and size decision Estimation of number of facilities required
Hospital planning International logistic system design
Transportation loading and unloading Warehouse location decision
Finance:
Building cash management models Building financial planning models
Allocating capital among various alternatives Investment analysis
Portfolio analysis Dividend policy making

Manufacturing:
Inventory control Marketing balance projection
Production scheduling Production smoothing

Marketing:
Advertising budget allocation Product introduction timing
Deciding most effective packaging alternative Selection of Product mix

Organizational Behavior / Human Resources:

Personnel planning Recruitment of employees
Skill balancing Training program scheduling
Designing organizational structure more effectively

Purchasing:
Optimal buying Optimal reordering Materials transfer

Research and Development:

R & D Projects control R & D Budget allocation
Planning of Product introduction

Limitations of Operations Research

Operations Research has number of applications; similarly it also has certain limitations. These
limitations are mostly related to the model building and money and time factors problems
involved in its application. Some of them are as given below:

i) Distance between O.R. specialist and Manager

Operations Researchers job needs a mathematician or statistician, who might not be
aware of the business problems. Similarly, a manager is unable to understand the
complex nature of Operations Research. Thus there is a big gap between the two
personnel.

ii) Magnitude of Calculations

The aim of the O.R. is to find out optimal solution taking into consideration all the
factors. In this modern world these factors are enormous and expressing them in
 quantitative model and establishing relationships among these require voluminous
calculations, which can be handled only by machines.

iii) Money and Time Costs

The basic data are subjected to frequent changes, incorporating these changes into the
operations research models is very expensive. However, a fairly good solution at present
may be more desirable than a perfect operations research solution available in future or
after some time.
iv) Non – quantifiable Factors
When all the factors related to a problem can be quantifiable only then operations
research provides solution otherwise not. The non-quantifiable factors are not
incorporated in O.R. models. Importantly O.R. models do not take into account emotional
factors or qualitative factors.

v) Implementation
Once the decision has been taken it should be implemented. The implementation of
decisions is a delicate task. This task must take into account the complexities of human
relations and behavior and in some times only the psychological factors.

LINEAR PROGRAMMING –GRAPHICAL METHOD

Introduction to Linear Programming
Linear Programming is a special and versatile technique which can be applied to a variety of
management problems viz. Advertising, Distribution, Investment, Production, Refinery
Operations, and Transportation analysis. The linear programming is useful not only in industry
and business but also in non-profit sectors such as Education, Government, Hospital, and
Libraries. The linear programming method is applicable in problems characterized by the
presence of decision variables. The objective function and the constraints can be expressed as
linear functions of the decision variables. The decision variables represent quantities that are,
in some sense, controllable inputs to the system being modeled. An objective function represents
some principal objective criterion or goal that measures the effectiveness of the system such as
maximizing profits or productivity, or minimizing cost or consumption. There is always some
practical limitation on the availability of resources viz. man, material, machine, or time for the
system. These constraints are expressed as linear equations involving the decision variables.
Solving a linear programming problem means determining actual values of the decision variables
that optimize the objective function subject to the limitation imposed by the constraints.
The main important feature of linear programming model is the presence of linearity in the
problem. The use of linear programming model arises in a wide variety of applications. Some
model may not be strictly linear, but can be made linear by applying appropriate mathematical
transformations. Still some applications are not at all linear, but can be effectively approximated
by linear models. The ease with which linear programming models can usually be solved makes
an attractive means of dealing with otherwise intractable nonlinear models.

Linear Programming Problem Formulation

The linear programming problem formulation is illustrated through a product mix problem. The
product mix problem occurs in an industry where it is possible to manufacture a variety of
products. A product has a certain margin of profit per unit, and uses a common pool of limited
resources. In this case the linear programming technique identifies the products combination
which will maximize the profit subject to the availability of limited resource constraints.

