SET-1

Q1. Describe in details the different scopes of application of Operations Research.

Ans.: Scope of Operations Research (OR)

In general, whenever there is any problem simple or complicated, the OR techniques may be
applied to find the best solution. In this section we shall try to find the scope of OR by seeing its
application in various fields of everyday life.

i) In Defense Operations: In modern warfare the defense operations are carried out by a number
of independent components namely Air Force, Army and Navy. The activities in each of these
components can be further divided in four subcomponents
viz.: administration, intelligence, operations and training, and supply. The application of modern
warfare techniques in each of the components of military organizations requires expertise
knowledge in respective fields. Furthermore, each component works to drive maximum gains
from its operations and there is always a possibility that strategy beneficial to one component
may have an adverse effect on the other. Thus in defense operations there is a necessity to
coordinate the activities of various components which gives maximum benefit to the
organization as a whole, having maximum use of the individual components. The final strategy is
formulated by a team of scientists drawn from various disciplines who study the strategies of
different components and after appropriate analysis of the various courses of actions, the best
course of action, known as optimum strategy, is chosen.

ii) In Industry: the systems of modern industries are so complex that the optimum point of
operation in its various components cannot be intuitively judged by an individual. The business
environment is always changing and any decision useful at one time may not be so good some
time later. There is always a need to check the validity of decisions continually, against the
situations. The industrial revolution with increased division of labor and introduction of
management responsibilities has made each component an independent unit having their own
goals. For example: Production department minimize cost of production but maximizes output.
Marketing department maximizes output but minimizes cost of unit sales.
Finance department tries to optimize capital investment and personnel department appoints good
people at minimum cost. Thus each department plan their own objectives and all these objectives
of various department or components come to conflict with each other and may not conform to
the overall objectives of the organization. The application of OR techniques helps in overcoming
this difficulty by integrating the diversified activities of various components so as to serve the
interest of the organization as a whole efficiently. OR methods in industry can be applied in the
fields of production, inventory controls and marketing, purchasing, transportation and
competitive strategies etc.
iii) Planning: In modern times it has become necessary for every government to have careful
planning, for economic development of the country. OR techniques can be fruitfully applied to
maximize the per capita income, with minimum sacrifice and time. A government can thus use
OR for framing future economic and social policies.

iv) Agriculture: With increase in population there is a need to increase agriculture output. But
this cannot be done arbitrarily. There are a number of restrictions under which agricultural
production is to be studied. Therefore there is a need to determine a course of action, which
serves the best under the given restrictions. The problem can be solved by the application of OR
techniques.

v) In Hospitals: The OR methods can be used to solve waiting problems in outpatient

department of big hospitals. The administrative problems of hospital organization can also be
solved by OR techniques.

vi) In Transport: Different OR methods can be applied to regulate the arrival of trains and
processing times, minimize the passengers waiting time and reduce congestion, formulate
suitable transportation policy, reducing the costs and time of transshipment.

vii) Research and Development: Control of R and D projects, product introduction planning
etc. and many more applications.
Q2. What do you understand by Linear Programming Problem? What are the
requirements of L.P.P.? What are the basic assumptions of L.P.P.?

Ans.: Linear Programming

The Linear Programming Problem (LPP) is a class of mathematical programming in which the
functions representing the objectives and the constraints are linear. Here, by optimization, we
mean either to maximize or minimize the objective functions. The general linear programming
model is usually defined as follows:

Maximize or Minimize
Z = c1 x1 + c2 x 2 +--------------- +cn x n
Subject to the constraints,
a11 x1 + a12 x2 +------------------ +a1n xn ~ b1
a21 x1 + a22 x2 +------------------- +a2n xn ~ b2
-------------------------------------------------------
------------------------------------------------------
am1x1 + am2 x2 +-------------------- +amn xn ~ bm and x1 ³ 0, x2 ³ 0, ---------------------- xn³ 0.
Where cj, bi and aij (i = 1, 2, 3… m, j = 1, 2, 3 n) are constants determined from the technology
of the problem and xj (j = 1, 2, 3 n) are the decision variables. Here ~ is either £
(Less than), ³ (greater than) or = (equal). Note that, in terms of the above formulation the
coefficient cj, aij, bj are interpreted physically as follows. If bi is the available amount of
resources
i, where aij is the amount of resource i, that must be allocated to each unit of activity j, the
“worth” per unit of activity is equal to cj.

