Chapter 1-Operations Research - An Overview 1.1 INTRODU¢ ‘TION, The activity “Operations Research” has become increasingly important in the face of fast moving technology and increasing complexities in business and industry. Operations research is a discipline that deals with the application of advanced analytical methods to help make better decisions. Operations Research, also called Decision Science or Operations Analysis, is the study of applying mathematics to business questions. As a sub-field of Applied Mathematics, it has a very interesting position alongside other fields as Data Science and Machine Learning. ORIGIN AND DEVELOPMENT OF OR The term operations Research was first coined in 1940 by MeClosky and Trefthen in a small town, Bowdsey, of the United Kingdom. This new science came into existence in military context. During World War II, military management called on scientists from various disciplines and organized them into teams to assist in solving strategic and tactical problems (ie) to discuss, evolve and suggest ways and means to improve the execution of various military projects. By their joint efforts, experience and deliberations, they suggested certain approaches that showed remarkable progress. This new approach to systematic and scientific study of the operations of the system was called the Operations Research or Operational Research (abbreviated as O.R), During the year 1950, O.R achieved recognition as a subject worthy of academic study in the Universities. Since then, the subject has been gaining more and more importance for students of Economies, Management, Public Administration, Behavioral Sciences, Social work, Mathematics, Commerce and Engineering, Operations Research Society of America was formed in 1950 and in 1957 the International Federation of O.R Societies was established. In several Countries, International Scientific Journals in O.R began to appear in different languages. The primary journals are Operations Research, Transportation Science, Management Sciences, Operational Research Quarterly, Journal of the Canadian Operational Research Society, Mathematics of Operational Research, International journal of Game Theory etc.OPERATIONAL RESEARCH IN INDIA In India, Operational Research came into existence in 1949 with the opening of an 3, an Operational Research Unit at the Regional Research Laboratory at Hyderabad. In 19: Operational Research Unit was established in the Indian Statistical Institute, Caleutta for the application of Operational Research methods in national planning & survey . Operational Research Society of India was formed in 1957. It became a member of the International Federation of Operational Research Societies in 1959. The first Conference of Operational Research Society of India was held in Delhi in 1959. Operational Research Society of India started a journal “Opsearch” in 1963. Other journals which deal with Operational Research are : Journal of the National Productivity Council, Materials Management journal of India and the Defence Science journal. DEFINITIONS Because of the wide scope of applications of Operational Research, giving a precise definition is difficult, However, a few definitions of Operational Research are as under : “Operational Research is the application of scientific methods, techniques and tools to problems involving the Operations of a system so as to provide those in control of the system with optimum solutions to the problem”. = C.W.Churchman, R.L.Ackoff & E.L.Amoff ii, “Operational Research is the art of giving bad answers to problems which otherwise have worse answers”, - T.LSaaty MODELS IN OPERATIONAL RESEARCH A model in Operational Research is a simplified representation of an operation or a process in which only the basic aspects or the most important features of a typical problem under investigation are considered. Types of Models There are many ways to classify models and therefore, the decision-maker must identify which type of model best suits the decision problem.Physical Models These models provide a physical appearance of the real object under study either reduced in size or scaled up physical models are useful only in design problems because they are easy to observe, build and deseribe. i. Teonie models: Iconic model retain some of the physical properties and characteristics of the system they represent. ii, Analogue models: The models represent a system by the set of properties different from that of the original system and does not resemble physically. Symbolic Models These models use letters, numbers and other symbols to represent the properties of the system. i. Verbal Models: These models describes a situation in written or spoken language. eg:= Written Sentences, books ete., ii, Mathematical Models: These models involve the use of mathematical Symbols, letters, numbers and mathematical operators (+, -, =, *) to represent relationship among various variables of the systems to describe its properties or behaviour. Descriptive Models, These models simply describe some aspects of a situation, based on observation, survey, questionnaire results or other available data of a situation and do not predict or recommend. Eg:- Plant layout diagram Predictive Models These models are used to predict the outcomes due to a given set of altematives for problem. These models do not have an objective function as a part of the model to evaluate decision alternatives.Optimization Models ‘These models provide the ‘best’ or ‘optimal’ solution to problems subject to certain limitations of the use of resources, Static Models Static models present a system at some specified time and do not account for changes over time. Dynamic Models Ina dynamic model, time is considered as one of the variables and admit the impact, of changes generated by time in the selection of the optimal courses of action. Deterministic Models Ifall the parameters, constants and functional relationships are assumed to be known with certainty when the decision is made, then the model is said to be deterministic. For a specific set of input values, there is a uniquely determined output which represents the solution of the model under conditions of certainty. Eg:- Linear Programming Model. Probabilistic (Stochastic Models) Models in which atleast one parameter or decision variable is a random variable are called probabilistic (or Stochastic) models. Since atleast one decision variable is random, therefore, an independent variable which is the function of dependent variable(s) will also be random. This means consequences or payoff due to certain changes in the independent variable cannot be predicted with certainty. However, it is possible to predict a pattern of values of both the variable by their probability distribution. Eg:- Insurance against risk of fire, accidents, sickness ete. Analytical Models These models have a specific mathematical structure and thus can be solved by known analytical or mathematical techniques. Any optimization model ( which requires maximization or minimization of an objective function) is an analytical model Simulation Models These models also have a mathematical structure but are not solved by applying ‘mathematical structure but are not solved by applying mathematical techniques to get a solution. Instead, a simulation model is essentially a computer assisted experimentation on amathematical structure of a real-life problem in order to describe and evaluate its behavior under certain assumptions over a period of time. ADVANTAGES OF MODELS 1, Through a model the problem under consideration becomes controllable, 2. It provides some logical and systematic approach to the problem. 