Example 1:
Suppose an industry is manufacturing two types of products P1 and P2. The profits per kg of the
two products are N300 and N400 respectively. These two products require processing in three
types of machines. The following table shows the available machine hours per day and the time
required on each machine to produce 1 kg of P1 and P2. Formulate the problem in the form of
linear programming model.

Profit/kg P1 for N300 P2 for N400 Total available Machine

hours/day
Machine 1 3 2 600
Machine 2 3 5 800
Machine 3 5 6 1100

Solution:
The procedure for linear programming problem formulation is as follows:
Introduce the decision variable as follows:
Let x1 be the amount for P1 and x 2 be the amount for P2
In order to maximize profits, we establish the objective function as
300x1  400x2
Since one kg of P1 requires 3 hours of processing time in machine 1 while the corresponding
requirement of P2 is 2 hours. So, the first constraint can be expressed as
3x1  2 x2  600
Similarly, corresponding to machine 2 and 3 the constraints are
3x1  5x2  800
5x1  6 x2  1100
In addition to the above there is no negative production, which may be represented algebraically
as
x1  0 ; x2  0
Thus, the product mix problem in the linear programming model is as follows:
Maximize
300x1  400x2
Subject to:
3x1  2 x2  600
3x1  5x2  800
5x1  6 x2  1100
x1  0 ; x2  0

Formulation with Different Types of Constraints

The constraints in the previous example 1 are of “less than or equal to” type. In this section we
are going to discuss the linear programming problem with different constraints, which is
illustrated in the following Example 2.
Example 2:
A company owns two flour mills viz. A and B, which have different production capacities for
high, medium and low quality flour. The company has entered a contract to supply flour to a firm
every month with at least 8, 12 and 24 quintals of high, medium and low quality respectively. It
costs the company N2000 and N1500 per day to run mill A and B respectively. On a day, Mill A
produces 6, 2 and 4 quintals of high, medium and low quality flour, Mill B produces 2, 4 and 12
quintals of high, medium and low quality flour respectively. How many days per month should
each mill be operated in order to meet the contract order most economically.
Solution:
Let us assume that x1 and x 2 are the mills A and B produce. Here the objective is to minimize
the cost of the machine runs and to satisfy the contract order. The linear programming problem is
given by:

Minimize
2000x1  1500x2
Subject to:
6 x1  2 x2  8
2 x1  4 x2  12
4 x1  12x2  24
x1  0 ; x2  0

Graphical Analysis of Linear Programming

This section shows how a two-variable linear programming problem is solved graphically, which
is illustrated as follows:
Let us consider the product mix problem in Example 1

Maximize
300x1  400x2

Subject to:
3x1  2 x2  600
3x1  5x2  800
5x1  6 x2  1100
x1  0 ; x2  0

From the first constraint 3x1  2 x2  600 , we draw the line 3x1  2 x2  600 which passes
through the point (200, 0) and (0, 300). Also, repeat for second and third constraints to get the
feasible regions under the graph. (This will be shown on display board by tutor).
From the graph, we have the followings:

Half Plane - A linear inequality in two variables is called as a half plane.

Boundary - The corresponding equality (line) is called as the boundary of the half plane.
Close Half Plane – Half plane with its boundary is called as a closed half plane.

In this case we must decide in which side of the line 3x1  2 x2  600 , the half plane is located.
The easiest way to solve the inequality for x 2 is 3x1  600  2 x2
And for the fixed x1 , the coordinates satisfy this inequality that is smaller than the corresponding
ordinate on the line and thus the inequality is satisfied for all the points below the line 1.
Similarly, we have to determine the closed half planes for the inequalities 3x1  5x2  800 and
5x1  6 x2  1100.

Since all the three constraints must be satisfied simultaneously we have consider the intersection
of these three closed half planes. The complete intersection of these three closed half planes will
be shown in the graph and the region is called a feasible region, which will is shaded in the
graph.

Feasible Solution:
Any non-negative value of x1 , x 2 that is, x1  0 and x2  0 is known as feasible solution of the
linear programming problem if it satisfies all the existing constraints.

