Operation Research Note Complele

OPERATIONS RESEARCH
CHAPTER ONE: INTRODUCTION TO OPERATION RESEARCH

1.1. The history of Operation Research
Since the advent of the industrial revolution, the world has been a remarkable growth in the size and complexity
of organizations. The artisan's small shops of an earlier era have evolved into billion- dollar corporations of
today. Integral parts of this revolutionary change have been a tremendous increase in the division of labor and
segmentation of management responsibilities in these organizations. This increasing specialization has created
new problems, problems that are still occurring in many organizations. One problem is a tendency for many
components of organizations to grow in to relatively with their own goals and value system, thereby
autonomous empires losing sight of how their activities and objectives mesh with those of the overall
organization. What is best for one component frequently is detrimental to another, so the components may end
up working at cross purposes. A related problem is that as the complexity and specialization in an organization
increase, it becomes more and more difficult to allocate the available resources to the various activities in a way
that is more effective for the organization as a whole.
These kinds of problems and the need to find a better way to solve them provided the environment for the
emergence of operation research (OR).
The root of OR can be traced back many decades, when early attempts were made to use a scientific approach
in the management of organizations. However, the beginning of the activities called Operation Research has
generally been attributed to the military services early in World War II. Because of the war effort, there was an
urgent need to allocate scare resources to various military operations and to the activities within each operation
in an effective manner. Therefore, the British and then the US military management called upon a large number
of scientists to apply a scientific approach to dealing with this and other strategic and tactical problems. In
effect they were asked to do research on (military) operations. These teams of scientists were the First OR
teams. By developing effective methods of using the new tool of radar, these teams were instrumental in
winning the Air battle of Britain. Through their research on how to better manage convoy and antisubmarine
operations, they also played a major role in winning the Battle of the North Atlantic. Similar efforts assisted the
Island Campaign in the Pacific.
When the war ended, the success of OR in the war effort spurred interest in applying OR outside the military as
well. As the industrial boom following the war was running its course, the problems caused by the increasing
complexity and specializations in organizations were again coming to the forefront. It was becoming apparent to
a growing number of people, including business consultants who had served on or with the OR teams during the
war, that these were basically the same problems that had been faced by the military but in a different context.
By the early 1950s, these individuals had introduced the use of OR to a variety of organizations in business,
industry, and government. The rapid spread of OR soon followed.
At least two other factors that played a key role in the rapid growth of OR during this period can be identified.
One was the substantial progress that was made early in improving the techniques of OR. After the war, many
of the scientists who had participated on OR teams or who had heard about this work were motivated to pursue
research relevant to the field; important advancements in the state of the art resulted. A prime example is the
simplex method for solving linear programming problems, developed by George Dantzig in 1947. Many of the
standard tools of OR, such as linear programming, dynamic programming, queuing theory, and inventory
theory, were relatively well developed before the end of the 1950s.
A second factor that gave great impetus to the growth of the field was the onslaught of the computer revolution.
A large amount of computation is usually required to deal most effectively with the complex problems typically
considered by OR. Doing this by hand would often be out of the question. Therefore, the development of
Compiled by: Wondie Birhan. Department of Management:

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electronic digital computers, with their ability to perform arithmetic calculations thousands or even millions of
times faster than a human being can, was a tremendous boon to OR. A further boost came in the 1980s with the
development of increasingly powerful personal computers accompanied by good software packages for doing
OR. This brought the use of OR within the easy reach of much larger numbers of people. Today, literally
millions of individuals have ready access to OR software. Consequently, a whole range of computers from
mainframes to laptops now are being routinely used to solve OR problems.
1.2. Nature and Significance of Operation Research
As its name implies, operations research involves “research on military operations. This indicates the approach
as well as the area of its applications. The operations research approach is particularly useful in balancing
conflicting objectives (goals or interest) where there are many alternative courses of action available to decision
makers. In a theoretical sense, the optimum decision must be one that is best for the organization as a whole. It
is often called the global optimum. A decision that is best for one or more sections of the organization is usually
called suboptimum decision. The OR approach attempt to find global optimum by analyzing inter-relationships
among the system components involved in the problem. One such situation is described below.
Consider a large organization with a number of management specialists but not necessarily well
coordinated. For example, consider the basic problem of maintaining stock of finished goods. To marketing
manager, stocks of a large variety of products are a means of supplying the company's customers with what they
want and when they want it. Clearly, according to marketing manager, a fully stocked warehouse is of prime
importance to the company. But the production manager argues for long production runs preferably on smaller
product range, particularly if significant time is lost when production is switched from one variety to another.
The result would gain be a tendency to increase the amount of stock carried but it is, of course, vital that the
plant should be kept running. On the other hand, the finance manager sees stocks in terms of capital tied up
unproductively and argues strongly for their reduction. Finally, there appears the personnel manager for whom a
steady level of production is advantageous for having better labor relations. Thus, all these people would claim
to uphold the interests of the organization, but they do so only from their specialized point of view. They may
come up with contradictory solutions and obviously, they cannot all be right.
In view of the above involving the whole system, the decision makers, whatever his specialization, will
need help and it is in the attempt to provide his assistance that OR has been developed. Operation research
attempts to resolve the conflicts of interest among various sections of the organization and seeks the optimal
solution which may not be acceptable to one department but is in the interest of the organization as a whole.
Further, OR is concerned with providing the decision maker with decision aids (or rules) derived from:
i. A total system orientation,
ii. Scientific methods of investigation, and
iii. Models of reality, generally based on quantitative measurement and techniques.
1.3. Features of Operation Research
The features of operation research approach to any decision and control problem can be summarized as under.
1.3.1. Interdisciplinary Approach.
Interdisciplinary teamwork is essential because while attempting to solve a complex management problem, one
person may not have a complete knowledge of all aspects (such as economic, social, political, psychological,
engineering, etc.). This means we should not expect a desirable solution to managerial problems. Therefore a
group of individuals specializing in mathematics, statistics, economics, engineering, computer science,
psychology, etc. can be organized so that each aspect of the problem could be analyzed by a particular specialist

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in that field in order to arrive at an appropriate and desirable solution of the problem. However, there are certain
situations which may be analyzed even by one individual.
1.3.2. Methodological Approach
Operation research is a scientific methods, techniques and tools to problems solving the operations of systems
so as to provide those in control of operations with optimum solution to the problems. The scientific method
consists of observing, and defining the problem; formulating and testing the hypothesis; and analyzing the result
of the test. The data so obtained is then used to decide whether the hypothesis should be accepted or not. If the
hypothesis is accepted, the result should be implemented. Otherwise an alternative hypothesis has to be
formulated.
1.3.3. Wholistic Approach
While arriving at a decision, an operation research team examines the relative importance of all conflicting and
multiple objectives and the validity of claims of various departments of the organization from the perspective of
the whole.
1.3.4. Objectivistic Approach
An operation research approach seeks to obtain an optimal solution to the problem under analysis. For this, a
measure of desirability (or effectiveness) is defined, based on the objective(s) of the organization. A measure of
desirability so defined is then used to compare alternative courses of action with respect to their outcomes.
1.4. Meaning and definition of Operations Research:

Operations Research has been defined in various ways and it is perhaps too early to define it in some
authoritative way. However given below are a few opinions about the definition of OR which have been
changed along-with the development of the subject.
In 1946 Morse & Kimbel has defined as; "OR is a scientific method of providing executive departments with a
quantitative basis for decision regarding the operations under their control"
In 1948 Blackett defined as; "OR is a scientific method of providing executives with any analytical and
objective basis for decisions"
Another definition is due to Morse who defined in 1948 as; "The term OR, has here-to fore been used to
connote various attempts to study operations of war by scientific methods. From a more general point of view,
OR can be considered to be an attempt to study those operations of modern society which involved
organizations of men or men and machines".
Later on in 1957, Churchmen Ackoff and Arnoff defined; "OR is the application of scientific methods,
techniques and tools to problems involving the operations of systems so as to provide those in control of the
operations with optimum solutions to the problem".
In 1958 Saaty defined OR as; "The art of giving bad answer to problems to which, otherwise, worse answers
are given".
The Operational Research Society of U.K. defines OR as: "Operational Research is the application of the
methods of science to complex problems arising in the direction and management of large systems of men,
machines, materials and money in industry, business, government and defense.
In the USA, the OR Society of America says more briefly; "OR is concerned with scientifically deciding how
to best design and operate man-machine systems, usually under conditions requiring the allocation of scarce
resources".
An even briefer definition might be "Science applied to management", but however, it might be defined, there is
no doubt that OR provides the numerate scientist - of whatever discipline-with an opportunity to apply the skills
of science in the field of Management.

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Before proceeding further let us define for the sake of clarity some fundamental terms.
Management, Management Science and OR:
Management may be equated with decision-making and control.
Management Science is the study of problems as abstractions and the application of the resulting theory to
practical situations. Its two fundamental disciplines are behavioral science and science and quantitative
methods.
Operations Research (OR) is the application of quantitative methods to decision making. It formulates
problems incisively (clearly and effectively) and assesses the possible consequence of alternative course of
action, so that informed and effective decisions can be taken.
1.5. Models and Modeling in Operation Research

Management deals with reality that is at once complex, dynamic, and multi-facet. It is neither possible nor
desirable, to consider each and every element of reality before deciding the courses of action. It is impossible
because of time available to decide the courses of action and the resources, which are limited in nature. More
over in many cases, it will be impossible for a manager to conduct experiment in real environment. For
example, if an engineer wants to measure the inflow of water in to a reservoir through a canal, he cannot sit on
the banks of canal and conduct experiment to measure flow. He constructs a similar model in laboratory and
studies the problem and decides the inflow of water. Hence for many practical problems, a model is necessary.
We can define an operations research model as some sort of mathematical or theoretical description of
various variables of a system representing some aspects of a problem on some subject of interest or inquiry.
The model enables to conduct a number of experiment involving theoretical subjective manipulations to find
some optimum solution to the problem on hand.
Hence through a model, we can explain the aspect of the subject / problem / system. (Here we can say a model
is a relationship among specified variables and parameters of the system).
1.5.1. Types of Models
Models are also categorized depending on the structure.
I. Iconic Models:
These models are scaled version of the actual object. For example a toy of a car is an iconic model of a real car.
In your laboratory, you might have seen Internal Combustion Engine models, Boiler models etc. All these are
iconic models of actual engine and boiler etc. They explain all the features of the actual object. In fact a globe is
an iconic model of the earth. These models may be of enlarged version or reduced version. Big objects are
scaled down (reduced version) and small objects, when we want to show the features, it is scaled up to a bigger
version. In fact it is a descriptive model giving the description of various aspects of real object. As far as
operations research is concerned, is of less use. The advantages of these models: are It is easy to work with an
iconic model in some cases, these are easy to construct and these are useful in describing static or dynamic
phenomenon at some definite time.
The limitations are, we cannot study the changes in the operation of the system. For some type of systems, the
model building is very costly. It will be sometimes very difficult to carry out experimental analysis on these
models.
II. Analogue Model:
In this model one set of properties are used to represent another set of properties. Say for example, blue colour
generally represents water. Whenever we want to show water source on a map it is represented by blue colour.
Contour lines on the map is also analog model. Many a time we represent various aspects on graph by different

