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' 34 is an interdisciplinary branch of applied
mathematics and formal science that uses methods such as mathematical modeling,
statistics, and algorithms to arrive at optimal or near optimal solutions to complex
problems. It is typically concerned with optimizing the maxima (profit, assembly line
performance, crop yield, bandwidth, etc) or minima (loss, risk, etc.) of some objective
function. Operations research helps management achieve its goals using scientific
methods.

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In general, whenever there is any problem simple or complicated, the OR
techniques may be applied to find the best solution. In this section we shall try to find
the scope of OR by seeing its application in various fields of everyday life.
1.V / .
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/(In modern warfare the defense operations are
carried out by a number of independent components namely Air Force,
Army and Navy. The activities in each of these components can be further
divided in four sub-components viz.: administration, intelligence,
operations and training, and supply. The application of modern warfare
techniques in each of the components of military organizations requires
expertise knowledge in respective fields. Further more, each component
works to drive maximum gains from its operations and there is always a
possibility that strategy beneficial to one component may have an adverse
effect on the other. Thus in defence operations there is a necessity to co-
ordinate the activities of various components which gives maximum
benefit to the organization as a whole, having maximum use of the
individual components. The final strategy is formulated by a team of
scientists drawn from various disciplines who study the strategies of
different components and after appropriate analysis of the various courses
of actions, the best course of action, known as optimum strategy, is
chosen.
2.V / /05(The systems of modern industries are so complex that the
optimum point of operation in its various components cannot be intuitively
judged by an individual. The business environment is always changing and


 
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any decision useful at one time may not be so good some time later. There
is always a need to check the validity of decisions continually, against the
situations. The industrial revolution with increased division of labour and
introduction of management responsibilities has made each component an
independent unit having their own goals. For example: Production
department minimize cost of production but maximizes output. Marketing
department maximizes output but minimizes cost of unit sales. Finance
department tries to optimize capital investment and personnel department
appoints good people at minimum cost. Thus each department plan their
own objectives and all these objectives of various department or
components come to conflict with each other and may not conform to the
overall objectives of the organization. The application of OR techniques
helps in overcoming this difficulty by integrating the diversified activities
of various components so as to serve the interest of the organization as a
whole efficiently. OR methods in industry can be applied in the fields of
production, inventory controls and marketing, purchasing, transportation
and competitive strategies etc.
3.V -///(In modern times it has become necessary for every government
to have careful planning, for economic development of the country. OR
techniques can be fruitfully applied to maximize the per capita income,
with minimum sacrifice and time. A government can thus use OR for
framing future economic and social policies.
4.V c'-
(åith increase in population there is a need to increase
agriculture output. But this cannot be done arbitrarily. There are a number
of restrictions under which agricultural production is to be studied.
Therefore there is a need to determine a course of action, which serves the
best under the given restrictions. The problem can be solved by the
application of OR techniques.
5.V / 2-( The OR methods can be used to solve waiting problems in
out-patient department of big hospitals. The administrative problems of
hospital organization can also be solved by OR techniques.
6.V //2(£ifferent OR methods can be applied to regulate the arrival
of trains and processing times, minimize the passengers waiting time and


 
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reduce congestion, formulate suitable transportation policy, reducing the


costs and time of trans-shipment.
7.V 

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/(Oontrol of R and £ projects, product
introduction planning etc. and many more applications.

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V Oritical path analysis or project planning: identifying those processes in a
complex project which affect the overall duration of the project
V £esigning the layout of a factory for efficient flow of materials
V constructing a telecommunications network at low cost while still
guaranteeing QoS (quality of service) or QoS (Quality of Experience) if
particular connections become very busy or get damaged
V Road traffic management and 'one way' street allocations i.e. allocation
problems.
V £etermining the routes of school buses (or city buses) so that as few buses are
needed as possible
V designing the layout of a computer chip to reduce manufacturing time
(therefore reducing cost)
V Managing the flow of raw materials and products in a supply chain based on
uncertain demand for the finished products
V Efficient messaging and customer response tactics
V Robotizing or automating human-driven operations processes
V Êlobalizing operations processes in order to take advantage of cheaper
materials, labor, land or other productivity inputs
V Managing freight transportation and delivery systems (Examples:
LTLhttp://en.wikipedia.org/wiki/Less-Than-
Truckload_%28LTL%29_Shipping Shipping, intermodal freight transport)
V Scheduling:
oV Personnel staffing
oV Manufacturing steps
oV Project tasks
oV Network data traffic: these are known as queuing models or queueing
systems.


 
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c.V Existence of alternative courses of action.


d.V Non-negative conditions on decision variables.