3. It indicates the limitations and scope of an activity. 4, Models help in finding avenues for new research and improvements in a system. 5. It provides economic descriptions and explanations of the operations of the system they represent. 1,2 METHODOLOGY OF OPERATIONS RESEARCH It is essential to follow some steps that everybody agrees as being helpful in planning, organizing, directing and controlling Operations Rescarch activities within an organization. ‘The steps are listed below : 1. Formuk ion of the problem : It involves analysis of the physical system, setting-up of objectives, determination of restriction constraints against which decision should be adopted, alternative courses of action and measurement of effectiveness. 2. Construction of a Mathematical model: After formulation of the problem, the next step is to express all the relevant variables (activities) of the problem into a mathematical model. A generalized mathematical model might take the form: E=fix, yi) Where f represents a system of mathematical relationships between the measures of effectiveness of the objective and the variables, both controllable and uncontrollable (y;). 3. Deriving the solution from the model: Once the mathematical model is formulated, the next step is to determine the values of decision variables that optimize the given objective function, This deals with the mathematical calculations for obtaining the solution to the model. 4. Validity of the model : The model should be validated to measure its accuracy. A model is valid or accurate if (a) it contains al the objectives, constraints, and decision variables relevant to the problem,(b) the objectives, constraints, and decision variables included in themodel are all relevant to, or actually part of the problem, and (c) the functional relationships are vali 5. Establishing control over the solution : After testing the model and its solution, the next step of the study is to establish control over the solution, by proper feedback of the information on variables which deviated significantly, the solution goes out of control. In such situation the model may accordingly be modified. 6. Implementation of the final results : Finally, the tested results of the model are implemented to work. This would basically involve a careful explanation of the solution to be adopted and its relationship with the operating realities. This stage of Operations Research investigation is executed primarily through the cooperation of both the operations Research experts and those who are responsible for managing and operating the system, 1.3 APPLICATIONS OF OPERATIONS RESEARCH Operations Research is mainly concerned with the techniques of applying scientific knowledge, besides the development of science, It provides an understanding which gives the expert/manager new insights and capabilities to determine better solutions in his decision- making problems, with great speed, competence and confidence. In recent years, Operations. Research has successfully entered many different areas of research in Defence, Government, Service Organizations and Industry. We briefly describe some applications of Operations Research in the functional areas of management: Finance, Budgeting and Investment i. Cash flow analysis, long range capital requirements, dividend policies, investment portfolios. ii, Credit policies, credit risks and delinquent account procedures. iii, Claim and complain procedure. Marketing i, Product selection, timing, competitive actions. ii, Advertising media with respect to cost and time. iii, Number of salesmen, frequency of calling of account ete iv. Effectiveness of market research, Physical Distribution i, Location and size of warehouses, distribution centres, retail outlets ete. 6ii, Distribution policy. Purchasing, Procurement and Exploration i. Rules for buying. ii, Determining the quantity and timing of purchase. iii, Bidding policies and vendor analysis. iv, Equipment replacement policies Personnel i. Forecasting the manpower requirement, Recruitment policies and assignment of jobs. ji, Selection of suitable personnel with due consideration for age and skills, et. iii, Determination of optimum number of persons for each service centre. Production i, Scheduling and sequencing the production run by proper allocation of machines, ii, Calculating the optimum product mix. iii, Selection, location and design of the sites for the production plant. Research and Development i. Reliability and evaluation of alternative designs. ii, Control of developed projects. iii, Co-ordination of multiple research projects. iv. Determination of time and cost requirements. Besides the above mentioned applications of Operations Research in the context of modern ‘management, its use has now extended to a wide range of problems, such as the problems of communication and information, socio-economic fields and national planning. 