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colours or different lines all these are analog models. These are also not much used in operations research. The
best examples are warehousing problems and layout problems.
III. Symbolic Models or Mathematical Models:
In these models the variables of a problem is represented by mathematical symbols, letters etc. To show the
relationships between variables and constraints we use mathematical symbols. Hence these are known as
symbolic models or mathematical models. These models are used very much in operations research. Examples
of such models are Resource allocation model, Newspaper boy problem, transportation model etc.
1.5.2. Some of the Points to be remembered while Building a Model
 When we can solve the situation with a simple model, do not try to build a complicated model.
 Build a model that can be easily fit in the techniques available. Do not try to search for a technique, which
suit your model.
 In order to avoid complications while solving the problem, the fabrication stage of modeling must be
conducted rigorously.
 Before implementing the model, it should be validated / tested properly.
 Use the model for which it is deduced. Do not use the model for the purpose for which it is not meant.
 Without having a clear idea for which the model is built do not use it. It is better before using the model;
you consult an operations research analyst and take his guidance.
 Models cannot replace decision makers. It can guide them but it cannot make decisions. Do not be under the
impression, that a model solves every type of problem.
 The model should be as accurate as possible.
 A model should be as simple as possible.
 Benefits of model are always associated with the process by which it is developed.
1.6. Operations Research Approach to Problem Solving:
OR encompasses a logical systematic approach to problem solving. This approach to problem solving as shown
below and follows a generally recognized ordered set or steps:
1. Observation
The first step in a problem solving exercises in OR is the identification of a problem that exists in the system.
This requires that the system be continuously and closely observed so that problems can be identified as soon as
they occur.
2. Definition of the Problem
Once it has determined that a problem exists, it must be clearly and concisely defined.
The problem definition includes the limits of the problems and the degree to which it pervades other organs of
the system. A requirement of problem definition is that the goals (or objective) Must be clearly defined which
helps to focus attention on what the problem is.
3. Model Construction
An OR model is an abstract representation of an existing problem situation. It can be in the form of a graph or
chart, but mostly, an OR model consists of a set of mathematical relationship. In OR terminology, these are
called objective function and constraints.
4. Model Solution
Once models are constructed, they are solved using the OR techniques, presented in the next section. Actually it
is difficult to separate model construction and solution in most cases, since OR technique usually applies to a
specific type of model. Thus, the model type and solution method are both part of the OR technique.
5. Implementation of Results

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The results of an OR technique are information which helps in making a decision. The beauty of OR process
lies in obtaining, the results which are implement able or we call it a feasible whole exercise will go waste.
1.7. Operations Research Techniques:

Two of the five steps of OR process, model construction and solution, encompass the actual use of OR
techniques. These techniques can be loosely classified into five categories.
1) Linear mathematical programming technique consist of first, identifying problem as being solvable by
linear programming; second formulation of unturned problem and then finding the solution by using established
mathematical techniques. It derives its name from the fact that the functional relationship in the mathematical
model are linear and the solution techniques consists of a predetermined mathematical steps i.e. program.
2) Probabilistic techniques cover those problems in which all parameters are not known with certainty. The
solution results are assumed to be known with uncertainty, with probability that other solution might exist.
3) Inventory techniques are specifically designed for the analysis of inventory problem frequently encountered
by the business firms. This particular business function is singled out for attention, since it typically represents a
significant area of cost for almost every business. This category is divided into probabilistic and deterministic
techniques.
4) Network techniques consist of models that are represented by diagrams rather than strictly mathematical
relationship i.e. pictorial representation of the system under consideration.
These models can represent either probabilistic or deterministic systems.
5) Other techniques consist of all the remaining techniques, which do not come under the four heads
mentioned above. For example, Dynamic programming employs a different modeling and solution logic than
linear programming. In non-linear programming either the objective function or the constraints or both can be
non-linear functions, which would require altogether different solution technique.
1.8. Application Areas of Operations Research

In its recent years of organized development, OR has entered successfully many different areas of research for
military government and industry in many countries of the world.
The basic problem in most of the developing countries in Asia and Africa is to remove poverty and improve the
standard of living of a common man as quickly as possible. So there is a great scope for economists,
statisticians, administrators, politicians and the technicians working in a team to solve this problem by an OR
approach. The possible application sectors, in Ethiopia, are as under:-
1) Macro Economic Planning:
OR can be employed for Macro-Economic Planning of the country:
a) Input / Output Analysis: by using LP models. This input/output analysis can be of any duration [i.e. of short
term (up to say 10 years)-Five Year Plan; and of long term (10-30 years)].
b) Investment Planning: OR can be employed in the Investment Planning of the country where investment plans
for the next five or ten years are prepared. Mixed Integer Programming and Linear Programming techniques can
be used.
c) Choice of Projects: OR can help the people in the planning in choosing the optimal project. This sort of
choice would need Integer Programming and Quadratic Assignment techniques.
d) OR can also be used in Simulation Modeling of the Economy of the country.
2) Sectoral Planning:
OR can also be employed in a particular sector of the Economy, e.g. in agriculture, in finance, in industry, in
marketing, in production, in management etc.

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a) Scheduling all operations within a sector can be done by using OR e.g. production scheduling + Distribution
planning + marketing + Personnel management + maintenance + ...............
b) Schedule of some operations within a sector can be done by employing OR e.g. Inventory planning in
agriculture or distribution of fertilizer etc.
3) Micro Economic Planning:
This sort of activity involve for example:
 Planning the operations of a Company.
 Improving the layout of a workshop in a company.
 Finding size of a hospital in an area etc.
There is a great potential for utilizing OR in this area of planning in our country.
CHAPTER TWO: LINEAR PROGRAMMING

2.1. Introduction to Linear Programming
The development of linear programming has been ranked among the most important scientific advances of the
mid-20th century, and we must agree with this assessment. Its impact since just 1950 has been extraordinary.
Today it is a standard tool that has saved many thousands or millions of dollars for most companies or
businesses of even moderate size in the various industrialized countries of the world; and its use in other sectors
of society has been spreading rapidly. A major proportion of all scientific computation on computers is devoted
to the use of linear programming. What is the nature of this remarkable tool, and what kinds of problems does it
address?
You will gain insight into this topic as you work through subsequent examples. However, a verbal summary
may help provide perspective.
Briefly, the most common type of application involves the general problem of allocating limited resources
among competing activities in a best possible (i.e., optimal) way. More precisely, this problem involves
selecting the level of certain activities that compete for scarce resources that are necessary to perform those
activities. The choice of activity levels then dictates how much of each resource will be consumed by each
activity. The variety of situations to which this description applies is diverse, indeed, ranging from the
allocation of production facilities to products to the allocation of national resources to domestic needs, from
portfolio selection to the selection of shipping patterns, from agricultural planning to the design of radiation
therapy, and so on. However, the one common ingredient in each of these situations is the necessity for
allocating resources to activities by choosing the levels of those activities.
Linear programming uses a mathematical model to describe the problem of concern.
The adjective linear means that all the mathematical functions in this model are required to be linear functions.
The word programming does not refer here to computer programming; rather, it is essentially a synonym for
planning. Thus, linear programming involves the planning of activities to obtain an optimal result, i.e., a result
that reaches the specified goal best (according to the mathematical model) among all feasible alternatives.
Although allocating resources to activities is the most common type of application, linear programming has
numerous other important applications as well. In fact, any problem whose mathematical model fits the very
general format for the linear programming model is a linear programming problem. Furthermore, a remarkably
efficient solution procedure, called the simplex method, is available for solving linear programming problems of
even enormous size. These are some of the reasons for the tremendous impact of linear programming in recent
decades.
A Standard Form of the Model

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We can now formulate the mathematical model for this general problem of allocating resources to activities. In
particular, this model is to select the values for x1, x2. . . xn so as to
Maximize Z =c1x1 + c2x2 +………….. +cnxn

Subject to the restrictions
a11x1 +a12x2 +………………..+ a1nxn ≤ ≥ = b1
a21x1 +a22x2 +………………..+a2nxn ≤ ≥ = b2
.
.
.
am1x1 +am2x2+………………. + amnxn ≤ ≥ = bm,
TABLE 2.1 Data needed for a linear programming model involving the allocation of resources to activities
Resource Usage per Unit of Activity Sign of Amount of

Resources Activity equalities Resources
Z per unit of C1 C2 . . . Cn Available
activity
1 2 . . . n
1 a11 a 12 . . . a 1n ≤ = ≥ b1
2 a21 a22 . . . a2n ≤ = ≥ b2
. . . . . . . . .
. . . . . . . . .
m am1 am2 . . . amn ≤ = ≥ bm
And X1 ≥0, x2 ≥ 0, . . . , xn ≥0.

We call this our standard form1 for the linear programming problem. Any situation whose mathematical
formulation fits this model is a linear programming problem.
Common terminology for the linear programming model can now be summarized.
The function being maximized, c1x1 +c2x2+………+ cjxn, is called the objective function.
The restrictions normally are referred to as constraints. The first m constraints (those with a function of all the
variables ai1x1 +ai2x2 +…………..+ ainxn on the left-hand side) are sometimes called functional constraints (or
structural constraints). Similarly, the xn ≥ 0 restrictions are called non-negativity constraints (or non-negativity
conditions).
2.2. Concept and Importance of Linear Programming
Linear Programming- is an optimization method, which shows how to allocate scarce resources such as money,
materials or time and how to do such allocation in the best possible way subject to more than one limiting
condition expressed in the form of inequalities and/or equations.
It enables users to find optimal solution to certain problems in which the solution must satisfy a given set of
requirements or constraints.
Optimization in linear programming implies either maximization (such as profit, revenue, sales, and market
share) or minimization (such as cost, time, and distance) a certain objective function. It implies that in LP we
cannot max/min two quantities in one model. It involves linearly related multi-variate functions, i.e., functions
with more than one independent variable.