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5ë Both objective function and constraints must be expressed as linear
inequalities.
2.V .

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constraints expressions should be known and finite.
3.V c0065( The value of objective function for the given values of decision
variables and the total sum of resources used must be equal to sum of the
contributions earned from each decision variable and the sum of resources
used by decision variables respectively.
4.V .6%-5( The solution of decision variables and resources can be any non-
negative values including fractions.

There are many real life situations where an LPP may be formulated. The
following examples will help to explain the mathematical formulation of an LPP.

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( A diet is to contain at least 4000 units of carbohydrates, 500 units of fat
and 300 units of protein. Two foods A and B are available. Food A costs 2 dollars per
unit and food B costs 4 dollars per unit. A unit of food A contains 10 units of
carbohydrates, 20 units of fat and 15 units of protein. A unit of food B contains 25
units of carbohydrates, 10 units of fat and 20 units of protein. Formulate the problem
as an LPP so as to find the minimum cost for a diet that consists of a mixture of these
two foods and also meets the minimum requirements.



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A 10 20 15 2
B 25 10 20 4
Requirement 4000 500 300

Let the diet contain x units of A and y units of B
The LPP formulated for the given diet problem is


 
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the constraints, since these are added only to one side i.e., to the left hand side of the
equations. The new constraint equations so obtained is equivalent to the original
equations if and only if all artificial variables have value zero. To guarantee such
assignments in the optimal solutions, artificial variables are incorporated into the
objective function with very positive coefficient M in the minimization program and
very large negative coefficient ± M in the maximizing program. These coefficients
represent the penalty incurred in making a unit assignment to the artificial variable.

Thus the standard form of LPP can be given as follows:


Optimize Z = OT X
Subject to AX = B,
X• 0
And
åhere X is a column vector with decision, slack, surplus and artificial
variables, O is the vector corresponding to the costs; A is the coefficient matrix of the
constraint equations and B is the column vector of the right-hand side of the constraint
equations.

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1.V Introduce stack variables ( Si ,¶ s) for ³”´ type of constraints.
2.V Introduce surplus variables ( Si ,¶ s) and artificial (Ai) for ³”´ type of
constraints.
3.V Introduce only Artificial variable for ³=´ type of constraint
4.V Oost of (Oj) of slack and surplus variables will be zero and that of artificial
variables will be ³M´.
5.V Find Zj- Oj for each variable.
6.V Slack and Artificial variables will form Basic variable for the first simplex
table. Surplus variable will never become Basic Variable for the first
simplex table.
7.V Zj= sum of [cost of variable x its coefficients in the constraints ±Profit or
cost coefficient of the variables].
8.V Select the most negative value of Zj- Oj . That column is called key
column. The variable corresponding to the column will become Basic
variables for the next table.


 
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9.V £ivide the quantities by the corresponding values of the key column to get
ratios select the minimum ratio. This becomes the key row. The Basic
variable corresponding to this row will be replaced by the variable found
in step 6.
10.VThe element that lies both on key column and key row is called Pivotal
element.
11.VRatios with negative and ³Į´ value are not considered for determining key
row.
12.VOnce an artificial variable is removed as basic variable, its column will be
deleted from next iteration.
13.VFor maximization problems decision variables coefficient will be same as
in the objective function. For minimization problems decision variables
coefficients will have opposite signs as compared to objective function.
14.VValue of artificial variable will always is ± M for both maximization and
minimization problems.
15.V The process is continued till all Zj- Oj •0.


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i.VIf the primal contains a large number of constraints and a smaller
number of variables, the labour of computation can be considerably
reduced by converting it into the dual problem and then solving it.
ii.VThe interpretation of the dual variable from the loss or economic point
of view proves extremely useful in making future decisions in the
activities being programmed.

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The linear programming problem can be thought of as a resource allocation
model in which the objective is to maximize revenue or profit subject to limited
resources. Looking at the problem from this point of view, the associated dual
problem offers interesting economic interpretations of the L.P resource allocation


 
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model. åe consider here a representation of the general primal and dual problems in
which the primal takes the role of a resource allocation model.

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Maximize
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z=
 .
1

Subject to
  1
  , i = 1,2,«., m

xj • 0, j = 1,2,«., n
.-
Minimize
›

w=
 .
 1
 

Subject to
  1
    , i = 1,2,«., n

yj • 0, i = 1,2,«., m
From the above resource allocation model, the primal problem has n economic
activities and m resources. The coefficient cj in the primal represents the profit per
unit of activity j. Resource i, whose maximum availability is bi, is consumed at the
rate aij units per unit of activity j.

