Operations Research
Operations Research
Operations Research
OPERATIONS RESEARCH
CHAPTER I
INTRODUCTION
Management Science/Operations Research/ Quantitative
Techniques
Many people still remain in the bondage of self-incurred tutelage. Tutelage is
a person's inability to make his/her own decisions. Self-incurred is this
tutelage when its cause lies not in lack of reason but in lack of resolution and
courage to use it without wishing to have been told what to do by something
or somebody else.
The difficulty in life is the choice. Good decision-making brings about a better
life. A bad decision may force you to make another one. A good decision is
never an accident; it is always the result of high intention, sincere effort,
intelligent direction and skillful execution; it represents the wise choice of
many alternatives. One must appreciate the difference between a decision and
an objective. A good decision is the process of optimally achieving a given
objective.
The aim of this course is to make you a better decision maker by learning the
decision-making process. Decision-making is a complicated process that
1
involves a series of steps. This complication arises from the fact that your
present goal (including wants, resources, and abilities) dictates your choices;
however, your choices will change your goals. This influential-cycle keeps the
decision-maker busy all the time. Selecting your goals and your criteria for
success is a dynamic process and changes over time. The goal is the
foundation for decision-making process. This is true in almost all cases
dealing with personal growth or organizational growth.
The Industrial Revolution of the 19th century probably did more to shape life
in the modern industrialized world than any event in history. Large factories
with mass production created a need for managing them effectively and
efficiently. The field of Decision Science (DS) also known as Management
Science (MS), Operations Research (OR) in a more general sense, started with
the publication of the Principles of Scientific Management in 1911 by
Frederick W. Taylor. His approach relied on the measurement of industrial
productivity and on time /motion studies in the factories. The goal of his
scientific management was to determine the best method for performing tasks
in the least amount of time, while unfortunately using the stopwatch in an
inhuman manner.
2
A basic education in OR/MS/DS for managers is essential. They are
responsible for leading the business system and the lives in that system. The
business system is dynamic in nature and will respond as such to
disturbances internally and externally.
2. The analyst who models the problem in order to help the decision maker,
4. Uncontrollable factors,
3
Deterministic versus Probabilistic Models
4
Successful OR/MS/DS modeling approach to decision-making
demands a proper attitude as well as an understanding of more
technical matters.
Decision Science (DS) known also as Operations Research (OR), Management
Science (MS), and Success Science (SS) is the science of making decisions. To
manage means to utilize what is controllable, and to be able to predict what is
uncontrollable in order to achieve a specific objective. Science is a continuing
search; it is a continuing generation of theories, models, concepts, and
categories. Management Science is the science for managing and almost
always involves decision-making.
What Is OR/MS/DS/SS
Management Science (MS) often takes an analytical view of a decision before
making a decision. That is reflection before action, as a Chinese proverb says,
"To chop a tree quickly, spend twice the time sharpening the Ax." Carpenters
say, "Measure twice, cut once." It's no delay to stop to edge the tool.
5
Academically, OR/MS/DS/SS became increasingly focused on mathematical
models and strategic solution algorithms. OR/MS/DS/SS was locked into a
hard, technical shell. In recent years, however, this situation is changing with
the arrival of "soft" methodologies and critical systems strategic thinking.
You may ask, "Why must we learn the decision-making process?" Here are a
few motivating reasons:
6
builder known as the analyst. The analyst is to assist the decision-maker in
his/her decision-making process. Therefore, the analyst must be equipped
with more than a set of analytical methods.
Specialists in model building are often tempted to study a problem, and then
go off in isolation to develop an elaborate mathematical model for use by the
manager (i.e., the decision-maker). Unfortunately the manager may not
understand this model and may either use it blindly or reject it entirely. The
specialist may feel that the manager is too ignorant and unsophisticated to
appreciate the model, while the manager may feel that the specialist lives in a
dream world of unrealistic assumptions and irrelevant mathematical
language.
7
it is the process cycle of re-searching for an optimal (or desirable) strategic
solution to the existing decision problem/situation.
Cycle of Decision-Making
In summary, the OR/MS/DS/SS modeling process is the application of
scientific methods to complex organizational decision
problems/opportunities. The OR/MS/DS/SS models are aimed at assisting
the decision-maker in his/her decision-making process. This modeling
process is now widely used in the manufacturing industry, least cost
distribution of goods, and finance functions as well as in service industries,
and the health and education sectors. Improvement of an existing system and
good designs for new systems are the aims of OR/MS.
8
consultants. What we call OR/MS/DS/SS today is, in fact, the use of scientific
tools to aid the executive.
The term OR arose in the 1940's when research was carried out on the design
and analysis of mathematical models for military operations. Since that time
the scope of OR has expanded to include economics (known as econometrics),
psychology (psychometrics), sociology (socio-metrics), marketing (marketing
research and marketing science), astrology (astronomy), and corporate
planning problems. The growing complexity of management has necessitated
the development of sophisticated mathematical techniques for planning and
decision-making, and the OR/MS/DS/SS features prominently in this
structured decision-making process cycle by providing a quantitative
evaluation of alternative policies, plans, and decisions. The mathematical
disciplines most widely used in OR/MS/DS/SS modeling process include
mathematical programming, probability and statistics, and computer science.
Some areas of OR, such as inventory control, production control, and
scheduling theory, have grown into sub-disciplines of their own right and
have become largely indispensable in the modern world.
Military organizations had gone through the same type of evolution as other
businesses and industries. This organizational evolution took place in the
twenty-year gap between the end of World War I and the beginning of World
War II when the military leadership had to turn to teams of scientists for aid.
These teams of scientists were usually assigned to the executive in charge of
operations; hence their work came to be known as Operational Research in the
United Kingdom and by a variety of names in the United States: Operation
Research, Decision Science, Operational Analysis, System analysis, Success
Science, and Management Science. The name Operations Research is the most
widely used.
9
help in the utilization of the computer. The emerging search for assistance
was accelerated by the outbreak of the Korean War. This vigorous growth of
OR in the military continued to provide rapid applicability to other industries
and sectors.
In examining these definitions, it should be noted that neither the old and
well-established scientific discipline nor science itself has ever been defined in
a way that is acceptable to most practitioners.
10
OR/MS/DS/SS is the scientific method of decision-making. In most
discussions of the general scientific method you would find certain stages and
essential processes:
Reference: http://home.ubalt.edu/ntsbarsh/Business-stat/home.html
1.1. DEFINITION
Operations Research: is defined by many authors in different ways. However,
the following definition is proposed here.
11
Meaning of Operations Research
From the concept and definition given above, Operations Research is:
1. The application of scientific methods, techniques and tools to the problem to
find an answer
2. A management tool in the hands of a manager to take a decision
3. A scientific approach to decision-making process
4. An “applied research” aims at finding a solution for an immediate problem
facing a society, industry or a business enterprise. This is not “fundamental
research”
5. A decision-oriented research, using scientific methods, for providing
management a quantitative basis for taking decision regarding operations
under its control
6. Applied decision theory. It uses scientific, mathematical and logical means
to take decisions.
A Problem is any variation between what was planned and what is actually
have/produced.
Definition
Decision making is the process of selecting or choosing based on some criteria,
the best among the alternatives.
12
The decision making process: Steps in the process of rational decision-
making are:
1. Identify and define the problem
Problem is a necessary condition for a decision, i.e. here would be no need
for decisions if problems did not exist.
2. Determine the set of alternative solutions.
3. Determine the criteria to evaluate alternatives.
=>Identifying those characteristics that are important in making the
decision.
4. Analyze the alternatives.
==>Based on the advantages and disadvantages of each alternative.
5. Select the best alternative
==> Select the best alternative that suits to solve our decision problem. In
selecting the best alternative, factors such as risk, timing and limiting factors
should be considered adequately
6. Implementing the solution
==> Putting the decision into action
7. Establishing a control, follow up and evaluation system
==>On going actions need to be monitored
==>Following the decision
==>Evaluate the results and determine if a satisfactory solution has been
obtained.
13
Example: If you decide to invest your money in saving account in the
Commercial Bank of Ethiopia, You are certain that you will earn three percent
interest.
Under this situation, one may have factual information, but it may be incomplete.
Example: If we gamble by tossing a fair coin, the probability that a tail will turn up is
50%.
1.Model development
Model is a representation of real objects/situations
14
Following are types of models:
a. Physical (icon) model
This is the representation of the situation, problem or object.
It is also called Static Model. It is given in two or three dimensions. It is a
representation of the real object.
Example:
The structure of an atom
Model of an airplane
Photograph of a machine
Layout drawing of a factory
Glob
b . Analogue Models:
These are abstract models mostly showing inter and intra relationships
between two or more parameters.
For example:
It may show the relationship between an independent variable (input) with
that of a dependent variable (output). For instance; histogram, frequency
table, cause-effect diagram, flow charts, Gantt charts, price-demand graph,
world map and others.
:Is two dimensional.
2. Max.Z=3000x1 +2500x2
Subject to:
2x1+x2 < 40
x1+3x2 < 45
x1 < 12
x1 , x2 > 0
Objective Function:
15
A mathematical statement of the goal of an organization, stated as intent to
maximize or to minimize some important quantity such as profits or costs.
Constraint:
A restriction on the resources available to a firm (stated in the form of an
inequality or an equation.)
2x1+x2 < 40
x1+3x2 < 45 Are constraints
x1 < 12
x1, x2 > 0 x1, x2 > 0 is non-negativity constraint
2. Data presentation
Data represent the values of inputs to the model.
Max.Z=3000x1 +2500x2
Subject to:
2 x1+x2 < 40
x1+3x2 < 45
x1 < 12
x1, x2 > 0
16
process. The classical example of trial and error method is Linear
Programming
Then the next step after iteration is model testing and validation.
CHAPTER II
LINEAR PROGRAMMING
In general, linear programming models help managers determine solutions (i.e., make
decisions) for problems that will achieve some objective in which there are
17
restrictions, such as limited resources or a recipe or perhaps production guidelines. For
example, you could actually develop a linear programming model to help determine a
breakfast menu for yourself that would meet dietary guidelines you may have set, such
as number of calories, fat content, and vitamin level, while minimizing the cost of the
breakfast. Manufacturing companies develop linear programming models to help
decide how many units of different products they should produce to maximize their
profit (or minimize their cost), given scarce resources such as capital, labor, and
facilities.
Diagrammatically,
Resource
constraints
Objectives Constraints
Non-negativity
Constraints
Optimization
Maximization Minimization
LP is a method for choosing the best alternative from a set of feasible alternatives
To apply LP, the following conditions must be satisfied:
a. Objective Function: Is the goal or objective of a management, stated as an intent
to maximize or to minimize some important quantity such as profits or costs.
b. Constraints: Are limitations or restrictions imposed by the problems. And
constraints include:
1. Resource constraints: Are restrictions that should be clearly identifiable and
measurable in quantitative terms, which arise from limitation of available resources.
18
Raw materials availability
Labor power
Market demand, etc
2.1. FORMULATION OF LP
In formulating linear programming model, the model developer /
Analyst should consider the assumptions and components of the
model.
19
Decision variables: are the variables whose values are unknown and are searched
Decision variables are mathematical symbols that represent levels of activity.
Constraints: The model constraints are also linear relationships of the decision
variables; they represent the restrictions placed on the firm by the operating
environment. The restrictions can be in the form of limited resources or restrictive
guidelines. For example, only 40 hours of labor may be available to produce radios
during production. The actual numeric values in the objective function and the
constraints, such as the 40 hours of available labor, are parameters. Parameters are
numerical values that are included in the objective functions and constraints
Example:
A Maximization Problem
==>Maximize Z with inequalities of constraints in < form
20
Example: Consider two models of color TV sets; Model A and B, are produced by a
company to maximize profit. The profit realized is $300 from A and $250 from set B.
The limitations are
a. availability of only 40hrs of labor each day in the production department.
b. a daily availability of only 45 hrs on machine time
c. ability to sale 12 set of model A.
How many sets of each model will be produced each day so that the total profit will
be as large as possible?