Canonical forms:
The general Linear Programming Problem (LPP) defined above can always be put in the
following form which is called as the canonical form:
Maximize Z = c1 x1+c2 x2 +--------------- +cn xn
Subject to
a11 x1 + a12 x2 +--------------- +a1n xn £ b1
a21 x1 + a22 x2 +---------------- +a2n xn £ b2

------------------------------------------------------------------------------------
------------------------------------------------------------------------------------

am1x1+am2 x2 + …… + amn xn £ bm
x1, x2, x3, … xn ³ 0.

The characteristics of this form are:

1) All decision variables are nonnegative.
2) All constraints are of £ type.
3) The objective function is of the maximization type.
Any LPP can be put in the canonical form by the use of five elementary transformations:
1. The minimization of a function is mathematically equivalent to the maximization of the
negative expression of this function. That is, Minimize Z = c1 x1 + c2x2 + ……. + cn xn is
equivalent to
Maximize – Z = – c1x1 – c2x2 – … – cnxn.
2. Any inequality in one direction (£ or ³) may be changed to an inequality in the opposite
direction (³ or £) by multiplying both sides of the inequality by –1.
For example 2x1+3x2 ³ 5 is equivalent to –2x1–3x2 £ –5.
3. An equation can be replaced by two inequalities in opposite direction. For example, 2x1+3x2
=
5 can be written as 2x1+3x2 £ 5 and 2x1+3x2 ³ 5 or 2x1+3x2 £ 5 and – 2x1 – 3x2 £ – 5.
4. An inequality constraint with its left hand side in the absolute form can be changed into two
regular inequalities. For example: | 2x1+3x2 | £ 5 is equivalent to 2x1+3x2 £ 5 and 2x1+3x2 ³ –
5 or – 2x1 – 3x2 £ 5.
5. The variable which is unconstrained in sign (i.e., ³ 0, £ 0 or zero) is equivalent to the
difference between 2 nonnegative variables. For example, if x is unconstrained in sign then x= (x
+ – x –) where x + ³ 0, x – £ 0.
Examples of a Linear Programming Problem:
Example 1: A firm engaged in producing 2 models, viz., Model A and Model B, performs only 3
operations painting, assembly and testing. The relevant data are as follows:

Unit Sale Price Hours required for each unit

Assembly Painting Testing
Model A Rs. 50.00 1.0 0.2 0.0
Model B Rs. 80.00 1.5 0.2 0.1

Total number of hours available each week is as under assembly 600, painting 100, and testing
30.
The firm wishes to determine the weekly product mix so as to maximize revenue.
Solution: Let us first write the notations as under:
Z: Total revenue
X1: Number of Units of Model A
X2: Number of Units of Model B
X1, X2: Are known as decision variables
b1: Weekly hours available for assembly
b2: Weekly hours available for painting
b3: Weekly hours available for testing.
Since the objective (goal) of the firm is to maximize its revenue, the model can be stated as
follows:
The objective function, Z = 50x1 + 80x2 is to be maximized subject to the constraints
1.0 x1+1.5x2 £ 600, (Assembly constraints)
0.2 x1+0.2x2 £ 100, (Painting constants)
0.0 x1+0.1x2 £ 30, (Testing constraints) and
x1 ³ 0, x2 ³ 0, The Non negativity conditions.
Requirements of L.P.P
i. Decisions variables and their relationship
ii. Well defined objective function
iii. Existence of alternative courses of action
iv. Nonnegative conditions on decision variables.

Basic assumptions of L.P.P

1. Linearity: Both objective function and constraints must be expressed as linear inequalities.
2. Deterministic: All coefficients of decision variables in the objective and constraints
expressions should be known and finite.
3. Additivity: The value of objective function for the given values of decision variables and the
total sum of resources used must be equal to sum of the contributions earned from each decision
variable and the sum of resources used by decision variables respectively.
4. Divisibility: The solution of decision variables and resources can be any nonnegative values
including fractions.

Q3. Describe the different steps needed to solve a problem by simplex method.