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The goal in linear programming is to find the best solution given the constraints imposed by the problem; hence
the term constrained optimization.
2.3. Structure Linear programming Models (LPM)

Linear Programming (LP) models are mathematical representations of LP problems. Some LP models have a
specialized format, whereas others have a more generalized format. Despite this, LP Models have certain
characteristics in common. Knowledge of these characteristics enables us to recognize problems that are
amenable to a solution using LP models and to correctly formulate an LP model. The characteristics can be
grouped into two categories: Components and Assumptions: The components relate to the structure of a model,
whereas the assumptions reveal the conditions under which the model is valid.
Components Assumptions
1. Objective function 1. Linearity
2. Decision variables Model 2. Divisibility Model Validity
3. Constraints Structure 3. Certainty
4. Parameters & RHSV 4. Non-negativity
2.3.1. Components of LP model

1. The Objective Function- is the mathematical or quantitative expression of the objective of the company/model.
The objective in problem solving is the criterion by which all decisions are evaluated. In LPMs a single
quantifiable objective must be specified by the decision maker. For example, the objective might relate to
profits, or costs, or market share, but to only one of these. Moreover, because we are dealing with optimization,
the objective will be either maximization or minimization, but not both at a time.
2. The Decision Variables - represent unknown quantities to be resolved for. These decision variables may
represent such things as the number of units of different products to be sold, the amount of Birr to be invested in
various projects, the number of ads to be placed with different media.
Since the decision maker has freedom of choice among actions, these decision variables are controllable
variables.
3. The constraints - are restrictions which define or limit the feasibility of a proposed course of action. They limit
the degree to which the objective can be pursued.
Atypical restriction embodies scarce resources (such as labor supply, raw materials, production capacity,
machine time, storage space), legal or contractual requirements (e.g. Product standards, work standards), or they
may reflect other limits based on forecasts, customer orders, company policies etc.
4. Parameters - are fixed values that specify the impact that one unit of each decision variable will have on the
objective and on any constraint it pertains to as well as to the numerical value of each constraint.
 The components are the building blocks of an LP model. We can better understand their meaning by
examining a simple LP model as follows.
Example:
Maximize: 4X1 + 7X2 + 5X3 (Profit) ___________________ objective function
Subject to:
2X1 + 3X2 + 6X3  300 labor hrs
5X1 + X2 + 2X3  200 lb raw material A System constraints
3X1 + 5X2 + 2X3  360

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X1 = 30 Individual constraints
X2  40
X1, X2, X3  0  Non-negativity constraints.
System constraints – involve more than one decision variables.

Individual constraints – involve only one decision variable.
None-negativity constraints specify that no variable will be allowed to take on a negative value. The non-
negativity constraints typically apply in an LP model, whether they are explicitly stated or not.
2.3.2. Assumption of LP Models
1. Linearity. The linearity requirement is that each decision variable has a linear impact on the objective function
and in each constraint in which it appears. Following the above example, producing one more unit of product 1
adds Br. 4to the total profit. This is true over the entire range of possible values of X 1. The same applies to each
of the constraints. It is required that the same coefficient (from example, 2 lb. per unit) apply over the entire
range of possible value so the decision variable.
2. Divisibility. The divisibility requirement pertains to potential values of decision variables. It is assumed that
non-integer values are acceptable. For example: 3.5TV sets/hr would be acceptable  7 TV sets/2hrs.
3. Certainty. The certainty requirement involves two aspects of LP models.
i) With respect to model parameters (i.e., the numerical values) – It in assumed that these values are
known and constant e.g. in the above example each unit of product 1 requires 2lab his is known and
remain constant, and also9 the 300 lab/hr available is deemed to be known and constant.
ii) All the relevant constraints identified and represented in the model are as they are.
4. Non-negativity. The non-negativity constraint is that negative values of variables are unrealistic and,
therefore, will not be considered in any potential solution; only positive values and zero will be allowed.
2.4. Formulating LP Models
Once a problem has been defined, the attention of the analyst shifts to formulating a model. Just as it is
important to carefully define a problem, it is important to carefully formulate the model that will be used to
solve the problem. If the LP model is ill formulated, ill-structured, it can easily lead to poor decisions.
Formulating linear programming models involves the following steps:
1. Define the problem/problem definition
* To determine the # of type 1 and type 2 products to be produced per month so as to maximize the
monthly profit given the restrictions.
2. Identify the decision variables or represent unknown quantities
* Let X1 and X2 be the monthly qualities of Type 1 and type 2 products
3. Determine the objective function
* Once the variables have been identified, the objective function can be specified. It is necessary to
decide if the problem is maximization or a minimization problem and the coefficients of each decision
variable.
Note:
a. The units of all the coefficients in the objective function must be the same. E.g. If the contribution of
type 1 is in terms of Br so does for type 2.
b. All terms in the objective function must include a variable each term have to have 1 variable.
c. All decision variables must be represented in the objective function.
4. Identifying the constraints

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- System constraints: - more than one variable
- Individual constraints: - one variable
- Non-negative constraints
Examples
1. A firm that assembles computer and computer equipment is about to start production of two new
microcomputers. Each type of micro-computer will require assembly time, inspection time and storage space.
The amount of each of these resources that can be devoted to the production of microcomputers is limited. The
manager of the firm would like to determine the quantity of each microcomputer to produce in order to
maximize the profit generated by sales of these microcomputers.
Additional information
In order to develop a suitable model of the problem, the manager has met with design and manufacturing
personnel. As a result of these meetings, the manger has obtained the following information:
Type 1 Type 2
Profit per unit Birr 60 Birr 50
Assembly time per unit 4hrs 10hrs
Inspection time per unit 2hrs 1hr
Storage space per unit 3cubic ft 3cubic ft
The manager also has acquired information on the availability of company resources. These weekly amounts
are:
Resource Resource available
Assembly time 100hrs
Inspection time 22hrs
Storage space 39 cubic feet
The manger also meet with the firm’s marketing manager and learned that demand for the microcomputers was
such that whatever combination of these two types of microcomputer is produced, all of the output can be sold.
Required: Formulate the Linear programming model.
Solution:
Step 1: Problem Definition
- To determine the number of two types of microcomputers to be produced (and sold) per week so
as to maximize the weekly profit given the restriction.
Step 2: Variable Representation
- Let X1 and X2 be the weekly quantities of type 1 and type 2 microcomputers, respectively.
Step 3: Develop the Objective Function
Maximize Z or max Z = 60X1 + 50X2
Step 4: Constraint Identification
System constraints: 4X1 + 10X2  100hrs Assembly time
2X1 + X2  22hrs inspector time
3X1 + 3X2  39 cubic feet Storage space
Individual constraint No
Non-negativity constraint X1, X2  0
In summary, the mathematical model for the microcomputer problem is:
Max Z = 60X1 + 50X2
Subject to: 4X1 + 10X2  100

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2X1 + X2  22
X1 + 3X2  39
X1, X2  0
2. An electronics firm produces three types of switching devices. Each type involves a two-step assembly operation.
The assembly times are shown in the following table:
Assembly time per Unit (in minutes)
Section #1 Section #2
Model A 2.5 3.0
Model B 1.8 1.6
Model C 2.0 2.2
Each workstation has a daily working time of 7.5 hrs. The manager wants to obtain the greatest possible profit
during the next five working days. Model A yields a profit of Birr 8.25 per unit, Model B a profit of Birr 7.50
per unit and Model C a profit of Birr 7.80 per unit. Assume that the firm can sell all it produces during this time,
but it must fill outstanding orders for 20 units of each model type.
Required: Formulate the linear programming model of this problem.
Solution:
Step 1. Problem definition
To determine the number of three types of switching devices to be produced and sold for the next 5
working days so as to maximize the 5 days profit.
Step 2. Variable representation
Let X1, X2 and X3 be the number of Model A, B and C switching devices respectively, to be produced
and sold.
Step 3. Develop objective function
Max Z: 8.25X1 + 7.50X2 + 7.80X3
Step 4. Constraint identification
2.5X1 + 1.8X2 + 2.0X3  2250 minutes Ass. time station 1 System
3.0X1 + 1.6X2 + 2.2X3  2250 minutes Ass. time station 2
X1  20 Model A
X2  20 Model B Individual constraint
X3  20 Model C
X1, X2, X3 0 Non negativity
In summary:
Max Z: 8.25X1 + 7.50X2 + 7.80X3
subject to
2.5X1 + 1.8X2 + 2.0X3  2250 minutes

3.0X1 + 1.6X2 + 2.2X3  2250 minutes
X1  20 model A
X2  20 model B
X3  20 model C
X1, X2, X3  0 non negativity
3. A diet is to include at least 140 mgs of vitamin A and at least 145 Mgs of vitamin B. These requirements are to
be obtained from two types of foods: Type 1 and Type 2. Type 1 food contains 10Mgs of vitamin A and 20mgs
of vitamin B per pound. Type 2 food contains 30mgs of vitamin A and 15 mgs of vitamin B per pound. If type 1
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and 2 foods cost Birr 5 and Birr 8 per pound respectively, how many pounds of each type should be purchased
to satisfy the requirements at a minimum cost?
Vitamins
Foods A B
Type 1 10 20
Type 2 30 15
Solution:
To determine the pounds of the two types of foods to be purchased to make the diet at a minimum
possible cost within the requirements.
Step 2. Variable representation
Let X1 and X2 be the number of pounds of type 1 and type 2 foods to be purchased, respectively.
Step 3. Objective function
Min Z: 5X1 + 8X2
4. Constraints
10X1 + 30X2  140 System constraints
20X1 + 15X2  145
X1, X2 0 non-negativity constraints.
4. A farm consists of 600 hectares of land of which 500 hectares will be planted with corn, barley and wheat,
according to these conditions.
(1) At least half of the planted hectare should be in corn.
(2) No more than 200 hectares should be barley.
(3) The ratio of corn to wheat planted should be 2:1
It costs Birr 20 per hectare to plant corn, Birr 15 per hectare to plant barley and Birr 12 per hectare to plant
wheat.
Required: Formulate this problem as an LP model that will minimize planting cost while achieving the specified
conditions.
Solution:
To determine the number of hectares of land to be planted with corn, barley and wheat at a minimum
possible cost meeting the requirements.
Step 2. Decision variable representation
Let X 1 be the number of hectares of land to be planted with corn, X 2 be the number of hectares of land to
be planted with barley, and X3 be the number of hectares of land to be planted with wheat.
Step 3. Objective function
Min Z = 20X1 + 15X2 + 12X3
Step 4. Constraints
X1 + X2 + X3 = 500
X1  250
X2  200
X1 – 2X2 =0

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X1, X2, X3  0
In summary
Min Z: 20X1 + 15X2 + 12X3
: X1 + X2 + X2 = 500
X1 – 2X2 =0
X1  250
X2  200
X1, X2, X3 0
5. The Ambesa Shoe Company has contracted with an advertising firm to determine the types and amount of
advertising it should have for its stores. The three types of advertising available are radio and television
commercials and newspaper ads. The retail store desires to know the number of each type of advertisement
it should purchase in order to Maximize exposure. It is estimated that each ad and commercial will reach the
following potential audience and cost the following amount.
Type of Adv. Exposure (people/ad or commercial) Cost
TV. commercial 20,000 15,000
Radio commercial 12,000 8,000
Newspaper ad 9,000 4,000
The following resource constraints exist:
1. There is a budget limit of Br. 100,000 available for advertising.
2. The television station has enough time available for four commercials.
3. The radio station has enough time available for ten radio commercials.
4. The newspaper has enough space available for seven ads.
5. The advertising agency has time and staff to produce at most a total of fifteen commercials ads.
Required: Formulate the Linear programming model.
Solution:
Decision Variables
This model consists of three decision variables representing the number of each type of advertising produced:
X1 = the number of television commercials
X2 = the number of radio commercials
X3 = the number of newspaper ads
The Objective Function
The objective of this problem is different from the objectives in the previous examples in which only profit was
maximized (or cost minimized). In this problem profit is not maximized, but rather the audience exposure is
maximized.
This objective function demonstrates that although a linear programming model must either maximize or
minimize some objective; the objective itself can be in terms of any type of activity or valuation.
For this problem the objective of audience exposure is determined by summing the audience exposure gained
from each type of advertising
Maximize Z = 20, 000 X1 + 12, 000 X2 + 9, 000 X3
Where Z = the total number of audience exposures
20, 000 X1 = the estimated number of exposures from television commercials
12, 000 X2 = the estimated number of exposures from radio commercials
9, 000 X3 = the estimated number of exposures from newspaper ads