Labor hr. 2 1 40
Machine hr. 1 3 45
Marketing hr. 1 0 12
Solution
1. Formulation of mathematical modeling of LPP
Max Z=300X1 +250X2
St:
2X1 +X2< 40
X1 +3X2< 45
LPP Model
X1 < 12
X1, X2 >0
2. Convert constraints inequalities into equalities
2X1 +X2 = 40
X1 +3X2= 45
X1 = 12
2X1 +X2 = 40
40 X1 = 12==> (12,X0)
1=12
X1 +X2 = 45
X1, X2 =0
15 B
4. Identify the feasible area of the solution which satisfies all constrains.
5. Identify the corner points in the feasible region
A (0, 0), B (0, 15), C (12, 11) and D (12, 0)
6. Identify the optimal point
7. Interpret the result
Interpretation:
12 units of product A and 11 units of product B should be produced so that the total
profit will be $6350.
Exercise:
A manufacturer of light weight mountain tents makes two types of tents, REGULAR
tent and SUPER tent. Each REGULAR tent requires 1 labor-hour from the cutting
department and l labor-hours from the assembly department. Each SUPER tent
requires 2 labor-hours from the cutting department and 4 labor-hours from the
assembly department .The maximum labor hours available per week in the cutting
department and the assembly department are 32 and 84 respectively. Moreover, the
distributor, because of demand, will not take more than 12 SUPER tents per week. The
manufacturer sales each REGULAR tents for $160 and costs$110 per tent to make.
Where as SUPER tent ales for $210 per tent and costs $130 per tent to make.
Required:
A. Formulate the mathematical model of the problem
22
B. Using the graphic method, determine how many of each tent the company should
manufacture each tent the company should manufacture each week so as to
maximize its profit?
C. What is this maximum profit assuming that all the tents manufactured in each
week are sold in that week?
Solution
_____________________________________________________________________
Labor hours per tent
Department REGULAR (X1) SUPER(X2) Maximum labor-hours available
per week
_____________________________________________________________________
Cutting department 1 2 32
Assembly department 3 4 84
Selling price per tent $160 $210
Cost per tent $110 $130
Profit per tent $50 $80
*The distributor will not take more than 12 SUPER tents per week. Thus, the
manufacturer should not produce more than 12 SUPER tents per week.
Let X1 =The No of REGULAR tents produced per week.
X2 =The No of SUPER tents produced per week.
X1 and X2 are called the decision variables
……….Non-negativity constraints
X2
X1 =0
21
Corners Coordinates MaxZ=50 X1 +800X2
A o (0, 0) $0
B (0, 12) $960
C 16 (8, 12) $1360
B (0, 12)
C(8,12) D (20, 6) X2 =0 23
Feasible
Region
X1
A(0,0) E (28, 0) 32
D (20, 6) $1480
E (28, 0) $1400
Interpretation:
The manufacturer should produce and sale 20 REGULAR tents and 6 SUPERS tents
to get a maximum weekly profit of $1480.
B Minimization Problem
==>Minimize Z with inequalities of constraints in > form
Example:
Suppose that a machine shop has two different types of machines; machine 1 and
machine 2, which can be used to make a single product .These machine vary in the
amount of product produced per hr., in the amount of labor used and in the cost of
operation.
Assume that at least a certain amount of product must be produced and that we
would like to utilize at least the regular labor force. How much should we utilize
each machine in order to utilize total costs and still meets the requirement?
Solution
________________________________________________________________
Resource used
Machine 1 (X1) Machine (X2) Minimum required hours
_____________________________________________________________________
LPP Model
X2
X1equation:
Constraint =0
A (0, 20/3) 20X1 +15X2=100 ==> (0, 20/3) and (5, 0)
2X1+3X2=15 ==> (0, 5) and (7.5, 0)
X1 X2> 0
Feasible Region
B (2.5, 3.33)
X2 =0 24
X1
5 C (7.5, 0)
______________________________________________________________________________________________
Corners Coordinates MinZ=25 X1 + 30X2
A (0, 20/3) 200
Exercise:
A company owns two flour mills (A and B) which have different production
capacities for HIGH, MEDIUM and LOW grade flour. This company has entered
contract supply flour to a firm every week with 12, 8, and 24 quintals of HIGH,
MEDIUM and LOW grade respectively. It costs the Co. $1000 and $800 per day to run
mill A and mill B respectively. On a day, mill A produces 6, 2, and 4 quintals of
HIGH, MEDIUM and LOW grade flour respectively.
Mill B produces 2, 2 and 12 quintals of HIGH, MEDIUM and LOW grade flour
respectively. How many days per week should each mill be operated in order to meet
the contract order most economically standardize? Solve graphically.
Solution:
No of days per week of Minimum flour in
Mil A (X1) Mill B(X2) quintals
HIGH Capacity (in quintal) 6 2 12
MEDIUM Capacity (in quintal) 2 2 8
LOW Capacity (in quintal) 4 12 24
$1000 $800
25
Constraint equation:
X2
X1 =0
6 6X1+2 X2=12
2X1+2 X2=8
4 FR
4X1+12 X2=24
(1, 3)
(3, 1)
X2 =0
X1
2 4 6
Note:
-In maximization problems, our point of interest is looking the furthest point from the
origin.
-In minimization problems, our point of interest is looking the point nearest to the
origin.
26
2.3. SPECIAL CASES IN GRAPHICS METHODS
1. Redundant Constraint
If a constraint when plotted on a graph doesn’t form part of the boundary making
the feasible region of the problem that constraint is said to be redundant.
Example:
A firm is engaged in producing two products A and B .Each unit of product A
requires 2Kg of raw material and 4 labor-hrs for processing. Where as each unit of
product B requires 3Kg of raw materials and 3hrs of labor. Every unit of product
A requires 4 hrs for packaging where as B needs 3.5hrs. Every week the firm has
availability of 60Kg of raw material, 96 labor-hours and 105 hrs in the packaging
department.
[
27
1 unit of product A sold yields $40 profit and 1 unit of B sod yields $35 profit.
Required:
a. Formulate this problem as a LPP
b. Find the optimal solution
Solution
__________________________________________________________________
Products Resource available
Resources A B per week
_____________________________________________________________________
Raw materials (Kg) 2 3 60
Labor (hr) 4 3 96
Packaging (hr) 4 3.5 105
Profit per unit $40 $35
X2
(0, 32)
X1
A (0, 0) D (24, 0) (26, 0) (30, 0)
28
The packaging hr is redundant.
Interpretation:
The company should produce and sale 18 units of product A and 8 units of product B
per week so as to get a maximum profit of 1000.
By this production plan the entire raw material will be consumed.
2X1 +3X2 <60
2(18) +3(8) =60
60=60==> N o idle or unused raw material
4X1 +3X2 <96
4(18) +3(8) <96
96=96 ==>the entire labor hour will be consumed
4X1 +3.5X2 <105
100<105==>There is to be idle or unused capacity of 5hrs in the packaging
department.
Note:
The packaging hour’s constraint does not form part of the boundary making the
feasible region. Thus, this constraint is of no consequence and is therefore, redundant.
The inclusion or exclusion of a redundant constraint does not affect the optimal
solution of the problem.
Example:
The information given below is for the products A and B.
29
_____________________________________________________________________
Machine hours per week Maximum available
Department Product A Product B per week
_____________________________________________________________________
Cutting 3 6 900
Assembly 1 1 200
Profit per unit $8 $16
_____________________________________________________________________
Assume that the company has a marketing constraint on selling products B and
therefore it can sale a maximum of 125units of this product.
Required:
a. Formulate the LPP of this problem
b. Find the optimal solution
Solution:
Let X1 =The No of units f product A produced per week
X2 =The No of units f product B produced per week
a. The LPP Model of the problem is:
X2 X1=0
(0, 200)
FR X2=0
A (0, 0) X1
(300,0)
30
C (50, 125) 2400
D (100, 100) 2400
E (200, 100) 1600
Interpretation:
Both C and D are optimal solutions. Any point on the line segment CD will also lead
to the same optimal solution.
==>Multiple optimal solutions provide more choices for management to reach their
objectives.
3. Infeasible Solution
A solution is called feasible if it satisfies all the constraints and the constraints and
non-negativity condition. However, it is sometimes possible that the constraints may
be inconsistent so that there is no feasible solution to the problem. Such a situation is
called infeasibility.
Example:
MaxZ=20X1+30X2
St:
2X1+X2< 40
4X1+X2< 60
X1 > 30
X1, X2 > 0
Solution:
X2 X1=0
(0, 60) X1=30
(0, 40)
X2=0
X1
31
4X1+X2= 60
2X1+X2= 40
Note:
-In the above graph, there is no common point in the shaded area.
-All constraints cannot be satisfied simultaneously and there is no feasible solution to
the problem.
4. Mixed constraints
Example:
ABC Gasoline Company has two refineries with different production capacities.
Refinery A can produce 4,000gallons per day of SUPER UNLEADD GASOLINE, 2000
gallons per day of REGULAR UNLEADED GASOLINE and 1000 gallons per day of
LEADED GASOLINE. On the other hand, refinery B can produce 1000 gallons per
day of SUPER UNLEADED, 3000 gallons per day of REGULAR UNLEADED and
4,000 gallons per day of LEADED.
The company has made a contract with an automobile manufacturer to provide 24000
gasoline of SUPER UNLEADED, 42000 gallons of REGULAR UNLEADED and 36000
gallons of LEADED .The automobile manufacturer wants delivery in not more than
14 days.
The cost of running refinery A is $1500 per day and refinery B is $2400 per day.
Required:
a. Formulate this problem as a LPP
b. Determine the number of days the gasoline company should operate each refinery
in order to meet the terms of the above contract most economically.(i.e. At a
minimum running cost)
32
c. Which grade of gasoline would be over produced?
Solution:
_____________________________________________________________________
Production per day (in gallons) Contract with an automobile manufacturer
Grade of gasoline A B
_____________________________________________________________________
MinZ=1500X1+2400X2
St:
4000X1+1000X2>24000
2000X1+3000X2>42000
1000X1+2000X2> 36000
X1 < 14
X2< 14
X1, X2 > 0
==>T o simplify the problem divide by 1000 the constraints
MinZ=1500X1+2400X2
St:
4X1+1X2>24
2X1+3X2>42 Delivery time: X1=14
SUG: 4X 1+X2 =24
X +4X > 36
1 2
X1 < 14
A (2.5, 14) X2< 14 B (14, 14) Delivery time: X2=14
X1, X2 > 0
FSS
D (12, 6)
LG: X1+4X2=36
33
RUG: 2X1+3X2 =42
(6, 0) (14, 0) (21, 0) (36, 0)
Note: Point A, B, C, and D are solved by elimination-substitution method
________________________________________________________________
Corners Coordinates MaxZ=1500X1 + 2400X2
A (2.5, 4) $37350
B (14, 14) 54600
C (14, 5.5) 34200
D (12, 6) 32400
E (3, 12) 33300
_________________________________________________________________
Interpretation:
The oil company should operate refinery A for 12 days and refinery B for 6 days at a
minimum operating cost of $32,400.
c. Is there any over production
SUG: 4000X1+1000X2>24000
4000(12) +1000(6)>24000
54000 > 24000
Therefore, 30,000 gallons over production
RUG: 2000X1+3000X2>42000
2000(12) +3000(6)>42000
42000 > 42000
Therefore, there is no over production of RUG
LG: 1000X1+4000X2>36000
1000(12) +1000(6)>36000
36000 > 36000
There fore, No over production of LG
5. Unbounded Solution
34
When the value of decision variables in LP is permitted to increase infinitely without
violating the feasibility condition, then the solution is said to be unbounded .Here,
the objective function value can also be increased infinitely. However, an unbounded
feasible region may yield some definite value of the objective function.
Example:
Use the graphical method to solve the following LPP.
1. Max.Z=3X1+4X2
St:
X1-X2<-1==> -X1+X2>1 since the quantity solution is positive
-X1+X2<0
X1, X2 > 0
X2 X1-X2 =-1
X1+X2 =0
Unbounded
1 Feasible Region
X1
Fig: Unbounded Solution
2. Max.Z=3X1+2X2
St:
X1-X2<1
X1+X2<3
X1, X2 > 0
X2
A(0,3) Unbounded
Feasible Region
X1-X2=1
B (2, 1)
X1+X2=3
X1 35
Note here that the two corners of the region are A(0,3) and .B(2,1).The value of
MaxZ(A)=6 and MaxZ(B)=8. But there exist number of points in the shaded region for
which the value of the objective function is more than 8.For example, the point (10,
12) lies in the region and the function value at this point is 70 which is more than 8.
Remark:
An unbounded solution does not mean that there is no solution to the given LPP, but
implies that there exits an infinite number of solutions.
Exercise:
Use graphical method to solve the following LPP.