Feasible Region:
The collection of all the feasible solution is called as the feasible region.
Also, in example 2 we discussed about the less than or equal to type of linear programming
problem, i.e. maximization problem. Now consider a minimization (i.e. greater than or equal to
type) linear programming problem formulated in example 2.
Minimize
2000x1  1500x2
Subject to:
6 x1  2 x2  8
2 x1  4 x2  12
4 x1  12x2  24
x1  0 ; x2  0

The three lines 6 x1  2 x2  8 , 2 x1  4 x2  12 and 4 x1  12x2  24 passes through the point (1.3,
0) (0,4), (6,0) (0,3) and (6,0) (0,2). The feasible region for this problem is shown in the graph to
be discussed in the class. In this problem the constraints are of greater than or equal to type of
feasible region, which is bounded on one side only.

Graphical Linear Programming Solution

A two variable linear programming problem can be easily solved graphically. The method is
simple but the principle of solution depends on certain analytical concepts, they are:

Convex Region:
A region R is convex if and only if for any two points on the region R if the line
connecting those points lies entirely in the region R.
 Extreme Point:
The extreme point E of a convex region R is a point such that it is not possible to locate
two distinct points in R, so that the line joining them will include E. The extreme points
are also called as corner points or vertices.

Thus, the following result provides the solution to the linear programming model:
“If the minimum or maximum value of a linear function defined over a convex region exists,
then it must be on one of the extreme points”.

In this section we are going to describe linear programming graphical solution for both the
maximization and minimization problems, discussed in the above examples.

Consider the maximization problem described in example 1

Maximize
300x1  400x2

Subject to:
3x1  2 x2  600
3x1  5x2  800
5x1  6 x2  1100
x1  0 ; x2  0 M  300x1  400x2
The feasible region identified in the example 1 is a convex polygon, which is illustrated in the
following figure. The extreme point of this convex region are A, B, C, D and E.

A E
In this problem the objective function is 300x1  400x2 . Let be M is a parameter; the graph
3
M  300x1  400x2 is a group of parallel lines with slope  . Some of these lines intersect the
4
feasible region and contains many feasible solutions, whereas the other lines miss and contain no
feasible solution. In order to maximize the objective function, we find the line of this family that
intersects the feasible region and is farthest out from the origin. Note that the farthest is the line
from the origin the greater will be the value of M.

Observe that the line M  300x1  400x2 passes through the point D, which is the intersection of
the lines, 1 and 3 and has the coordinates (170, 40). Since D is the only feasible solution on this
line the solution is unique.

The value of M is 67,000, which is the objective function maximum value. The optimum value
variables are x1  170 and x2  40

The following Table 1 shows the calculation of maximum value of the objective function.

Extreme Point Coordinates Objective Function

x1 x2 300x1  400x2
A x1  0 x2  0 0
B x1  0 x2  160 64,000
C x1  110 x2  70 61,000
D x1  170 x2  40 67,000
E x1  200 x2  0 60,000

Consider the minimization problem described in example 2.

Minimize
2000x1  1500x2
Subject to:
6 x1  2 x2  8
2 x1  4 x2  12
4 x1  12x2  24
x1  0 ; x2  0 M  2000x1  1500x2

The feasible region for this problem is illustrated in the following graph. Here each of the half
planes lies above its boundary. In this case the feasible region is infinite. In this case, we are
concerned with the minimization; also it is not possible to determine the maximum value as in
the previous example 1. Now, let us introduce a parameter M in the objective function, i.e.,
2000x1  1500x2 and draw the lines for different values of M, which as shown in the following
table.
 Extreme Point Coordinates Objective Function
x1 x2 2000x1  1500x2
A x1  0 x2  4 6,000
B x1  0.5 x2  2.75 5,125
C x1  6 x2  0 12,000

Here, the minimum value is 5125 at the extreme point B, which is the value of the M (objective
function). The optimum values variables are x1  0.5 and x2  2.75 .

