# Appendix

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Appendix: Linear Programming Solution Methods

Introduction Simplex Method Simplex Maximization Solutions Simplex Minimization Solutions Interpreting Simplex Solutions Postoptimality Analysis Unusual Features of Some LP Problems Transportation Method Characteristics of Transportation Problems Solution Procedures of the Transportation Method

Unbalanced Problems Degeneracy Assignment Method Review and Discussion Questions Problems Computer Solutions Selected Bibliography Answers to Odd-Numbered Problems

Although the graphical solution method that was presented in Chapter 8 is a useful learning device for those with limited knowledge of linear programming (LP), other methods are used daily in the worlds of business and government to solve real LP problems. Preeminent among these are the simplex, transportation, and assignment methods.

SIMPLEX METHOD
Simplex does not mean simple. Nevertheless, the simplex method is used term after term by thousands of students just like you, and you can do it too. The main thing is to keep your eye on the big picture: Understand the overall procedures of the simplex method because it is easy to get bogged down in the nitty-gritty details and lose sight of the general process. Pay attention to the small details; this is necessary. But also constantly keep in mind the overall process. The best way to learn the simplex method is to use it to work LP problems. “Experience is the best teacher” certainly applies here.

Simplex Maximization Solutions
Table 1 presents the steps in the simplex method. Read them carefully, and don’t worry too much about being confused. Remember, get the big picture. Working through an example will demonstrate the meaning of each of these steps. Example 1 uses the simplex method to solve Problem LP-1 from Chapter 8 while methodically following the steps of the simplex method. Work through every step in this example meticulously; this is absolutely necessary to an understanding of the method. Notice that the step numbers in this example correspond to the step numbers in Table 1. You will not need a calculator, because calculators compute in decimals that require rounding or truncating. These sources of error are unacceptable in the simplex method, and therefore all calculations are carried out in fractions.
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Appendix: Linear Programming Solution Methods

Table 1

Steps in the Simplex Solution Method
1. 2. 3. 4. 5. 6. 7. 8. 9. Formulate the objective and constraint functions. Add slack variables to convert each constraint to an equality ( ). Add artificial variables to constraints that were originally or to produce a starting solution. Set up the first tableau, starting solution. Check solution for optimality. If optimal, stop. If not, continue. Select a variable to enter to improve the solution. Select a variable to leave the solution. Perform row operations to complete the new solution. Return to Step 5 and continue until optimality is achieved.

Example 1

Simplex Solution of LP-1, a Maximization Problem

As part of its strategic planning process, the Precision Manufacturing Company must determine the mix of its products to be manufactured next year. The company produces two principal product lines for the commercial construction industry, a line of powerful portable circular saws and a line of precision table saws. The two product lines share the same production capacity and are sold through the same sales channels. Although some product variety does exist within each product line, the average profit is \$900 for each circular saw and \$600 for each table saw. The production capacity is constrained in two ways, fabrication and assembly capacity. A maximum of 4,000 hours of fabrication capacity is available per month, and each circular saw requires two hours and each table saw requires one hour. A maximum of 5,000 hours of assembly capacity is available per month, and each circular saw requires one hour and each table saw requires two hours. The marketing department estimates that there is a maximum market demand next year of a total of 3,500 saws per month for both product lines combined. How many circular saws and how many table saws should be produced monthly next year to maximize profits? 1. Formulate the objective and constraint functions. LP-1 was formulated in Chapter 8 as: Max Z 900X1 2X1 X1 X1 where: X1 X2 number of circular saws to be manufactured per month number of table saws to be manufactured per month 600X2 X2 2X2 X2 4,000 (fabrication—hours) 5,000 (assembly—hours) 3,500 (market—saws)

2. Add slack variables to convert each constraint to an equality ( ): a. 2X1 X2 4,000 (fabrication—hours) Note that the left-hand side of the expression is less than or equal to the right-hand side (RHS). If the expression is to be an equality ( ), something must be added to the lefthand side to increase its value up to the level of the RHS. We shall add a slack variable S1 to take up the slack between the value of the left-hand side and the RHS. S1 will take

Appendix: Linear Programming Solution Methods

3

on the value of zero if the left-hand side exactly equals 4,000 and a value of 4,000 if X1 and X2 equal zero. When X1 and X2 take on values larger than zero, the value of S1 will decrease accordingly so that the left-hand side of the expression exactly equals 4,000: 2X1 X2 S1 4,000

b.

Note the subscript 1 in S1 denotes that S1 is the slack variable for the first constraint. When we proceed with and complete the simplex solution, and S1 takes on some specific value at the end, we shall automatically know that S1 belongs to the first constraint—unused fabrication hours. Similarly, S2 will belong to the second constraint—unused assembly hours. The second constraint is converted to an equality by adding a slack variable S2 to the left-hand side: X1 2X2 S2 5,000 (assembly—hours)

c.

The third constraint is converted to an equality by adding a slack variable S3 to the lefthand side: X1 X2 S3 3,500 (market—saws)

We now have this LP problem: Max Z 900X1 2X1 X1 X1 600X2 X2 2X2 X2 S1 S2 S3 4,000 5,000 3,500

3. Add artificial variables to constraints that were originally or to produce a starting solution. Since the constraints in this problem were all , no artificial variables are required. 4. Set up the first tableau, starting solution. A tableau simply means a table. Each solution will be a tableau. a. First, let all variables appear in the objective function and constraint functions. This is achieved by assigning zero coefficients to all variables not appearing in these expressions: Max Z 900X1 2X1 X1 X1 b. 600X2 X2 2X2 X2 0S1 S1 0S1 0S1 0S2 0S2 S2 0S2 0S3 0S3 0S3 S3 4,000 5,000 3,500

Now put the problem above into the tableau format. The format is achieved by entering the set of coefficients for all the variables into the framework below:
First Tableau C SOL 0 0 0 S1 S2 S3 Z (C RHS 4,000 5,000 3,500 0 Z) 900 X1 2 1 1 0 900 600 X2 1 2 1 0 600 0 S1 1 0 0 0 0 0 S2 0 1 0 0 0 0 S3 0 0 1 0 0

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Appendix: Linear Programming Solution Methods

c. d. e.

Constraints. The RHS value of each constraint is placed in the RHS column, and the coefficients of the variables in the constraint are placed under the variable columns. Objective function. The coefficients of the variables in the objective function are placed in Row C above the appropriate variable columns. SOL column. Note that the shaded matrix under the S1, S2, and S3 columns is an identity matrix, a NW to SE diagonal of ones with all other elements zero. The variables over the columns of the identity matrix are always in the SOL column.
SOL S1 S2 S3 S1 1 0 0 S2 0 1 0 S3 0 0 1

f.

g.

This condition will always hold: A variable found in the SOL column will have a one at the intersection of its row and column, and all other elements in its column will be zero. This condition holds for all tableaus. The variables in the SOL column are referred to as the basic variables for that particular tableau. The number of basic variables is always equal to the number of constraints. All of the variables not listed in the SOL column are referred to as the nonbasic variables for that particular tableau. Exactly which variables are basic and which variables are nonbasic will change with each different solution (tableau) as the simplex method proceeds. C column. The zeros in the C column and opposite S1, S2, and S3 are taken from Row C elements above S1, S2, and S3. This condition will always hold: The values in the C column are the coefficients in the objective function that correspond to the variables found in the SOL column of the tableau (i.e., the basic variables). Row Z. The elements in Row Z are all computed. Since the elements in the C column were zero, all the elements in Row Z were zero; however, the elements in the C column will not always be zero. Each element in Row Z is computed as follows: ZRHS ZX1 ZX2 ZS1 ZS2 ZS3 (0)(4,000) (0)(2) (0)(1) (0)(1) (0)(0) (0)(0) (0)(5,000) (0)(1) (0)(2) (0)(0) (0)(1) (0)(0) (0)(3,500) (0)(1) (0)(1) (0)(0) (0)(0) (0)(1) 0 0 0 0 0 0

h.

This step will become clearer in subsequent tableaus. Row (C Z). These values are computed by subtracting each element in Row Z from its counterpart in Row C: (C (C (C (C (C Z)X1 Z)X2 Z)S1 Z)S2 Z)S3 900 600 0 0 0 0 0 0 0 0 900 600 0 0 0

i.

The starting solution. This completes the explanation of the first tableau. The solution of the first tableau is: X1 X2 0 circular saws to be manufactured per month 0 table saws to be manufactured per month

by the pivot element. If zero values or ties occur in the column. Table 2 lists the steps in performing row operations. Check solution for optimality. X1.500 unsatisfied market demand for saws per month \$0 profits per month To read the solution from the simplex tableau you need only look at the SOL and RHS columns. Enter this new row in the next tableau: The first constraint row (4. they are nonbasic variables in this tableau). and the result is entered in the second tableau in the first-row position.500 0 Z) 900 X1 2 1 1 0 900 600 X2 1 2 1 0 600 0 S1 1 0 0 0 0 0 S2 0 1 0 0 0 0 S3 0 0 1 0 0 4. let that variable leave.000 . b. Solutions are optimal when all the values in Row (C Z) are either zero or negative. 7.e. All other variables (nonbasic variables) are equal to zero. If optimal. S1 4. In our first tableau of LP-1. The leaving variable has the smallest nonnegative value. It is found at the intersection of the entering-variable column (X1) and the leaving-variable row (S1): The pivot element is 2 .Appendix: Linear Programming Solution Methods 5 S1 S2 S3 Z 4. both X1 and X2 have Row (C Z) elements that are nonzero and positive. dividing the number of each row into its RHS value.000 2 1 1 0 0) is divided by 2.000 5. X1 0 and X2 0. The variable in the SOL column in this row is the new entering variable X1. Select the variable to enter that has the largest positive element in Row (C Z). If not.500.000/2 5. It is therefore not optimal. X1 will enter since its Row (C Z) element is the largest positive value in Row (C Z). from the SOL and RHS columns.500/1 2. the solution can be improved by continuing and the solution is not optimal. and in the case of a zero. stop.000.. and recording this value in the column to the right. Divide the pivot row.000 unused fabrication hours per month 5. Because X1 and X2 are not listed in the SOL column (i. (Remember that division by zero is undefined. Therefore.) 8. S3 3. Perform row operations to complete the new solution.500 + Entering Variable (largest positive) The variable to leave this starting solution is determined by entering the column of the entering variable. Select a variable to leave the solution: First Tableau (Continued) C SOL 0 0 0 S1 S2 S3 Z (C RHS 4. 6. S2 5. continue. In the case of a tie. .000/1 3. Leaving Variable 5.000 unused assembly hours per month 3. element by element. and its coefficient (900) in Row C is entered in Column C. Identify the pivot element.000 3. and Z 0. These steps will be followed to construct the second tableau. a.000. When any of the values in this row are nonzero positive numbers. Select a variable to enter to improve the solution. The variables in the SOL column (basic variables) are equal to the corresponding values in the RHS column. This is perhaps the most confusing point in the simplex method. arbitrarily select one of the tying variables to leave. and we must continue to the next tableau. do not worry. 5.000 (smallest nonnegative) 3.