1. Max.Z=7/4X1+3/2X2 2. Max.Z=3X1+2X2
St: St:
8 X1+5X2 < 320 -2X1+3X2 < 9
4X1+5X2 < 20 X1-5X2 > -20
X1 > 15 X1, X2 > 0
X2> 10
X1, X2 > 0
Answer: No feasible solution Answer: Unbounded solution
3. Max.Z=3X1+2X2 4.Max.Z=X1+X2
St: St:
X1-X2 < 1 X1+X2 < 1
X1+X2> 3 -3X1+X2> 3
X1, X2> 2 X1, X2> 0
Answer: Unbounded solution Answer: Unbounded solution
5. Max.Z=6X1-4X2 6.Max.Z=X1+1/2X2
St: St:
2X1+4X2 < 4 3X1+3X2 < 12
4X1+8X2> 16 5X1 < 10
X1, X2 > 0 X 1 + X2 >8
Answer: Infeasible solution -X1 + X2 >4
X1, X2 > 0
Answer: Infeasible solution
Exercise
36
I. Solve the following LP problems using the graphical method.
1. Max.Z=15X1-10X2 2.Max.Z=2X1+X2
St: St:
4X1+6X2 < 360 X1+2X2 < 10
3X1+0X2< 180 X1 +X2 < 6
0X1+5X2< 280 X1 - X 2 < 2
X1, X2 > 0 X1 -2X2 < 1
Answer: X1=60 , X2 =20 X1, X2 >0
and Max.Z=1,100 Answer: X1=4, X2 =2
and Max.Z=10
3. Max.Z=10X1+15X2 4.Min.Z=3X1+2X2
St: St:
2X1+X2 < 26 5X1+X2 > 10
2X1+4X2< 56 X1 +X2 > 6
-X1+X2< 5 X1 + 4 X2 > 12
X1, X2 > 0 X1, X2 >0
Answer: X1=4 , X2 =2 Answer:X1=1,X2=5
and Max.Z=230 and Min.Z=13
4. Min.Z=-X1+2X2 4.Min.Z=20X1+10X2
St: St:
-X1+3X2 < 26 X1+2X2 <40
X1 +X2 < 6 3X1 + 4 X2 > 30
X1-X2< 2 4X1+ 3X2> 60
X1, X2 > 0 X 1, X2 >0
Answer:X1=2 , X2 =0 Answer:X1=6,X2=12 and
Min.Z=-2 and Min.Z=240
II.A manufacturer produces two different models; X and Y, of the same product .The
raw materials r1 and r2 are required for production. At least 18 Kg of r1 and 12 Kg of r2
must be used daily. Almost at most 34 hours of labor are to be utilized .2Kg of r1 are
needed for each model X and 1Kg of r1 for each model Y. For each model of X and Y,
1Kg of r2 is required. It takes 3 hours to manufacture a model X and 2 hours to
manufacture a model Y. The profit realized is $50 per unit from model X and $30 per
unit from model Y. How many units of each model should be produced to maximize
the profit?
Answer: 10 units of model X, 2 units of model Y and the maximum profit is $ 560.
37
III.A manufacturing firm produces two machine parts P1 and P2 using milling and
grinding machines .The different machining times required for each part, the
machining times available on different machines and the profit on each machine part
are as given below:
____________________________________________________________________
Manufacturing time Maximum time
required (min) available per week (min)
Machine P1 P2
_____________________________________________________________________
Lathe 10 5 25,000
Milling Machine 4 10 2000
Grinding Machine 1 1.5 450
Profit per unit ($) $50 $100
_____________________________________________________________________
Determine the number of pieces of P1 and P2 to be manufactured per week to
maximize profit.
Answer:X1=187.5 , X2 =125 and Max.Z=21,875
IV.A person requires 10, 12 and 12 units of chemicals A, B and C respectively for his
garden. A liquid product contains 5, 2 and 1 units of A, B and C respectively per jar.
A dry product contains 1, 2 and 4 units of A, B and C per carton. If the liquid product
sells for $3 per jar and the dry product sells $2 per carton, how many of each should
be purchased in order to minimize cost and meet the requirement?
Answer: 1 Unit of liquid, 5 units of dry product and Min.Z=$8
SIMPLEX METHOD
INTRODUCTION
The graphical method to solving LPPs provides fundamental concepts for
fully understanding the LP process. However, the graphical method can
handle problems involving only two decision variables (say X1 and X2).
38
another basic feasible solution improving the solution each time until the optimal
solution is reached at.
Note:
The simplex method starts with a corner that is in the solution space or
feasible region and moves to another corner of the solution space improving
the value of the objective function each time until optimal solution is reached
at the optimal corner.
Scope of solution of LPP by simplex method
Example:
Solve the problem using the simplex approach
Max.Z=300x1 +250x2
Subject to:
2x1 + x2 < 40 (Labor)
x1+3x2 < 45 (Machine)
x1 < 12 (Marketing)
x1, x2 > 0
Solution
Step 1
Formulate LPP Model
Step 2
39
Standardize the problem
i.e Convert constraint inequality into equality form by introducing a variable
called Sack variable.
Slack Variables:
A sack variable(s) is added to the left hand side of a < constraint to covert the
constraint inequality in to equality. The value of the slack variable shows
unused resource.
Slack variables represent unused resource or idle capacity. Thus, they don’t
produce any product and their contribution to profit is zero.
Slack variables are added to the objective function with zero coefficients.
Let say that s1, s2 and s3 be unused labor, machine and marketing hours,
respectively.
Step 3
Obtain the initial simplex tableau
To represent the data, the simplex method uses a table called the simplex table
or the simplex matrix.
==> In constructing the initial simplex tableau, the search for an optimal
solution begins at the origin. Indicating that nothing is produced;
Thus, first assumption, No production implies that x1 =0 and x2=0
40
0 +0s1 +0 s2+ s3= 12
s3= 12 – Unused Marketing hrs.
Therefore, Max.Z=300x1 +250x2 + 0 s1 +0 s2+ 0 s3
=300(0) +250(0) + 0(40) +0(45) + 0(12)
=0
Note:
In general, whenever there are n variables and m constraints (excluding the
non-negativity), where m is less than n (m<n), n-m variables must be set equal
to zero before the solution can be solved algebraically.
a. Basic variables are variables with non-zero solution values.
Or: basic variables are variables that are in the basic solution. Basic
variables have 0 values in the Cj-Zj row.
b. Non-basic variables are variables with zero solution values.
Or: non-basic variables are variables that are out of the solution.
==>n=5 variables (x1 , x2, s1, s2, and s3) and m=3 constraints (Labor, machine
and marketing constraints), excluding non-negativity.
Therefore, n-m=5-3=2 variables(x1 and x2) are set equal to zero in the 1st
simplex tableau. These are non-basic variables. 3 Variables (s1, s2, and s3) are
basic variables (in the 1st simplex tableau) because they have non-zero solution
variables column
values.
Real or decision
Basic or Solution
Profit per unit
variable column
Step 3
column
Slack variables
column
Cj 300 250 0 0 0
Constraint
equation rows
Gross
41 Profit row
40 R1
0 S1 2 1 1 0 0
45 R2
0 S2 1 3 0 1 0
0 S3 1 0 0 0 1 12 R3
Zj 0 0 0 0 0 0
Cj - Zj 300 250 0 0 0
Step 4:
Choose the “incoming” or “entering” variables
Note:
The entering variable is the variable that has the most positive value in the Cj
- Zj row also called as indicator row. Or the entering variable is the variable
that has the highest contribution to profit per unit.
a. X1 in our case is the entering variable
b. The column associated with the entering variable is called key or pivot
column ( X1 column in our case )
Step 5:
Choose the “leaving “or “outgoing” variable
==> In this step, we determine the variable that will leave the solution for X1
(or entering variable)
Note:
The row with the minimum or lowest positive (non-negative) replacement
ratio shows the variable to leave the solution.
Note: RR>0
The variable leaving the solution is called leaving variable or outgoing
variable.
42
The row associated with the leaving variable is called key or pivot row (s3
column in our case)
The element that lies at the intersection of the pivot column and pivot row is
called pivot element(No 1 in our case)
Step 6:
Repeat step 3-5 till optimum basic feasible solution is obtained.
Or: repeat step 3-5 till no positive value occurs in the Cj - Zj row.
Note:
Divide each element of the pivot row by the pivot element to find new
values in the key or pivot row.
Perform row operations to make all other entries for the pivot column equal
to zero.
2nd simplex tableau
Cj 300 250 0 0 0
SV X1 X2 S1 S2 S3 Q
0 S1 0 1 1 0 -2 16 R’1=R1-2R3
33
0 S2 0 3 0 1 -1 R’2=R2-R3
300 X1 1 0 0 0 1 12 R’3=R3
Zj 300 0 0 0 300 3600
Cj - Zj 0 250 0 0 -300
3 simplex tableau
rd
Cj 300 250 0 0 0
SV X1 X2 S1 S2 S3 Q
43
Since all the Cj - Zj < 0 optimal solution is reached at.
Therefore, X1=12, X2=11, S1=5 and Max Z=6350
Exercise:
A Juice Company has available two kinds of food Juices: Orange Juice and
Grape Juice. The company produces two types of punches: Punch A and
Punch B. One bottle of punch A requires 20 liters of Orange Juice and 5 liters
of Grape Juice.1 Bottle of punch B requires 10 liters of Orange Juice and 15
liters of Grape Juice.
From each of bottle of Punch A a profit of $4 is made and from each bottle of
Punch B a profit of $3 is made .Suppose that the company has 230 liters of
Orange Juice and 120 liters of Grape Juice available
Required:
a. Formulate this problem as a LPP
b. How many bottles of Punch A and Punch B the company should produce in
order to maximize profit? (Using the simplex method)
c. What is this maximum profit?
Solution:
Juice needed for one bottle of
Juice Punch A Punch B Juice Available
__________________________________________________________
Orange Juice (lt) 20 10 230
Grape Juice (lt) 5 15 120
Profit per tent $4 $3
Let X1= the N of bottles of punch A produced.
o
LPP Model
Max Z=4X1 +3X2
St:
20X1 +10X2 < 230 Orange Constraint
5X1 +15X2 < 120 Grape Constraint
X1, X2 > 0 Non-negativity constraint
Standard form
Max.Z=4x1 +3x2 + 0 s1 +0 s2+ 0 s3
St:
44
20 x1+3x2 + s1 +0 s2 = 230
Standard form
5x1+15x2 +0s1 + s2+ = 120
x1 , x2 , s1 , s2, >0
Where, s1 =Unused orange juice
s2 =Unused grape juice
Cj 4 3 0 0
SV X1 X2 S1 S2 Q
0 S1 20 10 1 0 230
0 S2 5 15 0 1 120
Zj 0 0 0 0 0
Cj - Zj 4 3 0 0
Cj 4 3 0 0
SV X1 X2 S1 S2 Q
Cj 4 3 0 0
SV X1 X2 S1 S2 Q
4 X1 1 0 3/50 -1/25 9
0 X2 0 1 -1/50 2/25 5
Zj 4 3 0.12 0.08 51
Cj - Zj 0 0 - 0.12 -0.08
45
X1= 9 bottles of punch A
X2= 5 bottles of punch B
s1 =0
s2 =0
MaxZ=$51
Exercise:
Solve the following LPPs using the simplex method
1. Max.Z=3x1 +5x2 2. Max.Z=20x1 +10x2
Subject to: Subject to:
x2 < 6 5x1+4x2 < 250
3x1+2x2 < 18 2x1+5x2 < 150
x1, x2 >0 x1, x2 >0
Answer: Answer:
x1=2, x2 =6, s1 =0 , s2=0 and MaxZ=$36 x1=50, x2 =0, s1 =0 , s2=50 and MaxZ=$1,000
46
2. 5x1+3x2 < 45
x1= 12 and x2= 11==> 5x1+3x2+s = 45 ==>5(12)+3(11)+s = 45
==> s=0 unused resource (No idle resource)
3. 5x1+2x2<20
x1= 4.5 and x2= 2==> 5x1+2x2- s = 20 ==>5(4.5)+2(2)-s = 20
==> s=6 unused resource
4. 2x1+x2 >40
x1= 0 and x2= 0(No production)==> 5x1+2x2- s = 20 ==>5(4.5)+2(2)-s = 20
==> s=-6(This is mathematically unaccepted)
Thus, in order to avoid the mathematical contradiction, we have to add
artificial variable (A)
Note:
Type of constraint To put into standard form
< --------------------------------------------- Add a slack variable
= ---------------------------------------------Add an artificial variable
> ---------------------- Subtract a surplus variable and add a slack variable
Big M-method
/Charnes Penalty Method/
The Big-M Method is a method which is used in removing artificial variables
from the basis .In this method; we assign coefficients to artificial variables,
undesirable from the objective function point of view. If objective function Z is
to be minimized, then a very large positive price (called penalty) is assigned to
each artificial variable. Similarly, if Z is to be maximized, then a very large
negative price (also called penalty) is assigned to each of these variables.