1.4 ADVANTAGES & LIMITATIONS OF OPERATIONS RESEARCH Advantages + Better Control: The management of large organizations recognize that it is a difficult and costly affair to provide continuous executive supervision to every routine work An O.R. approach may provide the executive with an analytical and quantitative basis to identify the problem area, The most frequently adopted applications in this category deal with production scheduling and inventory replenishment, + Better Systems: Often, an O.R. approach is initiated to analyze a particular problem of decision making such as best location for factories, whether to open a new 1warehouse, etc. It also helps in selecting economical means of transportation, jobs sequencing, production scheduling, replacement of old machinery, ete. + Better Decisions: O.R. models help in improved decision making and reduce the risk of making erroneous decisions. O.R. approach gives the executive an improved insight into how he makes his decisions, + Better Co-ordination: An operations-research-oriented planning model helps in co- ordinating different divisions of a company. LIMITATIONS + Dependence on an Electronic Computer: O.R. techniques try to find out an optimal these factors are solution taking into account all the factors. In the modem socie enormous and expressing them in quantity and establishing relationships among these require voluminous calculations that can only be handled by computers. + Non-Quantifiable Factors: O.R. techniques provide a solution only when all the elements related to a problem can be quantified. All relevant variables do not lend themselves to quantification, Factors that cannot be quantified find no place in O.R. models, + Distance between Manager and Operations Researcher: O.R. being specialist's job requires a mathematician or a statistician, who might not be aware of the business problems. Similarly, a manager fails to understand the complex working of O.R. Thus, there is a gap between the two. + Money and Time Costs: When the basic data are subjected to frequent changes, incorporating them into the O.R. models is a costly affair. Moreover, a fairly good solution at present may be more desirable than a perfect O.R. solution available after sometime, + Implementation: Implementation of decisions is a delicate task. It must take into account the complexities of human relations and behaviour.CHAPTER 2- LINEAR PROGRAMMI NG PROBLEM. 2.1 FORMULATION OF LINEAR PROGRAMMING PROBLEM INTRODUCTION: Many business and economic situations are concemed with a problem of planning activity. In each case, there are limited resources at your disposal and your problem is to make such a use of these resources so as to yield the maximum production or to minimize the cost of production, or to given the maximum profit, etc. Such problem is referred to as the problem of constrained optimization. Linear programming is a technique for determining an optimum schedule of interdependent activities in view of the available resources. Programming is just another word for ‘planning’ and refers to the process. MATHEMATICAL FORMULATION OF THE PROBLEM The procedure for mathematical formulation of a linear programming problem consists of the following major steps: Step 1 Study the given situation to find the key decisions to be made. Step 2 Identify the variables involved and designate them by symbols x,(j=1,2...) Step 3 Formulate the objective function and express it as a linear function of the variables. Step 4 Identify the constraints in the problem and express them as linear inequalities or equations, LHS of which are linear functions of the decision variables. Step 5 State the non negativity constraints which generally are :x, > 0,for all j Step 6 Interpret the results, BASIC TERMINOLOGY Linear Function A linear function contains terms each of which is composed of only a single, continuous variable raised to (and only to) the power of 1 Objective Function Iisa linear function of the decision variables expressing the objective of the decision-maker. The most typical forms of objective functions are: maximize f{x) or minimize f(x).Decision Variables These are economic or physical quantities whose numerical values solution of the linear programming problem. These variables are under the control of the decision-maker and could have an impact on the solution to the problem under consideration, The relationships among these variables should be linear. Constraints These are linear equations arising out of practical limitations. The mathematical forms of the constraints are: (x) Sb or fx) 2b or fix) =b Feasible Solution Any non-negative solution which satisfies all the constraints is known as a feasible solution, The region comprising all feasible solutions is referred to as feasible region. Optimal Solution The solution where the objective function is maximized or minimized is known as optimal solution. EXAMPLE ‘A farmer has 125 acres of land in which he can grow three crops, paddy, banana and cotton. The selling prices per kg of these crops are respectively Rs.5, Rs.4 and Rs.5. The average yield of the three crops per ha are respectively 1500 kg, 1800 kg and 1200 kg. To produce each of 100 kg of paddy and banana and to produce 80 kg of cotton a sum of Rs.12 has to be spent for fertilizer. Labour required for each acre to raise the crop is 6 man days for paddy and cotton each and 5 man days for banana, A total of $00 man days of labour are available @ of Rs.40 per man day. The farmer wants to maximize his net return, Formulate the problem as a LP model. Solution: I Decision Variables: Let x, y and z be the acres of land allotted to the three crops paddy, banana and cotton. II Objective function: The net return per acre from the three crops can be calculated as follows; 10Paddy Banana Cotton Selling Price 3x 1500=7500 | 4x 1800-7200 3x 1200-6000 Fertilizer cost 12 x 15=180 12 x 18=216 12 x 1S=180 Labour cost 40 x 6=240 40 x 5=240 40 x 6=240 Total Input cost | 420 56 420 Net Return 7080 6744 5580 Since the farmer wants to maximize his profit then objective function is Maximize 7080 x + 6744 y + $580 z I Constraints: i) Constraint on land Since the total land used can’t exceed the total labour available, xty+z2s 125 ii) Constraint on labour : Similarly constraint on labour is 6x+5v +62 < 500 iii) Non-negativity conditions: Since the number of acres of land allotted can’t be negative, we have x,y,2>0 IV The Model Maximise Z = 7080x + 6744 y + 5580 z Subject to x+y 428125 6x +5y +62 £500 xy Z>=0 2.2 GRAPHICAL METHOD INTRODUCTION: Linear programming problem involving two decision variables can easily be solved by graphical method. The method also provides an insight into the concepts of simplex method- a powerful technique to solve the linear programming problems involving three or more decision variables. iGRAPHICAL SOLUTION METHOD: Linear Programming problem involving two variables can be easily solved by the graphical approach, Given a L.P-P, optimize Z = f(xi) subject to the constraints gi(xi) <, = , > bj and the non-negativity restrictions x; > 0, = 1,23j51,2,3 nm S. Step 1: Identify the problem, decision variables, the objective function and the constrait Step 2: Consider the inequality constraints as equalities. Draw the straight lines in the XOY plane corresponding to each equality and non-negativity restrictions, Step 3: Find the permissible region (feasible region or solution space or convex region) for the values of the variables which is the region bounded by the lines drawn in step 1 Step 4: Find the points of intersection of the bounded lines (vertices of the permissible