Ans.: Simplex Method

Consider a LPP given in the standard form, to optimize z = c1 x1 + c2 x2 + ---+ cn xn Subject to

a11 x1 + a12 x2 + -- + an x n  S1 = b1 a21 x1 + a22 x2 + ----+ a2n xn≥ S2 = b2
………………………………………………………………….
………………………………………………………………….
am1 x1 + am2 x2 + -- + amn xn  Sm = bm x1, x2, --- xn, S1, S2 ---, Sm ≥ 0.

To each of the constraint equations add a new variable called an artificial variable on the left
hand side of every equation which does not contain a slack variable. Then every constraint
equation contains either a slack variable or an artificial variable. The introduction of slack and
surplus variables does not alter either the constraints or the objective function. So such variables
can be incorporated in the objective function with zero coefficients. However, the artificial
variables do change the constraints, since these are added only to one side i.e., to the left hand
side of the equations. The new constraint equations so obtained is equivalent to the original
equations if and only if all artificial variables have value zero. To guarantee such assignments in
the optimal solutions, artificial variables are incorporated into the objective function with very
large positive coefficient M in the minimization program and very large negative coefficient – M
in the maximization program. These coefficients represent the penalty incurred in making a unit
assignment to the artificial variable. Thus the standard form of LPP can be given as follows:
Optimize Z = CT X Subject to AX = B, and X  0 Where X is a column vector with decision,
slack, surplus and artificial variables, C is the vector corresponding to the costs, A is the
coefficient matrix of the constraint equations and B is the column vector of the right hand side of
the constraint equations.

To solve problem by Simplex Method

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

Q4. Describe the economic importance of the Duality concept.

Ans.: Economic importance of duality

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

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

Economic importance of Dual variables:

For any pair of feasible primal and dual solutions, (Objective value in the maximization
problem) ≤ (Objective value in the minimization problem)
At the optimum, the relationship holds as a strict equation.
Note: Here the sense of optimization is very important. Hence clearly for any two primal and
dual feasible solutions, the values of the objective functions, when finite, must satisfy the
following inequality.

The strict equality, z = w, holds when both the primal and dual solutions are optimal. Consider
the optimal condition z = w first given that the primal problem represents a resource allocation
model, we can think of z as representing profit in Rupees. Because bi represents the number of
units available of resource i, the equation z = w can be expressed as profit (Rs) =  (units of
resource i) x (profit per unit of resource i) this means that the dual variables yi, represent the
worth per unit of resource i [variables yi are also called as dual prices, shadow prices and
simplex multipliers]. With the same logic, the inequality z < w associated with any two feasible
primal and dual solutions is interpreted as (profit) < (worth of resources) This relationship
implies that as long as the total return from all the activities is less than the worth of the
resources, the corresponding primal and dual solutions are not optimal. Optimality is reached
only when the resources have been exploited completely, which can happen only when the input
equals the output (profit). Economically the system is said to remain unstable (non optimal)
when the input (worth of the resources) exceeds the output (return). Stability occurs only when
the two quantities are equal.

Q5. How can you use the Matrix Minimum method to find the initial basic feasible solution
in the transportation problem?

Ans.: Matrix Minimum Method

Step 1: Determine the smallest cost in the cost matrix of the transportation table. Let it be cij,
Allocate xij = min (ai, bj) in the cell (i, j)
Step 2: If xij = ai cross off the ith row of the transportation table and decrease bj by ai goes to
step 3.
If xij = bj cross off the ith column of the transportation table and decrease ai by bj go to step 3. If
xij = ai= bj cross off either the ith row or the ith column but not both.
Step 3: Repeat steps 1 and 2 for the resulting reduced transportation table until all the rim
requirements are satisfied whenever the minimum cost is not unique make an arbitrary choice
among the minima.

Example 2: Obtain an initial basic feasible solution to the following T.P. using the matrix
minima method.

D1 D2 D3 D4
1 2 3 4 6
O1
4 3 2 8 8 0 Capacity
O2
0 2 2 1 1 10
O3

4 6 8 6 24

Demand

Where 0i and Di denote ith origin and jth destination respectively.