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Model Constraints
The first constraint in this model reflects the limited budget of Br. 100, 000 allocated for advertisement,
Br. 15, 000 X1 + 6, 000 X2 + 4, 000 X3 ≤100, 000
Where
Br15, 000 X1 = the amount spent for television advertising
Br 6, 000 X2 = the amount spent for radio advertising
Br 4, 000 X3 = the amount spent for newspaper advertising
The next three constraints represent the fact that television and radio commercials are limited to four and ten,
respectively, while newspaper ads are limited to seven.
X1 ≤ 4 Commercials
X2 ≤ 10 Commercials
X3 ≤ 7 Advertisements
The final constraint specifies that the total number of commercials and ads cannot exceed fifteen due to the
limitations of the advertising firm:
X1 + X2 + X3 < 15 commercials and ads
The complete linear programming model for this problem is summarized as
Maximize Z = 20, 000 X1 + 12, 000 X2 + 9, 000 X3
Subject to
Br. 15, 000 X1 + 6, 000 X2 + 4, 000 X3 ≤ Br 100, 000
X1 ≤ 4
X2 ≤ 10
X3 ≤ 7
X1 + X2 + X3 ≤ 15
X1, X2, X3 ≥ 0
2.5. Solution Approaches to Linear Programming Problems
There are two approaches to solve linear programming problems:
2.5.1. The Graphic solution method
2.5.2. The Algebraic solution/ simplex algorithm method
2.5.1. The Graphic Solution Method
It is a relatively straightforward method for determining the optimal solution to certain linear programming
problems. It gives as a clear picture. This method can be used only to solve problems that involve two decision
variables. However, most linear programming applications involve situations that have more than two decision
variables, so the graphic approach not used to solve them.
E.g.: 1. solving the micro-computer problem with graphic approach
Max Z = 60X1 + 50X2
Subject to
4X1 + 10X2  100
2X1 + X2  22
3X1 + 3X2  39
X1, X2  0
Steps:
1. Plot each of the constraints and identify its region – make linear inequalities linear equations.

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2. Identify the common region, which is an area that contains all of the points that satisfy the entire set
of constraints.
3. Determine the Optimal solution- identify the point which leads to maximum benefit or minimum
cost.
24
22 2X1 + X2 = 22
20
16
3X1 + 3X2 = 39
12
(0, 13) E
8
(5, 8)D 4X1 + 10X2 = 100
4 (9, 4) C
(0, 0) A 4 8 B 12 16 20 24 28
To identify the maximum (minimum) value we use the corner point approach or the extreme point approach.
The corner point/extreme point approach has one theorem: It states that;
For problems that have optimal solutions, a solution will occur at an extreme, or corner point. Thus, if a
problem has a single optimal solution, it will occur at a corner point. If it has multiple optimal solutions,
at least one will occur at a corner point. Consequently, in searching for an optimal solution to a problem,
we need only consider the extreme points because one of those must be optimal. Further, by determining
the value of the objective function at each corner point, we could identify the optimal solution by
selecting the corner point that has the best value (i.e., maximum or minimum, depending on the
optimization case) at the objective function.
Determine the values of the decision variables at each corner point. Sometimes, this can be done by
inspection (observation) and sometimes by simultaneous equation.
Substitute the value of the decision variables at each corner point.
After all corner points have been so evaluated, select the one with the highest or lowest value depending on
the optimization case.
Points Coordinates How Determined Value of Objective function

X1 X2 Z = 60X1 + 50X2
A 0 0 Observation Birr 0
B 11 0 Observation Birr 660
C 9 4 Simultaneous equations Birr 740
D 5 8 Simultaneous equations Birr 700
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E 0 10 Observation Birr 500
Basic solution
X1 = 9
X2 = 4
Z = Birr 740
After we have got the optimal solution, we have to substitute the value of the decision variables into the
constraints and check whether all the resources available were used or not. If there is an unused resource we can
use it for any other purpose. The amount of unused resources is known as SLACK-the amount of the scarce
resource that is unused by a given solution.
The slack can range from zero, for a case in which all of a particular resource is used, to the original amount of
the resource that was available (i.e., none of it is used).
Computing the amount of slack
Constraint Amount used with X1 Originally Amount of slack
= 9 and X2 = 4 available (available – Used)
Assembly time 4(9) + 10(4) = 76 100 hrs 100 – 76 = 24 hrs
Inspection time 2(9) = 1 (4) = 22 22 hrs 22 – 22 = 0 hr
Storage space 3(9) + 3(4) = 39 39 cubic ft 39 – 39 = 0 cubic ft
Constraints that have no slack are some time referred to as binding constraints since they limit or bind the
solution. In the above case, inspection time and storage space are binding constraints; while assembly time has
slack.
Knowledge of unused capacity can be useful for planning. A manager may be able to use the assembly time for
other products, or, perhaps to schedule equipment maintenance, safety seminars, training sessions or other
activities.
Interpretation: The Company is advised to produce 9 units of type 1 microcomputers and 4 units of type 2
microcomputers per week to maximize his weekly profit to Birr 740; and in do so the company would be left
with unused resource of 24-assembly hrs that can be used for other purposes.
2. Solving the diet problem with graphic approach
Min Z: 5X1 + 8X2
10X1 + 30X2  140
20X1 + 15X2  145
X1, X2 0
16
20X1 + 15X2 = 145
12
(0, 9.67) A

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8
10X1 + 30X2 = 140
4 B (5, 3)
(0,0) C (14,0)
4 8 12 16 20
Points Coordinates How Determined Value of the objective function

X1 X2 Z = 5X1 + 8X2
A 0 9.67 Observation Birr 77.30
B 5 3 Simultaneous Birr 49
equations
C 14 0 Observation Birr 70
Basic solution: X1 = 5 pounds

X2 = 3 pounds
C = Birr 49
Interpretation: To make the diet at the minimum cost of Birr 49 we have to purchase 5 pounds of Type1 food
and 3 pounds Type 2 food.
If there is a difference between the minimum required amount and the optimal solution, we call the difference
surplus: That is, Surplus is the amount by which the optimal solution causes a  constraint to exceed the
required minimum amount. It can be determined in the same way that slack can: substitute the optimal values of
the decision variables into the left side of the constraint and solve. The difference between the resulting value
and the original right-hand side amount is the amount of surplus. Surplus can potentially occur in a  constraint.
2.5.2. The Simplex Algorithm/Algebraic Solution Method

The simplex method is an iterative technique that begins with a feasible solution that is not optimal, but serves
as a starting point. Through algebraic manipulation, the solution is improved until no further improvement is
possible (i.e., until the optimal solution has been identified). Each iteration moves one step closer to the optimal
solution. In each iteration, one variable that is not in the solution is added to the solution and one variable that is
in the solution is removed from the solution in order to keep the number of variables in the basis equal to the
number of constraints.
The optimal solution to a linear programming model will occur at an extreme point of the feasible solution
space. This is true even if a model involves more than two variables; optimal solutions will occur at these
points. Extreme points represent intersections of constraints. Of course, not every solution will result is an
extreme point of the feasible solution space; some will be outside of the feasible solution space. Hence, not
every solution will be a feasible solution. Solutions which represent intersections of constraints are called basic
solutions; those which also satisfy all of the constraints, including the non-negativity constraints, are called

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basic feasible solutions. The simplex method is an algebraic procedure for systematically examining basic
feasible solutions. If an optimal solution exists, the simplex method will identify it.
The simplex procedure for a maximization problem with all  constraints consists of the following steps.
Step1. Write the LPM in a standard form: when all of the constraints are written as equalities, the linear
program is said to be in standard form. We convert the LPM in to a standard form by applying (introducing) the
slack variables, S, which carries a subscript that denotes which constraint it applies to. For example, S1 refers to
the amount of slack in the first constraint, S2 to the amount of slack in the second constraint, and so on. When
slack variables are introduced to the constraints, they are no longer inequalities because the slack variable
accounts for any difference between the left and right-hand sides of an expression. Hence, once slack variables
are added to the constraints, they become equalities. Furthermore, every variable in a model must be
represented in the objective function. However, since slack does not provide any real contribution to the
objective, each slack variable is assigned a coefficient of zero in the objective function.
Slack = Requirement – Production and Surplus = Production – Requirement
Taking the microcomputer problem its standard form is as follows:
Max Z = 60X1 + 50X2 max Z= 60X1 + 50X2 + 0S1 + 0S2 + 0S3
Sub. to : 4X1 + 10X2  100 sub. to : 4X1 + 10X2 + S1 = 100
2X1 + X2  22 2X1 + X2 + S2 = 22
3X1 + 3X2  39 3X1 + 3X2 + S3 = 39
X1, X2  0 X1, X2, S1, S2, S3  0
Step2. Develop the initial tableau: the initial tableau always represents the “Do Nothing” strategy, so that the
decision variables are initially non-basic.
a) List the variables across the top of the table and write the objective function coefficient of each variable
just above it.
b) There should be one row in the body of the table for each constraint. List the slack variables in the basis
column, one per raw.
c) In the Cj column, enter the objective function coefficient of zero for each slack variable. (Cj - coefficient
of variable j in the objective function)
Step3. Compute values for row Zj
Step4. Compute values for Cj – Zj row

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Sol/n Cj 60 50 0 0 0
RHSV Øj = bj/xj (aij)
basis X1 X2 S1 S2 S3
S1 0 4 10 1 0 0 100 100/4 = 25 Leaving
S2 0 2* 1 0 1 0 22 22/2 = 11 variable
S3 0 3 3 0 0 1 39 39/3 = 13 (Pivot row)
Zj 0 0 0 0 0 0
Cj-Zj 60 50 0 0 0 0
Entering variable (Pivot column)

* Pivot Element
4. Develop subsequent tableaus
3.1. Identify the entering variable - a variable that has a largest positive value in the Cj – Zj row.
3.2. Identify the leaving variable - Using the constraint coefficients or substitution rates in the entering variable
column divide each one into the corresponding quantity value. However do not divide by a zero or
negative value. The smallest non-negative ratio that results indicate which variable will leave the solution.
5. Find unique vectors for the new basic variable using row operations on the pivot element.
Sol/n Cj 60 50 0 0 0
S1 0 0 8 1 -2 0 56 56/8 = 7
X1 60 1 1/2 0 1/2 0 11 11/. 5 = 22
Leaving variable
S3 0 0 3/2 0 -3/2 1 6 6/1.5 = 4
Zj 60 30 0 30 0 660
.
Cj-Zj 0 20 0 -30 0 0
Entering Variable
Sol/n Cj 60 50 0 0 0
S1 0 0 0 1 6 -16/3 24
X1 60 1 0 0 1 -1/3 9
X2 50 0 1 0 -1 2/3 4
Zj 60 50 0 10 40/3 740
Cj-Zj 0 0 0 -10 -40/3

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Since the values of Cj-Zj row are less than or equal to zero (≤ 0), the solution is optimum.
Optimal solution: X1 = 9
X2 = 4
S1 = 24 hrs
Z = Birr 740
Interpretation: The Company is advised to produce 24 units of push type mowers and 42 units of self-propelled
mowers so as to realize a profit of Birr 4020. In doing so the company would be left with
unused resource of 9 engines which can be used for other purposes.
6. Compute the Cj – Zj row
7. If all Cj – Zj values are zeros and negatives you have reached optimality.
8. If this is not the case (step 6), rehear step 2to5 until you get optimal solution.
“A simplex solution is a maximization problem is optimal if the Cj – Zj row consists entirely of zeros and
negative numbers (i.e., there are no positive values in the bottom row).”
Note: The variables in solution all have unit vectors in their respective columns for the constraint equations.
Further, note that a zero appears in row c - z in every column whose variable is in solution, indicating that its
maximum contribution to the objective function has been realized.
Example 2
A manufacturer of lawn and garden equipment makes two basic types of lawn movers: a push-type and a self-
propelled model. The push-type requires 9 minutes to assemble and 2 minutes to package; the self-propelled
mover requires 12 minutes to assemble and 6 minutes to package. Each type has an engine. The company has
12 hrs of assembly time available, 75 engines, and 5hrs of packing time. Profits are Birr 70 for the self-
propelled models and Birr 45 for the push-type mover per unit.
Required:
1. Formulate the linear programming models for this problem.
2. Determined how many mower of each type to make in order to maximize the total profit (use the
simplex procedure).
Solution:
1. a) To determine how many units of each types of mowers to produce so as to maximize profit.
b) Let X1 - be push type mower.
X2 - be self-propelled mower.