Multiple Optimal Solutions

When the objective function passed through only the extreme point located at the intersection of
two half planes, then the linear programming problem possess unique solutions. The previous are
of this types (which possessed unique solutions).
When the objective function coincides with one of the half planes generated by the constraints in
the problem, will possess multiple optimal solutions. In this section we are going to discuss
about the multiple optimal solutions of linear programming problem with the help of the
following example.

Example 3
A company purchasing scrap material has two types of scarp materials available. The first type
has 30% of material X, 20% of material Y and 50% of material Z by weight. The second type
has 40% of material X, 10% of material Y and 30% of material Z. The costs of the two scraps are
N120 and N160 per kg respectively. The company requires at least 240 kg of material X, 100 kg
of material Y and 290 kg of material Z. Find the optimum quantities of the two scraps to be
purchased so that the company requirements of the three materials are satisfied at a minimum
cost.
Solution
First we have to formulate the linear programming model. Let us introduce the decision variables
x1 and x 2 denoting the amount of scrap material to be purchased. Here the objective is to
minimize the purchasing cost. So, the objective function here is
Minimize
120x1  160x2
Subject to:
0.3x1  0.4 x2  240
0.2 x1  0.1x2  100
0.5x1  0.3x2  290
x1  0; x2  0
We multiply by 10 both sides of the inequalities, then the problem becomes

Minimize
120x1  160x2
Subject to:
3x1  4 x2  2400
2 x1  x2  1000
5x1  3x2  2900
x1  0; x2  0
Let us introduce parameter M in the objective function i.e. 120x1  160x2  M . Then we have to
determine the different values for M, which shows the calculation of minimum objective
function value in the table below

Extreme Point Coordinates Objective Function

x1 x2 120x1  160x2
A x1  0 x2  1000 160,000
B x1  150 x2  740 136,400
C x1  400 x2  300 96,000
D x1  800 x2  0 96,000

Note that there are two minimum value for the objective function (M = 96, 000). The feasible
region and the multiple solutions are indicated in the following Graph.
(Draw in Class)
The extreme points are A, B, C, and D. One of the objective functions 120x1  160x2  M family
coincides with the line CD at the point C with value M = 96, 000, and the optimum value
variables are x1  400 and x2  300 . And at the point D with value M = 96, 000, and the
optimum value variables are x1  800 and x2  0 .
Thus, every point on the line CD minimizes objective function value and the problem contains
multiple optimal solutions.
Unbounded Solution
When the feasible region is unbounded, a maximization problem may not have optimal solution,
since the values of the decision variables may be increased arbitrarily. This is illustrated with the
help of the following problem.
Maximize
3x1  x2
Subject to:
x1  x2  6
 x1  x2  6
 x1  2 x2  6
and
x1 , x2  0
The graph below shows the unbounded feasible region and demonstrates that the objective
function can be made arbitrarily large by increasing the values of x1 and x 2 within the
unbounded feasible region. In this case, there is no point ( x1 , x 2 ) is optimal because there are
always other feasible points for which objective function is larger. Note that it is not the
unbounded feasible region alone that precludes an optimal solution. The minimization of the
function subject to the constraints is shown in the graph would be solved at one the extreme
point (A or B).

The unbounded solutions typically arise because some real constraints, which represent a
practical resource limitation, have been missed from the linear programming formulation. In
such situation the problem needs to be reformulated and re-solved.
Infeasible Solution
A linear programming problem is said to be infeasible if no feasible solution of the problem
exists. This section describes infeasible solution of the linear programming problem with the
help of the following example.
Minimize
200x1  300x2
Subject to:
0.4 x1  0.6 x2  240
0.2 x1  0.2x2  80
0.4x1  0.3x2  180
x1  0; x2  0
We multiply by 10 both sides of the inequalities, then the problem becomes
Minimize
200x1  300x2
Subject to:
4x1  6 x2  2400
2 x1  2 x2  800
4 x1  3x2  1800 x1  0; x2  0
The region right of the boundary AFE includes all the solutions which satisfy the first (
4x1  6 x2  2400 ) and the third ( 4 x1  3x2  1800) constraints. The region left of the BC
contains all solutions which satisfy the second constraint ( 2 x1  2 x2  800).
Hence, there is no solution satisfying all the three constraints (first, second, and third). Thus, the
linear problem is infeasible. This is illustrated in the above graph.