region) by solving the equations of the corresponding lines. Step 5: Find the values of Z at all vertices of the permissible region by substituting the corresponding values in the objective function. Step 5: (i) For maximization problem, choose the vertex for which Z is maximum. (ii) For minimization problem, choose vertex for which Z is minimum. EXAMPLE ‘A Company makes two kinds of leather belts. Belt A is a high quality belt and belt B is of low quality. The respective profits are Rs.4.00 and Rs.3.00 per belt. Each belt of type A requires twice as much time as a belt of type B, and if all belts were of type B, the company could make 1000 per day. The supply of leather sufficient for only 800 belts per day(both A. and B). Belt A requires a fancy buckle and only 400 per day are available, There are only 700 buckles a day available for belt B. Determine the optimal product(Maximization case) Graphical Solution Step 1. The given problem can be put in the language of algebra as follows Maximize Z= 4x, +3x Subject to the constraints 2x1 + x2 $ 1000 (Time constraint) 12xi+ 2 $800 (Availability of Leather) sus Osx <400 | (4 vailability of Buckles) 0 0 lies in the first quadrant. The inequalities are graphed taking them as equations, e.g., the first constraint 2x1 + x2 $ 1000 will be graphed as 2x; + x2 = 1000. The equation is re-written as ye 500” 1000 This equation indicates that when is plotted on the graph, it cuts an x-intercept of 500 and x2-intercept of 1000, ‘These two points are then connected by a straight line which is shown in Fig (a) as line AB. Any point (representing a combination of x: and x2) that falls on this line or in the area below it, is acceptable in so far as this constraint is concerned. The region OAB formed by two axes and the line representing the equation 2x; + x2 = 1000 is the region containing acceptable values of x; and x2 in respect of this constraint. Similarly, the constraint x:+x2 < 800 can be plotted. The line CD in Fig.2.1(b) represents the equation xi+x2 < 800. The region OCD, formed by the two axes and this line represents the area in which any point would satisfy this constraint of leather availability, Further, the constraints, x1 < 400 and x2 < 700 are also plotted on the graph which represents the area between the two axes and the lines x; = 400 and x2=700 as shown in Fig.(b) : 1000 100 {By X40 500 2utn= 1000 su S| 600 oo FX 400 400 200 200 Xs @Now all the constraints have been graphed. ‘The area bounded by all these constraints, called feasible region or solution in space is as shown in Fig.(b) by the shaded area OPQRST. Step-3. The optimum value of objective function occurs at one of the extreme (comer) points of the feasible region. The coordinates of the extreme points are: 0(0, 0), P= (400, 0), Q=(400, 200), R = (200, 600), S= (100, 700) and T= (0, 700). Step. 4. We now compute the z-values corresponding to the extreme points: Extreme point (1 2) Z= 4x1 + 3x0 oO (0,0) 0 P (400, 0) 1600 Q (400, 200 2200 R (200, 600) 2600 Maximum s (100, 700) 2500 T (0, 700) 2100 Since z-attains its maximum ar R, the optimum solution is : x1= 200 and x2= 600 Step 5: The company should produce 200 belts of type A and 600 belts of type B in order to achieve a maximum profit of Rs. 2600 Some more cases The constraints generally, give region of feasible solution which may be bounded or unbounded. Based on the nature of bounded or unbounded feasible solution that several linear programming problems and the optimal solution for either of them was unique. However, it may not be true for every problem. In general, a linear programming problem may have (i) aunique optimal solution (ii) an infinite number of optimal solutions (iii) an unbounded solution (iv) no solution 142.3 SIMPLEX METHOD INTRODUCTION Many different methods have been proposed to solve linear programming problems, but simplex method has proved to be the most effective, Simplex Method is applicable to any problem that can be formulated in terms of linear objective function, subject to a set of linear constraints, Often, this method is termed Dantzig's simplex method, in honour of the mathematician who devised the approach, The Simplex method, also called the “Simplex Technique’ or the ‘Simplex Algorithm’ is an iterative procedure for solving a linear programming problem in a finite number of steps. GENERAL LINEAR PROGRAMMING PROBLEM ‘The linear programming involving more than two variables may be expressed as follows Maximize (or) Minimize Z = e1x1 + ©2x2 + 3x3 +. coKa subject to the constraints anxi + axa +... + ain Xn S OF = or 2b, aziXi + a22X2 +... + Aan Xn S oF = or 2 by ayiX) + a50K2 +... + ain Xv S OF = or > by AmIX1 + na X2 + so. + am Xn SOF = OF 2 bm and the non-negativity restrictions %2, XI, os Kn 0, Note : Some of the constraints may be equalities, some others may be inequalities of (<) type or (2) type or all of them are of same type Solution: A set of values x1, x2 ...%o which satisfies the constraints of the LPP is called its, solution, Feasible solution: Any solution to a LPP which satisfies the non-negativity restrictions of the LPP is called its feasible solution. Optimum Solution or Optimal Solution: Any feasible solution which optimizes (maximizes or minimizes) the objective function of the LPP is called its optimum solution or optimal solution. Slack Variables: If the constraints of a general LPP be 15da, x sh (i= 1,2,3, ...k) ) then the non-negative variables si which are introduced to convert the inequalities (1) to the equalities Day x +5; =8 (i= 1,2,3, ...K) 5 are called slack variables. The value of these variables can be interpreted as the amount of unused resource. Surplus Variables: If the constraints ofa general LPP be Yay x 24 (i= kt, k+2,..) (1) then the non-negative variables si which are introduced to convert the inequalities (1) to the (= k+l k+2, equalities Sa, x,- are called surplus variables. The value of these variables can be interpreted as the amount over and above the required level. CANONICAL AND STANDARD FORMS OF LPP : After the formulation of LPP, the next step is to obtain its solution. But before any method is used to find its solution, the problem must be presented in a suitable from. Two forms are dealt with here, the canonical form and the standard form. The canonical form : The general linear programming problem can always be expressed in the following form Maximize Z = 1 x1 + ¢2 x2 +€3 x3... Cn Xa subject to the constraints ayy + B12X2 tae + AN Xp SB} nix) a22K2 FF dan Xn Se aniXt + dna X2 +o + Ama Xn Sm and the non-negativity restrictions XI, X2y X3, ou Xn ZO. This form of LPP is called the canonical form of the LPP. In matrix notation the canonical form of LPP can be expressed as Maximize Z = CX (objective function) 16Subject to AX 0(non-negativity restrictions) where C (er €2 65), 5 fx (o 1 iy yg b, A= X= , Co re ~ a Pn CHARACTERISTICS OF THE CANONICAL FORM : (The objective function is of maximization type. Min f(x) =~ Max {-f(%) } (or) = MinZ.