47
i. Minimization problems
-Assign +M as coefficient of artificial variable A in the objective
function Z
ii. Maximization problems:
- Assign–M as coefficient of artificial variable A in the objective
function Z
d. Coefficient of S (slack/surplus) takes zero values in the objective function Z
e. For minimization problem, the incoming variable corresponds to the
highest negative value of Cj-Zj.
f. Solution is optimal when there is no negative value of Cj-Zj.(For
minimization case)
Example:
1. Minimize Z=25x1 +30x2
Subject to:
20x1+15x2 > 100
2x1+ 3x2 > 15
x1, x2 >0
Solution
Step 1
Standardize the problem
Minimize Z=25x1 +30x2 +0s1+0s2 +MA1+MA2
Subject to:
20x1+15x2- s1+A1 = 100
2x1+ 3x2 –s2+A2 = 15
x1, x2 , s1, s2 ,A1 ,A2 > 0
Step 2
Initial simplex tableau
The initial basic feasible solution is obtained by setting x1= x2= s1= s2=0
No production, x1= x2= s1=0==>20(0) +15(0) - 0+A1 = 100 ==> A1 = 100
x1= x2= s2=0==>0(0)+3(0) - 0+A2 =15==> A2 = 15
48
Initial simplex tableau
Cj 25 30 0 0 M M
SV X1 X2 S1 S2 A1 A2 Q RR
M A1 20 15 -1 0 1 0 100
M A2 2 3 0 -1 0 1 15 15/2=7.5
100/20=5
Note:
Once an artificial variable has left the basis, it has served its purpose and can
therefore be removed from the simplex tableau. An artificial variable is never
considered for re-entry into the basis.
2nd Simplex Tableau
Cj 25 30 0 0 M
SV X1 X2 S1 S2 A2 Q
Cj - Zj 0 45/4-3/2M 5/4-1/10 M M 0
3rd Simplex Tableau
Cj 25 30 0 0
SV X1 X2 S1 S2 Q
Note:
As long as an “A” variable is available in the solution variable column, the
solution is infeasible.
50
2. Use the penalty (Big-M) method to solve the following LPP
Min Z=5x1 +3x2
Subject to:
2x1+4x2 < 12
2x1+ 2x2 = 10
5x1+ 2x2 > 10
x1, x2 >0
Solution
Min Z=5x1 +3x2 +0s1+0s2 +MA1+MA2
Subject to: If no production
2x1+4x2+s1 = 12 ==>x1 =x2=0==>s1=0 (Solution Value in the initial simplex tableau)
2x1+2x2 +A1 =10 ==>x1 =x2=0==>A1 =15 (Solution Value in the initial simplex tableau)
Cj 5 3 0 0 M M
RR
SV X1 X2 S1 S2 A1 A2 Q
6
0 S1 2 4 1 0 0 0 12
M A1 2 2 0 0 1 0 10 5
M A2 5 2 0 -1 0 1 10 2
Zj 7M 4M 0 M M M 20 M
Cj - Zj 5 -7M 3- 4M 0 -M 0 0
51
Cj 5 3 0 0 M
SV X1 X2 S1 S2 A1 Q
0 S1 0 16/5 1 2/5 0 8
M A1 0 6/5 0 2/5 1 6
5 X1 1 2/5 0 -1/5 0 2
Zj 5M 6/5M +2 0 2/5M -1 M 10+6 M
Cj - Zj 0 -6/5M +1 0 -2/5M+1 0
Cj 5 3 0 0 M
SV X1 X2 S1 S2 A1 Q RR
M A1 0 0 -3/8 1/4 1 3 12
5 X1 0 0 -1/8 -1/4 0 1 -
52
Cj 5 3 0 0
SV X1 X2 S1 S2 Q
3 X2 0 1 1/2 0 1
0 S2 0 0 -3/2 1 12
5 X1 0 0 -1/2 0 4
Zj 5 3 -1 0 23
Cj - Zj 0 0 1 0
Solution
Initial Simplex tableau
Cj 2 1 3 0 -M
RR
SV X1 X2 X3 S1 A1 Q
0 S1 1 1 2 1 0 5 2.5
-M A1 2 3 4 0 1 12
3
Zj -2M -3M -4M 0 -M -12 M
Cj - Zj 2M+2 3M+1 4M+3 0 0
53
2nd simplex tableau
Cj 2 1 3 0
SV X1 X2 X3 S1 A1 Q
3 X3 1/2 1/2 1 1 0 5
-M A1 2 3 4 0 1 12
Zj 3/2 -M +3/2 3 2M+3/2 -M -2M+15/2
Cj - Zj 1/22 M-1/2 0 -2M-3/2 0
RR
54
Cj 2 1 3 0
RR
SV X1 X2 X3 S1 Q
6
3 X3 1/2 0 1 3/2 1.5
1 X2 0 1 0 -2 2 Not defined
Cj 2 1 3 0
SV X1 X2 X3 S1 Q
3 X1 1 0 2 3 3
1 X2 0 1 0 -2 2
Zj 2 1 4 4 8
Cj - Zj 0 0 -1 -4
55
2x1 + 5x2 > 150
3x1+ x2 > 120
x1, x2 >0
Ans: x1=450/13, x2 =210/13 and Min Z=$540
Note:
To get an initial feasible solution
56
Subject to:
x2 < 4
x1+ x2 = 9
6x1+ 2x2 >24
x1, x2 >0
Standard form
Max.Z=6x1 +8x2 + 0 s1 +0 s2+ 0 s3-M A2- M A3
St:
x2 + s1 =4
x1+ x2 + A2 =9
6x1+2x2 - s3 + A3 =24 Standard form
All Variables >0
Cj 6 8 0 0 -M -M
SV X1 X2 S1 S3 A2 A3 Q
0 S1 0 1 1 0 0 0 4
-M A2 1 1 0 0 1 0 9
-M A3 6 2 0 -1 0 1 4
Zj -7M -3M 0 +M -M -M 24
Cj - Zj 7M +6 3M+8 0 -M 0 0
Note:
For the initial basis, use artificial variables for constraints that have them.
Otherwise, use a constraint slack variable. Hence, surplus variables will not
appear in an initial solution.
57
/ Or Tie for entering variables/
In order to break this tie, the selection for the key column (entering variable)
can be made arbitrary. However; the number of solution can be minimized by
adopting the following rules:
1. If there is a tie between two decision variables, then the selection can be
made arbitrary.
2. If there is a tie between a decision variable and a slack (or surplus)
variable, then select the decision variable to enter into basis first.
3. If there is a tie between slack or surplus variable, then selection can be
made arbitrary.
Example:
If the equation is max Z:
Cj
SV X1 X2 S1 S3 Q
Zj
Cj - Zj 5 2 5 0
3. Infeasibility
A situation with no feasible solution may exist if the problem was formulated
improperly.
Infeasibility comes about when there is no solution that satisfies all of the
problem’s constraints.
58
In the simplex method, an infeasible solution is indicated by looking at the
final tableau .In it, all Cj - Zj row entries will be the proper sign to imply
optimality, but an artificial variable (A) will still be in the solution mix.
Example:
Minimization case
Cj 5 8 0 0 M
SV X1 X2 S1 S2 A2 Q
5 X1 1 1 -2 3 0 200
8 X2 0 1 1 2 0 100
M A2 0 0 0 -1 1 20
Zj 5 8 -2 31-M M 1,800+200M
Cj - Zj 0 0 2 M-31 0
Even though all Cj - Zj are positive or 0(i.e the criterion for an optimal solution
in a minimization case), no feasible solution is possible because an artificial
variable (A2) remains in the solution mix.
4. Unbounded Solutions
No finite solution may exist in problems that are not bounded .This means
that a variable can be infinitely large without violating a constraint.
59
In the simplex method, the condition of unboundedness will be discovered
prior to reaching the final tableau. We will note the problem when trying to
decide which variable to remove from the solution mix.
Example:
Maximization case
Cj 6 9 0 0
SV X1 X2 S1 S2 Q
RR
9 X2 -1 1 2 0 30 30/-1=-30
Unacceptable RRs
0 S2 -2 0 -1 1 10 10/-2=-5
Zj -9 9 18 0 270
Cj - Zj 15 0 -18 0
Pivot Column
The solution in the above case is not optimal because not all Cj - Zj entries are
0 or negative, as required in a maximization problem. The next variable to
enter the solution should be X1.To determine which variable will leave the
solution, we examine the ratios of the quantity column numbers to their
corresponding numbers in the X1 or pivot column. Since both pivot column
numbers are negative, an unbounded solution is indicated.
5. Degeneracy
60
/Tie for leaving basic variable (key row)/
If there is a tie for the smallest ratio, this is a signal that degeneracy exists.
Degeneracy can occur right in the first (initial tableau).This normally happens
when the number of constraints is less than the number of variables in the
objective function. Problem can be overcome by trial and error method.
Cj 5 8 2 0 0 0
Q
SV X1 X2 X3 S1 S2 S3 RR
8 X2 1/4 1 1 -2 0 0 10 10/1/4=40
Zj 2 8 8 16 0 0 80
Cj - Zj 3 0 -6 -16 0 0
Example:
Maximization problem
61
Cj 3 2 0 0
SV X1 X2 S1 S2 Q
2 X2 3/2 1 1 0 6
0 S2 1 0 1/2 1 3
Zj 3 2 2 0 12
Cj - Zj 0 0 -2 0
MaxZ=3X1+2X2
X1=0, X2=6, S2=3 and MaxZ=12 or: X1=3, X2=3/2 and MaxZ=12
Exercise:
1. Solve the following LPP by the simplex algorithm
Min Z=6x1 +8x2
Subject to:
x1+ 2x2 > 80
3x1+ x2 > 75
62
x1, x2 >0
What are the values of the basic variables at each iteration?
Which are the non-basic variables at each iteration?
Ans:X1=14, X2=33, and
MinZ=221
2. At the 3rd iteration of a particular LP maximization problem, the following
tableau is established:
Cj
SV X1 X2 X3 S1 S2 S3 Q
5 X3 0 1 1 -2 0 0 5
6 X1 1 -3 0 0 0 1 12
0 S2 0 2 0 1 1 -1 10
Zj 6 -13 5 5 0 21 97
Cj - Zj 0 16 0 -5 0 -21
What special condition exists as you improves the profit and move to the next
iteration? Proceed to solve the problem for optimal solution
Ans: Degeneracy; X1=27, X2=5, X3=0, and
MaxZ=$177
3. Covert the following constraints and objective function into the standard
form for use in the simplex method
Min Z=4x1 +x2
Subject to:
3 x1+ x2 = 3
4x1+ 3x2 > 6
x1+ 2x2 < 3
x1, x2 >0
Answer:
63
Min.Z=4x1 +x2 + 0 s1 +0 s2+ M A1+M A3
St:
3x1+ x2 + A1 =3
4x1+ 3x2 -s1 A2 = 6
+
x1+ 2x2 + s2 =3
All Variables >0
4. Solve the following LPP using simplex method
MaxZ=9x1 +7x2
Subject to:
2x1+ x2 < 40
x1+ 3x2 < 30
x1, x2 >0
Ans: X1=18, X2=4, and MaxZ=$190
5. Solve the following LPP to show that it has alterative optimal solutions.
a. MaxZ=6x1 +3x2 Ans: i. X1=4, X2=0, and MaxZ=24
Subject to: ii.X1=5/2, X2=3, and MaxZ=24
2x1+ x2 < 8
3 x1+ 3x2 < 18
x2 < 3
x1, x2 >0
64
Subject to:
x1 <5
2 x1-3x2 < 6
x1, x2 >0
b. MaxZ=3x1 +6x2
Subject to:
3x1+ 4x2 > 12
-2x1+ x2 < 4
x1, x2 >0
7. Solve the following LPP to show that it has no feasible solution.
a. MaxZ=-2x1 +3x2 Ans: X1=2, X2=0, A1=2 and MaxZ=4-2M
Subject to:
x1 - x2 > 4
x1+ x2 < 6
x1 <2
x1, x2 > 0
b. MaxZ=3x1 +3x2 Ans: X1=0, X2=2, A2=2 and MaxZ=4-4M
Subject to:
2x1+ x2 < 2
3x1 + 4x2 > 12
x1, x2 >0
Assignment 1
1. A workshop prepared two articles A and B .The time required at different
stages and profit per unit are shown below. Formulate the LP model
Work
Cutting Machine Packing Profit per unit($)
center product
A 2 1 1 50
B 1 2 0.5 60
Total capacity 80 100 50
65
2. A farmer use his land to produce rice and wheat .Labor required per acre
and profit per acre given below. Formulate the LP model
Material(Kg/unit) 1 2 10Kg
Labor(Hr/unit) 6 6 36Hr
Profit 4 5
In addition, because of demand, a maximum of 4 units of container K
units of be produced. Obtain the optimal solution using graphical
method.