The variables in the SOL column for these rows do not change: Second Tableau (Continued) C SOL 900 0 0 X1 S2 S3 Z RHS 2.000 to get values of 3. Transform the second row in the first tableau (5.000 1. 0 12 1(1) 1 1 1(1/2) 12 1(1/2) 12 1(0) 0 0 0 1(0) 0 1 1 / / which are added to the row being transformed 1 / 0 12 / These rows are entered into the second tableau in the second.500 1 1 0 0 1) is now transformed by multiplying the row first entered in the new tableau (2.800.000 5.000 1 1/2 1/2 0 0) by 1 (the negative of the second row’s pivot column value) and adding this transitional row to the second row of the first tableau: Multiply the row first entered in the second tableau by 1: 1(2.000 3. Convert the other elements in the pivot column (X1) to zero.500 to get values of 1.000 3.000 900 X1 1 600 X2 12 0 S1 12 0 S2 0 0 S3 0 / / c.500 d.6 Appendix: Linear Programming Solution Methods Second Tableau C SOL 900 0 0 X1 S2 S3 Z (C Z) RHS 2.000) This gives values of 2.000) This gives values of 2.000 1 2 0 1 0) by multiplying the new row in the second tableau (2.000 0 32 1(1) 1 1 1(1/2) 12 1(1/2) 12 1(0) 0 1 1 1(0) 0 0 0 / / which are added to the row being transformed 2 / 0 12 / The third row in the first tableau (3.and third-row positions.500 1.000 1 1/2 1/2 0 0) by 1 (the negative of the third row’s pivot column value) and adding this transitional row to the third row of the first tableau: Multiply the row first entered in the second tableau by 1: 1(2.000 (C Z) 900 X1 1 0 0 900 0 600 X2 / / 1/2 12 32 0 S1 / / 1/2 12 12 0 S2 0 1 0 0 0 0 S3 0 0 1 0 0 450 150 450 450 .

Appendix: Linear Programming Solution Methods 7 e. because the value for the second row is the smallest nonnegative.000 unused assembly hours per month 1.800. Select a variable to leave the solution: Second Tableau (Continued) C SOL 900 0 0 X1 S2 S3 Z RHS 2.000) (900)(1) (900)(1/2) (900)(1/2) (900)(0) (900)(0) 0(3.000 circular saws to be manufactured per month 0 table saws to be manufactured per month 0 unused fabrication hours per month 3. S2.000 profits per month The values of X1.800.000 (C Z) 900 X1 1 0 0 900 0 600 X2 / 3/2 1/2 12 0 S1 / 1/2 1/2 12 0 S2 0 1 0 0 0 0 S3 0 0 1 0 0 2. If not. S2 leaves. Does this solution look familiar? It should. The solution to the second tableau is: X1 X2 S1 S2 S3 Z 2. Enter this new row into the third tableau in the same second-row position: . If optimal. Divide the pivot row (second constraint row) of the second tableau through by the pivot element (3/2). b. Leaving Variable 3.500 1. The pivot element is 3/2 because that element is at the intersection of the entering-variable column and the leaving-variable row.500) (0)(0) (0)(1/2) (0)( 12 1.500 unsatisfied market demand for saws per month \$1. because it is identical to Point C in Example 8.500/1/2 4. (See Table 2. Row (C Z) is again computed by subtracting each element in Row Z from its counterpart in Row C. 6.000) (0)(0) (0)(3/2) (0)( 12 0(1. Check solution for optimality.000 900 450 450 0 0 /) /) (0)(1) (0)(0) (0)(0) (0)(1) f. Return to Step 5 and continue until optimality is achieved: Steps 5.800. therefore they both equal zero.4 of the graphical method. Row Z for each column is computed by summing the products of values in Column C and that column as follows: ZRHS ZX1 ZX2 ZS1 ZS2 ZS3 (900)(2. Select a variable to enter the solution.000 2.000 . 10. X2 and S1 are not in the SOL column (they are nonbasic variables).000/3/2 1.000 (smallest nonnegative) 450 150 450 450 + Entering Variable (largest positive) The second tableau is not optimal since all Row (C Z) elements are not zero or negative. stop. and Z are found in column RHS of the second tableau.000/1/2 3.000 1.) a.000 3. 9. continue. S3 (basic variables). and 7. X2 enters and. Perform row operations to complete the solution.

000) 12 / (0) 12 / (1) 12 /( 13 /) 12 23 /(/) / (0) This gives values of 1.100.000 500 2.8 Appendix: Linear Programming Solution Methods Third Tableau C SOL 900 600 0 X1 X2 S3 Z (C Z) RHS 2. Multiply this new row by a negative 1/2 to transform the first constraint row in the second tableau: 12 / (2. Compute Rows Z and (C lows: ZRHS ZX1 Z) to complete the third tableau.000) (600)(0) (0)(500) (0)(1) 2. 0 0 13 / 13 / 1 These rows are now entered into the first.000 900 (900)(1.000 (C Z) 900 X1 1 0 0 900 0 600 X2 0 1 0 600 0 0 S1 23 0 S2 / / 1/3 13 23 0 S3 0 0 1 0 0 / / 1/3 13 400 400 100 100 e.000) 12 / (0) 12 / (1) 12 /( 13 /) 12 23 /(/) 12 / (0) This gives values of 1.000 0 12 / 16 / 13 / 0 which are added to the first constraint row of the second tableau 2.000 1 12 / 12 / 0 0 to give the new first constraint row of the third tableau 1.000) (900)(1) .and third-row positions of the third tableau: Third Tableau (Continued) C SOL 900 600 0 X1 X2 S3 Z RHS 1.000 900 X1 0 600 X2 1 0 S1 13 0 S2 23 0 S3 0 / / c. Row Z is computed as fol(600)(2.000 1 0 23 / 13 / 0 Multiply the first row entered in the third tableau by 12 12 /: 12 / (2.100.000 0 12 / 16 / 13 / 0 which are added to the third constraint row of the second tableau 1.500 0 12 / 12 / 0 1 to give the new third constraint row of the third tableau 500 d.000 2.

11.000 circular saws to be manufactured per month 2. stop. 2.000 profits per month Does this solution look familiar? It should. to a new column in the new tableau. . This operation involves the development of a special transitional row that is added to each remaining row in the present tableau. The graphical solution of maximization Problem LP-1. continue.000 table saws to be manufactured per month 0 unused fabrication hours per month 0 unused assembly hours per month 500 unsatisfied market demand for saws per month \$2. If not. because it is identical to Point B in Example 8. The solution to the third tableau is: X1 X2 S1 S2 S3 Z 1. The third tableau is optimal because all the elements in Row (C Z) are either negative or zero. Return to Step 5 and continue until optimality is achieved. Next. This row is entered in the new tableau in the same row position as it occupied in the present tableau before it was transformed. 3. This is done by performing a separate operation on each remaining row of the present tableau. Circle this element. Row (C Z) is again computed by subtracting each element in Row Z from its counterpart in Row C. convert all other elements in the pivot column of the present tableau to zero in the new tableau. This new row with a one in the pivot element is entered into the new tableau in the same row position as the pivot row of the present tableau. B. If optimal. This new column always has these features: The element that is the pivot element in the present tableau will be a one in the new tableau. Identify the pivot element in the present tableau. Each row in the present tableau for which we wish to convert its pivot column element to zero requires its own unique transitional row. When this transitional row is added to the row of the present tableau.Appendix: Linear Programming Solution Methods 9 ZX2 ZS1 ZS2 ZS3 (900)(0) (900)(2/3) (900)( 13 (600)(1) (600)( 13 23 (0)(0) (0)( (0)( 13 13 600 400 100 0 /) /) /) /) (600)( / ) (600)(0) (900)(0) (0)(1) f. and all other elements in that column in the new tableau will be zero. Check solution for optimality.4 of the graphical method. a new row results that has a zero in the pivot column. Row operations convert the pivot column in this present tableau.100. element by element. Convert the pivot element in the present tableau to a one in the new tableau by dividing the entire pivot row in the present tableau by the pivot element (element by element). element by element. and then each was substituted into the objective function to Table 2 Steps in Performing Row Operations 1. Each of these solutions was first identified as an intersection of the constraints. We then take the negative of the value of this element and multiply it by the new row obtained in Step 2 above. and C. which is found at the intersection of the column of the entering variable and the row of the leaving variable. Example 8. identified three solution points—A. This transitional row is developed by first determining the value of the element that we want to transform to zero.4.

Simplex Minimization Solutions The graphical solution of minimization Problem LP-2. identified three solution points—A. Example 8. Why do we do this? The only reason is to get a starting simplex solution. This progression to better and better solutions is the only conceptual departure of the simplex method from the general process of the graphical method. 2.5. Subsequent tableaus exhibit progressively lower values for Z until optimality is achieved. and this does not meet the requirement. You can be assured that each tableau will exhibit progressively higher profits. we must add an artificial variable to or rows to meet the requirement and obtain a starting solution (complete the first tableau). When constraints occur. Z is minimized. although the procedures for treating them apply to both minimization and maximization LP problems. B. For example. The optimal solution to the problem was then determined by investigating Points A. Remember when we said earlier that a requirement for each tableau was that the variable with a column which has a one in the first row and zeros for all other elements in its column is the variable that must go in the SOL column in the first row? What happens if no variable exists that has a column meeting this requirement? This is exactly the situation we have with or constraints. and we shall not be concerned with them again. X1 2X2 2X2 2X2 2X2 A1 S1 S1 500 500 500 500 S1 Note that in Step 2 above a slack variable (S1) is added to the right-hand side. The simplex solution to this problem begins the first tableau with a very large value of Z. and C. In Step 4 an artificial variable (A1) is added to the left-hand side. Minimization LP problems have different objective functions. The first tableau begins with Z 0. The simplex method solution to LP-1 follows this same general process with one exception. There are only two basic differences between maximization and minimization LP problem solutions with the simplex method: 1. the optimal solution (maximum profit) was selected. and each subsequent tableau methodically exhibits higher values of Z. For example: 3X1 3X1 2X2 2X2 A2 1. therefore we shall not be able to meet the requirement here either.000 1. The artificial variables have absolutely no meaning. and C. X1 2.10 Appendix: Linear Programming Solution Methods determine a value of Z. The artificial variables appear in the SOL column of the first tableau and are then methodically driven from the solution in subsequent tableaus. X1 3. The addition of S1 to the smaller side of the expression allows us to convert the to . In Step 3 the S1 is moved to the left-hand side by subtracting S1 from both sides. Similarly. When such conditions exist. and constraints are accommodated by adding artificial variables to these constraints. B.000 . Finally. This progression from high to low values of Z is characteristic of the simplex solution of minimization LP problems. which must always be less than or equal to the left-hand side. X1 4. In either minimization or maximization problems. an constraint does not have a slack variable (as we shall soon see). in the case of constraints: 1. A constraint has a 1 coefficient for S1. Minimization LP problems are more likely to have and constraints. an artificial variable must also be added.