— =~ Max (-Z) (ii) All constraints are of (S) type, except for the non-negative restrictions, An inequality of “2” type can be changed to an inequality of the type “<” type by multiplying both sides of the inequality y -1 For example, the linear constraint aux + a2 x2 +... + ain n= bi is equivalent to AIK = in XD ~ = Ain Xe S = ; An equation may be replaced by two weak inequalities in opposite directions. For example ans + aig x2 in Xe = is equivalent to aux: + a2 X2 +... Fain Xe > bi and aixi + a2 x2 +... + ain Xn bi 7Gi A variable which is unrestricted All variables are non-negative. lent to the difference between two non- n is eq negative variables. Thus if xj is unrestricted in sign, it can be replaced by (xj-x;"), where xiland xj" areboth non-negative, ie, xj=xjbx)", where x! =O and x!>0 ‘The Standard From : The general linear programming problem in the form Maximize or Minimize Z=cxi text + on Xn Subject to the constraints ax + aKa + on. azx + a9%2 +. AmiXt + ama X2 + + Am Xn = bm and X15 X24 se soe Xe 2 0 is known as standard form. In matrix notation the standard form of LPP can be expressed as : Maximize or Minimize Z = CX (objective function) Subject to constraints AX =bandX 20 Where © = (€1,625..4 5 x (, Ay diy hy x by Ay ay ay 4 son x Aig, gy oe ing . - Ve) Pn CHARACTERISTICS OF THE STANDARD FORM: i) All the constraints are expressed in the form of equations, except for the non-negative restrictions ii) The right hand side of each constraint equation is non-negative. 18‘The inequalities can be changed into equation by introducing a non-negative variable on the left hand side of such constraint. It is to be added (slack variable) iff the constraint is of “=” type and subtracted (surplus variable) if the constraint is of “>” type. Basic Solution, Given a system of m simultaneous linear equations with n variables (m< Ax=b, xTeR™ where A is an m x n matrix of rank m, Let B be any m x m sub matrix, formed by m linearly independent columns of A. Then a solution obtained by setting n-m variables not associated with the columns of B, equal to zero, and solving the resulting system, is called a basic solution to the given system of equations. ‘The m variables, which may be all different from zero, are called basic variables. The m x m non-singular sub matrix B called a basis matrix with the columns of B as basis, lled a vectors. The (n-m) variables which are put to zero are non-basie variables. EXAMPLE Obtain all the bs xit 2x x= 4 ic solutions to the following system of linear equation: 2xi + x2+ 5x3=5 Solution: The given system of equations can be written in the matrix form () since rank of A is 2, the maximum number of linearly independent columns of A is 2. Thus Ax=b x % x we can take any of the following, 2x 2 sub-matrices as basis matrix B: 2) ft fz 2 1]? lo sb I 5 The variables not associated with the columns of B are xa, x2 and x1 respectively, in the three different cases. 1 2 Let us first take B aR 1 | A basic solution to the given system is now obtained by setting x3= 0, and solving the system. 19Fa ae ‘Thus a basic (non-basic) solution to the given system is (Basic) x1= 2, x2= 1; (Non-basic) xs = 0, (Basic) x1= 5, x3=-1; (Non-basic) x2 = 0, (Basic) x2 = 5/3, x= 2/3; (Non-basic) x: = 0 We observe that all the above three basic solutions are non-degenerate solution Degenerate Basic Solution: A basic solution is said to be a degenerate basic solution if one or more of the basic variables are zero. Basic Feasible Solution: A feasible solution to a LPP., which is also a basic solution to the problem is called a basic feasible solution to the LPP. SIMPLEX METHOD ALGORITHM: For the solution of any L.P.P by simplex algorithm, the existence of an initial basic feasible solution is always assumed. The step for the computation of an optimum solution are as follows. Step 1 : Check whether the objecti function of the given L.P.P is to be maximized or minimized. If it is to be minimized, then convert it into a problem of maximization, by Minimize Z = - Maximize (-Z) Step 2 : Check whether all bj (i= 1,2,3...m) are positive. If any one of the bj is negative, multiply both sides of that constraint by -I so as to make its right hand side positive. Step 3: By introducing slack variables, convert the inequality constraints into equations and express the given LPP into its standard form. Put the cost of these variables equal to zero. Step 4: in the following simplex table. ‘nd an initial basic feasible solution and express the above information conveniently 0 0 0 G a Car 1 0 0 Car 0 1 0 Cas 0 0 1 ZG Coa 20(where C; — row denotes the coefficients of the variables in the objective function. Ca- column denotes the coefficients of the basic variables in the objective function. Ys —column denotes the basic variables. Xn -column denotes the values of the basic variables. The coefficients of the non-basic variables in the constraint equations constitute the body matrix while the coefficients of the basic variables constitute the unit matrix, The row (ZC) denotes the net evalutions (or) index for each column). Step 5: compute the net evalutions (Z;-C)) (=1,2,3...n) by using the relation Z)-Cj =Caay-C. Examine the sign of Zj-C; a) Ifall (Z)-C)) > 0 then the current basic feasible solution Xx is optimal. b) Ifatleast one (Zj-C)) < 0 then the current basic feasible solution is not optimal, go to next step. Step 6: (To find the entering variable) The entering variable is the non-basic variable corresponding to the most negative value of (Zj-C)). Let it be x; for some j=r. The entering variable column is known at the bottom. If more than one variable has the same most negative (Zj-C)), any of these variables, may be selected arbitrarily as the entering variable. Step 7: (To find the leaving variable) Compute the ratio Min { Ae a> of (ie) the ratio between the solution column and the entering variable column by considering only the positive denominators) (a) Ifall a, <0, then there is an unbounded solution to the given LPP. (>) Ifall a, >0, then the leaving variable is the basic variable corresponding to the Xn 4, minimum ratio 0. If 0 ; the the basic variable xx leaves the basis. The leaving variable row is called the key row or pivot row (or) pivot equation, and the element at the intersection of the pivot column and pivot row is called the pivot element or key element (or) leading element. Step 8 : Drop the leaving variable and introduce the entering variable along with its associated value