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For any pair of feasible primal and dual solutions,
(Objective value in the maximization problem) ” (Objective value in the
minimization problem)
At the optimum, the relationship holds as a strict equation. Note: Here the sense of
optimization is very important. Hence clearly for any two primal and dual feasible
solutions, the values of the objective functions, when finite, must satisfy the following
inequality.


 
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º ›

z=
1
 
 
 1


The strict equality, z = w, holds when both the primal and dual solutions are
optimal.

Oonsider the optimal condition z = w first given that the primal problem
represents a resource allocation model, we can think of z as representing profit in
Rupees. Because bi represents the number of units available of resource i, the
equation z = w can be expressed as profit (Rs) = 8 (units of resource i) x (profit per
unit of resource i)

This means that the dual variables yi, represent the worth per unit of resource i
[variables yi are also called as dual prices, shadow prices and simplex multipliers].

The same logic, the inequality z < w associated with any two feasible primal
and dual solutions is interpreted as (profit) < (worth of resources)

This relationship implies that as long as the total return from all the activities
is less than the worth of the resources, the corresponding primal and dual solutions are
not optimal. Optimality is reached only when the resources have been exploited
completely, which can happen only when the input equals the output (profit).
Economically the system is said to remain unstable (non optimal) when the input
(worth of the resources) exceeds the output (return). Stability occurs only when the
two quantities are equal.

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Let us consider a T.P involving m-origins and n-destinations. Since the sum of
origin capacities equals the sum of destination requirements, a feasible solution
always exists. Any feasible solution satisfying m + n ± 1 of the m + n constraints is a
redundant one and hence can be deleted. This also means that a feasible solution to a


 
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T.P can have at the most only m + n ± 1 strictly positive component, otherwise the
solution will degenerate.

It is always possible to assign an initial feasible solution to a T.P. in such a


manner that the rim requirements are satisfied. This can be achieved either by
inspection or by following some simple rules. åe begin by imagining that the
transportation table is blank i.e. initially all xij = 0. The simplest procedures for initial
allocation discussed in the following section.

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2$( £etermine the smallest cost in the cost matrix of the transportation table. Let
it be cij , Allocate xij = min ( ai, bj) in the cell ( i, j)


2( If xij = ai cross off the ith row of the transportation table and decrease bj by ai
go to step 3.
If xij = bj cross off the ith column of the transportation table and decrease ai by
bj go to step 3.
if xij = ai= bj cross off either the ith row or the ith column but not both.


2 ( Repeat steps 1 and 2 for the resulting reduced transportation table until the
entire rim requirements are satisfied whenever the minimum cost is not
unique make arbitrary choice among the minima.

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The Integer Programming Problem I P P is a special case of L P P where all or
some variables are constrained to assume nonnegative integer values. This type of
problem has lot of applications in business and industry where quite often discrete
nature of the variables is involved in many decision making situations. Eg. In
manufacturing the production is frequently scheduled in terms of batches, lots or runs;


 
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In distribution, a shipment must involve a discrete number of trucks or aircrafts or


freight cars

An integer programming problem can be described as follows:


£etermine the value of unknowns 



So as to optimize z          ºº
Subject to the constraints
          º º 
 


›
And  • 


º
åhere  being an integral value for 


  º

If all the variables are constrained to take only integral value i.e. k = n, it is
called an all (or pure) integer programming problem. In case only some of the
variables are restricted to take integral value and rest (n ± k) variables are free to take
any non negative values, then the problem is known as mixed integer programming
problem.

The iterative procedure for the solution of an all integer programming problem
is as follows:


2 $( Oonvert the minimization I.P.P. into that of maximization, if it is in the
minimization forms. The integrality condition should be ignored.


2 ( Introduce the slack or surplus variables, wherever necessary to convert the
in equations into equations and obtain the optimum solution of the given
L.P.P. by using simplex algorithm.


2 (Test the integrality of the optimum solution

i.V If the optimum solution contains all integer values, an optimum basic
feasible integer solution has been obtained.
ii.V If the optimum solution does not include all integer values then proceed onto
next step.



 
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2 *( Examine the constraint equations corresponding to the current optimum
solution. Let these equations be represented by
º1


  0
  ÿ  



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åhere µº¶ denotes the number of variables and µ›¶ the number of equations.
Ohoose the largest fraction of  ie to find {bi}i

Let it be=%>$?or write is as  




2 (Express each of the negative fractions if any, in the k th row of the optimum
simplex table as the sum of a negative integer and a nonnegative fraction.


2"(Find the Êomorian constraint
º1


 0
  À  

And add the equation


º1

 ÿ 
   
  
0

To the current set of equation constraints.