Solution: The transportation table of the given T.P. has 12 cells. Following the matrix minima
method. The first allocation is made in the cells (3, 1) the magnitude being x31 = 4. This satisfies
the requirement at destination D1 and thus we cross off the first column from the table. The
second allocation is made in the cell (2, 4) magnitude x24 = min (6, 8) =6. Cross off the fourth
column of the table. This yields the table (i)

We choose arbitrarily again to make the next allocation in cell (2,3) of magnitude x23 = min
(2,8) = 2 cross off the second row this gives table (iii). The last allocation of magnitude x23 =
min (6 , 6) = 6 is made in the cell (3,3). Now all the rim requirements have been satisfied and
hence an initial feasible solution has been determined. This solution is shown in table ( iv) Since
the cells do not form a loop, the solution is basic one. Moreover the solution is degenerate also.
The transportation cost according to the above route is given by

Z=6×2+2×2+6×0+4×0+0×2+6×2=28

Q6. Describe the Integer Programming Problem. Describe the Gomory’s All-I.P.P. method
for solving the I.P.P. problem.

Ans.: All And Mixed I P P

An integer programming problem can be described as follows:

Determine the value of unknowns x1, x2… xn so as to optimize z = c1x1 +c2x2 + . . .+ cnxn
subject to the constraints ai1 x1 + ai2 x2 + . . . + ain xn =bi , i = 1,2,…,m and xj ³ 0 j = 1, 2,
… ,n where xj being an integral value for j = 1, 2, … , k £ n.
If all the variables are constrained to take only integral value i.e. k = n, it is called an all (or pure)
integer programming problem. In case only some of the variables are restricted to take integral
value and rest (n – k) variables are free to take any non negative values, then the problem is
known as mixed integer programming problem.

Gomory’s all – IPP Method

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

Construction of Gomory’s Constraints

Consider an L P P for which an optimum non – integer basic feasible solution has been attained.
With usual notations, let this solution be displayed in the following simplex table.

YB XB Y1 Y2 Y3 Y4
Y2 Y10 Y11 Y12 Y13 Y14
Y3 Y20 Y21 Y22 Y23 Y24
Y00 Y01 Y02 Y03 Y04

Clearly the optimum basic feasible solution is given by xB = [ ] 2 3 x, x=[ , ] 10 20 y y ; Max z =

y00 since xB is a non integer solution. We assume that y10 is fractional.
The constraint equation is
y10 = y11 x1 + y12 x2 + y13 x3+ y14 x4 ( 1 4 0 ) x = x = reduces to
y10 = y11 x1 + x2 + y14 x4 (0) 1 4 x = x = (
1) because x2 and x3 are basic variables ( which implies that y12 = 1 and y13 = 0 )
The above equation can be rewritten as
x2 = y10 y11
x1 y14
x4 Which is a linear combination of non basic variables.
Now, since y10 ³ 0 the fractional part of y10 must also be non negative. We split over each of yij
in
(1) Into an integral part Iij , and a non negative fractional part, f1j for j = 0,1,2,3,4. After this
break
up (1) may be written as
I10 + f10 = (I11 + f11) x2 + (I14 + f14) x4
Or
f10 f11
x2 f14
x4 = x2 + I11 x1 + I14x4 I10
(2)
Comparing (1) and (2) we come to know that if we add an additional constraint in such a way
that the L.H.S. of (2) is an integer, then we shall be forcing the non integer
y10 towards an integer.
This is what is needed.
The desired Gomory’s constraint is f10 – f11 x1 – f11x4 ≤ 0.
Let it be possible to have f10 – f11 x1 – f11 x4 = h where h > 0 is an integer. Then f10 = h + f11
x1 +
f14 x4 is greater than one. This contradicts that 0 < fij < 1 for j = 0, 1, 2, 3, 4.
Thus Gomory’s constraint is.
When Gsla (1) is slack variable in the above first Gomory constraint.
This additional constraint is to be included in the given L.P.P. in order to move further towards
Obtaining an optimum all integer solution. After the addition of this constraint, the optimum
Simplex table looks like as given below

yB xB y1 y2 y3 y4 Gsla(1)

y1 y10 y11 y12 y13 y14 0

y2 y20 y21 y22 y23 y24 0
Gsla(1) – f10 – f11 0 0 – f14 1

y00 y01 y02 y03 y04 y05

Since – f10 is negative. The optimal solution is infeasible and thus the dual simplex method is to
be applied for obtaining an optimum feasible solution. After obtaining this solution, the above
referred procedure is applied for constructing second Gomory’s constraint. The process is to be
continued so long as an all – integer solution has not been obtained.
 SET 2

Q1. What are the important features of Operations Research? Describe in details the
different phases of Operations Research.