000X1 X1 X1 15.500 /M 7. and include all variables in all functions: Max Z 10.500 /M 7.000 X2 1 0 12 M A1 12 M A2 0 1 M 0 0 S1 / 1/2 12 12 0 S2 0 1 M M 2/1/2 1/2/1/2 4 1 Leaving Variable .000 0 /M 7.500 32 /M 7.000X2 2X2 X2 MA1 A1 0A1 MA2 0A2 A2 0S1 S1 0S1 0S2 0S2 S2 4 21/2 4.000 15.12 Appendix: Linear Programming Solution Methods 1.000 X1 / 1/2 12 15. Add artificial variables to constraints to obtain a starting solution.000X2 2X2 X2 S1 to : 4 21/2 S2 2.000 X2 2 1 3M 3M 15. Place in first tableau and solve: First Tableau C SOL M M A1 A2 Z (C RHS 4 21/2 61/2M Z) 10.000 M A1 1 0 M 0 M A2 0 1 M 0 0 S1 1 0 M M 0 S2 0 1 M M 4/2 21/2/1 2 21/2 Leaving . Add slack variables to constraints to convert from Min Z 10.500 12 (C Z) /M 2. (smallest nonnegative) / 1/2 /M 7. Variable (smallest nonnegative) + Entering Variable (largest nonnegative) 2 1/2 21/2 1 1/2 1/2 Second Tableau C SOL 15.000 12 1 1 0 / 0 1/2 0 1 0 1/2 1 1/2 12 0 1 1 10.000X2 2X2 X2 15. Multiply objective function by Max Z 1 to convert to a maximization problem: S1 S2 4 21/2 10.500 + Entering Variable (largest nonnegative) 12 1/2 / 0 1/2 2 1 11/2 0 1 12 12 / / 1 1 0 1 12 12 / / 1 1 0 1 .000 X1 1 1 2M 2M 10.000 M X2 A2 Z RHS 2 1/2 /M 30.000X1 X1 X1 15.000X1 X1 X1 3.500 12 12 15.

an average of 11/2 carloads of scrap from Source B could be accommodated by either 3 carloads one day and none the next or two carloads one day and one the next.000 0 M A1 1 1 5.000 0 S2 1 2 5.000 0 15.000 M 5.500 (market—saws) .000 (fabrication—hours) 5.500 (C Z) 10.Appendix: Linear Programming Solution Methods Third Tableau C SOL 15.000 X1 0 1 10.000 0 S1 1 1 5. for example.000 10. A1 and S1 belong to the first constraint. This is ordinarily not a serious difficulty. The key complication in minimization problems is the more frequent inclusion of artificial variables.000 M A2 1 2 5. Negative M’s. Let us now examine LP-1 and the last tableau from this example to determine what information is available to POM decision makers. The third tableau is optimal because all elements in Row (C Z) are zero or negative.500 The Gulf Coast Foundry should purchase 1 carload of scrap per day from Source A and 11/2 carloads of scrap per day from Source B. If these M’s are treated as any other very large number and are added. In this problem. and multiplied while the appropriate signs are observed.000 5. All variables that do not appear in the SOL column are equal to zero: X1 1 X2 11/2 S1 0 S2 0 Z 32.000 X2 1 0 15. Note also that the subscripts of the artificial and slack variables correspond to the order of the constraints.000 5. Note that the simplex method does not guarantee whole number (integer) answers. LP-1 was formulated as: Max Z 900X1 2X1 X1 X1 600X2 X2 2X2 X2 S1 S2 S3 4. subtracted.500. the minimization problems are as straightforward to solve as the maximization problems. appear in the C row and column and consequently in Row Z and Row (C Z). and no excess lead or copper above the minimum requirements will result.000 M 5. The total daily scrap cost will be \$32. Interpreting Simplex Solutions Example 1 used the simplex method to solve Problem LP-1. negative very large numbers. Pay particular attention to the conversion of constraints to the first tableau form by adding artificial variables and subtracting slack variables.000 13 5.000 (assembly—hours) 3. and A2 and S2 belong to the second.000 X2 X1 Z RHS 11/2 1 32. Interpret the solution: The solution is deduced from the SOL and RHS columns of the last tableau.

000 0 1.000 The fabrication of circular saws (X1) and table saws (X2) has used up all the available fabrication hours per month.000 S2 S2 S2 S2 S2 5.100.500 (market—saws) 3.000 S1 S1 S1 S1 S1 4.000 circular saws and 2. X2.000 (fabrication—hours) 4.14 Appendix: Linear Programming Solution Methods where: X1 X2 S1 S2 S3 Z number of circular saws to be manufactured per month number of table saws to be manufactured per month unused fabrication hours per month unused assembly hours per month unsatisfied market demand for saws per month profits per month The last tableau in the simplex solution to LP-1 in Example 1 was: Third Tableau C SOL 900 600 0 X1 X2 S3 Z RHS 1.000 5. This solution indicates that management should manufacture 1. X1 1.000 0 2. To check this.000) 4.000) 2.000 5.000 2.100.000.000 S3 S3 S3 S3 3.000 2.500 1. therefore S1 0.000 (C Z) 900 X1 1 0 0 900 0 600 X2 0 1 0 600 0 0 S1 / / 1/3 23 13 0 S2 23 0 S3 0 0 1 0 0 / / 1/3 13 400 400 100 100 The solution to LP-1 is deduced as follows: X1.000 2.000 4.000 .000 (assembly—hours) 5.000 4.000 The manufacture of circular saws and table saws has used up all the available assembly capacity per month.000 2X2 2(2.000 4. X1 1.000 1.000 500 2. and 500 additional saws could be sold to the market. S3 (all basic variables).000 2.000 table saws per month for a monthly profit of \$2. Because S1 and S2 are not found in the SOL column (nonbasic variables). and their values are shown in the RHS column.500 3. therefore S2 0. and Z are in the SOL column.000 X2 2.500 3.000 X2 2. let’s examine the constraints of LP-1: 2X1 2(1. their values are zero. All fabrication and assembly production capacity would be used.

000 under S1 means that if the lead requirement is raised or lowered one unit (1 ton per day). to further develop your ability to interpret simplex solutions. The meanings of the variables in the solution and the shadow prices are then easier to understand. The minimization and maximization LP problems are interpreted exactly the same way. Example 3 presents this problem and its simplex solution and fully interprets the meaning of the solution.000 The zeros appear under X1 and X2 because both X1 and X2 are in the solution.7. A3. A2. Example 8. Z will change by \$5. from Chapter 8.500 to \$37. Now. The meaning of the 5. The values under A1 and A2 have no meaning. If the RHS of the first constraint were increased from 4 to 5. The 5. Z would increase from \$32. It is usually helpful to have the original problem formulated and in front of you when the last tableau is interpreted.000 under S2 is similarly the marginal impact of 1 ton of copper on Z. A5.000.500. let us move on to a more realistic LP problem. Z would decrease from \$32.500. Example 3 Interpreting Simplex Solutions: The Oklahoma Crude Oil Company Ingredient Mix Problem The variable definitions of the Oklahoma Crude Oil Company problem are: X1 X2 X3 X4 X5 S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 thousands of gallons of Oklahoma crude to be purchased per month thousands of gallons of Texas crude to be purchased per month thousands of gallons of Kansas crude to be purchased per month thousands of gallons of New Mexico crude to be purchased per month thousands of gallons of Colorado crude to be purchased per month excess regular gasoline over minimum market requirement in thousands of gallons excess premium gasoline over minimum market requirement in thousands of gallons excess low-lead gasoline over minimum market requirement in thousands of gallons excess diesel fuel over minimum market requirement in thousands of gallons excess heating oil over minimum market requirement in thousands of gallons excess lubricating oil base over minimum market requirement in thousands of gallons unused Oklahoma crude supply in thousands of gallons unused Texas crude supply in thousands of gallons unused Kansas crude supply in thousands of gallons unused New Mexico crude supply in thousands of gallons unused Colorado crude supply in thousands of gallons no meaning A1.16 Appendix: Linear Programming Solution Methods (C Z) X1 0 X2 0 A1 M 5.000 A2 M 5. Remember the Oklahoma Crude ingredient mix problem. and A6 .500 to \$27.000 S1 5. Carefully reread the earlier problem before you begin this example. A4. If the RHS were decreased from 4 to 3.000 S2 5.

500 0 S7 0 0.67 2.33 0.67 3.67 2.000 3.500 M 1.000 2.07 1 0.33 0.33 0.23 1 0.333.1 0.200 4.33 0 90 90 .2 1 0 1 0 0.07 70 70 0 S9 0 0 0 0 0 0 0 1 0 0 0 0 0 0 S10 0 0 0 0 0 0 0 0 0 1 0 0 0 0 S11 1 0.07 1 0.18 Table 3 C 200 X1 120 180 0 150 0 140 200 0 0 0 0 X5 X4 S5 X3 S2 X2 X1 S9 S4 S10 S1 Z 6.500 M A1 0 0 0 0 0 0 0 0 0 0 1 0 M M A2 0 0 0 0 1 0 0 0 0 0 0 0 M M A3 0 3.33 0.000 (C Z) 0 0 0 0 0 0 1 0 0 0 0 200 0 Optimal Tableau from Ingredient Mix Problem: Oklahoma Crude Oil Company Appendix: Linear Programming Solution Methods 140 X2 0 0 0 0 0 1 0 0 0 0 0 140 0 150 X3 0 0 0 1 0 0 0 0 0 0 0 150 0 180 X4 0 1 0 0 0 0 0 0 0 0 0 180 0 120 X5 1 0 0 0 0 0 0 0 0 0 0 120 0 0 S1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 S2 0 0 0 0 1 0 0 0 0 0 0 0 0 0 S3 0 3.67 0.33 0.666.500 1.67 600 M 600 M A4 0 0 0 0 0 0 0 0 1 0 0 0 M M A5 0 0 1 0 0 0 0 0 0 0 0 0 M M A6 0 0 1 10 4 0 0 10 1 0 3 1.33 466.33 0.67 0.67 0 1 0 0 0 0 3.67 600 600 0 S4 0 0 0 0 0 0 0 0 1 0 0 0 0 0 S5 0 0 1 0 0 0 0 0 0 0 0 0 0 0 S6 0 0 1 10 4 0 0 10 1 0 3 1.000 1.03 70 70 0 S8 0 0.420.3 0 0 1 0.33 0.4 0 1 1 0 0.000 600 1.67 0 1 0 0 0 0 3.000 8.066.

or sensitivity analysis as it is often called. Z would decrease by \$90.420. X3. If the amount of Texas crude available each month were increased by 1. raising or lowering the RHS a small amount will not affect Z. A5. . S9. Z would decrease by \$70. manipulates the elements of the last tableau of the simplex procedure to determine the sensitivity of the solution to changes in the original problem. S3 S6 S7 S8 S11 Column Postoptimality Analysis Postoptimality analysis.000-gallon change in the RHS of these constraints will not affect the monthly crude oil cost (Z). because each of these slack variables is in the solution. How will Z change if the RHS of any constraint changes? This question was addressed earlier in this section.0662/3 means that 2. A5. S4. Therefore. A3.000.420. Z would decrease by \$70.500.000 (\$3. The zeros in the S1. If the amount of Oklahoma crude available each month were increased by 1.000 gallons.000 (3. Here are some of the questions that this analysis seeks to answer: 1. 0 (no excess lubricating oil base will be supplied monthly) 0 (all Oklahoma crude oil available will be purchased monthly) 0 (all Texas crude oil available will be purchased monthly) 3.667 gallons more than the 5.000 gallons of Kansas crude oil will be available and not purchased monthly) 1. The values in Row (C Z) under the slack variables provide this information. and X5 columns because all of these variables are in the solution. If the amount of Colorado crude available each month were increased by 1. If the lubricating oil base monthly market requirement were increased by 1. and S10 columns mean that a 1.000 gallons.667 gallons of New Mexico crude oil will be available and not purchased monthly) 0 (all Colorado crude oil available will be purchased monthly) no meaning 3. Row (C 600 1. X2. 3. A4. The values in Row (C Z) under the decision variables provide this information. 3. Z would increase \$600. The values in the A1. A2.666.500 70 70 90 Z) Interpretation If the low-lead gasoline monthly market requirement were increased by 1. S1 2. and A6 Interpret Row (C Z): 1. X4.000 gallons.000 gallons.000 gallons.Appendix: Linear Programming Solution Methods 19 S6 S7 S8 S9 S10 S11 Z b. The zeros in the X1.000 RHS of the regular gasoline minimum market requirement is supplied. 2.6662/3 (1. S2. S5. If a decision variable is not in the optimal solution (equals zero). Z would increase \$1. how will Z change if one unit of the decision variable is forced into the solution (Xi 1)? This question was also addressed earlier in this appendix. For example. and A6 columns have no meaning.000. Over what range can the RHS change and the shadow prices in Row (C Z) remain valid? 2.066.000 crude oil cost per month will result) A4.