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c) Determine the objective function

max Z = 45X1 + 70X2
d) Identify constraints
9X1 + 12X2  720 minutes Assembly time
2X1 + 6X2  300 minutes packing time
X1 + X2  75 engines Engines
X1, X2  0
In summary:
Max Z = 45X1 + 70X2
Sub. to: 9X1 + 12X2  720
2X1 + 6X2  300
X1 + X2  75
X1, X2  0
2.a Write the LPM in a standard form
Max Z= 45X1 + 70X2 + OS1 + OS1 + OS3
Sub. to : 9X1 + 12X2 + S1 = 720
2X1 + 6X2 + S2 = 300
X1 + X2 + S3 = 75
X1, X2, S1, S2, S3  o
a. Develop the initial tableau – in LP matrices are commonly called tableaus
Sol/n Cj 45 70 0 0 0
S1 0 9 12 1 0 0 720 720/12 =60 Leaving variable
S2 0 2 6 0 1 0 300 300/6 =50
S3 0 1 1 0 0 1 75 75/1 = 75
Zj 0 0 0 0 0 0
Cj-Zj 45 70 0 0 0
Entering variable
b. Develop the subsequent tableaus
- Identify the entering variable

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- Identify the leaving variable
Sol/n Cj 45 70 0 0 0
Leaving variable
S1 0 5 0 1 -2 0 120 120/5 = 24
X2 70 1/3 1 0 1/6 0 50 50/. 333 =150
S3 0 2/3 1 0 -1/6 1 25 25/.666 = 75
Zj 70/3 70 0 70/6 0 3500
Cj-Zj 65/3 0 0 -70/6 0
Entering
variable
Sol/n Cj 45 70 0 0 0
X1 45 1 0 1/5 -2/5 0 24
X2 70 0 1 -1/15 3/10 0 42
S3 0 0 0 -2/15 1/10 1 9
Zj 45 70 13/3 3 0 4020
Cj-Zj 0 0 -13/3 -3 0 Since the values of Cj-Zj
row are less than or equal
to zero (≤ 0), the solution is optimum.
Optimal solutions: X1 = 24 units
X2 = 42 units
S3 = 9 engines
Z = Birr 4020
Interpretation: The Company is advised to produce 24 units of push type movers and 42 units of self-propelled
movers so as to realize a profit of Birr 4020. In doing so the company would be left with
unused resource of 9 engines which can be used for other purposes.

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2.6. Some special Issues in LP

2.6.1 Unbounded solutions
A solution is unbounded if the objective function can be improved without limit. The solution is unbounded if
there are no positive ratios in determining the leaving variable. A negative ratio means that increasing a basic
variable would increase resources! a zero ratio means that increasing a basic variable would not use any
resources. This condition generally arises because the problem is incorrectly formulated. For example, if the
objective function is stated as maximization when it should be a minimization, if a constraint is stated  when it
should be, or vice versa.
2.6.2 Multiple optimal solutions
The same maximum value of the objective function might be possible with a number of different combinations
of values of the decision variables. This occurs because the objective function is parallel to a binding constraint.
With simplex method this condition can be detected by examining the Cj – Zj row of the final tableau. If a zero
appears in the column of a non-basic variable (i.e., a variable that is not in solution), it can be concluded that an
alternate solution exists.
E.g. max Z = 60X1 + 30X2
4X1 + 10X2  100
2X1 + X2  22
3X1 + 3X2  39
X1, X2  0
The other optimal corner point can be determined by entering the non-basic variable with the
C - Z equal to zero and, then, finding the leaving variable in the usual way.
2.6.3 Degeneracy
In the process of developing the next simplex tableau for a tableau that is not optimal, the leaving variable must
be identified. This is normally done by computing the ratios of values in the quantity column and the
corresponding row values in the entering variable column, and selecting the variable whose row has the smallest
non-negative ratio. Such an occurrence is referred to degeneracy, because it is theoretically possible for
subsequent solutions to cycle (i.e., to return to previous solutions). There are ways of dealing with ties in a
specific fashion; however, it will usually suffice to simply select one row (variable) arbitrarily and proceed with
the computations.

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2.7. Limitations of linear programming

1. In linear programming uncertainty is not allowed, i.e., LP methods are applicable only when values for costs,
constraints, etc. are known, but in real life such factors may be unknown.
2. According to the LP problem, the solution variables can have any value, whereas sometimes it happens that
some of the variables can have only integral values. For example, in finding how may machines to be produced;
only integral values of decision variables are meaningful. Except when the variables have large values,
rounding the solution to the nearest integer will not yield an optimal solution. Such situations justify the use of
Integer Programming.
3. Many times, it is not possible to express both the objective function and constraints in linear form.
4. Self Exercise
1. A firm produces products A, B, and C, each of which passes through assembly and inspection departments. The
number of person hours required by a unit of each product in each department is given in the following table.
Person hours per unit of product
Product A Product B Product C
Assembly 2 4 2
Inspection 3 2 1
During a given week, the assembly and inspection departments have available at most 1500 and 1200 person-
hours, respectively. If the unit profits for products A, B, and C are Birr 50, Birr 40, and Birr 60, respectively,
determines the number of units of each product that should be produced in order to maximize the total profit
and satisfy the constraints of the problem.
2. The state chairman of a political party must allocate an advertising budget of birr 3,000,000 among three media:
radio, television, and newspapers. The expected number of votes gained per birr spent on each advertising
medium is given below.
Expected votes per Birr spent
Radi Television Newspapers
o
3 5 2
Since these data are valid within the limited amounts spent on each medium, the chairman has imposed the
following restrictions:

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 No more than Birr 500,000 may be spent on television ads.
 No more than Birr 1,200,000 may be spent on radio ads.
 No more than Birr 2,400,000 may be spent on television and newspaper ads combined.
Required: How much should be spent on each medium in order to maximize the expected number of votes
gained?
2.8. Duality in LPP

Every linear programming problem can have two forms. The original formulation of a problem is referred to as its primal
form. The other form is referred to as its dual form. As you will see, the dual is kind of a “mirror image” of the primal
because in both its formulation and its solution, the values of the dual are flip-flop versions of the primal values.
The solution to the primal problem contains the solution to the dual problem, and vice versa. Consequently, once either
the primal or the dual problem has been solved, the solution to the other is also apparent. You might wonder, then, why
we even bother to discuss duality. The answer is mainly in the economic interpretation of the results of the dual solution.
Analysis of the dual can enable a manager to evaluate the potential impact of a new product, and it can be used to
determine the marginal values of resources (i.e., constraints). Relative to a new product, a manager would want to know
what impact adding a new product would have on the solution quantities and the profit; relative to resources, a manager
can refer to a dual solution to determine how much profit one unit of each resource is equivalent to. This can help the
manager to decide which of several alternative uses of resources is most profitable.
2.8.1. Formulating the Dual

All of the problems formulated in the preceding units can be classified as primal problems because they were formulated
directly from descriptions of the problem. The dual, on the other hand, is an alternate formulation of the problem that
requires the existence of the primal. Let’s now consider how the dual can be formulated from the primal problem.
Table 6-5 Transforming the Primal into Its Dual

Primal Dual
Objective function
Minimize
40 x 1 + 44 x 2 + 48 x 3 Maximize
20 y 1 + 30 y 2
and right hand side
Subject to Subject to
values
1 ≥ 20 1  40
2 ≥ 30 2  44
3  48
Primal Dual
Constraint coefficients
1
1 x1 + 2 x 2 + 3 x 3 ≥ 1
1 y1 + 4 y2 ≤
4 x1 + 4 x 2 + 4 x 3 ≥ 2
2 y1 + 4 y2 ≤
2
3
3 y1 + 4 y2 ≤
Consider this primal problem:
Minimize
40 x 1 + 44 x 2 + 48 x 3
Subject to
1 x1 + 2 x 2 + 3 x 3 ≥ 20

26
OPERATIONS RESEARCH
4 x1 + 4 x 2 + 4 x 3 ≥ 30
x 1 , x 2 , x3 ≥ 0
The dual of this problem is:
Maximize
20 y 1 + 30 y 2
Subject to
1 y 1 + 4 y 2 ≤ 40
2 y 1 + 4 y 2 ≤ 44
3 y 1 + 4 y 2 ≤ 48
y1 , y2 ≥ 0
A comparison of these two versions of the problem will reveal why the dual might be termed the “mirror image” of the
primal. Table 6-5 shows how the primal problem is transformed into its dual.
We can see in Table 6-5 that the original objective was to minimize, whereas the objective of the dual is to maximize. In
addition, the coefficients of the primal’s objective function becomes the right hand side values for the dual constraints,
whereas the primal RHSV become the coefficients of the dual’s objective function.
Note that the primal has three decision variables and two constraints; whereas the dual has two decision variables and
three constraints. The constraint coefficients of the primal are constraint coefficients of the dual, except that the
coefficients of the first “row” of the primal become the coefficients of the first “column” of the dual, and the coefficients
of the second “row” of the primal become the coefficients of the second “column” of the dual.
Finally, note that the ≥ constraints of the primal become  constraint in the dual. When the primal problem is
maximization problem will all  constraints, the dual is a minimization problem with all ≥ constraints, as the next example
illustrates.
Example 6: Formulate the dual of the microcomputer problem.
Solution: The original (primal) problem was:
Maximize
60 x 1 + 50 x 2
Subject to
4 x1 + 10 x 2 ≤ 100
2 x1 + 1 x 1 ≤ 22
3 x 1 + 3 x 2 ≤ 39
To formulate the dual, we can follow this sequence:
1. For the objective function,
a. Because the primal is maximization, the dual will be a minimization.
b. The right hand side values for the constraints become the coefficients of the objective function of the
dual.
Thus, the objective function of the dual is
Minimize
100 y + 22 y + 39 y
1 2 3
The variable names are y’s for the dual, simply to differentiate them from the primal variables. There will be
one dual variable for each constraint.
2. For the constraints,
a. There will be one dual constraint for each primal decision variable. Hence, because the primal has two
such variables, the dual will have two constraints.
b. The right-hand side values of the dual constraints will equal the primal’s objective function coefficients
taken in order. That is, the right hand side value of the first dual constraint will equal the first coefficient