under Cp column, Convert the pivot element to unity by dividing the pivot equation by the pivot element and all other elements in its column to zero by making use of 21(New pivot equation = old pivot equation + pivot element. (ii) New equation (all other rows including (2) - C)) row) New equation = old equation- (corresponding element) X New pivot equation Step 9 : Go to step (5) and repeat the procedure until either an optimum solution is obtained or there is an indication of an unbounded solution. EXAMPLE Luminous Lamps produces three types of lamps - A, B, and C. These lamps are processed on three machines - X, Y, and Z. The full technology and input restrictions are given in the following table. Product Profit per unit X]Y]Z a 10 [7 |2 | B 2 [3 |4 3 ¢c T f2q1fi ‘Available Time | 100 | 7 [ 80 Find out a suitable product mix so as to maximize the profit Solution: ‘The decision problem can be formulated as Maximize z = 12x1 + 3x2 + x3 subject to 10x; + 2x2 + x3 < 100 Txt + 3x2 2x77 2xrh de ts 80 x1, %2, 20 Converting inequ: 10xi + 2x2 + x3 + x4 = 100 Ixy + 3x2 + 2xa + xs= 77 xs = 80 Xiy X2y X3, Ky Xs, Xo > 0 ies to equalities 2xit 4x + Where xs, xs and xs are slack variables. Including these slack variables in the objective function, we get Maximize z= 12x1 + 3x2 + x3 + Ox + Oxs + Ox 22Initial basic feasible solution x1 =0,x2=0, x5 =0,2=0 x4 = 100, x5 = 77, x6 = 80 Initial Tab! 6 231000 co Basievatlables xy XX) XE HG Hy Solution values 8 bere) Pivot column = x: column. Ratio: Minimum (100/10, 77/7, 80/2) = 10 Pivot row x4 row Pivot element = 10 xz departs and x; enters First Iteration ce |Ye| Xe [ul me | om | x [xs 2)xu) 10 |1|i5| imo /;iofo O fxs] 7 [0 | 85 [1310] -70] 7 O fxs | 60 [0 [18s] 45 [-1S [Olt 0 | o| x 7G) Z=120 35] us | 6s [oo Second Iteration o 2y3) 1] 0 | ojo ce |¥s) Xs |ujel w | ou | we [x 2 [x | 8 T 0 |-116 [3/6 |-18 [0 3 [x | 358 0 [1 | ise | -7716 [58 JO 0 [xe 1774 0 [0 |-178] 118 |-94]T 26) Z-981/8 [0 [0 [iil] 15/16] 378 [0 23‘The Optimal Solution is Max z= 981/8 3/8, x2=35/8, x30. 2.4 BIG M (PENALTY) METHOD INTRODUCTION To solve a LPP by simplex method, we have to start with the initial basic feasible solution and construct the initial simplex table. In the previous problems, we see that the slack variables readily provided the initial basic feasible solution. However, in some problems, the slack variables cannot provide the initial basic feasible solution. In these problems atleast one of the constraints is of = or 2 type. “Big M-method is used to solve such linear programming problems Big M method Algorithm Step (1) : Express the linear programming problem in the standard form by introducing slack and/or surplus variables, if necessary. Step (2) : Introduce the non-negative artificial variables Ay, A2 .... To the left hand side of all the constraints of > or = type. The purpose of introducing artificial variables is just to obtain an initial basic feasible solution. However, addition of these attificial variables causes violation of the corresponding constraints. Therefore we would like to get rid of these variables and would not allow them to appear in the final solution. To achieve this we assign a very large penalty (-M for maximization problems and +M for minimization problems) as the coefficients of the artificial variables in the objective function, Step (3) : Solve the modified linear programming problem by simplex method, While making iterations, using simplex method, one of the following three cases may arise : (i) If no artificial variable remains in the basis and the optimality condition is satisfied, then the current solution is an optimal basic feasible solution. (ii) Ifatleast on artificial variable appears in the basis at zero level (with zero value of Xs column) and the optimality condition is satisfied, then the current solution is am optimal basic feasible solution. (ii) If atleast one artificial variable appears in the basis at non-zero level (with positive value in Xp column) and the optimality condition is satisfied, then the original problem has no feasible solution. The solution satisfies the constraints but 24does not optimize the objective function since it contains a very large penalty M and is called pseudo-optimal solution. Note: While applying simplex method, whenever a vector corresponding to some artificial variable happens to leave the basis, we drop that vector and omit all the entries corresponding, to its column from the simplex table EXAMPLE Maximize z= -4x1 - 2x2 subject to 3x1 + x22 27 x17 x22 21 x 2x 230 x20 Solution: By introducing surplus and artificial variables, the standard form of LPP becomes 4x1 - 2x2 + Oxs + Oxs + Oxs—MAi— MA2 -MAs Ai =27 21 Maximize z 3x1 + x2- Xy 72 = xe Ay X1 + 2x2 - xs + As = 30 X90, 30, %4, %5, As, A= 0 Where: x< and xs are surplus variables A, and A2 are artificial variables. Initial Table Gj 4 2 [0;0T0 ce |Ye| Xe I mm |u| xs —MIAr| 27 3 1 |-ljofo;i|jofo —M[A:[ 20 T Tr |oj-rfo;o ;i1fo —M IAs | 30 T 2 [0/0]; oO ]O0]t Zo 778M |[-5M+4|-4M+2[M|M|M] 0 | 0 [0 25As-5M <-4M, x: becomes a basic variable in the next iteration Key column = x: column. Minimum (27/3, 21/1, 30/1) =9 Key row = A; row Pivot element = 3. Al departs and x: enters. First Iteration q 4 2 0 oy0 ce [Ye Xe |% % x xa fxs | Ar | Ad am 9 T 1B 1s [o;0, 0] 0 M [Ae 12 0 23 wm [tjo;1]o —M [As 2 0 3B wm | 0 ot 8} 0 |-7M3+28|2M3-43/M|M] 0 ] 0 Second Iteration < 4y2 0 0 0 —M es | Yn Xo Hie) GG 5 A 4x 2415 T)0| 25 10 15 0 —M | A: 185 ojo) i 41 2S T 2 fe 635 oji| Ww [ol 35 0 Z= 2225-185 | 0 | 0 [-MiS +65 |M]-2MIS +25 | 0 G 4]2] 07 0\0 co [¥s| Xe» [u[ulwe lm px F{x] 3 |1)ol-mlfinjo O[=l 9 [ofo|ia|sa 1 Ze] iw |o]1}i2|a3/o so Z-alo;o] 1 [1 fo The optimum solution is Max 2=-48 x153, x2=18 261. EXERCISE PROBLEMS A Company makes two kinds of leather belts, Belt A is a high quality belt and belt B is of lower quality. The respective profits are Rs.4.00 and Rs.3.00 per belt. Each belt of type A requires twice as much time as a belt of type B, and if all belts were of type B, the company could make 1000 per day. The supply of leather sufficient for only 800 belts per day (both A and B). Belt A requires a fancy buckle and only 400 per day are available, There are only 700 buckles a day available for belt B. Determine the optimal product mix. (Maximization case). ‘A manufacturer produces 3 models (I, Il, & II) ofa certain product. He uses two types of raw material (A and B) of which 4000 & 6000 units respectively are available. The raw material requirements per unit of 3 models are given below: Raw material Requirement/unit of the given model 1 1 M1 A 2 3 5 B 4 2 7 The labour time for each unit of model I is twice that of model II and three times that of model III. The entire labour force of the factory can produce the equivalent of 2,500 units of model I. A market survey indicates that the minimum demand of the three models is 500, 500 and 375 units respectively. However the ratios of the number of units produced must be equal to 3: 2: . Assume that the profits per unit of models I, II and III are Rs, 60, 40 & 100 respectively. Formulate the problem as a linear programming model in order to determine the number of units of each product which will maximize profit. The medical experts and dieticians tell us that it is necessary for an adult to consume at least 75 gms, of proteins, 85 gms. of fats and 300gms, of Carbohydrates daily. The following table gives the food items, their analysis and the cost. Food type Costikg 1 1.00 2 - 3.00 3 10 4.00 4 25 2.005 5.0 8.0 40.0 1.50 6 2.5 = 25.0 3.00 Minimum 75 85 300 daily requirement Formulate the diet problem as linear programming problem. 