4. Looping situations almost never happen in nontrivial real LP problems in POM. a condition of degeneracy is present. input the new problem to the computer. For example. How will Z change if one of the coefficients of a decision variable in the objective function changes by one unit? How will Z change if one of the coefficients of a decision variable in a constraint changes by one unit? These and other postoptimality questions are deduced from the optimal tableau. one rather obvious method for answering these and other postoptimality questions exists: Make the desired changes in the original problem. S1 could leave and S2 could reenter the third tableau. thus prohibiting an optimal solution. When they do. Therefore. in the example above. consider this problem: Max Z 5X1 X1 2X1 First Tableau C SOL 0 0 S1 S2 Z (C RHS 6 4 0 Z) 5 X1 1 2 0 5 10 X2 3 2 0 10 + Entering Variable 0 S1 1 0 0 0 0 S2 0 1 0 0 63 43 10X2 3X2 2X2 6 4 / / 2 2 In the first tableau. a simple solution is to add or subtract an infinitesimally small amount to either the RHS or coefficient in the ratio to break the tie. This switching could conceivably continue endlessly. but the methods of analysis required to answer Questions 3. and 5 are beyond the scope of this book. if S2 is selected to leave the first tableau. 5. Degeneracy is a condition in which there is a tie between two or more leaving variables in any maximization or minimization simplex tableau. S1 and X2 are in the SOL column of the second tableau. In rare instances. and S2 and X2 would be in the SOL column. and interpret the new results. In other words. however. These questions assume that all other parts of the original problem remain unchanged and that only the singular change under consideration occurs. Although this is a popular topic with operations researchers. looping can occur. One of the variables is arbitrarily selected to leave. For example. the original problem could be modified as follows: Max Z 5X1 X1 2X1 10X2 3X2 2X2 6. and the simplex method is continued. and S1 and X2 would be in the fourth tableau.20 Appendix: Linear Programming Solution Methods 4. S2 could leave and S1 reenter the fourth tableau. a tie for the leaving variable exists. Why is this a problem? It usually poses absolutely no problem at all in arriving at an optimal solution. Unusual Features of Some LP Problems Two linear programming situations deserve special attention: degeneracy and alternate optimal solutions.0001 4 .

Third Tableau C SOL 7 1 X2 X1 Z (C RHS 1/ 13/4 34 1 X1 0 1 1 Z) 0 7 X2 1 0 7 0 0 S1 49 336 1 48 0 S2 7 336 7 48 / / / / 14 1 1 0 0 We should always examine Row (C Z) to inspect for alternate optimal solutions. . Note that the zero in Row (C Z) under S2 in the third tableau indicates also that an alternate optimal solution exists. and Z 14. Z 14) with no change in Z. Why? Because these alternatives offer management the ultimate in flexibility—alternatives with the same profits or costs.Appendix: Linear Programming Solution Methods 21 This slight modification breaks the tie of leaving variables and removes the degeneracy condition. the one in the second tableau. Alternate optimal solutions exist when an element under a variable in Row (C Z) is zero and that variable is not in the solution. X1 0. Z has not changed. consider this problem: Max Z X1 X1 7X1 Second Tableau C SOL 7 0 X2 S2 Z (C RHS 2 12 14 Z) 1 X1 17 48 7 7X2 7X2 X2 14 14 7 X2 1 0 7 0 0 S1 17 17 0 S2 0 1 0 0 2/1/7 12/48/7 14 Leaving 13/4 . Now let us turn to a solution method designed to solve a special type of LP problem—the transportation problem. Let X1 enter to check this out. Variable / / / / 1 0 1 1 + Entering Variable Note that the zero under X1 in Row (C Z) of this optimal tableau indicates that X1 can enter the solution (X2 2. For example. X2 13/4. X1 enters and S2 leaves: / (13/4) / 2 13/4 14 17 17 17 or / (1) / 1/7 0 17 / (0) 0 1 1 / ( 1/48) / 1/7 49/336 1 336 17 /(/ ) / 0 7/336 7 336 1 7 7 48 A new alternate optimal solution emerges in the third tableau where X1 13/4.

Example 4 uses only the northwest corner rule and the stepping-stone method so that you can get the overall picture of how the transportation method works. Each destination has a precise number of units that must be received in the time period. Notice in Steps 2 and 3 of Table 4 that two alternative ways can be used to either test a solution for optimality or obtain a starting solution. If not. Such problems were first formulated in the 1940s.22 Appendix: Linear Programming Solution Methods TRANSPORTATION METHOD In Chapter 8. problems with and constraints. If the solution is optimal. Formulate the problem in a transportation table. . As we shall see later in this section. Each discrete unit to be shipped has a specific transportation cost from each source to each destination. The objective is to minimize the total transportation costs for the time period. Go back to Step 3. stop. 3. 2. Example 4 analyzes a problem of a manufacturing company that must select a new location for a factory to produce computer peripheral units. Table 4 Procedures of the Transportation Method 1. To demonstrate these procedures. Later the same problem will be worked with the MODI and VAM methods so that you can appreciate the relationships among the methods. demands greater than supply. Each source has a precise number of units that must be shipped in the time period. Develop a new transportation table that is an improved solution. Solution procedures that constitute the transportation method also are used routinely to solve such expanded problems. and the solution procedures that will be presented in this section were developed in the 1950s. we discussed selecting a set of shipments from sources to destinations that minimized period transportation costs. Solution Procedures of the Transportation Method The procedures of the transportation method are exhibited in Table 4. and other characteristics are now routinely described as transportation problems. We present the essential elements of the transportation method here. later formulations and solutions allow a much broader range of problems. Characteristics of Transportation Problems Transportation problems have these characteristics: • • • • • • A finite and homogeneous set of discrete units must be shipped from several sources to several destinations in a particular time period. These problems can be analyzed by either the simplex method or the transportation method. Although the characteristics listed above accurately depict the problems as they were originally formulated and solved. 4. Use the northwest corner rule or VAM to obtain a feasible starting solution. The decision variables represent the number of units to be shipped from each source to each destination during the time period. continue to the next step. Test the optimality of the solution by using the stepping-stone or MODI method. maximization objectives.

. is proposed to increase factory capacity. Plain View’s president. The per-unit shipping cost is shown in a box within each factory–warehouse cell. How many units per month should be shipped from each factory to each warehouse after the new factory is built? Follow the steps in Table 4 for the transportation method. Bill Mayer. Test the optimality of the solution by using the stepping-stone method. and 2. and use the northwest corner rule to obtain a starting solution. This starting solution shows how many units are shipped from each factory to each warehouse. Only 300 units are possible in the Amarillo–San Antonio cell because this amount satisfies the San Antonio warehouse requirement.000 Transportation Costs Warehouse Factory Amarillo Waco Huntsville San Antonio \$31 20 23 Dallas \$21 21 20 Houston \$42 30 15 Factory Amarillo Waco Huntsville Total Monthly Capacity (units) 400 1.000 600 2. and the transportation costs per unit from each factory to each warehouse are: Monthly Warehouse Requirement (units) 300 900 800 2.Appendix: Linear Programming Solution Methods 23 Example 4 The Northwest Corner Rule and the Stepping-Stone Method The Plain View Manufacturing Company presently has two factories at Amarillo and Waco. Use the transportation method to determine the total monthly transportation costs if the new factory is located at Huntsville. Plain View has been unable to produce and ship enough of its computer peripheral units to satisfy the market demand at the warehouses. 3. Solution 1. and so on until all 2. zero units are to be shipped. and Houston. we can allocate only 100 units to the Amarillo–Dallas cell because this completes the Amarillo factory capacity of 400 units. San Antonio. and three warehouses at Dallas. In recent months. the monthly warehouse requirements. This step requires systematically evaluating each of the empty cells in Transportation Table #1 to determine if monthly transportation costs can be reduced by moving any units into the empty cells. wants to determine what Plain View’s monthly shipping costs will be with the new factory located at Huntsville. The stepping-stone evaluation method involves the procedures in Table 5. Next. b. Transportation Table #1 is not optimal because we have a negative circuit cost for the Waco–San Antonio cell and we can reduce monthly transportation costs by moving some units into this empty cell.000 Warehouse San Antonio Dallas Houston Total a. Similarly. The initial solution is obtained by beginning in the northwest cell (Amarillo–San Antonio) and allocating as many units as possible to this cell and proceeding likewise from left to right and downward. As shown in Figure 1. Formulate the problem in a transportation table. Note that the monthly factory capacities are placed on the right-hand side of the table opposite the appropriate factory row. Note also that the total capacity for all factories equals the total warehouse requirements. When a cell is empty. Texas. Texas.000 units have been allocated. we move downward and allocate 800 units to the Waco–Dallas cell. The monthly capacities of the old and new factories. These steps are illustrated in Figure 1. move right and allocate 200 units to the Waco–Houston cell. Texas. Moving to the right. A new factory at Huntsville. warehouse requirements are placed along the bottom of the table under the appropriate warehouse column.