27
OPERATIONS RESEARCH
of the primal’s objective function coefficient, and the right hand side value of the second dual constraint
will equal the second objective function coefficient of the primal.
c. The coefficients of the first primal constraint will become the first coefficients in each of the dual
constraints: The
x 1 coefficient in the first primal constraint becomes the y coefficient in the first dual
x
constraint and 2 coefficient in the first primal constraint becomes the y coefficient in the second dual
constraint, and so on.
Thus, the constraints of the dual are:
1
4 y 1 + 2 y 2 + 3 y 3 ≥ 60
2
10 y + 1 y + 3 y ≥ 50
1 2 3
Putting these two parts together, the dual of the microcomputer problem is:
Minimize
100 y 1 + 22 y 2 + 39 y 3
Subject to
1
4 y 1 + 2 y 2 + 3 y 3 ≥ 60
2
10 y 1 + 1 y 2 + 3 y 3 ≥ 50 y1 , y2 , y3 ≥ 0
2.8.2 Formulating the Dual When the Primal Has Mixed Constraints
In order to transform a primal problem into its dual, it is easier if all constraints in a maximization problem are of the 
variety, and in a minimization problem, every constraint is of the ≥ variety.
To change the direction of a constraint, multiply both sides of the constraint by -1. For example,
-1(2 x1 + 3 x 2 ≥ 18) is −2x 1 − 3 x 2 ≤ −18
If a constraint is equality, it must be replaced with two constraints, one with a ≥ sign. For instance,
4 x1 + 5 x 2 = 20
Will be replaced by
4 x1 + 5 x 2 ≤ 20
4 x1 + 5 x 2 ≥ 20
Then one of these must be multiplied by -1, depending on whether the primal is a max or a min problem.
Example 7
Formulate the dual of this problem:
Maximize
50 x 1 + 80 x 2
Subject to
3 x 1 + 5 x 2 ≤ 45
4 x1 + 2 x 2 ≥ 16
6 x 1 + 6 x2 = 30
Solution
Since this is a maximization problem, put constraints into the  form.
The first constraint is already in that form. The second constraint can be converted to that form by multiplying both sides
by -1. Thus:
4 x + 2 x ≥ 16
-1( 1 2 ) becomes 1−4 x − 2x ≤ −16
2
The third constraint is equality, and must be restated as two separate constraints. Thus, it becomes:
6 x 1 + 6 x2 ≤ 30 and 6 x 1 + 6 x2 ≥ 30
The second of these two must now be multiplied by -1, which yields:

28
OPERATIONS RESEARCH
−6 x 1 − 6 x 2 ≤ −30
Hence, the form of the primal is:
Maximize
50 x 1 + 80 x 2
Subject to
3 x 1 + 5 x 2 ≤ 45
−4 x 1 − 2 x 2 ≤ −16
6 x 1 + 6 x2 ≤ 30
−6 x 1 − 6 x 2 ≤ −30
x1 , x2 ≥ 0
The dual is:
Minimize
45 y 1 − 16 y 2 + 30 y 3 − 30 y 4
Subject t
3 y 1 − 4 y 2 + 6 y 3 − 6 y 4 ≥ 50
5 y 1 − 2 y 2 + 6 y 3 − 6 y 4 ≥ 80
y1 , y2 , y3 , y4 ≥ 0
2.8.3 Comparison of the Primal and Dual Simplex Solutions
The flip-flopping of values between the primal and the dual carries over to their final simplex tableaus. Table 6-6 contains
the final tableau for the dual and Table 6-7 contains the final tableau for the primal.
The primary concern with a simplex solution is often threefold:
1. Which variables are in solution?

2. How much of each variable is in the optimal solution?
3. What are the shadow prices for the constraints?
Let’s consider how we can obtain the answers to these questions from the dual solution. Notice that the solution quantities
40
of the dual are equal to the shadow prices of the primal (i.e., 3 and 10). Next, notice that the values of the solution
quantities of the primal (i.e., 24, 9, and 4) can be found in the bottom row of the dual.
Table 6-6 Final tableau of Dual solution to the Microcomputer problem
C 100 22 39 0 0 M M
Basis y
1 y2 y 3 S S
1 a 2 a Quantity
1 2
y3 39
16
3 0 1
1
3
2
- 3 -
1
3
2
3
40
3 Primal
y2 -6 1 0 -1 1 1 -1 10
22 shadow
Z 76 22 39 -9 -4 9 4 740
C-Z 24 0 0 9 4 9-M 4-M
Primal solution quantities
Table 6-7 Final Tableau of Primal solution to the Microcomputer problem

C 60 50 0 0 0
Basis x 1 x 2S 1 S S Quantity
2 3

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OPERATIONS RESEARCH
16
S1 0 0 0 1 6 - 3
24
x1 60
1
9
1 0 0 1 - 3
x2 50
2 4
0 1 0 -1 3
40
Z 60 50 0 10 3
740
C-Z 40
0 0 0 -10 - 3
S y
Now, in the primal solution, 1 equals 24. In the dual, the 24 appears in the 1 column. The implication is that a slack
variable in the primal solution becomes a real variable (i.e., a decision variable) in the dual. The reverse is also true: A
real variable in the primal solution becomes a slack variable in the dual. Therefore, in the primal solution we have
x1 = 9
x S S
and 2 = 4; in the dual, 9 appears under 1 in the bottom row, and 4 appears under 2 . Thus, we can read the solution to
the primal problem from the bottom row of the dual: In the first three columns of the dual, which equate to slack variables
of the primal, we can see that the first slack equals 24 and the other two are zero. Under the dual’s slack columns, we can
read the values of the primal are decision variables. In essence, then, the variables of the primal problem become the
constraints of the dual problem, and vice versa. The way in which primal and dual values are cross referenced is
summarized in Table 6-8.
2.8.4 Economic Interpretation of the Dual

In order to fully appreciate the correspondence between the primal and dual formulations of a problem, we shall now
focus on an economic interpretation of the dual, using the microcomputer problem for purpose of illustration.
Primal How Labeled/Where Correspondence in the Dual

Found in the Primal
Decision variable x 1 , x 2 , x3 , . . . s1 , s2 , s 3 , . . .
Slack variable s1 , s2 , s 3 , . . . y1 , y2 , y3 , . . .
Shadow price Z row under slack columns Quantity column in decision
variable rows
Solution quantities Quantity column C-Z row under slack and
decision variable columns
Table 6-8 Cross Referencing Primal and Dual Values in the Final Tableaus
Suppose the microcomputer firm has been approached by a representative of a department store chain that wants the firm
to make computers that will be sold under the store’s brand name. The microcomputer company has only a limited
capacity for producing computers, and therefore, must, decide whether to produce its own computers or produce
computers for the department store.
For convenience, the original problem is repeated here:
x 1 = number of Model I’s
x 2 = number of Model II’s
Maximize
60 x 1 + 50 x 2
Subject to
Assembly time
4 x 1 + 10 x 2 ≤ 100
Inspection time
2 x 1 + 1 x 2 ≤ 22

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OPERATIONS RESEARCH
Storage space
3 x + 3 x ≤ 39
1 2
The manager of the firm would reason in the following way. For each unit of Model I that the firm sacrifices to produce
computers for the department store, it will gain 4 hours of assembly time, 2 hours of inspection time, and 3 cubic feet of
storage space, which can be applied to the store computers. However, it will also give up a unit profit of $60. Therefore, in
order for the firm to realistically consider the store’s offer, the amounts of scarce resources that will be given up must
produce a return to the firm that is at least equal to the foregone profit. Hence, the value of 4 assembly hours + 2
inspection hours + 3 cubic feet of storage space ≥ $60. By similar reasoning, giving up one unit of Model II will required
that the value received by giving up 10 assembly hours + 1 inspection hour + 3 cubic feet of storage must equal or exceed
the Model II profit of $50 per unit. These, then, become the constraints of the dual problem. Thus:
Value Received per Resources Freed Up Minimum Profit

Unit of Required
Model I 4 y +2y +3y
1 2 3
$60
Model II 10 y 1 + 1 y 2 + 3 y 3 $50
Hence the constraints of the dual refer to the value of capacity (i.e., the scarce resources). The formulation indicates that
in order to switch from making units of Models I and II making computers for the department store, the value received
from that switch must be at least equal to the profit foregone on the microcomputer models. The variables 1 2
y , y , and y
3
are the managerial values of scarce resources 1 (assembly time), 2(inspection time), and 3 (storage space). Solving the
dual will tell us the imputed values of the resources given our optimal solution.
Naturally, the department store would want to minimize the use of the scarce resources, because the computer firm almost
certainly would base its charges on the amount of resources required. Consequently, the objective function for the dual
problem focuses on minimizing the use of the scarce resources. Thus:
Minimize
100 y + 22 y + 39 y
1 2 3
Looking at the optimal solution to the dual of the microcomputer problem (see Table 6-8), we can see the marginal values
y
of 2
and y 3 in the Quantity column, but not the value of y 1 . This is because the optimal solution to the primal did not
completely use up all of the assembly capacity. Consequently, no amount of either 1

x or x 2 would need to be given up to
obtain one free hour of assembly time. Thus, the marginal value of one hour of assembly time is $0.
Finally, the optimal dual solution always yields the same value of the objective function as the primal optimal. In this
case, it is 740. The interpretation is that the imputed value of the resources that are required for the optimal solution equals
the amount of profit that the optimal solution would produce.
2.9. Sensitivity Analysis
Sensitivity analysis, or post optimality analysis, as it is also referred to, carries the LP analysis beyond the determination
of the optimal solution. It begins with the final simplex tableau. Its purpose is to explore how changes in any of the
parameters of a problem, such as the coefficients of the constraints, coefficients of the objective function, or the right-
hand side values, would affect the solution. This kind of analysis can be quite beneficial to a decision maker in a number
of ways.
In preceding units, the formulation and solution of linear programming problems treated the parameters of a problem as if
they were known and fixed. The goal of analysis was to determine the optimal value of the decision variables in the
context. Unfortunately, in practice, the parameters of a problem often are no more than educated guesses. Consequently,
the optimal solution may or may not be optimal, depending on how sensitive that solution is to alternate values of
parameters. Hence, a decision maker usually would want to perform sensitivity analysis before implementing a solution. If
the additional analysis satisfies the decision maker that the solution is reasonable, he or she can proceed with greater