2 +( Starting with this new set of equation constraints, find the new optimum
solution by dual simplex algorithm. (So that Êsla (1) is the initial leaving basic
variable).


2#(If this new optimum solution for the modified L.P.P. is an integer solution. It
is also feasible and optimum for the given I.P.P. otherwise return to step 4 and
repeat the process until an optimum feasible integer solution is obtained.


 
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1.V It is System oriented: OR studies the problem from over all point of view of
organizations or situations since optimum result of one part of the system
may not be optimum for some other part
2.V It imbibes Inter ± disciplinary team approach. Since no single individual can have
a thorough knowledge of all fast developing scientific knowhow, personalities
from different scientific and managerial cadre form a team to solve the
problem.
3.V It makes use of Scientific methods to solve problems.
4.V OR increases the effectiveness of a management £ecision making ability.
5.V It makes use of computer to solve large and complex problems.
6.V It gives Quantitative solution.
7.V It considers the human factors also.


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The scientific method in OR study generally involves the following three
phases:
1.V Â0
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i.V £etermination of the operation.
ii.V Establishment of the objectives and values related to the
operation.
iii.V £etermination of the suitable measures of effectiveness and
iv.V Formulation of the problems relative to the objectives.
2.V 

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(This phase utilizes
i.V Operations and data collection for a better understanding of the
problems.
ii.V Formulation of hypothesis and model.
iii.V Observation and experimentation to test the hypothesis on the
basis of additional data.
iv.V Analysis of the available information and verification of the
hypothesis using pre-established measure of effectiveness.


 
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Subject to
a11 x1 + a12 x2 +................. a 1n xn < b1
a21 x1 + a22 x2 + ................. +a 2n xn < b2
.....................................................................
am1x1+am2 x2 + ...... + a mn xn < bm
x1 , x2, x3, ... xn > 0.


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i.V All decision variables are nonnegative.
ii.V All constraints are of ” type.
iii.V The objective function is of the maximization type.
Any LPP can be put in the canonical form by the use of five elementary
transformations:

1.V The mini mization of a function is mathematically equivalent to the


maximization of the negative expression of this function. That is,
Minimize Z = c1 x1 + c2 x2 + ....... + c n xn is equivalent to
Maximize ± Z = ± c1 x1 ± c2 x2 ± ... ± cnxn.
2.V Any inequality in one direction (” or •) may be changed to an inequality in the
opposite direction (• or ”) by multiplying both sides of the inequality by ±1.
For example 2x 1+ 3x2 • 5 is equivalent to ±2x1 ±3x2 ” ±5.
3.V An equation can be replaced by two inequalities in opposite direction. For
example, 2x1 +3x2 = 5 can be written as 2x1 +3x2 ” 5 and 2x1 +3x2 • 5 or
2x1+3x2 ” 5 and ± 2x1 ± 3x2 ” ± 5.
4.V An inequality constraint with its left hand side in the absolute form can be
changed into two regular inequalities. For example: | 2x1 +3x2 | ” 5 is
equivalent to 2x1 +3x2 ” 5 and 2x1 +3x2 • ± 5 or ± 2x1 ± 3x2 ”5.
5.V The variable which is unconstrained in sign (i.e., • 0, ” 0 or zero) is
equivalent to the difference between 2 nonnegative variables. For example,
if x is unconstrained in sign then x
= (x + ± x ± ) where x + • 0, x ± ” 0.


 
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1.V Introduce stack variables ( Si ,¶ s) for ³”´ type of constraints.


2.V Introduce surplus variables ( Si ,¶ s) and artificial (Ai) for ³”´ type of
constraints.
3.V Introduce only Artificial variable for ³=´ type of constraint
4.V Oost of (Oj) of slack and surplus variables will be zero and that of artificial
variables will be ³M´.
5.V Find Zj- Oj for each variable.
6.V Slack and Artificial variables will form Basic variable for the first simplex
table. Surplus variable will never become Basic Variable for the first
simplex table.
7.V Zj= sum of [cost of variable x its coefficients in the constraints ±Profit or
cost coefficient of the variables].
8.V Select the most negative value of Zj- Oj . That column is called key
column. The variable corresponding to the column will become Basic
variables for the next table.
9.V £ivide the quantities by the corresponding values of the key column to get
ratios select the minimum ratio. This becomes the key row. The Basic
variable corresponding to this row will be replaced by the variable found
in step 6.
10.VThe element that lies both on key column and key row is called Pivotal
element.
11.VRatios with negative and ³Į´ value are not considered for determining key
row.
12.VOnce an artificial variable is removed as basic variable, its column will be
deleted from next iteration.
13.VFor maximization problems decision variables coefficient will be same as
in the objective function. For minimization problems decision variables
coefficients will have opposite signs as compared to objective function.