Ans.: Important features of OR are:

i. It is System oriented: OR studies the problem from overall point of view of organizations or
situations since optimum result of one part of the system may not be optimum for some other
part.
ii. It imbibes Inter – disciplinary team approach. Since no single individual can have a thorough
knowledge of all fast developing scientific knowhow, personalities from different scientific and
managerial cadre form a team to solve the problem.
iii. It makes use of Scientific methods to solve problems.
iv. OR increases the effectiveness of a management Decision making ability.
v. It makes use of computer to solve large and complex problems.
vi. It gives Quantitative solution.
vii. It considers the human factors also.

Phases of Operations Research

The scientific method in OR study generally involves the following three phases:
i) Judgment Phase: This phase consists of
a) Determination of the operation.
b) Establishment of the objectives and values related to the operation.
c) Determination of the suitable measures of effectiveness and
d) Formulation of the problems relative to the objectives.
ii) Research Phase: This phase utilizes
a) Operations and data collection for a better understanding of the problems.
b) Formulation of hypothesis and model.
c) Observation and experimentation to test the hypothesis on the basis of additional data.
d) Analysis of the available information and verification of the hypothesis using reestablished
measure of effectiveness.
e) Prediction of various results and consideration of alternative methods.
iii) Action Phase: It consists of making recommendations for the decision process by those who
first posed the problem for consideration or by anyone in a position to make a decision,
influencing the operation in which the problem is occurred.
Q2. Describe a Linear Programming Problem in details in canonical form.

Ans.: Canonical forms:

The general Linear Programming Problem (LPP) defined above can always be put in the
following form which is called as the canonical form:
Maximize Z = c1 x1+c2 x2 +------------- +cn xn
Subject to
a11 x1 + a12 x2 +------------- +a1n xn b1
a21 x1 + a22 x2 +------------- +a2n xn b2
--------------------------------------------------------------------------
---------------------------------------------------------------------------
am1 x1+am2 x2 + …… + amn xn bm
x1, x2, x3, … xn ³ 0.

The characteristics of this form are:

1) All decision variables are nonnegative.
2) All constraints are of type.
3) The objective function is of the maximization type.

Any LPP can be put in the canonical form by the use of five elementary transformations:
1. The minimization of a function is mathematically equivalent to the maximization of the
negative expression of this function. That is, Minimize Z = c1 x1 + c2x2 + ……. + cn xn is
equivalent to
Maximize – Z = – c1x1 – c2x2 – … – cnxn.
2. Any inequality in one direction ( or ) may be changed to an inequality in the opposite
direction ( or ) by multiplying both sides of the inequality by –1.
For example 2x1+3x2 5 is equivalent to –2x1–3x2 –5
3. An equation can be replaced by two inequalities in opposite direction. For example, 2x1+3x2
=
5 can be written as 2x1+3x2 5 and 2x1+3x2 5 or 2x1+3x2 5 and – 2x1 – 3x2 –
5.
4. An inequality constraint with its left hand side in the absolute form can be changed into two
regular inequalities. For example: | 2x1+3x2 | 5 is equivalent to 2x1+3x25 and 2x1+3x2
5 and 2x1+3x2 –5
5. The variable which is unconstrained in sign (i.e., 0, 0 or zero) is equivalent to the
difference between 2 nonnegative variables. For example, if x is unconstrained in sign then x= (x
+ – x – ) where x + 0, x – 0.
Q3. What are the different steps needed to solve a system of equations by the simplex
method?