31
OPERATIONS RESEARCH
confidence in using the solution. Conversely, if sensitivity analysis indicates that the solution is sensitive to changes that
are within the realm of possibility, the decision maker will be warned that more precise information on parameters is
needed.
Even if the parameters of a problem are known with a high degree of certainty, a decision maker might still want to use
sensitivity analysis in order to determine how changes in parameters would affect the final solution. For instance, a
manager may want to consider obtaining an additional amount of some scarce resource that might be available, in which
case the manager would want to know the answers to questions such as:
1. Will an increase in the right-hand side of this constraint affect the objective function?
2. If so, how much of the resource can be used?
3. Given the answer to the preceding question, what will be the revised optimal solution?
Conversely, the decision maker might be facing a situation in which the amount of a scarce resource available is less than
the original amount, in which case the issues would be:
1. Will the decreased level of the resource have an impact on the value of the objective function?
2. If yes, how much of an impact will it have, and what will be the revised optimal solution?
Of course, not all constraints pertain to scarce resources. However, the concept is the same: What impact will a change in
the right-hand side value of a constraint have on the optimal value of the objective function and what impact will the
change have on the optimal values of the solution variables?
Similar questions can arise if there are changes contemplated in the coefficients of the objective function. For instance, the
marketing department may want to change the price of a product, and that may alter the product’s coefficients in the
objective function. Similarly, a change in a manufacturing process may require a change in a constraint coefficients are
beyond the scope of this book. In order to demonstrate sensitivity analysis, consider the following problem with its model
and optimal solution.
Example:
A firm that assembles computers and component equipments is about to start production of two new micro-computers.
Each type of microcomputer will require assembly time, inspection time, and storage space. The amount of each of these
resources that can be devoted to the production of micro-computers is limited. The manager of the firm would like to
determine the quantity of each micro computer to produce in order to maximize the profit generated by sales of these
micro computers.
In order to develop a suitable model of the problem, the manager has met with design and manufacturing personnel. As a
result of these meetings, the manager has obtained the following information:
Type -1 Type-2
Profit per unit $60 $50
Assembly time per unit 4 hrs. 10 hrs.
Inspection time per unit 2 hrs. 1 hr.
Storage space per unit 3 cubic ft. 3 cubic ft.
The manager has also acquired information in the availability of company resources. These (weekly) amounts are:
Resource Resource available
Assembly time 100 hours
Inspection time 22 hours
Storage space 39 cubic feet.
The manager also met with the firms marketing manager and learned that demand for the micro-computers was such that
whatever combination of these two types of micro-computers is produced all of the output can be sold.
The model and for the above mentioned micro computer problem is indicated below.
Maximize
60 x 1 + 50 x 2

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OPERATIONS RESEARCH
Subject to
Assembly time
4 x1 + 10 x 2 ≤ 100
Inspection time
2 x1 + 1 x 2 ≤ 22
Storage space
3 x 1 + 3 x 2 ≤ 39
All var. P 0
2.9.1 A Change in the RHS of A Constraint
The first step in determining how a change in the RHS (right hand side) of a constraint (e.g., the amount of scarce
resource that is available for use) would influence the optimal solution is to examine the shadow prices in the final
simplex tableau. These are the values in the Z row in the slack columns. The final tableau for the microcomputer problem
is shown in Table 6-1.
C 60 50 0 0 0
Basis x 1 x S2 S
1 S 2
Quantity
3
16
S1 0 0 0 1 6 - 3
24
x1 60
1
9
1 0 0 1 - 3
x2 50
2 4
0 1 0 -1 3
40
Z 60 50 0 10 3
740
C-Z 40
0 0 0 -10 - 3
Negatives of
shadow prices
Table 6-1 Shadow Prices in the microcomputer final tableau
40
The shadow prices are 0, 10, and 3 . Note that the negatives of the shadow prices appear in the bottom row of the table.
Because they differ only in sign, the values in the bottom row are sometimes also referred to as shadow prices.
A shadow price is a marginal value; it indicates the impact that a one-unit change in the amount of a constraint would
have on the value of the objective function. More specifically, a shadow price reveals the amount by which the value of
the objective function would increase if the level of the constraint was increased by one unit. Table 6-1 reveals that the
shadow prices are $0 for
S1 (i.e., the first constraint, assembly time), $10 for S2 (i.e., the second constraint, inspection
40 S
time) and $ 3 for 3 (i.e., the third constraint, storage space). This tells us that if the amount of assembly time was
increased by one hour, there would be no effect on profit; if inspection time was increased by one hour, the effect would
40
be to increase profit by $10; and if storage space was increased by one cubic foot, profit would increase by $ 3 , or
$13.33. The reverse also holds. That is, by using the negative sign of each shadow price, we can determine how much a
one-unit decrease in the amount of each constraint would decrease profit. Hence, a one-unit decrease in assembly time
would have no effect because its shadow price is $0. However, a one-unit decrease in inspection time would decrease
profit by $10, and a one unit decrease in storage space would decrease profit by $13.33. In effect, shadow prices are a
manager’s “window” for gauging the impact that changes have on the value of the objective function.
What the shadow prices do not tell us is the extent to which the level of a scarce resource can be changed and still have
the same impact per unit. For example, we now know that a one unit increase in inspection time will increase profit by
$10. Because of linearity, a two unit increase in inspection time will mean an increase of $20, and a ten unit increase in
inspection time will mean an increase of 10($10), or $100, in profit. However, at some point, the ability to use additional

33
OPERATIONS RESEARCH
amounts of a resource will disappear because of the fixed amounts to the other constraints. In other words, limits on
assembly time and storage space mean that only a certain amount of additional inspection time can be used and still have a
feasible solution.
Conversely, a similar situation can arise when considering the potential impact of a decrease in the RHS of a constraint.
For instance, the assembly constraint has a shadow price of $0, which indicates that a one unit decrease in the amount of
assembly time available will have no impact on profit. However, we know that some assembly time is required to produce
the computers, which means that it cannot be decreased indefinitely. At some point, fewer assembly hours will restrict
output. Therefore, we need to determine the range over which we can change the right hand side quantities and still have
the same shadow price. This is called the range of feasibility, or the right hand side range.
The key to computing the range of feasibility for the constraints lies in the final simplex tableau. More specifically, the
values in the body of the final tableau in each slack column can be used to compute the range of feasibility for the
corresponding constraint. The final tableau for the microcomputer problem is repeated in Table 6-2. The slack variable
columns of the table indicate the values needed to compute the ranges of feasibility.
For each constraint, the entries in the associated slack column must be divided into the values in the Quantity column.
Because there are three entries in each column, there will be three ratios after the division. For example, for the Storage
column values, the resulting ratios are:
S3 Quantity S
Quantity/ 3
24
−16 = −4 .5
16
- 3
24
3
1
9 9
-
−1 = −27
3
3
2 4 4
3
−2 = +6
3
Assembly
Inspectio
Storage
n
C 60 50 0 0 0
Basis x1 x2 S1 S2 Quantity
S3
S1 0 0 0 1 6 - 24
x1 60
16
3 9
x2 1 0 0 1 - 4
50 1
3
0 1 0 -1
2
3
Z 60 50 0 10 740
40
C-Z 3
0 0 0 -10 -

34
OPERATIONS RESEARCH
40
3
Table 6-2 Final Tableau for the Microcomputer Problem

Unlike the simplex calculations, negative ratios are acceptable. Two of these ratios indicate the extent to which the
constraint level can be changed and still have the current shadow price remain valid: The smallest positive ratio indicates
how much the constraint level can be decreased before it reaches the lower limit of its range of feasibility. Thus, the
storage constraint can be decreased by 6 cubic feet before it hits the lower limit of its range of feasibility. Conversely, the
smallest negative ratio (i.e., the negative ratio closest to 0) indicates how much the storage constraint can be increased
before it reaches its upper limit of feasibility. Hence, the storage level can be increased by 4.5 cubic feet before it hits that
upper limit.
Perhaps it seems strange that a positive ratio relates to a decrease and a negative ratio to an increase. However, the
positive ratio indicates the amount that must be added to the lower limit to achieve the current constraint level (i.e., how
much the current level is above the lower limit). Thus, knowing the current level, we must subtract that amount to obtain
the lower limit. Thus, for the storage constraint, the current level is 39. Thus we have:
Lower limit + 6 = 39, so Lower limit = 39 – 6=33
Similarly, the smallest negative ratio reveals how much the current level is below the upper limit, so that amount must be
added to the current level to determine the upper limit. For the storage constraint, that is:
Upper limit – 4.5 = 39, so Upper limit = 39 + 4.5=43.5
The same general rule always applies when computing the upper and lower limits on the range of feasibility for a
maximization problem:
Allowable decrease: The smallest positive ratio.
Allowable increase: The negative ratio closest to zero.
For a minimization problem, the rules are reversed: The allowable decrease is the negative ratio closest to zero and the
allowable increase is the smallest positive ratio.
Example 1
Determine the range of feasibility for each of the constraints in the microcomputer problem.
Solution
Table 6-3 illustrates the computations and resulting ranges. It is important to recognize when determining ranges of
feasibility that each range is determined under the assumption that the levels of the other constraints will not change. If
multiple changes are contemplated, the entire problem will have to be reworked using the revised values.
You are probably wondering why these ratios tell us how much latitude there is for feasible changes in a constraint level.
Recall that the values in the body of any simplex tableau are substitution rates. They indicate how much, and in what
direction, a one unit change in a column variable will cause the current quantity value to change. For example, in the final
S
tableau, the values in the 3 column and the Quantity column are:
Basis S3 Quantity
16
S1 - 3 24
x1 1 9
- 3
4
2
3

35
OPERATIONS RESEARCH
x2
40
Z 3
S
The values in the 3 (storage) column tell us the following: A one unit increase in storage space will:
1. Cause S1 (assembly slack) to decrease by 3 = 5.33 units.
16
2. Cause
x 1 to decrease by 1 3 = .33 units.
x 2
3. Cause 2 to increase by 3 = .67 units.
40
4. Cause profit to increase by 3 = $13.33.
Because the quantity column entries indicate how much of S1 ,
x 1 and x 2 are currently in solution, dividing each of those
entries by the respective substitution rates in the

S3 column will indicate the limit on possible changes that will reflect the
40
shadow price of 3 . Since the substitution rates apply in either direction (i.e., for a one unit increase or a one unit
decrease in storage space), we can determine the potential for both changes at the same time: The smallest positive ratio
reveals the amount that the current level of the constraint is above the lower limit, and the smallest negative ratio reveals
the amount that the current level of the constraint is below the upper limit.
Assembly
Inspectio
Storage
n
0 0 0 Assembly Inspection Storage

S1 S2 S3 Quantity 24 24 24
= +24 = +4 −16
= −4 . 5
1 6 -
16
3
24 1 6 3
9 9 9 9
=undef .
1
0 1 - 3 = +9 = −27
2 4 0 1 −1
3
0 -1 3 4 4 4
40
740
= undef . = −4 = +6
0 10 3 0 −1 2
40 3
0 -10 - 3
Original amount 100 hours 22 hours 39 cubic feet
Upper limit None 22 + 4 = 26 39 + 4.5 = 43.5
Range
Lower limit 100 – 24 = 76 22 – 4 = 18 39 – 6 = 33
Table 6-3 Determining the Range of Feasibility of the Microcomputer Problem
When a decision maker becomes involved with changing constraint levels, that person wants to know not only the range
over which the level can be changed, but also what impact a contemplated change would have on the optimal solution.
Fortunately, when the proposed change is within the range of feasibility, very little effort is required to obtain the resulting
optimal solution. Again, the key values are the substitution rates for the constraint in question, as the next two examples
illustrate.
Example 2
The manager in the microcomputer problem is contemplating one of two possible changes in the level of the storage
constraint. One change would be an increase of 3 cubic feet in its level and the other would be an increase of 8 cubic feet
in its level. Determine the revised optimal solution for each possible change.
Solution