Summary
In Operations Research linear programming is a versatile technique with wide applications in
various management problems. Linear Programming problem has a number of characteristics.
That is, first we have to identify the decision variable. The problem must have a well-defined
objective function, which are expressed in terms of the decision variables.
The objective function may have to be maximized when it indicates the profit or production or
contribution. If the objective function represents cost, in this case the objective function has to be
minimized.
The management problem is expressed in terms of the decision variables with the objective
function and constraints. A linear programming problem is solved graphically if it contains only
two variables.
Key Terms
Objective Function: is a linear function of the decision variables representing the objective of
the manager/decision maker.
Constraints: are the linear equations or inequalities arising out of practical limitations.
Decision Variables: are some physical quantities whose values indicate the solution.
Feasible Solution: is a solution which satisfies all the constraints (including the non-negative)
presentsin the problem.
Feasible Region: is the collection of feasible solutions.
Multiple Solutions: are solutions each of which maximize or minimize the objective function.
Unbounded Solution: is a solution whose objective function is infinite.
Infeasible Solution: means no feasible solution.

ASSIGNMENT 1
1. A juice company has its products viz. canned apple and bottled juice with profit margin N40
and N20 respectively per unit. The following table shows the labour, equipment, and ingredients
to produce each product per unit.

Canned Apple Bottled Juice Total

Labour 2.0 3.0 12.0
Equipment 3.2 1.0 8.0
Ingredients 2.4 2.0 9.0

Formulate the linear programming problem (model) specifying the product mix which will
maximize the profit without exceeding the levels of resources. Hence, find graphically the
feasible region.

2. An organization is interested in the analysis of two products which can be produces from the
idle time of labour, machine and investment. It was notified on investigation that the labour
requirement of the first and the second products was 4 and 5 units respectively and the total
available man hours was 48. Only first product required machine hour utilization of one hour per
unit and at present only 10 spare machine hours are available. Second product needs one unit of
by product per unit and the daily availability of the byproduct is 12 units. According to the
marketing department the sales potential of first product cannot exceed 7 units. In a competitive
market, first product can be sold at a profit of N60 and the second product at a profit of N100 per
unit. Formulate the problem as a linear programming model. Also determine graphically the
feasible region. Identify the redundant constraints if any.

3. A bed mart company is in the business of manufacturing beds and pillows. The company has
40 hours for assembly and 32 hours for finishing work per day. Manufacturing of a bed requires
4 hours for assembly and 2 hours in finishing. Similarly a pillow requires 2 hours for assembly
and 4 hours for finishing. Profitability analysis indicates that every bed would contribute N80,
while a pillow contribution is N55 respectively. Find out the daily production of the company to
maximize the contribution (profit).
4. Maximize
1170x1  1110x2
Subject to:
9 x1  5x2  500
7 x1  9 x2  300
5x1  3x2  1500
7 x1  9 x2  1900
2 x1  4 x2  1000
x1  0; x2  0
Find graphically the feasible region and the optimal solution.
5. Solve the following problem graphically
Minimize
2 x1  1.7 x2
Subject to:
0.15x1  0.10x2  1.0
0.75x1  1.70x2  7.5
1.30x1  1.10x2  10.0
x1  0; x2  0
6. Solve the following problem graphically
Maximize
2 x1  3x2
Subject to:
x1  x2  1
x1  x2  3
x1 , x2  0
7. Graphically solve the following problem
Maximize
3x1  2 x2
Subject to:
2 x1  3x2  0
3x1  4 x2  12
x1 , x2  0
8. Solve the following problem graphically
Maximize
4 x1  4 x2
Subject to:
 2 x1  x2  1
x1  2
x1  x2  3
x1 , x2  0
SIMPLEX METHOD
Introduction
The Linear Programming with two variables can be solved graphically. The graphical method of
solving linear programming problem is of limited application in the business problems as the
number of variables is substantially large. If the linear programming problem has larger number
of variables, the suitable method for solving is Simplex Method. The simplex method is an
iterative process, through which it reaches ultimately to the minimum or maximum value of the
objective function.
The simplex method also helps the decision maker/manager to identify the following:
 Redundant Constraints
 Multiple Solutions
 Unbounded Solution
 Infeasible Problem