4. A farmer has a 100 acre farm, He can sell all the tomatoes, lettuce or radishes he can raise. The p ce he can obtain is Rs. | per kg. for tomatoes, Re.0.75 a head for lettuce and Rs.2 per kg. for radishes. The average yield per acre is 2,000 kilograms of tomatoes, 3,000 head of lettuce and 1,000 kilograms of radishes. Fertilizer is available at Rs .0.50 per kg, and the amount required per acre is 100 kgs. each for tomatoes and lettuce and 50 kgs. for radishes. Labour required for sowing, cultivating and harvesting per acre is 5 man-days for tomatoes and radishes and 6 man ~days for lettuce. A total of 400 man - lays of labour are available Rs. 20 per man day. Formulate this problem as a Linear Programming model to maximize the farmer's total profit 5. A certain farming organisation operates three farms of comparable productivity. The ‘output of cach farm is limited both by the usable acreage and by the amount of water available for irrigation, The data for the upcoming season are the following: Farm Usable acreage Water available in acre 1 400 1500 2 600 2000 3 300 900 The organization is considering three crops for planting which differ primarily in their expected profit per acre and in their consumption of water. Further more, the total acreage that can be devoted to each of the crops is limited by the amount of appropriate harvesting equipment available. Crop Maximum acreage Water consumption Expected profit in acre feet per acre per acre A 700 8 Rs.400 B 800 4 Rs.300 c 300 3 Rs.100 In order to maintain a uniform work load among the farms, it is the policy of the organization that the percentage of usable acreage planted must be the same at each 28farm. However, any combination of the crops may be grown at any of the farm. The organization wishes to know how much of each crop should be planted at the respective farms in order to maximize the expected profit. Formulate this as a linear programming problem. An electronic company is engaged in the production of two components C1 and C2 used in T.V. sets, Each unit of C1 costs the company Rs, 25 in wages and Rs. 25 in material, while each unit of C2 costs the company Rs. 125 in wages and Rs. 75 in material, The company sells both products on one-period credit terms, but the company’s labour and material expenses must be paid in cash. The selling price of C1 is Rs. 150 per unit and of C is Rs. 350 per unit, Because of the strong monopoly of the company for these components, it is assumed that the company can sell at the prevailing prices as many units as it produces. The company’s production capacity is, however, limited by two considerations. First, at the beginning of period 1, the company has an initial balance of Rs. 20,000 (cash plus bank credit plus collections from past credit sales). Second, the company has available in each period 4,000 hours of machine time and 2,800 hours of assembly time. The production of each C1 requires 6 hours of machine time and 4 hours of assembly time, whereas the production of each C2 requires 4 hours of machine time and 6 hours of assembly time. Formulate this problem as an Linear Programming model so as to maximize the total profit to the company. ‘A farm is engaged in breeding pigs. The pigs are fed on various products grown on the farm. In view of the need to ensure certain nutrient constituents (call them X, Y and Z), it is necessary to buy two additional products, say, A and B. one unit of product A contains 36 units of X, 3 units of Y and 20 units of Z. one unit of product B contains units of X, 12 units of ¥ and 10 units of Z. The minimum requirement of X, Y and Z is 108 units, 36 units and 100 units respectively. Product A costs Rs. 20 per unit and product B Rs. 40 per unit.Formulate the above as a linear programming problem to minimize the total cost. The advertising agency wishes to reach two types of audiences, customers with annual incomes greater than Rs. 40,000(target audience A) and customers with annual incomes of less than Rs. 40,000 (target audience B). the total advertising budget is Rs, 2,00,000. One programme of TV advertising costs Rs. 50,000; one programme of 2910. 1. 12. radio advertising costs Rs. 20,000. For contract reasons, atleast 3 programmes ought to be on TV and the number of radio programmes must be limited to 5. Surveys indicate that a single TV programme reaches 7,50,000 customers in target audience A and 1,50,000 in target audience B, One radio programme reaches 40,000 in target audience A and 2,60,000 in target audience B, Formulate this as a linear programming problem and determine the media mix to minimize the total reach. A manufacturer of furniture makes two products: chairs and tables. Processing of these is done on two machines A and B. A chair requires 2 hours on machine A and 6 hours on machine B. A table requires 5 hours on machine A and no time on machine B. There are 16 hours of time per day available on machine A and 30 hours on machine B. Profit gained by the manufacturer from a chair and a table is Rs. 2 and Rs. 10 respectively. What should be the daily production of each of the two products? Food X contains 6 units of vitamin A per gram and 7 units of vitamin B per gram and costs 12 paise per gram. Food Y contains 8 units of vitamin A per gram and 12 units of vitamin B per gram and costs 20 paise per gram. ‘The daily minimum requirements of vitamin A and vitamin B are 100 units and 120 units respectively. Find the minimum cost of product mix. ‘A company manufactures two products viz., say P and Q. To produce these products he needs two resources say R1 and R2. The requirements of these two resources and their availability are given in the following table: Resource Requirement for Product ‘Availability of P g Resource RI 2 3 1500 R2 3 2 1500 Profit per unit(s) 30 0 How many units of Products P and Q have to be manufactured so as to maximize the profit? A Television Company operates two assembly lines, line I and Line II, Each line is used to assemble the components of three types of televisions: Colour, standard and Economy. The expected daily production on each line is as follows TV model Line I Line Colour 3 T 3013. 