66
4. Personal Mini Warehouses is planning to expand its successful Orlando
business into Tampa. In doing so, the company must determine how many
storage rooms of each size to build. Its objective and constrains follow:
Assignment 2
Solve the following LPP by simplex method
1. Max.Z=4X1+3X2 2. Max.Z=2X1+3X2
Subject to: Subject to:
X1+2X2<10 7X1+4X2<28
4X1 +3X2<24 7X1 +12X2<52
X1 , X2> 0 X1 , X2> 0
3. Max.Z=3X1+5X2
Subject to:
67
3X1+2X2<18
X1 <4
X1 , X2 > 0
4. Max.Z=3X1+2X2 +3X3 5. Max.Z=5X1-2X2+3X3
Subject to: Subject to:
2X1+X2+X3<2 2X1+2X2-X3
>2
3X1 +4X2-X3>8 3X2-
4X3>3
X1 , X2, X3> 0
X1+3X3<5
X1 , X2 ,X3>
0
6. Max.Z=X1+X2
Subject to:
2X1+X2>4
X1+7X2>7
X1+X2>0
X1 , X2 > 0
CHAPTER 3
DISTRIBUTION MODELS
One important application of linear programming has been in the area of the
physical distribution (transportation) of resources, from one place to another,
to meet a specific set of requirement.
This chapter describes two special –purpose algorithms: the transportation
model and the assignment model. Model formulation and manual solution are
covered for each of these classes of problems.
68
Both transportation and assignment problems are members of a category of
linear programming techniques called network flow problems.
3.1. TRANSPORTATION PROBLEMS
Transportation problem deals with the distribution of goods from several
points of supplies (sources) to a number of points of demands (destinations).
Consider a corporation engaged in the manufacture of products. Most of such
big corporations are of “multiple-product” and “multi-unit” organizations
having production units situated at different places. Items are produced for
sales. Sales take place at different markets which are, again located at different
places. It is not feasible to co-locate production and market. Markets are
located away from the manufacturing places. Hence products are sent to
factory warehouses set up near market outlets. Cost of product consists of
production cost and distribution cost.
Distribution cost consists of mainly the transportation cost of items from its
production (manufacturing) center to the warehouses. Transportation
techniques are designed to minimize the distribution costs. In order to identify
products, it is necessary to workout per unit distribution cost of each product.
We also know the production capacity of each product in each factory is not
fixed. The holding capacity of a warehouse or potential sales in each
marketing center is again a fixed quality which cannot be exceeded.
The characteristics of transportation problem are as follows:
1. A limited supply of one commodity is available at certain sources or origins.
2. There is a demand for the commodity at several destinations
3. The quantities of supply at each source and the demand at each destination are
constant.
4. The shipping or transportation costs per unit from each source to each destination
are assumed to be constant.
5. No shipments are allowed between sources or between destinations. All supply and
demand quantities are given in whole number or integers.
6. The problem is to determine how many units shipped from each source to each
destination so that all demands are satisfied at the minimum total shipping costs.
Uses of transportation techniques:
69
1. Reduce distribution or transportation cost
2. Improve competitiveness of product
3. Assist proper location of warehouses
3. Assist proper location of new factories or plants being planned.
4. Close down warehouses which are found costly and uneconomical.
The objective of transportation problem is:
1. To identify the optimal shipping routes-minimum cost route
2. To identify the maximum amount that can be shipped over the optimum route
3. To determine the total transformation cost or the profit of transportation
3.1.1. The Transportation Method
The solution algorithm to a transportation problem may be summarized into
the following steps:
Step 1:
Formulate the problem and set up in the matrix form
The formulation of the problem is similar to the linear programming. Here the
objective function is the total transportation cost and the constraints are the
supply and demand available at each source and destination respectively.
Step 2:
Obtain an initial basic feasible solution
There are 3 methods to find the initial feasible solution.
1. North-West Corner Method (NWCM)
2. Least Cost Method (LCM)
3. Vogel’s Approximation Method (VAM)
The initial solution obtained by any of the three methods must satisfy the
following condition:
i. The solution must be feasible
It must satisfy all the supply and demand constraints
ii. The number of positive allocations must equal to m+n-1, where m=the
number of rows (or origins or supply centers) and n= the number of
columns(or destination centers or demand centers)
Example:
m=3 origins and n=4 destinations ==>m+n-1=3+4 -1=6 (i.e. the
transportation model should have 6 occupied cells).
Note:
70
If the number of occupied cells < m+n-1==> degenerate solution will result
in.
Step 3. Test the initial solution for optimality
Testing for optimality can be made using three approaches:
i. Stepping stone approach
ii. Modified distribution method
If the current solution is optimal, then stop. Otherwise, determine the new
improved solution.
Step 4 Repeat step 3 until an optimal solution is reached
3.1.2. Linear programming formulation of the transportation problem
Example
Suppose that a firm has three factories /sources of supply/ & four
warehouses
/point of demand/. The firm's production capacity at the three factories, the
demand for the four distribution centers located at various regions & the cost
of shipping each unit from the factories to the warehouses through each route
is given as follows:
Destinations (dd) =j
Factory
Origin
W1 W2 W3 W4 Capacity
(Supply)
=i
Br.
F1 3 2 7 6 5000
7 5 2 6000
F2
3
F3 2 5 4 5 2500
Requirements of 6000 4000 2000 1500 13500
71
the
Warehouses
( Units of
demand)
Using all the above information
i. Express the following transportation problem as an LPP
Solution
Let xij =The amount of commodity to be transported form source i (i =1,2,3) to
destination j( j= 1,2,3,4).
Then the objective function of the problem (minimization of the total
transportation cost) can be formulated as:
MinZ = 3x11 +2x12 + 7x13 +6 x14 +
7x21 +5x22 +2x23 + 3x24 +
2x31+5x32 +4x33+5x34
Subject to the constraints
a. Supply constraints:
x11 +x12 +x13 +x 14 =5000 F1 supply constraint
x21 + x22 + x23 +x24 =6000 F2 supply constraint
x31 +x32 +x33+x34 = 2500 F3 supply constraint
b. Demand constraints:
x11 + x21 + x31 = 6000 W1 demand constraint
x12 + x22 + x32 = 4000 W2 demand constraint
x13 + x23 +x33 = 2000 W3 demand constraint
x14 +x24 + x34 = 1500 W4 demand constraint
xij > 0 for all i& j
In the above LPP, there are m x n = 3x4 =12 decision variables & m + n = 3+4
=7 constraints. Thus, if this problem is solved by the simplex method, then it
may take considerable computational time.
ii. The network representation of the transportation LPP is called Net work
flow
Origin Destination centers
(Sources of Supply) (Point of demand centers)
F1 50000 3 W1 6000
2
6 7
7
72
F2 6000 5 W2 4000
2
3
W3 2000
2 5
4
F3 2500 5 W4 1500
This LPP has 12 shipping routes. The objective is to identify the minimum
cost route (Least cost route).
3.2. METHODS OF FINDING INITIAL FEASIBLE SOLUTION
There are several methods available to obtain an initial feasible solution. Here
we shall discuss only three different methods to obtain the initial feasible
solution:
A. NORTH- WEST CORNER METHOD (NWCM)
This method does not take into account the cost of transportation on any
route of transportation.
The NWCM gets its name because the starting point for the allocation process
is the Upper Left-hand (Northwest) corner of the transportation table.
Therefore, allocate to the Northwest corner as many units as possible.
Northwest corner rule
The following set of principles guides the allocation:
1. Begin with the upper left hand cell (Left, upper most in the table), & allocate
as many units as possible to that cell. This will be the smaller amount of
either the row supply or the column demand. Adjust the row & column
quantities to reflect the allocation.
2. Subtract from the row supply & from the column demand the amount
allocated
3. If the column demand is now zero, move to the cell next to the right, if the
row supply is zero, move down to the cell in the next row.
If both are zero, move first to the next cell on the right then down one cell.
4. Once a cell is identified as per step (3), it becomes a northwest cell. Allocate
to it an amount as per step (1)
5. Repeat, the above steps (1) - (4) until all the remaining supply and demand
is gone.
73
Example:
1) Consider the following transportation problem:
Plant 3 40 8 70 20 18
8 7 14 34
Demand 5
a. Develop an initial feasible solution using the NWCM
b. Compute the total cost for this solution.
Solution
a. Table: Initial feasible solution
To
Store 1 Store 2 Store 3 Store 4 Supply
From
Plant 1 19 30 50 10
7
5 2
70 30 40 60
Plant 2 9
6 3
40 8 70 20
Plant 3 18
4 14
8 7 14 34
Demand 5
74
Note: NWCM does not consider the cost factor for allocation.
Exercise:
1. Determine an initial basic feasible solution to the following transportation
problem using NWCM. Compute the total cost for this solution
Destination
A B C Supply
S1 2 7 14 5
S2 3 3 1 8
S3 5 4 7 7
S4 1 6 2 14
Demand 7 9 18
Answer: X11=5, X21=2, X22=6, X32=3, X33=4, X43=4, and Total cost =$102
Note:
1. Total Supply= Total demand ===> Balanced TP
2. Total Supply ≠ total demand ===> Unbalanced TP
3. Convert the unbalanced TP into a balanced TP by using dummy
destination/dummy source.
* If total Supply > Total demand, then create a fictitious or artificial
destination called dummy destination
i.e: total Supply > Total demand===> Add dummy column
* Excess demand (Supply < demand)
- Add a dummy source
- Add a dummy row
Note: the cost of “shipments” to the dummy is usually set at zero ==> No real
cost
Example
Develop an initial feasible solution using NWCM
Table: Unbalanced transportation table
R S T Supply
A 1 2 3 100
B 4 1 5 110
75
Solution:
R S T Supply
1 2 3
A 100
80 20
4 1 5
B 110
100 10
0 0 0
Dummy 50
50
Demand 80 120 60 260
Answer:X11=80, X12=20, X22=100, X23=10, X33=50 Total cost =$270
Assignment
Consider that Harley's Sand & Gravel Pit has contracted to provide topsoil for
three residential housing developments. Topsoil can be supplied form three
different “farms" as follows:
_______________________________________________________________
__ Weekly Capacity
Farm (Cubic Yards)
A 100
B 200
C 200
________________________________________________________________
_
76
_______________________________________________________________
__
Costs per cubic yard to
From Project # 1 Project #2 Project #3
Farm A $4 $2 $8
Farm B 5 1 9
Farm C 7 6 3
_______________________________________________________________
__
Required
Develop the initial feasible solution using NWCM & compute the total cost for
this solution.
B. THE LEAST- COST METHOD (LCM) or
(LARGEST- PROFIT) METHOD
LCM is the method used a minimum cost in the allocation.
It begins a solution by sequentially assigning to the ratios or cells with the
minimum cost as many units as possible. The first allocation be made to the
cell with the lowest cost (the highest profit in a maximization case)
The Least- Cost Method yields not only an initial feasible solution but also
one that is close to optimal in small problems.
Example
1.Suppose that a firm has three factories / sources of supply /& four
warehouses/point of demand/ .The firm's production capacity at the three
factories, the demand for the four destination centers located at various
regions & the cost of shipping each unit from the factories to the warehouses
through each route is given as follows:
Destinations
Factory
W1 W2 W3 W4 Capacity
F1 3 2 7 6 5000
F2 7 5 2 3 6000
F3 2 5 4 5 2500
Demand 6000 4000 2000 1500 13500
Required:
77
a. Develop an initial feasible solution using NWCM & Compute the total cost
b. Develop an initial feasible solution using least-cost method & compute the
total cost.