Basics of Simplex Method

The basic of simplex method is explained with the following linear programming problem.
Example:
Maximize
60x1  70x2
Subject to:
2 x1  x2  300
3x1  4 x2  509
4 x1  7 x2  812
and
x1 , x2  0
Solution
First we introduce the variables
s3 , s 4 , s5  0
So that the constraints becomes equations, thus
2 x1  x 2  s3  300
3x1  4 x2  s4  509
4 x1  7 x2  s5  812
Corresponding to the three constraints, the variables s3 , s 4 and s5 are called slack variables.
Now, the system of equation has three equations and five variables.
There are two types of solutions they are basic and basic feasible, which are discussed as
follows:

Basic Solution
We may equate any two variables to zero in the above system of equations, and then the system
will have three variables. Thus, if this system of three equations with three variables is solvable
such a solution is called as basic solution.
For example suppose we take x1  0 and x2  0 , the solution of the system with remaining three
variables is s3  300 , s4  509 and s5  812 , this is a basic solution and the variables s3 , s 4 and
s5 are known as basic variables where the variables x1 and x2 are known as non-basic variables.
The number of basic solution of a linear programming problem depends on the presence of the
number of constraints and variables. For example if the number of constraints is m and the
number of variables including the slack variables is n , and then there are at most n Cnm  n Cm
basic solutions.

Basic Feasible Solution

A basic solution of a linear programming problem is called as basic feasible solutions if it is
feasible it means all the variables are non-negative. The solution s3  300 , s4  509 and
s5  812 is a basic feasible solution.
The number of basic feasible solution of a linear programming problem depends on the presence
of the number of constraints and variables. For example if the number of constraints is m and the
number of variables including the slack variables is n then there are at most n Cnm  n Cm basic
feasible solutions.
Every basic feasible solution is an extreme point of the convex set of feasible solutions and every
extreme point is a basic feasible solution of the set of given constraints. It is impossible to
identify the extreme points geometrically if the problem has several variables but the extreme
points can be identified using basic feasible solutions. Since one of the basic feasible solutions
will maximize or minimize the objective function, the searching of extreme points can be carried
out starting from one basic feasible solution to another.
The Simplex Method provides a systematic search so that the objective function increases in the
cases of maximization progressively until the basic feasible solution has been identified where
the objective function is maximized.
Simplex Method Computation
This section describes the computational aspect of simplex method. Consider the following
linear programming problem
Maximize
60x1  70x2
Subject to:
2 x1  x2  s3  300
3x1  4 x2  s4  509
4 x1  7 x2  s5  812
x1 , x2 s3 , s 4 , s5  0

The profit Z  60x1  70x2 i.e. Maximize 60x1  70x2

The standard form can be summarized in a compact table form as

In this problem the slack variables s3 , s 4 and s5 provide a basic feasible solution from which the
simplex computation starts. That is, s3  300 , s4  509 and s5  812 . This result follows
because of the special structure of the columns associated with the slacks.
If Z represents profit, then Z  0 corresponding to this basic feasible solution.
We represent by CB the coefficient of the basic variables in the objective function and by XB the
numerical values of the basic variable.
So that the numerical values of the basic variables are: XB1 = 300, XB2 = 509, XB3 = 812. The
profit Z  60x1  70x2 can also be expressed as Z  60x1  70x2  0 . The simplex computation
starts with the first compact standard simplex table as given below:

In the objective function the coefficients of the variables are CB1 = CB2 = CB3 = 0. The
topmost row of the table denotes the coefficient of the variables x1 , x2 s3 , s 4 , s5 of the
objective function respectively. The column under x1 indicates the coefficient of x1 in the three
equations respectively. Similarly the remaining column also formed.
On seeing the equation Z  60x1  70x2 we may observe that if either x1 or x 2 , which is
currently non-basic is included as a basic variable so that the profit will increase. Since the
coefficient of x 2 is higher, we choose x 2 to be included as a basic variable in the next iteration.
An equivalent criterion of choosing a new basic variable can be obtained the last row of table,
i.e., corresponding to Z .
Since the entry corresponding to x 2 is smaller between the two negative values, x 2 will be
included as a basic variable in the next iteration. However with three constraints there can be
only three basic variables.
Thus, by bringing x 2 a basic variable one of the existing basic variables becomes non-basic. The
question here is how to identify this variable? The following statements give the solution to this
question.

Consider the first equation i.e., 2 x1  x 2  s3  300

From this equation
2 x1  s3  300  x2
But x1  0 . Hence, in order that s3  0
300  x2  0 which implies that x2  300

Similarly consider the second equation i.e. 3x1  4 x2  s4  509

From this equation
3x1  s4  509  4 x2
But x1  0 . Hence, in order that s4  0
509  4 x2  0 such that x 2  509 4
Similarly consider the third equation i.e. 4 x1  7 x2  s5  812
From this equation
4 x1  s5  812  7 x 2
But x1  0 . Hence, in order that s5  0
812  7 x2  0 such that x 2  812 7

Therefore the three equations lead to

x2  300, x 2  509 4 and x 2  812 7

 
Thus, x 2  Min x 2  300, x 2  509 4 , x 2  812 7 , this implies that x2  116

If x2  116 , you may note from the third equation that s5  0 because s5  812  7 x 2
Thus, the variable s5 becomes non-basic in the next iteration.
So that the revised values of the other two basic variables are
s3  300  x2 , which gives s3  184 and s4  509  4 x2 , which gives s 4  45

With reference to the previous table, we obtain the elements of the next table using the following
rules:
1. We allocate the quantities which are negative in the z-row. Suppose if all the quantities
are positive, the inclusion of any non-basic variable will not increase the value of the
objective function. Hence the present solution maximizes the objective function. If there
are more than one negative values we choose the variable as a basic variable
corresponding to which the Z value is least as this is likely to increase the more profit.
2. Let xj be the incoming basic variable and the corresponding elements of the jth row
column be denoted by Y1j, Y2j and Y3j respectively. If the present values of the basic
variables are XB1, XB2 and XB3 respectively, then we can compute.
Min [XB1/Y1j, XB2/Y2j, XB3/Y3j] for Y1j, Y2j, Y3j>0.
Note that if any Yij ≤ 0, this need not be included in the comparison. If the minimum
occurs corresponding to XBr/Yrj then the rth basic variable will become non-basic in the
next iteration.
3. Using the following rules the next table is computed from the previous table.
i. The revised basic variables are s3, s4 and x2. Accordingly, we make
CB1 = 0, CB2 = 0 and CB3 = 70.
ii. As x 2 is the incoming basic variable we make the coefficient of x 2 one
by dividing each element of row-3 by 7. Thus the numerical value of the
element corresponding to x1 is 4/7, corresponding to s5 is 1/7 in the next
table.
iii. The incoming basic variable should appear only in the third row. So we
multiply the third-row of the next table by 1 and subtract it from the first-
row of the previous table element by element. Thus the element
corresponding to x 2 in the first-row of the next table is 0. Therefore the
element corresponding to x1 is 2-1*4/7=10/7 and the element
corresponding to s5 is 0-1*1/7=-1/7
In this way we obtain the elements of the first and the second row in the next table where the
numerical values can also be calculated in a similar way.