Factory To Dallas Houston San Antonio From Totals 31 21 42 400 Amarillo 300 100 Waco Huntsville Warehouse Totals 300 20 23 800 14 900 21 20 ( ) ( ) Warehouse Totals Factory Amarillo Waco Waco Waco Huntsville The monthly costs of Transportation Table #2 are: Monthly Units to Transportation Be Shipped Warehouse Costs per Month Dallas San Antonio Dallas Houston Houston Totals 400 300 500 200 600 2.200 Factory Totals 400 1.000 9. evaluate the Waco–San Antonio empty cell: Circuit cost 20 31 21 21 11. Place this cost in a circle.000 2. Place this cost in a circle.000 600 2. evaluate the Huntsville–San Antonio empty cell: Circuit cost 23 31 21 21 30 15 7.000 600 2.000 Warehouse Totals To From 300 San Antonio 300 X 31 20 23 900 Dallas 100 800 X 21 X 21 20 200 600 800 Houston 42 X 30 X 15 Factory Totals 400 1. Factory To Dallas Houston San Antonio From Totals 31 21 42 400 300 100 Amarillo ( ) ( ) ( ) Step 5: Transportation Table #2 To From Amarillo Waco Huntsville San Antonio 11 300 18 300 31 20 23 Dallas 400 500 14 900 21 21 20 Houston 12 200 600 800 42 30 15 Waco Huntsville Warehouse Totals 7 ( ) 20 23 800 21 20 200 30 15 ( ) ( ) 1.000 600 800 . Place this cost in a circle.000 \$43. Factory To Dallas Houston San Antonio From Totals 21 42 31 400 Amarillo 300 100 ( ) ( ) ( ) ( ) Amarillo Waco Huntsville Warehouse Totals Waco Huntsville Warehouse Totals 11 20 23 800 21 20 200 600 800 30 15 1.24 Appendix: Linear Programming Solution Methods Figure 1 Transportation Tables of Example 4 Steps 1 and 2: Starting Solution Using the Northwest Corner Rule To From Amarillo 400 Waco 1.000 2.800 6.000 600 800 300 900 Step 3d: Next.000 2.000 600 2.000 \$39.500 6.000 600 2.000 10.000 \$ 9.900 200 30 15 ( ) ( ) 1.000 2.000 Huntsville 600 2.000 2. evaluate the Huntsville–Dallas empty cell: Circuit cost 20 21 30 15 14. Place this cost in a circle.000 Factory Totals 400 1.000 300 900 Factory Amarillo Amarillo Waco Waco Huntsville The monthly costs of Transportation Table #1 are: Monthly Units to Transportation Be Shipped Warehouse Costs per Month San Antonio Dallas Dallas Houston Houston Totals 300 100 800 200 600 2.000 Step 3a: First evaluate the Amarillo–Houston empty cell: Circuit cost 42 30 21 21 12.000 600 2.000 \$ 8.000 600 2.400 6. To From Amarillo Waco Huntsville Warehouse Totals 300 San Antonio 300 31 20 23 900 Dallas 100 21 21 20 ( ) ( ) Houston 12 42 30 15 ( ) ( ) Factory Totals 800 200 600 800 Step 4: Transportation Table #1 San Antonio 300 11 7 300 31 20 23 Dallas 100 800 14 900 21 21 20 Houston 12 200 600 800 42 30 15 Step 3b: Next.000 Step 3c: Next.100 16.000 2.000 9.300 2.000 2.

Select an empty cell from the transportation table. Positive values mean costs will rise. Each unfilled cell (a variable not in the solution) is investigated to determine if period costs would be reduced if units were moved from a filled cell (a variable in the solution) to an unfilled cell. 4. The stepping-stone circuit is simply a logical way of determining the per-unit change in period costs if units are moved into an unfilled cell. which had a negative circuit cost in Step 3? Let us again examine the stepping-stone circuit for this cell. and these values mean the amount of change in total shipping costs that can be realized by moving one unit to the empty cell under examination.900 in Transportation Table #2—but is it optimal? Optimality can be determined once again by following the stepping-stone procedures. develop an improved solution. Steps of the Stepping-Stone Method 1. Beginning at the empty cell being evaluated. 5. An improved solution is obtained by moving as many units as possible into the empty cell of the last transportation table with the most negative circuit cost. Return to Step 1 and continue until all empty cells have been evaluated. The circuit may skip over stones or other empty cells. If all the circuit totals are positive or zero. In this circuit. If negative circuit totals exist. 300. move clockwise and alternatively assign positive ( ) and negative ( ) signs to the costs of the cells at the corners of the circuit from Step 2. but the corners of the circuit may occur only at stones (occupied cells) and the empty cell that is being evaluated. subtract the smallest number of units in negative cells. Subtract the number of units from all filled cells with negative costs and add this number to all filled cells with positive costs on that stepping-stone circuit. Now let us answer the questions of Plain View’s location problem: . the solution is optimal. 2. among the filled cells with negative costs. we want to determine if the present transportation table is optimal and. which variable should enter the solution. The maximum number of units that can be moved into the Waco–San Antonio empty cell is 300—the smallest number of units in a negative cell on the Waco–San Antonio steppingstone circuit. 6. This is analogous to examining the Row (C Z) in the simplex method to determine the entering variable. The circuit total corresponds to the Row (C Z) values of the simplex method. 4. This solution is an improved one—\$43. Draw a closed circuit between the empty cell and other stones (occupied cells) by using only straight vertical or horizontal lines. the solution in Transportation Table #2 is optimal. 3. All other cells not on this circuit remain unchanged. This is analogous to determining the value of the entering variable in the simplex method.Appendix: Linear Programming Solution Methods 25 Table 5 Stepping-Stone Method Logic of the Stepping-Stones In this procedure. Because all stepping-stone circuit costs are either positive or zero. locate the filled cell with the smallest number of units to be shipped. how many units should be moved? We should move as many as possible. This new solution is shown in Transportation Table #2 of Figure 1. To complete the improved solution.200 in Transportation Table #1 versus \$39. But how many units can be moved into the Waco–San Antonio cell. The stepping-stone circuit costs of the empty cells are shown in circles in Transportation Table #2 of Figure 1. Total the per-unit costs of the cells at the corners of the circuit. The new cell to enter the solution is the cell whose circuit has the most negative circuit total cost. from all negative cells and add this same number of units to the positive cells of the circuit. Develop a new transportation table that is an improved solution. negative values mean costs will fall. The change in the solution is determined by examining the stepping-stone circuit with the most negative total circuit cost. Determining the New Solution Once we determine that period costs would be reduced if some units were moved into an unfilled cell. if it is not.

If the factory is located at Huntsville. b. This step uses the stepping-stone method to check the optimality. Everything else in the procedure stays the same— formulating the transportation tables. Plain View’s total monthly transportation costs will be \$39. Example 5 MODI Method of Testing Transportation Tables for Optimality Transportation Table #1 Kj Ri To From R1 R2 R3 0 0 15 Amarillo Waco Huntsville Warehouse Totals K1 31 K2 21 K3 30 Factory Totals 42 30 15 400 1. Next.000 San Antonio 300 11 7 31 20 23 Dallas 100 800 14 21 21 20 Houston 12 200 600 . A newer and more frequently used method is the MODI method (modified distribution method). review Step 3 in Figure 1. Plain View should make these monthly shipments: Factory Amarillo Waco Waco Waco Huntsville Total Warehouse Dallas San Antonio Dallas Houston Houston Number of Units 400 300 500 200 600 2.000 Example 4 uses the well-known stepping-stone method to determine optimality and to develop improved solutions. review the procedures of the transportation method from Table 4 to get the overall view of the procedure again. Notice that the only way that the MODI method affects the procedures of the transportation method is in testing each transportation table for optimality. and developing new transportation tables that are improved solutions. but it is more efficient in computing the improvement costs (circuit costs in the stepping-stone method) for the empty cells.900. using either the northwest corner rule or VAM to obtain a starting solution.000 600 2. First.26 Appendix: Linear Programming Solution Methods a. Before you begin this example. perhaps it would be helpful if you would do two things. This procedure is similar to the stepping-stone method. Example 5 uses the MODI method to test Transportation Table #1 in Figure 1 for optimality.000 300 900 800 2. however.

and we therefore allocate 600 units to that cell. in the example the D1 row and column are first completed. many tables would be required if we used the northwest corner rule to obtain a starting solution. VAM is a more practical way to obtain starting solutions. and develop a new transportation table with an improved solution as before. we first compute the Ri and Kj for the table. After we know these values. which explains the steps of the method that are applied in Example 6. where Cij represents the transportation cost of the ij cell 0 C11 31. Next. but in problems of more realistic proportions. These values represent the difference between the lowest unit cost and next lowest unit cost for each row and column. but one that is arbitrary. R1 is always set equal to zero. In Step 3. in many problems the starting solution is optimal. the Huntsville–Houston cell has the lowest unit cost within the Houston column. we can directly calculate the circuit costs for the empty cells of the transportation table. R3 15 Calculating Circuit Costs for Unfilled Cells Cij Ri Kj Amarillo–Houston C13 R1 K3 42 0 30 Waco–San Antonio C21 R2 K1 20 0 31 Huntsville–San Antonio C31 R3 K1 23 ( 15) 31 Huntsville–Dallas C32 R3 K2 20 ( 15) 21 27 R1 0 R1 0 R2 R2 R2 0 R3 R3 12 11 7 14 In Example 5. Because all of the Huntsville row has been allocated. this allows us to compute all other values of Ri and Kj for filled cells. K2 21 C22 21. Although the Ri and Kj must be recomputed for each transportation table. Although the VAM method is more complicated than the northwest corner rule. In Step 2. In fact. the Houston column has the largest difference on the first iteration and it is selected. you may draw a line all the way through this row to eliminate it from further consideration. The northwest corner rule provides a starting solution to transportation problems. but without the necessity of drawing the stepping-stone circuits for all of these cells as in the stepping-stone method. R2 0 C23 30. This completes the first iteration. this results in too many transportation tables.Appendix: Linear Programming Solution Methods Calculating Ri and Kj for Filled Cells Ri Kj R1 K1 K1 K2 K2 K2 21 K3 K3 K3 30 Cij. the MODI method is more efficient than the stepping-stone method and tends to be used more frequently in practice. in realistic problems. K1 31 C12 21. the most possible. K3 30 C33 15. refer to Table 6. In Step 1 from Table 6. . Vogel’s approximation method (VAM) was developed to obtain a more efficient starting solution. Example 6 develops a starting solution to the transportation problem of our previous example. we would draw the stepping-stone circuit for the empty cell that has the most negative circuit cost. In most problems. In working through the procedures of the VAM method. just as we did in Figure 1. if there are any negative circuit costs. say 25 sources and 40 destinations. This source of inefficiency may not seem too important to you now after having worked through Example 4 in just two transportation tables.

1. we begin the second iteration in the D2 row and column. The Houston column has the largest difference and is selected. 5 10. 21 12 11 .000 5 1 1 1 20 (1) 600 300 3 11 11 900 1 0 0 0 800 15 12 2. This completes the second iteration. 21 15 11. 0. and 200 units are allocated to the Waco–Houston cell within the Houston column because this cell has the lowest remaining unit cost.28 Appendix: Linear Programming Solution Methods Example 6 Starting Solutions with Vogel’s Approximation Method (VAM) To From San Antonio 31 Dallas (4) 400 21 Houston 42 Factory Totals D1 400 10 D2 10 D3 10 D4 Amarillo (3) Waco 300 23 Huntsville Warehouse Totals D1 D2 D3 D4 20 (4) 500 21 (2) 200 30 1. in Example 6. Di Row Calculations 31 21 20 31 21 31 21 21 20 15 21 20 21 20 10. In other words. This is not always the case and although the VAM method does yield an efficient starting solution when compared to the northwest corner method. This allocation exhausts the Houston column and a line may be drawn through the column. 1 10. 1 Units Allocated at Iteration (i) (1) 600/Huntsville–Houston (2) 200/Waco–Houston (3) 300/Waco–San Antonio (4) 500/Waco–Dallas 400/Amarillo–Dallas Next. The starting solution obtained in this example is the same optimal solution obtained in Figure 1 of Example 4.000 Di Column Calculations D1 23 30 D2 31 42 D3 31 21 D4 21 20 15 20 30 20 21 21 3. 0 0 20 21 1.000 15 600 2. . it still must be considered only a starting solution and all the steps of the transportation method listed in Table 4 must be followed. after the last iteration we would need to use either the stepping-stone or the MODI method to test the solution for optimality and proceed with the entire transportation method. The third and fourth iterations are similarly completed.