Solution:
Initial feasible solution
Factory
W1 W2 W3 W4 Capacity
F1 3 2 7 6
5000
Factory 5000
F2 7 5 2 3 6000
1000 4000 1000
2 5 4 5
F3 2500
1000 1500
Demand 6000 4000 2000 1500 13500
m= 3, n =4 ==> 3+4 -1 =6 occupied cells (Feasible)
Routes Units Unit Total
From To Shipped X Cost =Cost
F1 W1 5000 3 $ 15000
F2 W1 1000 7 7000
F2 W2 4000 5 20000
F2 W3 1000 2 2000
F3 W3 1000 4 4000
F3 W4 1500 5 7500
Total transportation cost =$55,500
b.
Factory
W1 W2 W3 W4 Capacity
3 2 7 6
F1 5000
1000 4000
7 5 2 3
F2 6000
2500 2000 1500
2 5 4 5
F3 2500
2500
Demand 6000 4000 2000 1500 13500
78
From To Shipped X Cost =Cost
F1 W1 1000 3 $ 3000
F1 W2 4000 2 8000
F2 W1 2500 7 17500
F2 W3 2000 2 4000
F2 W4 1500 3 45000
F3 W1 2500 2 5000
Total transportation cost =$42,000
Solution
The 1st allocation should be made to the cell with the least-cost. Cells AD & CD
both have the lowest cost f $1. Cell AD is selected 1st because more units can be
allocated to it (70) than to cell CE (50).
Cell CF is filled in 1st since a larger quantity (120-50-70) can be placed there.
Then, the remaining requirement of 30 for column F is allocated to cell BF &
source B's supply is reduced to 30.
The initial solution by the least -cost method
D E F G Supply
Source
A Destination 1 5 3 4 100
70
B 4 2 2 5 60
30 30
C 3 1 2 4 120
50 70
Deman
70 50 100 60 280
d
79
Routes Units Unit Total
From To Shipped Cost =Cost
A D X 1 $ 70
B F 70 2 60
B G 30 5 150
C E 30 1 50
C F 50 2 140
70 Total transportation =$470
cost
R S T Supply Solution
A 1 2 3 100
80 10 10
B 4 1 5 110
110
Dummy 0 0 0 50
50
Demand 80 120 60
Total transportation cost=80x1+10x2+10x3+110x1+50x0=$240
Exercise
80
Three garment plants are available for monthly education of four styles of
men's shirts. The capacities of the three plants are 45,000, 93,000 and 60,000
shirts. The number of shirts required in style "a" through "d" are 28,000,
65,000, 35,000 & 70,000, respectively. The profits, in $ per shirt, at each plant
for each style are shown below.
Table: The garment plants' profit.
STYLE A b C D
PLANT
1 8 12 -2 6
2 13 4 3 10
3 0 7 11 8
How many shirts of each type to produce in each plant so that profit is
maximized?
Answers: Total profit= $2,119,000
(Hint: Select the largest per unit profit, first & use largest-profit method)
2. Determine an initial feasible solution to the following transportation
problem
using LCM
A B C D Supply
S1 1 5 3 3 34
Source
S2 3 3 1 2 15
S3 0 2 2 4 12
C.
S4 2 7 2 4 19
demand 21 25 17 17
VOGEL'S APPROXIMATION METHOD (VAM)
or
PENALTY METHOD
VAM is preferred to the other two methods described above. In this method
each allocation is made on the basis of the opportunity (or penalty or extra)
cost that would have incurred if allocation in certain cells with minimum unit
transportation cost were missed.
In this method allocation are made so that the penalty cost is minimized. The
advantage of this method is that it gives an initial solution which is nearer to
an optimal solution or is the optimal solution itself.
81
VAM determines the penalty for not using the minimum cost routes, where
the objective is to avoid large penalties so that the penalty from not using the
routes is minimized.
The steps in VAM are as follows:
1. Calculate penalties for each row (column) by taking the smallest & the next
smallest unit transportation cost in the same row (column). This difference
indicates the penalty or extra cost which has to be paid if one fails to
allocate to the cell with the minimum unit transportation cost
2. Select the row or column with the largest penalty & allocate as much unit as
possible in the cell having the least cost in the selected row or column
satisfying the conditions. If there is a tie in the values of penalties, it can be
broken by selecting the cell where maximum allocation can be made.
3. Adjust the supply & demand & cross out the satisfied row or column
If a row or column is satisfied simultaneously, only one of them is crossed
out & the remaining row (column) is assigned a zero supply (demand) .Any
row or column with zero supply or demand should not be used in
computing future penalties.
4. Repeat step 1 to 3 until the entire available supply at various sources &
demand at various destinations are satisfied.
Example:
1. Determine an initial basic feasible solution to the following transportation
problem using VAM. Row difference or Row penalty
or opportunity cost
2 0 - - -
Warehouse 2 2 2 2 5
A B C D Supply
Factory F1 2 2 0 4
25
5 20
F2 5 9 8 3
25
15 5 5
F3 6 4 3 2
10
10
Demand 20 15 20 5 60
Column difference 3 2 3 1
or Column penalty
or opportunity cost 3 2 - 1
1 5 - 1
82
5 9 - -
5 - - -
m= 3, n=4 ==> 3+4-1 =6 Occupied cells (feasible)
The transportation cost associated with this solution is:
Total cost= 5x2 + 20x0+15x5x9 =+95x3+10x4= $185
2. A dairy firm has three plants located in different regions. The daily milk
production at each plant is as follows:
Plant 1: 6 million liters.
Plant 2: 1 million liters, &
Plant 3: 10 million liters
Each day the firm must fulfill the needs of its four distribution centers.
Minimum requirement at each center is as follows.
Distribution center 1: 7 million liters
" " 2: 5 " "
" " 3: 3 " "
" " 4: 2 " "
Cost of shipping one million liters form each plant to each distribution
center is given in the following table in hundreds of dollar.
Distribution Center
D1 D2 D3 D4
P1 2 3 11 7
Plant
P2 1 0 6 1
P3 5 8 15 9 Find the initial basic
feasible solution by:
a. North-west corners method
b. LCM
c. VAM if the object is to minimize the total transportation cost
Answer:
a. Total cost = $11, 600
b. Total cost= $11,200
83
c.
D1 D2 D3 D4 Supply Row Penalty
P1 2 3 11 7 6 1 1 5 -
P2 1 0 6 1 1 1 - - -
P3 5 8 15 9 10 3 3 4 4
Demand 7 5 3 2
Column
Penalty
7 5 3 2
1 3 5 6
3 5 4 2
3 - 4 2
5 - 15 9
Assignment
1. Determine an initial basic feasible solution to the following transportation
problem by VAM
Destination
D1 D2 D3 D4 Supply
S1 21 16 15 3 11
Source S2 17 18 14 13 13
S3 32 27 18 41 19
Demand 6 10 12 15
2. Determine an initial feasible solution to the following transportation
problem using
a. NWCM
b. LCM, &
84
c. VAM
Destination
D1 D2 D3 D4 Supply
A 11 13 17 14 250
Source B 16 18 14 10 300
C 21 24 13 10 400
Demand 200 225 275 250
For each empty cell, the effect of changing it to an occupied cell is examined.
If any of these changes are favorable, the solution is not optimal & a new
solution must be designed. A favorable change means an increase in the value
of the objective function in maximization problems or a decrease in
minimization problems.
Optimum solution to a TP can be obtained by following two methods. These
methods are much simpler compared to simplex method of an LPP.
A. Stepping stone Method
B. Modified Distribution method (MODI Method)
A. Stepping-stone method
The Stepping-stone method is an iterative technique for moving from an
initial feasible solution to an optimal solution in transportation problems.
For the stopping- stone method to be applied to a transportation problem, one
rule about the no of shipping routes being used must be observed. The rule is:
85
“The No of occupied routes (or squares) must always be equal to one less than
the sum of the no of rows plus the no of columns."
i.e Occupied shipping routes ( squares) = N o of rows + No of columns - Non
degenerate solution.
Rules for drawing each closed loop:
1. Select an unused square (cell) to be evaluates.
2.Beginning at that cell, trace a closed loop going clockwise draw an arrow to an
occupied cell in the same row ( or column).
3. Move vertically or horizontally (but never diagonally) to another occupied
cell “stepping –over” unoccupied or occupied cells (if necessary) without changing
them. Follow the same procedure to other occupied cells until returning to the
original empty cell.
4. Begin with a plus (+) sign at the unused cell, place alternative (-) signs and plus
signs on each corner square of the closed path just traced.
i.e At each turn of the loop ( the loop may cross over itself at times), plus and
minus signs are alternately placed in the cells, starting with a + sign in an empty
cell.
5. There must be exactly one cell with a + sign and exactly one cell with a - sign
in any row or column in which the loop turns.
6. An even no of at least four cells must participate in a loop and the occupied
cells can be visited once and only once.
7. Repeat steps 1 to 4 until an improvement index has been calculated for all unused
squares (cells). If all indices computed are greater than or equal to zero, an optimal
solution has been reached (for minimization problems). If not, it is possible to
improve the current solution and decrease total shipping costs.
Note:
In a non-degenerate problem, there is only one possible way of drawing the
loop for each empty cell.
How to find the value of a cell evaluator
The value of a cell evaluator is the sum of the per unit shipping costs in the
gaining cells less the sum of the per unit shipping costs in the losing cells of
the closed loop. This evaluation process must be extended to all unoccupied
cells.
1. The test of optimality for a minimization (cost) problem:
86
If one or more of the cell evaluators is negative, the existing solution is not
optimal.
i.e.: For minimization (cost) problems, all the cell evaluators must be
positive for optimality.
Analysis of test:
Check all the empty cells and select for improvement the one with the
largest improvement potential.
If the solution is not optimal, the next step in the transportation
method is to find a better solution. The operations in this step are:
a. Identify the “incoming" cell (the empty cell to be occupied)
In a minimization case, the incoming cell is located by identifying
the most negative cell evaluator.
b. Design an improved solution
-By shifting units form cell to cell
2. The test of optimality for a maximization (profit) case:
: Is the reversed of minimization case
-If one or more of the cell evaluators is positive, the existing solution is
not optimal.
i.e: for a maximization (profit) case, all the cell evaluators must be
negative for optimality. If any cell evaluation is positive, the solution is not
optimal. Note:
A cell evaluator of 0 indicates the existence of another solution just as
good as the current solution. Thus, in the final solution, if cell
evaluators of 0 exist, this indicates the existence of multiple optimal
solutions.
If two or more cells have the same value, then either may be selected.
If two or more of the "losing" cells contain the same no of units, both
will become empty simultaneously and a “degenerate" solution will
result.
For the minimization case; when one or more cell evaluators are
negatives, the cell with the largest negative should be brought into
solution because that route has the largest potential for improvement
per unit.
87
The loop starts and ends at the selected unoccupied cell. Every corner
element of the loop must be an occupied cell.
Example:
1. Use NWCM to find initial feasible solution and test the solution for optimality.
Project Project Project ss
A B C
F1 4 2 8 100
Farm
F2 5 1 9 200
F3 7 6 3 200
dd 50 150 300 500
Solution: Initial feasible solution
88
(F3 ,B) +6-1+9-3=+11
The negative value for cell (F1, C) indicates an improved solution is possible.
For each unit we can shift into that cell, the total cost will decrease by $2. The
next question is how many units can be reallocated into that cell while
retaining the balance of supply and demand for that table?
The Stepping- stone path for cell (F1, C) is:
The + Signs in the path indicate units to be added, the - signs indicate units to
be subtracted. The limit on subtraction is the smallest quantity in a negative
position along the cell path. There are two quantities in negative positions, 50
and 100. Because 50 is the smaller quantity, that amount will be shifted in the
following manner: Subtract 50 units from each cell on the path with a - sign
and add 50 units to the quantity of each cell with a + sign in it.
With each iteration (new solution), it is necessary to evaluate the empty cells
to see if further improvements is possible.
The distribution plan after reallocation of 50 units is:
A B C ss
F1 4 2 8 100
F2 50 5 1 50 9 200
150 50
F3 7 6 200
3
Dd 50 150 300 500
89
Because none of these no is negative, this is an optimal solution. Therefore, the
total cost for the distribution plan is:
The total transportation cost = $ (50x4 +50x8 150x1+50x9 +200x3) = $1,800
2. Consider the following TP
Destination
R S T Ss
A 1 2 3 100
B 4 1 5 110
Origin
21
Dd 80 120 60 0
260
a. Obtain the basic feasible solution using VAM
b. Obtain the optimal solution
c. What is the optimal shipping cost?