 
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below called the transportation table. The transportation algorithm is the simplex
method specialized to the format of table it involves:

i.V Finding an integral basic feasible solution


ii.V Testing the solution for optimality
iii.V Improving the solution, when it is not optimal
iv.V Repeating steps (ii) and (iii) until the optimal solution is obtained.

The solution to T.P is obtained in two stages. In the first stage we find Basic
feasible solution by any one of the following methods a) Northwest corner rale b)
Matrix Minima Method or least cost method c) Vogel¶s approximation method. In
the second stage we test the B.Fs for its optimality either by MO£I method or by
stepping stone method.

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2$: Under this method we construct penalties for rows and columns by
subtracting the least value of row / column from the next least value.

2 : åe select the highest penalty constructed for both row and column. Enter
that row / column and select the minimum cost and allocate min (ai, bj)

2 : £elete the row or column or both if the rim availability / requirements is met.

2*: åe repeat steps 1 to 2 to till all allocations are over.

2 : For allocation all form equation ui + vj = cj set one of the dual variable ui / vj
to zero and solve for others.

2 ": Use these values to find ǻij = cij ± ui ± vj of all ǻij •, then it is the optimal
solution.

2+: If any £ij ” 0, select the most negative cell and form loop. Starting point of
the loop is +ve and alternatively the other corners of the loop are ±ve and + ve.
Examine the quantities allocated at ±ve places. Select the minimum. Add it
at +ve places and subtract from ±ve place.

2#: Form new table and repeat steps 5 to 7 till ǻij • 0

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2$(The first assignment is made in the cell occupying the upper left hand (North
åest) corner of the transportation table. The maximum feasible amount is
allocated there, that is x11 = min (a1 ,b1 )

So that either the capacity of origin O1 is used up or the requirement


at destination £1 is satisfied or both. This value of x11 is entered in the upper
left hand corner (small square) of cell (1, 1) in the transportation table


2 ( If b1 > a1 the capacity of origin O, is exhausted but the requirement at
destination £1 is still not satisfied , so that at least one more other variable in
the first column will have to take on a positive value. Move down vertically to
the second row and make the second allocation of magnitude

x21 = min (a2 , b1 ± x21 ) in the cell (2,1). This either exhausts the capacity of
origin O2 or satisfies the remaining demand at destination £1.

If a1 > b1 the requirement at destination £1 is satisfied but the


capacity of origin O1 is not completely exhausted. Move to the right
horizontally to the second column and make the second allocation of
magnitude x12 = min

(a1 ± x11, b2 ) in the cell (1, 2). This either exhausts the remaining capacity of
origin O1 or satisfies the demand at destination £2 .

If b1 = a1, the origin capacity of O1 is completely exhausted as well as the


requirement at destination is completely satisfied. There is a tie for second
allocation; an arbitrary tie breaking choice is made. Make the second
allocation of magnitude x12 = min (a1 ± a1, b2 ) = 0 in the cell (1, 2) or x21 =
min (a2, b1 ± b2 ) = 0 in the cell (2, 1).


2 ( Start from the new north west corner of the transportation table satisfying
destination requirements and exhausting the origin capacities one at a time,
move down towards the lower right corner of the transportation table until all
the rim requirements are satisfied.

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L.P.P. ± (1), (2), (4) and (5). Indicating x1 = 1.66 (for example). Then we formulate
and solve two L.P.P¶s each containing (1), (2) and (4).

But (5) for j = 1 is modified to be 2 ” x1 ” U1 in one problem and L1 ” x1 ”


1 in the other. Further each of these problems process an optimal solution satisfying
integer constraints (3)

Then the solution having the larger value for z is clearly optimum for the given
I.P.P. However, it usually happens that one (or both) of these problems has no
optimal solution satisfying (3), and thus some more computations are necessary.
åe now discuss step wise the algorithm that specifies how to apply the
partitioning (6) and (7) in a systematic manner to finally arrive at an optimum
solution.

åe start with an initial lower bound for z, say z (0) at the first iteration which
is less than or equal to the optimal value z*, this lower bound may be taken as the
starting Lj for some xj.

(0)
In addition to the lower bound z , we also have a list of L.P.P¶s (to be
called master list) differing only in the bounds (5). To start with (the 0th iteration) the
master list contains a single L.P.P. consisting of (1), (2), (4) and (5). åe now discuss
below, the step by step procedure that specifies how the partitioning (6) and (7) can
be applied systematically to eventually get an optimum integer valued solution.


 
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