CONTENTS

1. BASIC OVERVIEW………………………………………………………………

2. SIMPLEX METHOD……………………………………………………………

3. CHARNES BIG M METHOD……………………………………………….

4. TWO-PHASE METHOD……………………………………………………..

5. REVISED SIMPLEX METHOD…………………………………………….

6. DUAL SIMPLEX METHOD…………………………………………………

OBJECTIVES:
 Understand the need of using operations research – a
quantitative approach for effective decision making.
 To gain an understanding of how the simplex method works.
Understanding the underlying principles help to interpret and
analyze solution of any LP problem.
 Use dual-simplex algorithm to derive optimal basic feasible
solution of any LP problem.
 Develop a knowledge base about relevant information required at
each iteration of the revised simplex method.
LINEAR PROGRAMMING :
Basic Overview: Linear programming (LP) is a widely used mathematical
modeling technique developed to help decision makers in planning and decision-
making regarding optimal use of scarce resources. The application of specific
operations research techniques to determine the choice among several courses of
action, so as to get an optimal value of the measures of effectiveness (objective or
goal), requires to formulate (or construct) a mathematical model. Such a model
helps to represent the essence of a system that is required for decision-analysis.
The term formulation refers to the process of converting the verbal description
and numerical data into mathematical expressions, which represents the
relationship among relevant decision variables (or factors), objective and
restrictions (constraints) on the use of scarce resources (such as labour, material,
machine, time, warehouse space, capital, energy, etc.) to several competing
activities (such as products, services, jobs, new equipment, projects, etc.) on the
basis of a given criterion of optimality. The term scarce resources refers to
resources that are not available in infinite quantity during the planning period.
The criterion of optimality is generally either performance, return on investment,
profit, cost, utility, time, distance and the like.

Historic Overview: It is generally agreed that operations research came into

existence as a discipline during World War II when there was a critical need to
manage scarce resources. However, a particular model and technique of OR can
be traced back as early as in World War I, when Thomas Edison (1914–15) made
an effort to use a tactical game board for finding a solution to minimize shipping
losses from enemy submarines, instead of risking ships in actual war conditions.
About the same time AK Erlang, a Danish engineer, carried out experiments to
study the fluctuations in demand for telephone facilities using automatic dialing
equipment. Such experiments were later on used as the basis for the
development of the waiting-line theory. Since World War II involved strategic and
tactical problems that were highly complicated, to expect adequate solutions
from individuals or specialists in a single discipline was unrealistic. Thus, groups of
individuals who were collectively considered specialists in mathematics,
economics, statistics and probability theory, engineering, behavioural, and
physical science, were formed as special units within the armed forces, in order to
deal with strategic and tactical problems of various military operations. After
World War II, scientists who had been active in the military OR groups made
efforts to apply the operations research approach to civilian problems related to
business, industry, research, etc.

THE SIMPLEX METHOD

Most real-life problems when formulated as an LP model have more than two
variables and therefore need a more efficient method to suggest an optimal
solution for such problems. Simplex method is used for solving an LP model of
such problems. This method was developed by G B Dantzig in 1947. The simplex,
an important term in mathematics, represents an object in an n-dimensional
space, connecting n + 1 points. In one dimension, the simplex represents a line
segment connecting two points; in two dimensions, it represents a triangle
formed by joining three points; in three dimensions, it represents a four-sided
pyramid.

Basic definitions:
 Basic solution: Given a system of m simultaneous linear equations with n (>
m) variables: Ax = B, where A is an m × n matrix and rank (A) = m. Let B be any
m × m non-singular submatrix of A obtained by reordering m linearly
 independent columns of A. Then, a solution obtained by setting n – m variables
not associated with the columns of B, equal to zero, and solving the resulting
system is called a basic solution to the given system of equations.
 The m variables (may be all non zero) are called basic variables. The m × m
non-singular sub-matrix B is called a basis matrix and the columns of B as basis
vectors.
 Basic feasible solution: A basic solution to the system of simultaneous
equations, Ax = b is called basic feasible if xB ≥ 0.
 Degenerate solution: A basic solution to the system of simultaneous
equations, Ax = b is called degenerate if one or more of the basic variables
assume zero value.
 Cost vector: Let xB be a basic feasible solution to the LP problem. Maximize Z =
cx subject to the constraints Ax = b, and x ≥ 0. Then the vector cB = (cB1,
cB2, . . ., cBm), is called cost vector that represents the coefficient of basic
variable, xB in the basic feasible solution.
SIMPLEX ALGORITHM (MAXIMIZATION CASE)

The steps of the simplex algorithm for obtaining an optimal solution (if it exists) to
a linear programming problem are as follows:

Step 1: Formulation of the mathematical model

(i) Formulate the LP model of the given problem.
(ii) If the objective function is of minimization, then convert it into
equivalent maximization, by using the following relationship
Minimize Z = – Maximize Z *, where Z * = – Z.
(iii) Check whether all the bi (i = 1, 2, . . . , m) values are positive. If any
one of them is negative, then multiply the corresponding constraint
by – 1 in order to make bi > 0. In doing so, remember to change a ≤
type constraint to a ≥ type constraint, and vice versa.

(iv) Express the given LP problem in the standard form by adding additional
variables in constraints (as per requirement) and assign a zero-cost coefficient
to these variables in the objective function.

(iv) Replace each unrestricted variable (if any) with the difference of the
two non-negative variables.

Step 2: Set-up the initial solution Write down the coefficients of all the
variables in the LP problem in a tabular form, as shown in Table below, in
order to get an initial basic feasible solution [xB = B–1 b].