Solution:
a. Initial feasible solution
To
R S T ss Opportunity cost
1 2 3 100
A 1 1 1 1
80 10 10
From
3 3 - -
B 4 1 5 110
0 - - -
Dummy 0 1100 0 50
dd 80 120 60 260
Opportunity 1 1 3
3 1 2
cost 1 2 3
1 2 -
Note: Include the dummy cells to select the opportunity cost under VAM
problems.
b. Test of optimality.
Table: Test of optimality
Unoccupied cells Cell evaluators
+4-1+2-1= +4
(B,R)
(B,T) +5-1+2-3= +3
90
+0-1+3-0= +2
(D,R)
+0-2+3-0= +1
(D,S)
Since none of the cell evaluators is negative, the above feasible solution is
optimal.
Thus, accordingly the distribution is as follows
A Supplies 80 units to warehouse R
B Supplies 10 units to warehouse S
C Supplies 10 units to warehouse T
B Supplies 110 units to warehouse S
c. The total optimal shipping cost is = $240
Exercise:
Consider the following transportation problem
B 9 11 4 15
C 20 14 8 55
Dema 25 50 45 120
nd
a. Develop an initial feasible solution using the NWCM. And compute the
total cost for this solution.
b. Evaluate the solution using the stepping-stone method. Is the solution
optimal? Explain.
c. What is the total cost for the optimal solution?
B. Modified Distribution Method (MODI Method)
It is another logarithm to test the transportation solution for optimality.
The MODI method allows us to compute improvement indices quickly for
each unused cell without drawing all of the closed paths. Because of this, it
can often provide considerable time savings over the stepping-stone method
for solving transportation problems.
91
MODI provides a new means of finding the unused route with the largest
negative improvement index. Once the largest index is identified, we are
required to trace only one closed path. Just as with the stepping-stone
approach, this path helps to determine the maximum N o of units that can be
shipped via the best unused route.
Steps in the MODI Method
The steps to evaluate unoccupied calls are as follows:
1. For an initial basic feasible solution, calculate Ui and Vj ;for rows
and columns and set
Cij = Ui + Vj for all occupied calls (i , j)
i.e: Cell cost= Raw Index +Column Index
92
minus sign (-) alternatively. Close the path back to the selected
unoccupied call.
Locate the smallest quantity allocated to a cell marked with a minus
sign. Allocate this value to the selected unoccupied cell and add it to
other occupied cells marked with plus signs and subtract it from the
occupied cells marked with minus signs.
5. Obtain a new improved solution by allocating units to the
unoccupied call and calculate the new transportation cost.
6. Test the revised solution for optimality.
Note:
Any initial feasible solution will do: NWCM, VAM Solution, or any
arbitrary assignment.
The stepping- stone method is efficient for small sized transportation
problems. For larger problems, however, the MODI method is
recommended.
Example:
1. Obtain an optimal solution to the transportation problem by MODI method
given below:
Solution
Note:
Both the MODI and the stepping - stone method will yields the same values.
Remark:
Conventionally, we begin by assigning a value of zero as the index for row 1
(U1=0). Once row index has been established, it will enable us to compute
93
column index numbers for all occupied cells in that row. Similarly, once a
column index number has been determined, index numbers for all rows
corresponding to occupied cells in that column can be determined.
Consider the initial feasible solution of the given example by NWCM as
shown below:
Initial solution, NWCM
94
(3,2) C32– (U3 +V2)=6-(-7+2)=+11
In this case, we found hat cell (1, 3) had an evaluation of -2, which represented
an improvement potential of and $ 2 per unit. Hence, an improved solution is
possible.
The stepping-stone path for call (1, 3) is:
Farm 3 7 6 3 200
200
Dema 150 300 500
nd 50
95
Kij = Cij– (Ui + Vj)
(1,2) C12– (U1 +V2)=2-(0+0)= 2
(2,1) C21 – (U2 +V1)=5-(1+4)=0
(3,1) C31– (U3 +V1)=7-(-5+4)=8
(3,2) C32– (U3 +V2)=6-(-5+0)=+11
Because none of the cell evaluators is negative, this is an optimal solution.
Thus, the total cost for the distribution plan =$1800
Assignment
1. Obtain an optimal solution to the transportation
problem by MODI method given below.
D1 D2 D3 D3 Supply
19 30 50 10 7
Farm 1
70 30 40 60 9
Farm 2
Farm 3 40 8 70 20 18
Deman 34
8 7
d 5 14
Ware house: A B c d
No of units: 15 16 12 13
And the customer’s requirements are:
Customer: A B C
No of units: 18 20 18
96
The table below shows the costs of transporting one unit from warehouse to
customer.
A B c d
8 9 6 3
A
6 11 5 10
B
C 3 8 7 9
39 38 40 43
C 97
Determine the optima distribution for this company to minimize shipping
costs.
3.4. SPECIAL CASES
3.4.1. Degeneracy
A condition that occurs when the N o of occupied cells in any solutions less
than the No of rows plus the No of columns minus 1 in a transportation table.
98
The epsilon/delta cannot be placed in a cell which later turns out to be in a
negative position of a cell path involved in reallocation because epsilon/delta
will be the “smallest quantity a negative position “ and shifting that minute
quantity around the cell path will leave the solution virtually unchanged.
Consequently, a certain amount of trial and error may be necessary before a
satisfactory location can be identified for epsilon/delta.
Example; - 1. Solve the following transportation problem.
1 2 Supply
1 3 3 50
2 4 6 30
Dem
50 30 80
and
Solution:
Using NWCM and MODI, the initial solution is:
1 2 Supply Ui
3 3
1 50 U1=0
50
4 6
2 30 U2=3
30
Demand 50 30 80
Vj V1=3 V2=3
Cij= Ui + Vj
==>C11= U1 +V1==>3=0+ V1==> V1=3, U1=0 by convention
==>C12= U1 +V2==>3=0 +V2==> V2=3
==>C22= U2 +V2==>6= U2+3==> U2= 3
==>C33= U3 +V3==>3= U3+8 ==> U3= -5
Note: m=2 and n=2==>2+2-1=3==>Occupied cells=2< 3 (Degeneracy)
Table: Test of optimality
Unoccupied cell Cell evaluator
Kij = Cij– (Ui + Vj)
(2,1) C21 – (U2 +V1)=4-(3+3) =-2
The optimal solution is:
99
1 2 Supply Ui
Cij= Ui + Vj
3 3 ==>C11=U1+V1==>3=0+V1==>V1=3,
1 50 U1=0
50 30 U1=0 by convention
4 6 ==>C21= U2+V1==>4= U2+3==> U2=3
2 30 U2=1
30 ==>C12= U1 +V2==>3= 0+ V2==> V2=
Demand 50 30 80 3
V1=
Vj V2=3
3
100
The warehouses supply tobacco to cigarette companies in three cities that have the
following demand:
The following railroad shipping costs per tone (in hundred dollars) have been
determined:-
Warehouse L p Q
location
A 7 10 5
B 12 9 4
C 7 3 11
D 9 5 7
Because of rail road construction, shipments are temporarily from warehouse at
city A to L Cigarette Company.
A. Find the optimum distribution for XYZ Tobacco Company.
B. Are there multiple optimum solutions? If there are alternative
optimum solutions, identify them.
3.4.3. Prohibited Transportation Routes.
The situation may arise such as road hazards (snow, foods, etc), traffic
regulation etc, when it is not possible to transport goods from certain sources to
certain destinations. In this case, the appropriate cell may either be completely
crossed out or a very large per unit transportation cost assign to it (M)
VI. ASSIGNMENT PROBLEMS
The Assignment Problem(AP) refers to the class of LPPs that involves
determining the most efficient assignment of people to projects, salespeople to
territories, contracts to bidders ,jobs to machines, and so on. The objective is
101
to assign a number of resources to an equal number of activities so as to
minimize total costs or total time or maximize total profit of allocation.
The problem of assignment arises because available resources such as men,
machines, etc have varying degrees of efficiency for performing different
activities such as job. Therefore, cost, profit or time of performing the different
activities is different.
Assumptions:
The AP is a special case of TP under the condition that the number of origins
is equal to the number of destinations. Viz. m=n .Hence assignment is made
on the basis of 1:1.
Following are the assumptions:
Number of jobs is equal to the number of machines or persons
Each man or machine is loaded with one and only one job.
Each man or machine is independently capable of handling any of the jobs being
presented.
Loading criteria must be clearly specified such as “minimizing operating time”
or “maximizing profit” ,or “minimizing production cost” or “minimizing
throughput (production cycle) time ” etc.
Remark:
The AP is considered as a special TP in which the supply at each source and the
demand at each destination are always one unit.
Since the supply and demand are always equal to one unit in each row and column,
there is no need to write them in the assignment table.
Example:
Service costs of different team assignment ($ in thousands)
Table: The assignment table
Zone
Service
Z1 Z2 Z3 Zone
Team Service
20 15 31 ====> Team Z1 Z2 Z3
S1 SS
S2 17 16 33 20 15 31 1
S1
S3 18 19 27 S2 17 16 33 1
S3 18 19 27 1
DD 1 1 1
102
The above problem can be presented as a LPP as follows:
MinZ = 20x11 +15x12 + 31x13 +17x21 +16x22 +33x23 +18x31+19x32 +27x33
Subject to the constraints
a. Supply constraints:
x11 +x12 +x13 =1 S1 constraint
x21 + x22 + x23 =1 S2 constraint
x31 +x32 +x33 = 1 S3 supply constraint
b. Demand constraints
x11 + x21 + x31 = 1 Z1 constraint
x12 + x22 + x32 = 1 Z2 constraint
x13 + x23 +x33 = 1 Z3 constraint
xij either 0 or 1 for all i , j
Since all xij can be either 0 or 1, there will be one assignment in each supply
constraint and one assignment in each demand constraint.
As in the transportation problem, assignment problems can be balanced or
not. In a balanced case, the number of objects to be assigned equals the
number of objects to which they are assigned. Unbalanced problem can be
balanced by adding a dummy (dummies) with zero cost coefficients.
3.5.1. Methods of solving assignment problems
An assignment problem can be solved by the following methods:
1. Enumeration method
2. Simplex method
3. Transportation method
4. Hungarian method
3.5.1.1. Hungarian Method/Food’s Technique/
The Hungarian Method (developed by Hungarian mathematician D.Konig) of
assignment provides us with efficient method of finding the optimal solution
without having to make a direct comparison of every solution. It works on the
principle of reducing the given cost matrix (the principle of matrix reduction)
to a matrix of opportunity costs, which means that by subtracting and adding
appropriate numbers in the cost table or matrix ,we can reduce the problem to
a matrix of opportunity costs.
Opportunity costs show the relative penalties associated with assigning
resource to an activity as opposed to making the best or least-cost assignment.
103
If we can reduce the cost matrix to the extent of having at least one zero in
each row and column, then it will be possible to make optimal assignments.
Steps in solving assignment problems:
Step.1. Develop the cost table from the given problem
If the number of rows does not equal the number of columns and vice versa,
then a dummy row or dummy column must be added. The assignment costs
for dummy cells are always zero.
Step 2.Find the opportunity cost table
The transformation of the cost matrix to what is termed as a total-opportunity
cost matrix. It involves two operations:
a. Perform row operation
I.e. locate the smallest element in each row of the given cost table
and then subtract that the given cost table and then subtract that
from each element of that row
b. Perform column operation
I.e. in the reduced matrix obtained from 2(a), locate the smallest
element in each column and then subtract that from each
element of that column. Notice that each row and column, now
have at least one zero value.
Step 3.Test for an optimal assignment
I.e. test the table resulting from step 2 to see whether an optimal assignment
can be made. The procedure is:
a. Draw the minimum number of Horizontal and /or Vertical lines necessary
to cover all zeros costs.
Draw the lines by trial and error but always try to cover two or
more zeros with one line.
b. Count the number of the lines
If the number of lines equals either the number of rows or
columns in the table, an optimal assignment can be made.
If the number of lines is less than the number of rows or
columns, an improvement is possible (we proceed to step 4).
Step 4.Improve the present opportunity cost table (matrix)
This is done by the following operations:
a. Find the smallest entry in the uncovered cells (cells with no lines through them)
and subtract it from all entries in the uncovered cells.