All other solution procedures (the northwest corner rule. The only function of the fictitious destination is to balance the problem. When differences cannot be calculated in Step 1 because only one row or one column remains. If ties occur.Appendix: Linear Programming Solution Methods 29 Table 6 Steps of the VAM Method 1. Unbalanced Problems Example 4 involved a problem where the total number of units to be shipped from sources exactly equaled the number of units required at destinations. the VAM method yields very good starting solutions that are sometimes optimal. where i represents the number of times you have done this step.000 units in the Source C–dummy destination cell is that 2. Allocate as many units as possible to the cell with the lowest cost in the row or column selected in Step 2. The interpretation of the final solution is exactly the same in either balanced or unbalanced problems. Select either the row or column with the largest difference. This is called a balanced transportation problem. compute the difference between the lowest unit cost and the next lowest unit cost and record this difference. with the exception of the dummy row or column interpretation. The dummy destination column therefore serves the same purpose as slack variables in the simplex method. 3. At each iteration. Place the row differences in a column to the right of the table under a heading of Di and the column differences in a row across the bottom of the table with a heading of Di. an opportunity cost principle is applied. that row or column may be eliminated from further consideration in subsequent calculations by drawing a line through it. 2. It is not unusual to have an unbalanced transportation problem. Figure 2 is the optimal transportation table of such an unbalanced transportation problem. Return to Step 1 and continue until the units in all the rows and columns have been allocated. the largest opportunity cost is avoided. If the units in a row or column have been exhausted in Step 3. A dummy destination column is entered into the table to account for the difference between destination requirements and source shipments. By selecting the largest difference. Calculate the differences that are possible and continue. where the number of units that can be shipped from sources exceeds the number required at destinations. By taking into account the costs of alternative allocations. the difference between the lowest unit cost and the next lowest unit cost is the opportunity cost of not allocating units to a row or a column. or the MODI method) discussed earlier are followed to solve unbalanced transportation problems. 4. . the stepping-stone method. For each row and column of the transportation table. arbitrarily select among tying elements. In the VAM method. 5.000 units of the capacity at Source C will not be shipped. this is not an unusual occurrence as we near the end of the process. The interpretation of the 2. 6. Note that the shipping cost from any source to the dummy destination is zero. or vice versa. The reason that the VAM method yields better starting solutions than the northwest corner rule is that the northwest corner rule does not consider any cost information when the starting solution is determined—units are arbitrarily allocated on a northwest diagonal regardless of the costs. particularly in simple problems. VAM.

000 2 2. Notice that the initial solution to this transportation problem has 6 occupied cells.5 3.0 1. a zero is assigned to one of the empty cells. this procedure makes one occupied cell go to zero units. or it makes it impossible to compute the Ri and Kj if the MODI method is used to check for optimality of transportation tables. but in this circuit both the Miami–Seattle and Chicago–Denver cells go to zero.000 2.000 1. The stepping-stone circuit of the San Diego–Seattle cell (superimposed on Transportation Table #1) has the most negative circuit cost of any empty cell in this table. Ordinarily. When degeneracy occurs in transportation tables beyond the initial solution.000 4.000 1 3.000 10.000 3 4. a slightly different procedure is used. This is analogous to having a variable in the solution. and an improved solution must be developed from this circuit. The number of occupied cells in a transportation table must equal the number of sources plus the number of destinations minus 1. The zero cell is treated as an occupied cell with zero units occupying the cell when stepping-stone circuits are drawn or Ri or Kj is calculated.0 1. special procedures are necessary to solve these problems successfully.000 units) and then subtract this number from all negative cells and add it to all positive cells on the circuit.000 10.0 3. The empty cell selected is usually one that creates an unbroken chain of occupied cells from NW to SE across the transportation table. Thus. in Example 4 all transportation tables always had 5 occupied cells (3 sources 3 destinations 1 5). interferes with the drawing of stepping-stone circuits when the stepping-stone method is used. Therefore. but with a zero value as in the simplex method. Remember that we first identify the smallest number of units in the negative cells (5.000 5.000 Degeneracy Degeneracy is another complication that can be encountered in transportation problems.0 Dummy Destination 0 0 2. That is what causes . exactly the required minimum (3 sources 4 destinations 1 6).30 Appendix: Linear Programming Solution Methods Figure 2 An Unbalanced Transportation Problem To From A B C Destination Totals 1. Degeneracy is present when less than this minimum number of occupied cells occurs.000 4. Degeneracy. If degeneracy occurs in the initial transportation table solution after employing either the VAM method or the northwest corner rule.000 3. This manipulation allows us to complete our check for optimality without changing the nature of the transportation problem. if present.0 2.000 1.5 3.000 2.000 0 Source Totals 1.5 4. Figure 3 shows Transportation Tables #1 and #2 of a transportation problem where degeneracy exists.0 2.

5 Denver 10.000 ( ) 15.7 10.000 10.000 0.000 0.6 0.7 0.000 0. .000 10.8 1.6 Factory Totals 10.2 Denver 5.5 0.Appendix: Linear Programming Solution Methods 31 Figure 3 A Degenerate Transportation Table Transportation Table #1 To From Miami Seattle 5.000 20.000 10.2 0.7 New Orleans 0.8 10. more than one zero must be assigned to these cells to overcome the condition of degeneracy.000 ( ) 1.000 45.000 Transportation Table #2 To From Miami Chicago San Diego Warehouse Totals 5.7 0.7 0.2 15. When more than two occupied cells are eliminated. the zero is assigned to either the Miami–Seattle cell or the Chicago–Denver cell.5 5.6 20. The zero is then treated as an occupied cell.000 New Orleans 0.000 ( ) 0.000 15.000 ( ) 20.7 0.000 10. when applying either the stepping-stone or the MODI method of checking subsequent transportation tables for optimality.000 45. with standard transportation method procedures. Add enough zero cells so that the number of occupied cells equals the number of sources plus the number of destinations minus 1.000 San Diego ( ) Warehouse Totals 5.000 New York 0.6 1.5 0.000 ( ) 5. but with zero units.000 45. We handle this degenerate situation in the transportation method by assigning a zero number of units to either one of the cells reduced to zero units.5 New York 0.000 0. All other procedures of the transportation method are followed as before.000 45.000 5. These problems are otherwise solved as before.2 Factory Totals 10.000 Chicago 0.000 Seattle 0 1.5 0. a condition comparable to a tie for leaving variables in the simplex method.000 20.5 10.5 0.000 10.000 the solution in Transportation Table #2 to be degenerate. In Figure 3.

maximum profit. Example 7 demonstrates the procedures of the assignment method. Bill Tobey has just received five electric motor overhaul jobs and is trying to decide to which rewinding work centers the jobs should be assigned. Because of this complication. This is shown in Step 1 in Figure 4. the cost for processing each job varies from work center to work center. Place the cost information for assigning the jobs to work centers in an assignment table format. In this formulation. the Mercury Electric Motor Company needs to assign five motor overhaul jobs to five motor rewinding centers. See Step 3 in Figure 4. Example 7 demonstrates the minimization algorithm that is appropriate for minimizing costs or processing times. The objective is to minimize the total cost of the assignments. 4. its solution with the transportation method can become difficult owing to extreme cases of degeneracy. we would multiply all the profits in the first table by minus 1 ( 1) and then follow the same procedures as in the minimization case. the assignment method is easier to work than the simplex method. and he uses the assignment method to make a minimum cost assignment of the jobs to work centers by following this procedure: 1. the “sources” are the objects to be assigned. Regardless of whether the problem is of the maximization or minimization type. The assignment method is a simple and efficient method for solving such problems because it guarantees assignments that result in minimum processing cost. 2. n objects must be assigned to n destinations. the assignment method offers computational advantages for solving assignment problems. since multiple optimal solutions are possible—results from the use of the assignment method. 3. Subtract the smallest cost in each column from all other costs in that column. See Step . Draw the least number of vertical or horizontal straight lines to cover the zero cells. 2. 3. Although this formulation is straightforward. If we wished to maximize profits. These characteristics are even more restrictive than those of LP problems using the transportation method: 1. the optimal job assignment—or job assignments. Example 7 Using the Assignment Method to Assign n Jobs to n Work Centers The Mercury Electric Motor Company overhauls very large electric motors used in industrial plants in its region. Each object must be assigned to some destination. In this example. These problems can be solved by the transportation method where the units to be “shipped” is 1 for all rows and columns and the number of rows equals the number of columns. but it can be used only on LP problems with special characteristics. Bill has estimated the processing costs for the five jobs at five rewinding work centers. Like the transportation method. The resulting table is shown in Step 2 in Figure 4.32 Appendix: Linear Programming Solution Methods ASSIGNMENT METHOD The assignment method is another method for solving LP problems. Subtract the smallest cost in each row from all other costs in that row. Because some of the work centers specialize in certain types of jobs. or minimum processing time for all the jobs. 4. Each destination must be assigned an object.

Select the smallest cost not covered by lines in the table in Step 4 in Figure 4 (the smallest cost is 50). Subtract this cost from all uncovered costs and add this cost to cells at the intersections of lines in Step 4. the solution is optimal. Redraw the lines to cover the zero cells. If that were the case.Appendix: Linear Programming Solution Methods 33 5. the optimal job assignments would be found at the zero cells. 4 in Figure 4. the optimal solution would have been reached. Note that several different schemes may be possible. If fewer than five lines had been required. If n lines (five in this example) were the minimum number of lines to cover the zero cells. Step 5 would have to be repeated. we must perform a modification to the table in Step 4 in Figure 4. Then transfer these new costs and the costs that are unchanged in Step 4 to a new table in Step 5. Because five lines are required in Step 5. but the same number of minimum lines should result. Because less than n or only four lines were required. Figure 4 Step 1 Tables of the Assignment Method in Example 7 Step 2 Work Centers Work Centers 4 \$350 300 200 250 375 5 \$250 250 150 200 260 Jobs A B C D E Step 4 Work Centers Work Centers 4 100 0 0 50 125 5 50 0 0 50 60 Jobs A B C D E 1 0 100 50 200 0 2 150 0 0 0 200 3 75 200 0 100 80 4 100 0 0 50 125 5 50 0 0 50 60 1 0 100 50 200 0 2 150 0 0 0 200 3 75 200 0 100 80 4 200 100 100 150 225 5 100 50 50 100 110 1 A Jobs B C D E Step 3 1 A Jobs B C D E Step 5 0 100 50 200 0 \$150 300 150 300 150 2 \$300 200 100 100 350 3 \$225 400 100 200 230 2 150 0 0 0 200 3 75 200 0 100 80 Work Centers 1 A Jobs B C D E 0 150 100 250 0 2 100 0 0 0 150 3 25 200 0 100 30 4 50 0 0 50 75 5 0 0 0 50 10 .