Ans.: Different Steps needed to solve a system of equations

1. Introduce stack variables (Si’s) for “ ” type of constraint.

2. Introduce surplus variables (Si’s) and Artificial Variables (Ai) for “ ” type of
constraint.
3. Introduce only Artificial variable for “=” type of constraint.
4. Cost (Cj) of slack and surplus variables will be zero and that of artificial variable will be “M”
5. Find Zj - Cj for each variable.
6. Slack and Artificial variables will form Basic variable for the first simplex table. Surplus
variable will never become Basic Variable for the first simplex table.
7. Zj = sum of [cost of variable x its coefficients in the constraints – Profit or cost coefficient of
the variable].
8. Select the most negative value of Zj - Cj. That column is called key column. The variable
corresponding to the column will become Basic variable for the next table.
9. Divide the quantities by the corresponding values of the key column to get ratios select the
minimum ratio. This becomes the key row. The Basic variable corresponding to this row will be
replaced by the variable found in step 6.
10. The element that lies both on key column and key row is called Pivotal element.
11. Ratios with negative and “ ” value are not considered for determining key row.
12. Once an artificial variable is removed as basic variable, its column will be deleted from next
iteration.
13. For maximization problems decision variables coefficient will be same as in the objective
function. For minimization problems decision variables coefficients will have opposite signs as
compared to objective functions.
14. Values of artificial variables will always is – M for both maximization and minimization
problems.
15. The process is continued till all Zj - Cj 0.
Q4. What do you understand by the transportation problem? What is the basic assumption
behind the transportation problem? Describe the MODI method of solving transportation
problem.

Ans.: Transportation Problem This model studies the minimization of the cost of transporting a
commodity from a number of sources to several destinations. The supply at each source and the
demand at each destination are known.

The objective is to develop an integral transportation schedule that meets all demands from the
inventory at a minimum total transportation cost.
The standard mathematical model for the transportation problem is as follows. Let xij be number
of units of the homogenous product to be transported from source i to the destination j Then
objective is to

m n
Minimize z = ∑ ∑Cij Xij
i=1 j=1

Subject to

n
∑ Xij= ai; i=1, 2…... m
j=1
( 2)
m
∑Xij=bj=1, 2…………., n
i=1

With all xij ≥0 and integrals

Theorem: A necessary and sufficient condition for the existence of a feasible solution to the
transportation problem (2) is that

m n
∑ ai = ∑ bj
i=1 j=1

Basic Assumption behind Transportation Problem:

Let us consider a T.P involving m-origins and n-destinations. Since the sum of origin capacities
equals the sum of destination requirements, a feasible solution always exists. Any feasible
solution satisfying m+n-1 of the m + n constraints is a redundant one and hence can be deleted.
This also means that a feasible solution to a T.P can have at the most only m + n – 1 strictly
positive component, otherwise the solution will degenerate.

It is always possible to assign an initial feasible solution to a T. P. in such a manner that the rim
requirements are satisfied. This can be achieved either by inspection or by following some
simple rules. We begin by imagining that the transportation table is blank i.e. initially all Xij = 0.
The simplest procedures for initial allocation discussed in the following section.

MODI Method of Solving Transportation Problem:

The first approximation to (2) is always integral and therefore always a feasible solution. Rather
than determining a first approximation by a direct application of the simplex method it is more
efficient to work with the table given below called the transportation table. The transportation
algorithm is the simplex specialized to the format of table it involves:

a) Finding an integral basic feasible solution

b) Testing the solution for optimality
c) Improving the solution, when it is not optimal
d) Repeating steps (1) and (2) until the optimal solution is obtained

The solution of T.P. is obtained in two stages. In the first stage we find basic feasible solution by
any one of the following methods a) North-west corner rule b) Matrix Minima method or least
cost method c) Vogel’s approximation method. In the second stage we test the B.Fs for its
optimality either by MODI method or by stepping stone method.

Steps of MODI method

Step 1: Under this method we construct penalties for rows and columns by subtracting the least
value of row / column from the next least value.

Step 2: We select the highest penalty constructed for both row and column. Enter that row /
column and select the minimum cost and allocate min (ai, bj)

Step 3: Delete the row or column or both if the rim availability / requirements is met.

Step 4: We repeat steps 1 to 2 to till all allocations are over.

Step 5: For allocation all form equation ui + vj = cj set one of the dual variable ui / vj to zero and
solve for others.