104
b. Add the same smallest entry to those cells in which the lines intersect (cells with
two lines them)
c. Cells with one line through them are transferred (i.e. unchanged to the improved
table).
In those problems where the first improvement does not yield an optimal
solution, we keep on improving the solution by repeating step 4 until an
optimal solution is achieved.
Step 5: Make an optimal assignment
An optimal assignment should be made to cells with a zero entery,
maintaining the one-to-one requirement
If more than one optimal solution exists, a trial-and –error approach can be
used to find all possible combination assignments in the zero cells.
Note that multiple optimal solutions are possible.
Example:
1. A computer center has three programmers. The center wants three
application programs to be developed. The head of the computer center, after
studying carefully the programs to be developed, estimate the computer time
in minutes required by the experts for the application programs as follows:
Programs
Programmers
(Estimated time in
1 120 minute)
100 80
2 80 90 110
3 110 140 120
Assign the programmers to the programs in such a way that the total
computer time is minimum.
Solution:
Steps 1 and 2:
a. Perform row reduction
The minimum time element in row 1, 2, and 3 is 80, 80 and 110 respectively.
Subtract those elements from all elements in there respective row.
The reduced time matrix is:
Table: After row reduction
A B C
-80 1 40 20 0 105
-80 2 0 10 30
-110 3 0 30 10
b. Column reduction
Since column B has no one ‘0’, perform also column reduction. The minimum
time element in columns A, B and C is 0, 10 and 0 respectively. Subtract these
elements from all elements in their respective column to get the reduced time
matrix.
A B C
1 40 10 0
2 0 0 30
Step 3: Test for an optimal
3 0 20 10
assignment
a. Draw the minimum number of horizontal and /or vertical lines necessary to
cover all zero times (costs).
Table: Test of optimal assignment
A B C
40 10 0
1
0 0 30
2
0 20 10
3
106
An optimal assignment should be made to cells with a zero entery,
maintaining the one-to-one requirement.
A B C
40 10
1
0
3 30
2
0 0
0 1
3
0 10
Note:
In optimal assignment, start with row/column having one zero and cancel the
alternative zeros(x)
The pattern of assignment among programmers and programs with their
respective time (in minute) is given below:
A 10 I 5 II13 IV
15 V16
bs
Jo
107
B 3 9 18 13 6
C 10 7 2 2 2
D 7 11 9 7 12
E 7 9 10 4 12
How should the jobs be allocated, one per employees, so as to minimize the
total man-hours?
Solution:
Table: After row reduction
-5 A 5I 0II III
8 IV
10 V
11
-3 B 0 6 15 10 3
-2 C 8 5 0 0 0
-7 D 0 5 2 0 5
E 3 5 6 0 8
-4
Since the number of lines less than the number of rows/columns, an
improvement is possible.
Step 4. Improve the present opportunity cost table
This is done by the following operations;
a. Select the smallest entry (element) among all uncovered elements by the
lines and subtract it from all entries in the uncovered cells.
b. Add the same smallest entry to those cells in which lines intersect (cells
with two lines them).
c. Cells with one line through them are unchanged to the improved table.
Table: After improvement
A 7I 0II III
8 IV
12 V
11
B 0 4 13 10 1
C 10 5 0 2 0
D 0 2 0 0 2
E 3 3 4 0 6
108
Since the number of lines equals to the number of rows/columns, the solution
is optimal.
Table: Optimal assignments
I II III IV V
A 7 8 12 11
B 04 13 10 1
C
10 5 0 0
2
D 00 2 2
E 3 3 4 6
0
0 0
The pattern of assignments among jobs and employees with respective time (in hours)
is given below:
Job Employees Time (in minutes)
A II 5
B I 3
109
C V 2
D III 9
E IV 4
1 5A 0 B7
2 1 0 8
3 0 1 0
1 4A 0 B6
2 0 0 7
Table: Optimal 3 0 2 0 Assignment
A B C
1 4 6
0
Job Machine Cost(in $)
1 B 15000
2 2 A 7 17000
0 0
110
3 2
3 C 27000
Total optimal assignment=$59000
3.6. SPECIAL CASES IN THE ASSIGNMENT PROBLEMS
Certain situations can arise in which the model deviates slightly from that
previously described. Among those situations are the following:
A. Multiple Optimal Solutions
While making an assignment in the reduced assignment matrix, it is possible
to have two or more ways to strike off a number of zeros. Such situation
indicates multiple optimal solutions with the same optimal value of objective
function. In such cases the more suitable solution may be considered by the
decision-maker.
In multiple optimal solutions, no unique 0 will exist at some point, resulting
in more than one choice for assignment and hence, more than one optimal
solution. It should be noted that all optimal solutions will yield the same value
of the objective function.
Example:
1. Given this final assignment table, identify two optimal solutions.
Machine
(Estimated time in
A 4 minute) 0 0
Job B 0 3 2
C 1 0 0
Solution
The first assignment must be B-1, because B-1 is the only 0 that appears in a
single row or column. Having made that assignment, there are two choices for
the remaining two rows, and two choices for the remaining two columns. This
results in two possible solutions, as shown:
Machine
(Estimated time in
A 4 minute)
Job B 0 3 2
C 1
111
2. The foreman of a machine shop wants to determine a minimum cost matching for
operators and machines. The foreman has determined hourly cost for of four operators
for the four machines, as shown in the following cost table.
Machine
(Estimated cost
1
Operator 70 in80
$) 75 D64
2 55 52 58 54
3 58 56 64 68
4 62 60 67 70
Required:
a. Determine the minimum-cost assignment for this problem
b. What is the total cost for the optimal assignment?
c. Is there an alternative optimal assignment? What is it? Calculate the total
cost for the alternate optimal assignment.
Solution:
Table: After row reduction Table: After column
reduction
Table: Optimal Assignments
1 6 A 16 B11 D
0
2 3 0 6 2
3 2 0 8 12 1 4 A 16 B5 D
4 2 0 7 10 2 1 20
3 0 20 12
4 0 0 1 10
0 0
a. Optimal Assignment b.
Operator Machine Cost(in $)
4 A 62
3 B 56
2 C 58
1 D 64
Total cost =$240
c. Yes!
Operator Machine Cost(in $)
1 D 64
112
2 C 58
3 A 58
4 B 60
Total cost=$240
Alternative optimal assignment
There may arise situations when the assignment problem calls for
maximization of profit, revenue, etc as the objective function. Such problem
may be solved by converting the given maximization problem into a
minimization problem by the following procedure:
i. Find the largest profit coefficient in the entire.
ii. Subtract each entry in the original table from the largest profit
coefficient.
The transformed assignment problem so obtained can be solved by using the
Hungarian method.
Example
1. A company has four territories open, and four salesmen available for an
assignment. The territories are not equally rich in their sales potential. Based
on the past performance, the following table shows the annual sales (in $)
that can be generated by each salesman in each territory. Find the optimal
assignment and the maximum expected total sales.
Salesmen
Territory
I II III IV
A 42 35 28 21
B 30 25 20 15
C 30 25 20 15
D 24 20 16 12
Solution:
Convert maximization problem into minimization problem by subtracting all
elements from the highest element (i.e 42)
Thus, the equivalent cost table is:
I II III IV
A 0 3 6 9
B 0 1 2 3 113
C 0 1 2 3
D 0 0 0 0
Thus, after improvement of the table, the optimal assignment is:
I II III IV
A 0 2 4 7
B 0 0 0 1
C 0 0 0 1
D 2 1 0 0
The pattern of two alternative optimal assignments among territories and salesmen
with respective sale is given below:
114
Five salesmen are to be assigned to five territories. Based on the past performance, the
following table shows the annual sales man in each territory. Find the optional
assignment.
T1 T2 T3 T4 T5
S1 26 14 10 12 9
S2 31 27 30 14 16
S3 15 18 16 25 30
S4 17 12 21 30 25
S5 20 19 25 16 10
C. Unbalanced Assignment problem
The Hungarian method of assignment requires that the number of columns
and rows in the assignment matrix be equal. However, when the given cost
matrix is not a square matrix, the assignment problem is called an unbalanced
problem. In such cases a dummy row(s) or column(s) are added in the matrix
(with zeros as the cost elements) to make it a square matrix. After making the
given cost matrix a square matrix, the Hungarian method may be used to
solve the problem.
Example
MEGA printing press, a publisher headquartered in Addis Ababa, wants to
assign three recently hired college graduates, Marta, Bakcha and Hirut to
regional sales districts in Mekelle, Bahir Dare, and DireDawa. But the firm
also has an opening in Gambela and would send one of the three there if it
were more economical than a move to Mekelle, Bahir Dar and Dire Dawa. It
will cost Br. 1,000 to relocate Marta to Gambela, Br. 800 to relocate Baklcha
there, and Br. 1,500 to move Hirut. What is the optimal assignment of personnel to
offices?
Offi
Bahir Dire
ce Mekelle
Dare Dawa
Hire
Marta Br.800 Br 1,100 Br 1,200
Bekcha Br. 500 Br 1,600 Br 1,300
Hirut Br. 500 Br 1,000 Br 2,300
Solution
115
To balance the problem, we add a dummy row (person) with a zero relocation
cost to each city. City
C1 C2 C3 C4(Gambela)
P1 800 1,100 1,200 1,000
Person P2 500 1,600 1,300 800
P3 500 1,000 2,300 1,500
Dummy 0 0 0 0
Table: After row reduction
Table: Optimal Assignment
Thus, an optimal assignment can be
made at zero cells (squares). C1 C2 C3 C4
Cost =Br.(0+500+800+1,100)=Br.2,400
D. Restrictions on Assignments
In certain instances, it may happen that a particular match or pairing may be
either undesirable or otherwise unacceptable. For example, an employee may
not have the skills necessary to perform a particular job or a machine may not
be equipped to handle a particular operation. In such cases, the cost of
performing that particular activity by a particular resource is considered to be
very large (written as M or ) so as to prohibit the entry of this pair of
employee-job into the final solution. When such a restriction is present, a letter
(M) is often placed in the table in the position that would represent a paring.
Analysis is performed as usual except the M is ignored throughout the
analysis. That is, M is not used in any reductions, nor is any value added to it
or subtracted from it during the course of the analysis.
Example
1. In the modification of a plant layout of a factory four new machines M1,
M2, M3 and M4 are to be installed in a machine shop. There are five vacant
places A, B, C, D and E available. Because of limited space, machine M2 can
116
not be placed at C and M3 cannot be placed at A. the cost of placing of
machine at place i (in $) is shown below.
2. Location
A B C D E
M1 9 11 15 10 11
Machine M2 12 9 - 10 9
M3 - 11 14 11 7
M4 14 8 12 7 8
Find the optimal assignment schedule.
Solution:
As the cost matrix is not balanced, add one dummy row (machine) with a
zero cost element in that row. Also assign a high cost, denoted by M, to the
pair (M2, C) and (M3, A).
Apply the Hungarian method to solve the problem
Table: Optimal
assignment
A B C D E
A B C D E
M1 9 11 15 10 11 M1 0 2 6 1 2
M2 12 9 M 10 9
M3 M 11 14 11 7
0 0
M4 14 8 12 7 8 3 M 1
M2
M5 0 0 0 0 0
0
M3 M 4 7 4
0
M4 0 0 0 0 0
7 5 1
M5
The total minimum cost ($) and optimal assignments made are as follows:
117
Location Costs ($)
Machine
M1 A 9
M2 B 9
M3 E 7
M4 D 7
M5 (Dummy) C 0
Total = $32
Exercise:
1. A car rental company has one car at each of five
depots a, b, c, d and e. A customer in each of the five towns A, B, C, D and
E requires a car. The distance in (in kilometers) between the depots and
towns where the customers are, is given in the following distance matrix:
Depots
a B c D e
A 160 130 175 190 200
B 135 120 130 160 175
Towns
B c
C b
D d
118
Minimum distance = 570 km
3. An airline company has drawn up a new flight schedule involving five
flights. To assist in allocating five pilots to the flights, it has asked them to
state their preference scores by giving each flight a number out of 10 .The
higher the number , the greater is the preference. Certain of these flights are
unsuited to some pilots owing to domestic reasons. These have been
marked with a X
Flight number
Pilot
A B c D e
A 8 2 X 5 4
B 10 9 2 8 4
C 5 4 9 6 X
D 3 6 2 8 7
E 5 6 10 4 3
What should be the allocation of the pilots to flights in order to meet as many
performances as possible?
(Hint: The problem is to maximize the total preference score)
119