36
OPERATIONS RESEARCH
The first step in analyzing the effect of a constraint level change is to check to see if the change is within the range of
feasibility. We previously determined that the upper limit of that range for the storage constraint is 39 + 4.5. Hence, an
increase of three cubic feet is within the range, but an increase of eight cubic feet is not.
The effect of an increase of three cubic feet can be computed in this way:
(Partial final tableau)
Basis S3 Quantity
Current Revised
S1 solution Change solution
16
- 3 24
x1 24 16
( S1 )
+ 3(- 3 ) = 8
1
- 3
9
x2 9
+ 3(-
1
) = 8 x1 )
2 4
3 (
3
4 = 4
Z 40
740 + 3(
2
3 ) ( 2)
x
3
40
740 + 3( 3 ) = 780 (Profit)
For an increase in storage space of 8 cubic feet, since the upper
limit of the feasible range for storage is 4.5 cubic feet (see Table 6-3), the amount of increase above 4.5 cubic feet will be
excess, or slack. Moreover, the new optimal solution will occur at the point where the constraint level equals its upper
limit. Therefore, the additional amount needed to achieve the upper limit is used to compute the revised solution. Thus:
Current Revised
Basis Solution Change solution
16
S1 24 + 4.5(- 3 ) = 0
x1 9 1 = 7.5
+4.5 (- 3 )
x2 4 2 = 7
+ 4.5( 3 )
40
Z 740 + 4.5( 3 ) = 800
S S
Note, however, that beyond the upper limit, 3 would come into solution, replacing 1 , which would no longer be slack.
The amount of slack would be 8 – 4.5 = 3.5 cubic feet. Consequently, the revised solution would be:
S3 = 3.5, x 1 = 7.5, x 2 = 7
Profit = 800
Example 3
Suppose the manager in the microcomputer problem is contemplating a decrease in storage space due to an emergency
situation. There are two possibilities being considered: a decrease of 6 cubic feet and a decrease of 9 cubic feet. Recall
that the limit on a decrease is 6 cubic feet (see Table 6-3). Hence, the computation of the impact of a decrease in 6 cubic
feet to storage space is relatively simple:
Current Revised
Basis Solution Change solution
16
S1 24 -6(- 3 ) = 56
x1 9 1 = 11
-6(- 3 )
x2 4 2 = 0
-6( 3 )

37
OPERATIONS RESEARCH
40
Profit 740 -6( 3 ) = 660
Now consider a decrease of 9 cubic feet. Note that a decrease in storage space beyond the lower limit would cause the
storage line to move even closer to the origin. You should be able to see that the revised optimal solution would include
x x S
only 1 , that it would have a lower profit than if 1 = 11, and that 2 would enter the basis.
In general, the substitution rates and the shadow prices do not hold when the lower limit is exceeded. Consequently, for a
decrease in the level of a constraint beyond its lower limit, a new simplex solution must be generated.
2.9.2 A Change in an Objective Function Coefficient
A manager or other decision maker often finds it useful to know how much the contribution of a given decision variable to
the objective function can change without changing the optimal solution. Such changes may occur because of changed
costs, new pricing policies, product or process design changes, as well as other factors. In some instances, the changes
reflect improved information.
There are two cases to consider: changes for a variable that is not currently in the solution mix, and changes for a variable
that is currently in the solution mix. The range over which a non basic variable’s objective function coefficient can change
without causing that variable to enter the solution mix is called its range of insignificance. The range over which the
objective function coefficient of a variable that is in solution can change without changing the optimal values of the
decision variables is called its range of optimality. Note, however, that such a change would change the optimal value of
the objective function.
If a variable is not currently in solution in a maximization problem, its objective function coefficient would have to
increase by an amount that exceeds the C-Z value for that variable in the final tableau in order for it to end up as a basic
variable in the optimal solution.
Example 4
Given the final tableau in Table 6-4, determine the range over which the objective function coefficient of variable
x3
could change without changing the optimal solution.
C 120 105 112 0 0 0

Basis x1 x2 x3 S1 S2 S3 Quantity
x1 120
0 0 .06 .14 -.08 0 16.8
1 1 1.1 -.1 .2 0 8
x2 105 0 0 .88 -.28 .16 1 16.4
S3 0
Z 0 0 122.7 6.3 11.4 0 2,856

C-Z 0 0 -10.7 -6.3 -11.4 0
Table 6-4 Final Simplex tableau for Example 4

Solution
x
Because 3 is not in solution, its objective function coefficient would need to increase in order for it to come into solution.
The amount of increase must be greater than its C-Z value, which is -10.7. Therefore, its objective coefficient function
must increase by more than $10.70. Because its current value is $112, as indicated at the top of Table 6-4, the current
solution will remain optimal as long as its objective function coefficient does not exceed $112 + $10.70. Since an increase
would be needed to bring it into solution, any lesser value of its objective function coefficient would keep it out of
x
solution. Hence, the range of insignificance for 3 is $122.70 or less.

38
OPERATIONS RESEARCH
For variables which are in solution, the determination of the range of optimality requires a different approach. The values
in row C-Z must be divided by the corresponding row values of the variable in question. This will result in a series of
ratios. The smallest positive ratio will indicate the amount of allowable increase and the smallest negative ratio (i.e., the
ratio closest to zero) will indicate the amount of allowable decrease. (Finally, we have a rule where the signs go the right
way!)
Hence, the rules (for both maximization and minimization problems) are:
Allowable increase: The smallest positive ratio of C-Z value and the variable
substitution rate.
Allowable decrease: The smallest negative ratio of C-Z value and the variable
substitution rate.
(Note: If there is no positive ratio, there is no upper limit on that variable’s objective function coefficient.)
In order to illustrate concept of the changes in the objective function coefficients, we return to the microcomputer problem
rather than continuing with the previous example.
C 60 50 0 0 0
Basis x1 x2 S1 S2 S3 Quantity
16
S1 0 0 0 1 6 - 3
24
x1 60
1
9
1 0 0 1 - 3
x2 2 4
50 0 1 0 -1 3
40
Z 60 50 0 10 3
740
C-Z 40
0 0 0 -10 - 3
For
x 1 we find:
Column x1 x2 S1 S2 S3
−40
C−Z value 0 0 0 −10
=0 = undefined = undefined = −10 3
−1 = +40
x 1 value 1 0 0 1 3
x
The smallest positive ratio is +40. Therefore, the coefficient of 1 can be increased by $40 without changing the optimal
solution. The upper end of its range of optimality is this amount added to its current (original) value. Thus, its upper end is
x
$60 + $40 = $100. Also, the smallest negative ratio is -10; therefore, the 1 coefficient can be decreased by as much as
$10 from its current value, making the lower end of the range equal to $60 - $10 = $50.
For
x 2 we have:
Column x1 x2 S1 S2 S3
−40
C  Z value 0 0 0 −10
= undefined =0 = undefined = +10 3
= −20
x 2 value 0 1 0 −1 2
3
x
The smallest positive ratio is +10. This tells us that the 2 coefficient in the objective function could be increased by $10
to $50 + $10 = $60. The smallest negative ratio is -20, which tells us the
x 2 coefficient could be decreased by $20 to $50 -
$20 = $30. Hence, the range of optimality for the objective function coefficient of
x 2 is $30 to $60.
2.9.3 Adding another Variable

39
OPERATIONS RESEARCH
The concepts introduced in the preceding section also can be applied to evaluating the feasibility of adding another
decision variable to the problem. For example, suppose the microcomputer firm is considering a third model of
microcomputer that will yield a profit of $70 per unit, and this will require resource requirements of 8 hours of assembly
time, 4 hours of inspection time, and 5 cubic feet of storage space per unit. The dual constraint for this model would be:
8 y 1 + 4 y 2 + 5 y 3 ≥ 70
In order to determine if this new variable would come into the optimal (primal) solution, we can substitute the dual
y = 10 , and y 3 = 40 3
solution of y = 0 , 2 (i.e., the shadow prices, or marginal values of the resources) into this constraint to
40
see if it would be satisfied. Thus, we find, 8(0) + 4(10) + 5( 3 ) = 106.67. Because this amount is greater than the new
x
dual constraint, the original solution remains optimal. Hence, the new variable ( 3 ) would not come into solution.
Conversely, if the dual constraint has not been satisfied, the new variable would have come into solution. In this instance,
the marginal value of scarce resources that would be required for the new model exceeds the marginal contribution to
profit that the new model would provide. That is, $106.67 > $70.
The value of this approach is that it is not necessary to rework the entire problem in order to test the potential impact that
adding a new decision variable would have on the optimal solution.

40

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OPERATIONS RESEARCH

CHAPTER ONE: INTRODUCTION TO OPERATION RESEARCH

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

1.4. Meaning and definition of Operations Research:

Compiled by: Wondie Birhan. Department of Management:

1.5. Models and Modeling in Operation Research

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

1.7. Operations Research Techniques:

1.8. Application Areas of Operations Research

Compiled by: Wondie Birhan. Department of Management:

CHAPTER TWO: LINEAR PROGRAMMING

Compiled by: Wondie Birhan. Department of Management:

Maximize Z =c1x1 + c2x2 +………….. +cnxn

Resource Usage per Unit of Activity Sign of Amount of

And X1 ≥0, x2 ≥ 0, . . . , xn ≥0.

Compiled by: Wondie Birhan. Department of Management:

2.3. Structure Linear programming Models (LPM)

2.3.1. Components of LP model

Compiled by: Wondie Birhan. Department of Management:

System constraints – involve more than one decision variables.

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

2.5X1 + 1.8X2 + 2.0X3  2250 minutes

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

Points Coordinates How Determined Value of Objective function

E 0 10 Observation Birr 500

Compiled by: Wondie Birhan. Department of Management:

Points Coordinates How Determined Value of the objective function

Basic solution: X1 = 5 pounds

2.5.2. The Simplex Algorithm/Algebraic Solution Method

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Compiled by: Wondie Birhan. Department of Management:

Entering variable (Pivot column)

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Compiled by: Wondie Birhan. Department of Management:

c) Determine the objective function

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

2.6. Some special Issues in LP

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2.7. Limitations of linear programming

Compiled by: Wondie Birhan. Department of Management:

2.8. Duality in LPP

2.8.1. Formulating the Dual

Table 6-5 Transforming the Primal into Its Dual

Consider this primal problem:

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

Compiled by: Wondie Birhan. Department of Management:

The primary concern with a simplex solution is often threefold:

1. Which variables are in solution?

Primal solution quantities

Table 6-7 Final Tableau of Primal solution to the Microcomputer problem