Step 6: Use these values to find Δij = cij - ui - vj of all Δij ≥, then it is the optimal solution.
Step 7: If any Δij ≤0 select the most negative cell and form loop. Starting point of the loop is +ve
and alternatively the other corners of the loop are –ve and +ve. Examine the quantities allocated
at –ve places. Select the minimum. Add it at +ve places and subtract from –ve place.

Step 8: Form new table and repeat steps 5 to 7 till Δij ≥ 0

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

Ans.: North West Corner Rule

Step1: The first assignment is made in the cell occupying the upper left hand (North West)
corner of the transportation table. The maximum feasible amount is allocated there, that is x11 =
min (a1, b1) So that either the capacity of origin O1 is used up or the requirement at destination
D1 is satisfied or both. This value of x11 is entered in the upper left hand corner (Small Square)
of cell (1, 1) in the transportation table

Step 2: If b1 > a1 the capacity of origin O, is exhausted but the requirement at destination D1 is
still not satisfied , so that at least one more other variable in the first column will have to take on
a positive value. Move down vertically to the second row and make the second allocation of
magnitude x21 = min (a2, b1 – x21) in the cell (2, 1). This either exhausts the capacity of origin
O2 or satisfies the remaining demand at destination D1. If a1 > b1 the requirement at destination
D1 is satisfied but the capacity of origin O1 is not completely exhausted. Move to the right
horizontally to the second column and make the second allocation of magnitude x12 = min (a1 –
x11, b2) in the cell (1, 2). This either exhausts the remaining capacity of origin O1 or satisfies
the demand at destination D2.
If b1 = a1, the origin capacity of O1 is completely exhausted as well as the requirement at
destination is completely satisfied. There is a tie for second allocation; an arbitrary tie breaking
choice is made. Make the second allocation of magnitude x12 = min (a1 – a1, b2) = 0 in the cell
(1, 2) or x21 = min (a2, b1 – b2) = 0 in the cell (2, 1).
Step 3: Start from the new north west corner of the transportation table satisfying destination
requirements and exhausting the origin capacities one at a time, move down towards the lower
right corner of the transportation table until all the rim requirements are satisfied.

Q 6. Describe the Branch and Bound Technique to solve an I.P.P. problem.

Ans.: The Branch and Bound Technique

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

I.P.P. the technique for a maximization problem is discussed below:

Let the I.P.P. be

n
Maximize z = ∑ c j x j……………………………………………. (1)
j=1

Subject to the constraints

∑ aij xj≤bi i= 1, 2 , ...., m…………………(2)

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

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

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

Lj ≤ xj ≤ Uj j = 1, 2… r ––––––––––––– (5)

The following idea is behind “the branch and bound technique”

Consider any variable xj, and let I be some integer value satisfying Lj £ I £ Uj – 1. Then clearly
an optimum solution to (1) through (5) shall also satisfy either the linear constraint.
x j ³ I + 1 (6)
Or the linear constraint xj ≤ I ………………... (7)

To explain how this partitioning helps, let us assume that there were no integer restrictions (3),
and suppose that this then yields an optimal solution to L.P.P. – (1), (2), (4) and (5). Indicating
x1
= 1.66 (for example). Then we formulate and solve two L.P.P’s each containing (1), (2) and (4).

But (5) for j = 1 is modified to be 2 ≤ x1 ≤ U1 in one problem and L1 ≤ x1 ≤ 1 in the other.

Further each of these problems process an optimal solution satisfying integer constraints (3)
Then the solution having the larger value for z is clearly optimum for the given I.P.P. However,
it usually happens that one (or both) of these problems has no optimal solution satisfying (3), and
thus some more computations are necessary. We now discuss step wise the algorithm that
specifies how to apply the partitioning (6) and (7) in a systematic manner to finally arrive at an
optimum solution.

We start with an initial lower bound for z, say z (0) at the first iteration which is less than or
equal to the optimal value z*, this lower bound may be taken as the starting Lj for some xj.
In addition to the lower bound z (0), we also have a list of L.P.P’s (to be called master list)
differing only in the bounds (5). To start with (the 0 th iteration) the master list contains a single
L.P.P. consisting of (1), (2), (4) and (5).
We now discuss below, the step by step procedure that specifies how the partitioning (6) and (7)
can be applied systematically to eventually get an optimum integer valued solution.