14, 15. Standard Economy The daily running cos ‘or two lines average Rs. 6,000 for line T and Rs. 4,000 for Line II. It is given that the company must produce at least 24 colour, 16 standard, and 48 Economy TV sets for which an order is pending. You are required to formulate the above problem as an LPP taking the objective function as minimization of total cost. Also determine the umber of days the two Jines should be run to meet the requirements. Find the maximum value of Z= 5x1 +3X2 Subject to the constraint 3x1 + 5x2 S15 Sxrt2 x2 $10 x1, 2220, Manufacturing process requires three different inputs viz., A, B and C. A sandal soap of first type requires 30 gm of A, 20 gm of B and 6 gm of C, while this data for the second type of soap is 25, 5 and 15, respectively. The maximum availability of A, B and C are 6000, 3000 and 3000 gm, respectively. The selling prices of the sandal soap of the first and second type are Rs.14 and Rs.15, respectively. The profit is proportional to the amount of soaps manufactured. How many soaps of first and second kind should be manufactured to maximize the profit. Assume that the market has unlimited demand, IBM produces two kinds of memory chips (Chip-1 and Chip-2) for memory usage. ‘The unit selling price is Rs.15 for Chip-1 and Rs.25 for Chip-2. To make one Chip-1, IBM has to invest 3 hours of skilled labour, 2 hours of unskilled labour and 1 unit of raw material. To make one Chip-2, it takes 4 hours of skilled labour, 3 hours of unskilled labour, and 2 units of raw material. The company has 100 hours of skilled labour, 70 hours of unskilled labour and 30 units of raw material available, and is interested to utilize the full potential of skilled labour. The sales contract signed by TBM requires that at least 3 units of chip-2 have to be produced and any fractional quantity is acceptable. Formulate a LP model to help IBM determine its optimal product mix. 3116. Use simplex method to Maximize z= 5x1 +3x2 Subject to the constraints x tx $2, Sx +2x. <10 3x1 + 8x2 $12 x, 20 Use simplex method to Maximize z= 5x1 +4x2 Subject to the constraints 4x + 5x2 <10, 3x 42x. <9 8x1 43x. $12 x, x 20 18. A manufacturer of leather belts makes three types of belts A, B and C which are processed on three machines M, Mz and Ms. Belt A requires 2 hours on machine Mi and 3 hours on machine Ms. Belt B requires 3 hours on machine M1,2 hours on machine Mzand 2 hours on machine Ms;and belt C requires 5 hours on machine M2 and 4 hours on machine M3.There are 8 hours of time per day available on machine M1,10 hours of time per day available on machineM2 and 15 hours of time per day available on machine Ms.The profit gained from belt A is Rs.3.00 per unit, from belt B is Rs.5.00 per unit, from belt C is Rs.4.00 per unit. What should be the daily production of each type of belts so that the profit is maximum? 19, Use simplex method to Minimize z= x1 - 3x2+2xs Subject to the constraints 3xi- Hx $7, 2xt4ea $12, 4x1 + 3x2 48x < 10, M,%,% 2020. 2. 22, 23. A farmer has 1,000 acres of land on which he can grow corn, wheat or soyabeans. Each acre of com costs Rs. 100 for preparation requires 7 man-days of work and yields a profit of Rs. 30. An acre of wheat costs Rs. 120 to prepare requires 10 man- days of work and yields a profit of Rs. 40. An acre of soyabeans costs Rs. 70 to prepare requires 8 man-days of work and yields a profit of Rs, 20. The farmer has Rs. 1,00,000 for preparation and 8,000 man-days of work, how many acres should he allocated to each crop to maximize profits? Use simplex method to Maximize z= 4x1 + 10x2 Subject to the constraints Inte <50, 2x1 + 5x2 $100 2x $3x2 $90 An electronics firms undecided as to the most profitable mix for its produets. The products now manufactured are transistors, resistors and carbon tubes with a profit (per 100 units) of Rs. 10, Rs 6 and Rs. 4 respectively. To produce a shipment of transistors containing 100 units requires 1 hours of engineering, 10 hours of direct labour and 2 hours of administrator service. To produced 100 resistors are required 1 hour, 4 hours and 2 hours of engineering, direct labour and administration time respectively. To produce one shipment of the tubes (100 units) requires 1 hours of engineering, 5 hours of direct labour and 6 hours of administration, There are 100 hours of engineering services available, 600 hours of direct labour and 300 hours of administration, What is the most profitable mix? A manufacture has two products P1 and P2, both of which are produced in two steps by machines M1 and M2. The process time per hundred for the products on the machines are: M1 | M | Contribution (per 2 100 units) PI as 1052 5 100 | 80 ‘The manufacturer is in @ market upswing and can sell as much as he can produce of both products. Formulate the problem as LP model and determine optimum product mix, using simplex method. 24, Use Penalty (or Big M) method to Maximize z= 3x1- x2 Subjects to the constraints: 2x tm22 xit3nS3 xs4 x12 0, x22 0. 25, Use Penalty (or Big M) method to Maximize z= 6x1 +4x2 Subjects to the constraints: 2xi+ 3x2 $30 3xi + 2x2 24 xitm23 x1 20, x22 0. 26. Use Penalty (or Big M) method to Maximize z= 2x1 + x2+3x3 Subjects to the constraints: Xi xrt2x5 $5 2xi+ Sxot4xs = 12 x1, x2, x3 20 Use Penalty (or Big M) method to Maximize z= 3x1 + 2x243x3 Subjects to the constraints: 2x + xb £2 3x t+ dxtden 28 1,2, % 20 27, A chemical company produces two compound A and B. The following table gives the 34units of ingredients C and D per kg. of compound A and B as well as minimum requirement of C and D and cost per kg of A and B. Using the simplex method, find the quantities of A and B which would give a supply of C and D at minimum cost. ‘Compound | Minimum requirement Ingredient [C ]7 [2 | 80 Dis |i 175 Cost per kg, a (6 A small jewellery manufacturing company employs a person who is a highly skilled ‘gem cutter, and it wishes to use this person at least 6 hours per day for this purpose On the other hand, the polishing facilities can be used in any amount up to 8 hours per day. The company specializes in three kind of semiprecious stones P, Q and R. Relevant cutting, polishing, and cost requirements are listed in the following table. How many gemstones of each type should be processed each day to minimize the cost of the finished stones? What is the minimum cost? P Q R Cutting 2h [thr | thr Polishing Thr [Tbr |2br Cost per stone [ Rs. 30 [Rs. 30 [Rs. 10