Why must row operations be performed in the simplex method? 5. and the MODI method? 16. and 5. Select any row or column with just one zero in this new matrix. What are the procedures of the transportation method? 10. 13. Make the assignment at the cell with a zero in Row D: D–2. you are ready to read the optimal solution from this table. What are shadow prices? What information do they provide managers? 4. B. 3. Eliminate Row D and Column 2 from further consideration by drawing a line through this row and column. In this example. 4. What is an unbalanced transportation problem? What modifications are necessary in our ordinary transportation method when working unbalanced problems? 15.625 Z) 40 X1 12 75 X2 1 0 75 0 0 S1 14 12 75 4 75 4 0 S2 0 1 0 0 / / / / / 4 / / 75 2 52 . and complete the third tableau. What are the characteristics of assignment problems? 17. Where are the shadow prices in the optimal simplex tableau? 3. eliminate that row and column from further consideration. To do so. C–3. Is the third tableau optimal? If not. giving a total cost of \$250 300 100 100 150 \$900. Where in the optimal simplex tableau is the LP solution found? 2. which variables will enter and leave the third tableau? Second Tableau C SOL 75 0 X2 S2 Z (C RHS 75 50 5. C. The optimal solution in this example is A–5. B–4. What are the procedures of the northwest corner rule? Why is it used? 11. you could choose either Column 3 or Row D or E. Why is degeneracy a difficulty in the transportation method? What specific difficulties are encountered in the northwest corner rule.34 Appendix: Linear Programming Solution Methods Once the optimal table has been obtained. and E and Columns 1. Perform row operations on this second tableau. What determines the subscripts for artificial and slack variables? 8. Make that assignment. What advantage does the MODI method have over the stepping-stone method? Explain. 14. Suppose you choose Row D. and repeat this process until all assignments have been made. What purpose do artificial variables serve? 6. What advantage does the VAM method have over the northwest corner rule? Explain. Now only consider the 4 4 matrix with Rows A. and E–1. What are slack variables? What purpose do they serve? 7. What are the characteristics of transportation problems? 9. as in Step 5. select any row or column with only one zero in the optimal table. PROBLEMS Simplex Method 1. Describe the procedures of the assignment method. stepping-stone method. What methods may be used to test a transportation table for optimality? 12. D–2. REVIEW AND DISCUSSION QUESTIONS 1.

What is the optimal solution? 6. H. What is the optimal solution? 10. and J problems are found at the end of Chapter 8. Solve LP-I using the simplex method. and complete the third tableau. Solve LP-C using the simplex method. Is the third tableau optimal? If not. X2. C. What is the meaning of each element in Row (C Z)? . a. to management decision makers. S3. S4. Solve LP-E using the simplex method. What is the optimal solution? Fully interpret the meaning of the solution.) 9. which variables will enter and leave the third tableau? Second Tableau C SOL 70 0 0 X3 S2 S3 Z (C RHS 100 0 400 7.000 Z) 50 X1 0 2 4 0 50 60 X2 / / 1/2 14 12 35 2 85 2 70 X3 1 0 0 70 0 0 S1 / / 1/2 14 12 35 2 35 2 0 S2 0 1 0 0 0 0 S3 0 0 1 0 0 / / / / 3. What is the optimal solution? 8. which variables will enter and leave the third tableau? Second Tableau C SOL 40 M 0 X2 A2 S3 Z RHS 30 50 20 50M 1. What should management do? In other words. A3. Perform row operations on this second tableau. S1. and Z in the optimal tableau? b. Solve LP-G using the simplex method. what is the complete meaning of the values of X1. What is the optimal solution? 7.) 4. Solve LP-B using the simplex method.200 (C Z) 30 X1 / 3/2 3/2 12 32 40 X2 1 0 0 40 0 M A1 / 5/2 1/2 12 52 M A2 0 1 0 M 0 0 S1 / 5/2 1/2 12 52 0 S2 0 1 0 M M 0 S3 0 0 1 0 0 /M 20 /M 20 /M 20 /M 20 32 /M 10 72 /M 20 52 (LP-A. Formulate Problem LP-A. G. Solve LP-H using the simplex method. Is the third tableau optimal? If not. Perform row operations on this second tableau. What is the optimal solution? 11. A4. Below are the variable definitions and the last (optimal) tableau for Problem LP-A. D. F. Complete the third tableau. 12. S2. B.Appendix: Linear Programming Solution Methods 35 2. E. I. Develop the initial simplex tableau. 5. What is the optimal solution? (Hint: Convert the objective function to cents. Solve LP-D using the simplex method.

S1. Below are the variable definitions and the last (optimal) tableau for Problem LP-C. X2. S1. S2. What should management do? In other words.833 1 80 1 48 / 83.36 Appendix: Linear Programming Solution Methods X1 X2 S1 S2 S3 S4 Z number of chairs to produce per week number of bookshelf units to produce per week excess labor hours unused per week excess wood unused per week (board-feet) number of chairs above minimum per week number of bookshelf units above minimum per week dollars of profit per week Optimal Tableau C SOL 0 0 15 21 S1 S3 X1 X2 Z RHS 20 50 150 100 4. a.000 (C Z) 100 X1 0 1 100 0 100 X2 1 0 100 0 0 S1 30 8 0 S2 / / / 0. and Z in the optimal solution? b. What is the meaning of each element in Row (C Z)? X1 X2 S1 S2 Z hundreds of gallons of premium ice cream to produce per week hundreds of gallons of light ice cream to produce per week unused mixing machine hours unused gallons of milk dollars of profit per year Optimal Tableau C SOL 100 100 X2 X1 Z RHS 175 175 35. What should management do? In other words.33 35 12 83. S3. What is the meaning of each element in Row (C Z)? . to management decision makers. a. what is the complete meaning of the values of X1. to management decision makers.350 (C Z) 15 X1 0 0 1 0 15 0 21 X2 0 0 0 1 21 0 0 S1 1 0 0 0 0 0 0 S2 / / 1/8 0 12 18 15 8 15 0 S3 0 1 0 0 0 0 0 S4 3 / 3/2 1 32 32 3 M A3 0 1 0 0 0 M M A4 3 32 32 / / / 1 32 / / /8 /2 M 3/2 13.833 14. Below are the variable definitions and the last (optimal) tableau for Problem LP-B. and Z in the optimal solution? b. what is the complete meaning of the values of X1. S2.33 0. X2.

What is the meaning of each element in Row (C Z)? X1 X2 S1 S2 S3 Z pounds of oats fed to each hog each day pounds of corn fed to each hog each day excess mineral units per hog per day excess calories per hog per day excess vitamin units per hog per day daily cents of feed cost per day .400 Z) 6 X1 0 1 0 6 0 8 X2 0 0 1 8 0 M A1 1 0 1 8 M 8 M A3 1 0 0 0 M 0 S2 1 1 1 2 2 0 S3 1 0 0 0 0 tons of sand per day tons of gravel per day below maximum sand limit above minimum gravel limit \$ cost of sand and gravel per day 16. What should management do? In other words. What should management do? In other words. S2.86 314. S3. and Z in the optimal solution? b.7 142. to management decision makers. What is the meaning of each element in Row (C Z)? X1 X2 S2 S3 Z Optimal Tableau C SOL 0 6 8 S3 X1 X2 Z (C RHS 100 800 700 10. S1.429 21.429 46. X2.Appendix: Linear Programming Solution Methods 37 X1 X2 S1 S2 S3 Z Optimal Tableau C SOL 0 250 200 S1 X1 X2 Z RHS 4285. S3. to management decision makers.429 Z) 15. Below are the variable definitions and the last (optimal) tableau for Problem LP-E: a. and Z in the optimal tableau? b.429 21. X2. what is the complete meaning of the values of X1. S2.572 (C cases of relays per quarter cases of capacitors per quarter unused labor-hours unused stamping machine hours unused testing machine hours dollars of profit per year 250 X1 0 1 0 250 0 200 X2 0 0 1 200 0 0 S1 1 0 0 0 0 0 S2 275 7 5 14 3 14 0 S3 / 100 7 17 27 / / / / / 46. Below are the variable definitions and the last (optimal) tableau for Problem LP-D. what is the complete meaning of the values of X1. a.286 98.

9 X1 6. INF 27000. 14000. .000 2000. 18000.600 RANGE OF RHS FOR WHICH SHADOW PRICE IS VALID 32000.7 X2 8.500 7.2 X3 4.5 X7 7. 10000.000 0.000 8000.6 X8 5 X12 32000 40000 25000 ST (1) (2) (3) (4) (5) (6) (7) SOLUTION: VARIABLE MIX X3 X5 X7 X2 Slack 2 X12 X8 Z 1 1 1 1 1 1 1 X1 X5 X9 X1 X2 X3 X4 SOLUTION 14000.7 X6 6.38 Appendix: Linear Programming Solution Methods Fourth Tableau C SOL 12 0 7 X1 S3 X2 Z (C RHS / 250 5 25 2 12 X1 1 0 0 12 0 7 X2 0 0 1 7 0 0 S1 3 400 14 1 200 11 200 11 0 S2 1 400 34 1 200 1 200 1 0 S3 / 0 1 0 0 0 / M A1 3 400 14 1 200 11 200 M A2 1 400 34 1 200 1 200 M A3 0 1 0 0 M / / / / / / / / / / / 185 Z) / / / /200 /200 11 200 M / 1 200 M / 17.1 X11 1 X4 1 X8 1 X12 30000 18000 22000 27000 8.4 X9 1 1 1 1 1 1 1 X2 X6 X10 X5 X6 X7 X8 4.000 30000.000 4.000 488600.3 X4 7. 40000.000 25000.600 6. 22000.100 6.6 X10 1 1 1 1 1 1 1 X3 X7 X11 X9 X10 X11 X12 3. 0. 25000. 30000.300 0. 27000. 25000.000 18000.1 X5 5.000 SENSITIVITY ANALYSIS: CONSTRAINTS: —————————————————————————————————— CONSTRAINT NUMBER 1 2 3 4 5 6 7 TYPE OF CONSTRAINT SHADOW PRICE 1.000 2. The computer solution to Problem LP-F from the POM Software Library follows. Min Z 7. –– –– –– –– –– –– –– 40000.

18. to management decision makers. to management decision makers.2 —————————————————————————————————— a. and Z in the optimal solution? What is the meaning of each value in the sensitivity analysis section of the solution? b. slack variables. what is the complete meaning of the values of X1. . What should management do? In other words.Appendix: Linear Programming Solution Methods NOTE: 39 THE SHADOW PRICE REPRESENTS THE AMOUNT Z WOULD CHANGE IF A CONSTRAINT’S RHS CHANGED ONE UNIT. S3.7 1. what is the complete meaning of the values of the decision variables. S2. What is the meaning of each element in Row (C Z)? X1 X2 S1 S2 S3 Z Third Tableau C SOL 0 64 87 S1 X1 X2 Z (C RHS 21 2 number of cases of Product A per week number of cases of Product B per week unused Cutting Department hours per week unused Trimming Department hours per week unused Coating Department hours per week dollars of profit per week 64 X1 0 1 0 64 0 / 15 10 Z) 87 X2 0 0 1 87 0 0 S1 1 0 0 0 0 0 S2 / 1/4 0 16 16 58 0 S3 39 160 1 16 18 55 8 55 8 / / / 1.2 5.830 / / Transportation Method 19.1 2.9 3. What should management do? In other words. 2. Use the northwest corner rule and the stepping-stone method to solve the transportation problem below. and Z in the optimal tableau? b. DECISION VARIABLES: NONBASIC VARIABLE X1 X4 X6 X9 X10 X11 AMOUNT Z IS REDUCED (MAX) OR INCREASED (MIN) FOR ONE UNIT OF X IN THE SOLUTION 3. X2. S1. Below are the variable definitions and the last (optimal) tableau for Problem LP-G: a. a.

100 a.70 300 3 \$0.60 Source Totals 300 300 400 1.50 0.400 1. and Chicago. 21. . The Apex Company produces electric transformers for electric distributors at two factories located in Atlanta and San Jose.80 0. The monthly warehouse requirements. b. Use the northwest corner rule and the stepping-stone method to solve the transportation problem above. Solve Problem LP-F using the northwest corner rule and the stepping-stone method.000 Factory Atlanta San Jose Source Atlanta Destination Dallas Seattle Philadelphia Chicago Dallas Seattle Philadelphia Chicago Transportation Cost per Unit \$16 40 20 18 30 15 45 33 San Jose Warehouse Dallas Seattle Philadelphia Chicago Monthly Warehouse Requirement (units) 1. What is the optimal solution? Fully interpret the meaning of the solution.40 0. Philadelphia. Seattle.300 1. c. monthly factor capacities. What is the optimal solution? Fully interpret the meaning of the solution.60 500 2 \$0. What is the optimal solution? Fully interpret the meaning of the solution.40 Appendix: Linear Programming Solution Methods To From A B C Destination Totals 200 1 \$0.80 0.200 1. c. Apex has four regional warehouses located in Dallas.000 1.90 0. and per-unit transportation costs are: Monthly Factory Capacity (units) 2.000 3. 20.000 b.70 0. a.

and it is desirable that each department operate at capacity. In other words.65 0. and 4. The monthly fabrication department capacities.000 Fabrication Department A Assembly Department 1 2 3 4 1 2 3 4 1 2 3 4 Materials-Handling Cost per Unit \$0.80 0. Solve Problem LP-F using the VAM and MODI methods.35 \$0.30 0. Solve Problem LP-J using the northwest corner rule and the stepping-stone method. Three recycling plants—A.90 0. and C—receive and process scrap paper and ship paper stock to three regional warehouses—1. b. What is the optimal solution? Fully interpret the meaning of the solution. Each fabrication and assembly department has a unique monthly capacity. b. a. What is the optimal solution? Fully interpret the meaning of the solution.60 0. a.10 0.15 0. and 3.90 0. What is the optimal solution? Fully interpret the meaning of the solution. What is the optimal solution? Fully interpret the meaning of the solution.000 14.65 \$0. b.10 0. 25.15 0.10 0.35 0. Solve Problem LP-J using the VAM and MODI methods.Appendix: Linear Programming Solution Methods 41 b. and per-unit materials-handling and assembly processing costs are: Total Materials-Handling and Assembly Cost per Unit \$0. monthly assembly department capacities. 22.70 0.20 0.15 Assembly Cost per Unit \$0.70 0.25 0. Use the northwest corner rule and the stepping-stone method to solve the problem.000 6.70 Fabrication Department A B C Monthly Capacity (units) 12. 2. and C—produce three slightly different products that are processed further in four assembly departments—1. and the shipping cost per 100 pounds are: . the assembly cost per unit differs among the products. The monthly recycling plant capacities.90 \$0. B.55 B Assembly Department 1 2 3 4 Monthly Capacity (units) 7. monthly regional warehouse requirements.50 \$1.00 1. 23. Although any of the three products coming from the three fabrication departments can be processed in any of the four assembly departments. 2.80 0. the materials-handling costs per unit differ among all the fabrication and assembly departments.70 0.20 0. What is the optimal solution? Fully interpret the meaning of the solution.15 \$0. how many units should be processed in each fabrication department and moved to and processed in each assembly department so that monthly assembly and materials-handling costs are minimized? a.000 10.30 0. Additionally.40 0. 24. Three fabrication departments—A.60 0.000 C Develop a monthly production schedule for the three fabrication and four assembly departments. 3.25 \$0.65 0.95 0.000 11. B.000 8. Use the VAM and MODI methods to solve the problem.25 0.60 1.

42 Appendix: Linear Programming Solution Methods Monthly Monthly Shipping Recycling Capacity Regional Requirement Recycling Regional Cost per Plant (100 pounds) Warehouse (100 pounds) Plant Warehouse 100 Pounds A B C 800 600 1. The cost of processing each job through each work center is shown below: Work Centers 1 A Jobs B C D \$50 25 30 20 2 \$40 25 35 30 3 \$70 55 55 75 4 \$35 40 60 45 a. What is the cost of your assignments in Part a? 27. What is the optimal solution? Fully interpret the meaning of the solution. Assignment Method 26. and all jobs must be processed. Use the northwest corner rule and the stepping-stone method to solve this problem. What is the optimal solution? Fully interpret the meaning of the solution. b. and all projects must be performed.100 1 2 3 700 900 600 A 1 2 3 1 2 3 1 2 3 \$1 4 2 \$2 4 1 \$1 3 2 B C How many pounds of paper stock should be shipped from each recycling plant to each regional warehouse per month to minimize monthly shipping costs? a. b. Only one employee can be assigned to a project. Use the VAM and MODI methods to solve this problem. The costs of the employees performing the projects are: Projects 1 Employees Ann Ben Cal Dee \$400 350 500 600 2 \$300 400 350 475 3 \$250 275 200 375 4 \$300 250 300 425 a. Use the assignment method to determine which jobs should be assigned to which work centers to minimize total processing costs. Four jobs must be assigned to four work centers. What is the total cost of your assignments in Part a? . Four employees must be assigned to four projects. Use the assignment method to assign these employees to these projects. Only one job can be assigned to each work center. b.

2nd ed. Introduction to Mathematical Programming. 2000. Carter. Winston. Evans. 9th ed. Hillier.Appendix: Linear Programming Solution Methods 43 28. New York: John Wiley & Sons. and Jane Deere Company—are especially intended for solution with the POM Software Library. In other words. Michael W.. Use the assignment method to assign the five customers to the five different brokers to maximize profits for the brokerage house. 2001. slack variables (S’s). Cincinnati. C. Integrated Products Corporation (IPC). Upper Saddle River. and K. 7th ed. Wayne L. This means not only determining the value of the decision variables (X’s). David R. b. Christian Albright. OH: South-Western College Publishing.. Introduction to Practical Linear Programming. Sweeney. Management Science and Decision Technology. C. OH: South-Western College Publishing. 2000. An Introduction to Management Science: Quantitative Approaches to Decision Making. Frederick S. Jeffrey D. and James R. Cincinnati. 1996. David J. Boston: McGraw-Hill.. . SELECTED BIBLIOGRAPHY Anderson. for example. Practical Management Science. In solving these problems. Dennis J. 2001.. 2001. NJ: Prentice Hall. and S. you should be aware of unusual features in the solution. Perry. no. What are the profits from your assignment in Part a? COMPUTER SOLUTIONS Several of the problems at the end of Chapter 8 and some of the problems in this appendix are appropriate for solution with a computer. Camm. and Thomas A. 2 (April 1982): 61–63. determine the solution of the problems using a computer. “The Precise Management Meaning of a Shadow Price. and the objective function (Z) but also fully interpreting the meaning of the solution to management. 1999. Boca Raton. Pannell. what would you recommend that management do as a result of your analysis? This interpretation should also include an explanation of the meaning of the shadow prices. take care to define the decision variables. Five customers must be assigned to five stockbrokers in a brokerage house. FL: CRC Press. and Gerald J. Walker. Williams. and fully interpret the meaning of the solution.” Interfaces 12.. which accompanies this book. you should determine if alternate optimal solutions are present. Also. and Camille C... The estimated profits for the brokerage house for all possible assignments are shown below: Brokers 1 A Customers B C D E \$400 325 450 225 500 2 \$400 525 575 450 550 3 \$375 400 425 500 475 4 \$450 525 550 600 525 5 \$400 425 400 450 500 a. Operations Research: A Practical Introduction. The three computer problems/cases at the end of Chapter 8—Quality Pixels Inc. Lieberman. Crellin. Pacific Grove. CA: Brooks/Cole. Russell C. Introduction to Operations Research. Price.

800 to Denver. X2 100.200 to New York. and 2.000. • (9) X1 15 cases of Product A per week. and gravel will be above the minimum limit by 100 tons.000 pounds of carrier.000 pounds to Warehouse 1.75.44 Appendix: Linear Programming Solution Methods ANSWERS TO ODD-NUMBERED PROBLEMS (1) Third tableau is optimal.000 to Dallas. Sand will be at the maximum limit. S2 0 hours of unused Trimming Department capacity per week. Z 5. Z \$35. Z \$1.400 per week. 8. b.833 for each additional gallon of milk that could be found.000 pounds to Warehouse B.603.275. S2 0 unused high-grade milk. monthly shipping cost will be \$191. • (25) Alternative optimal solutions are available for this problem. S1. • (21) See the answer to Problem 17. S2 ( 0. b. All mixing machine capacity and milk available will be used.600 to \$488.400 total cost of sand and gravel each day.000 profit next week. The values in the decision variable section represent the amount of change in Z if one unit of a nonbasic variable were forced into the solution. X2 (0). and S3 0. S2 ( 2) means daily cost would decrease \$2 for each additional ton increase in the maximum limit of sand. • (7) X1 800 tons of sand. Cal to Project 3.25.5. from Source C ship 200 units to Destination 1 and 200 units to Destination 3. • (17) a. S3 100 so amount of gravel in the concrete exceeded the 30% requirement by 100 tons. X2 175 hundred gallons of light ice cream. Z would be increased from \$488. S2. X2 10 cases of Product B per week.40.001. from Mill 3 ship 25. • (23) Atlanta plant should ship 400 systems to Chicago and 1. from Source B ship 300 units to Destination 2. because these variables are in the optimal solution. X1 (0).000 units to Warehouse B and 14.000 pounds of filler/color. X2 68. 1. El Paso plant should ship 100 systems to Chicago.10. • (13) a. Z \$370. • (19) From Source A ship 200 units to Destination 2 and 100 units to Destination 3. For example. For example. Z would decrease from \$488. and Dee to Project 4. the 2. Use 800 tons of sand and 700 tons of gravel per day for a cost of \$10.000 pounds to Warehouse 2. • (27) Assign Ann to Project 2. • (11) X1 500. The values in the constraints section represent the amount of change in Z for a one-unit change in each constraint’s RHS. S3 (0) means daily cost would not change if the minimum limit of gravel were lowered. monthly shipping cost will be \$4. S3 0 hours of unused Coating Department capacity per week. because these variables are in the optimal solution. From Mill 1 ship 18. Ben to Project 1. X1 12.000 units to Warehouse D. X1 will enter and S3 will leave. X2 (0). Z \$10.000 units to Warehouse D. .6 in the third constraint means that if Mill 3’s capacity were increased from 25. from Plant B ship 60.830 total profit per week. S1 0 unused mixing capacity.33) means weekly profit would increase \$83.000 units to Warehouse C. X2 700 tons of gravel.000 pounds of adhesive.000 units to Warehouse A. if we were forced to ship one unit from Mill 1 to Warehouse A. cost of the assignments will be \$1. • (5) X1 175 hundred gallons of premium ice cream.597. • (3) Third tableau is not optimal. and 500 to San Jose. S1 10.656.33 for each additional mixing machine hour that could be found. S2 0 so exactly 40% of the concrete is sand. One solution: From Plant A ship 70. total shipping cost will be \$540. • (15) a.000 per week.833) means weekly profit would increase \$0.600 to \$488. X1 (0).5 hours of unused Cutting Department capacity per week.000 units to Warehouse C. from Mill 2 ship 30. Make 175 hundred gallons of premium ice cream and 175 hundred gallons of light ice cream per week for a profit of \$35. b. X3 100. S1 ( 83. from Plant C ship 90.000.000 to 25.000.