A Standard Form of LP (Linear programming) Model:

The model is to select the values of decision variables x1, x2,……,xj……….., xn so as to

Maximize the objective function, Z = c1 x1 + c2 x2 +……..+ cj xj + ………… + cn xn
subject to the restrictions or functional constraints: -

a11 x1 + a12 x2 + a13 x3 +…………………+ a1n xn b1

a21 x1 + a22 x2 + a23 x3 +…………………+ a2n xn  b2
…………………………………………………………………………………………
ai1 x1 + ai2 x2 + ai3 x3 +………………….+ ain xn  bi
………………………………………………………………………………………
….
am1 x1 + am2 x2 + am3 x3 +………………+ amn xn  bm
and the non-negativity constraint: -
x1  0 , x2  0 , x3  0 , ………………… xn  0 .

Data needed for a LP Model involving allocation of resources: -

Resource Usage per unit of activity

Amount of resource
Resource Activity available
1 2 3 j n
1 a11 a12 a13 a1j b1
2 a1n a21 a22 a23 b2
a2j a2n
i
bi
m ai1 ai2 ai3 aij
ain bm

am1 am2 am3 amj

amn
Contribution to Z per unit c1 c2 c3 cj
of activity cn

Assumptions of Linear Programming:

1. Proportionality: The contribution of each activity to the value of the objective function Z is proportional to the
level of the activity xj, as represented by the cj xj term in the objective function. Similarly, the contribution of
each activity to the left-hand side of each functional constraint is proportional to the level of activity xj, as
represented by the aij xj term in the constraints. The proportionality assumption rules out any exponent other than
1 for any variable in any term of any function (whether it is objective function or it is the function on the left-hand
side of the functional constraints).
2. Additivity: Every function (whether it is the objective function or the function on the left-hand side of the
functional constraints) is the sum of the individual contributions of the respective activities. The additivity
assumption prohibits cross-product terms (e.g. xixj etc) of two or more variables.
3. Divisibility: Decision variables x1, x2,……,xj……….., xn are allowed to have any value, including non-integer
values, that satisfy the functional and non-negativity constraints.

1
4. Certainty: The values assigned to each parameter of the model (i.e. the coefficients of the objective function cj,
the coefficients of the functional constraints aij, and the right-hand side values of the functional constraints bi) are
assumed to be known constant.

Formulation of Linear Programming Problems

Ex. 1. (or ex 1): The Wyndor Glass Company produces high-quality glass windows and doors. It has three plants.
Aluminum frames and hardware are made in Plant 1, wooden frames are made in Plant 2, and Plant 3 produces the
glass and assembles the products. Because of declining earnings, top management has decided to revamp the
company’s product line. Unprofitable products are being discontinued, releasing production capacity to launch two
new products – P1 and P2, having large sales potential.

Product P1 requires some of the production capacity in Plants 1 and 3, but none in Plant 2. Product P2 needs only
Plants 2 and 3. The marketing division has concluded that the company could sell as much of either product as could
be produced by these plants. However because both products would be competing for the same production capacity in
Plant 3, it is not clear which mix of the two products would be most profitable. Therefore, an O R team has been
formed to study the question. As a member of the O R team, you have collected the following data: -

Production time per batch in hours

Production time available
Plant Product
per week in hours
P1 P2
Plant 1 1 0 4
Plant 2 0 2 12
Plant 3 3 2 18
Profit per batch Rs. 3,000/- Rs. 5,000/-

Decide the number of batches of product P1 and P2 to be produced per week to maximize the profit.

The LPP can be formulated as: -

Maximize, Z = 3 X1 + 5 X2
s.t. X1 <= 4
2 X2 <= 12
3 X1 + 2 X2 <= 18
and
X1, X2 >= 0.

2
Ex.1A.(or ex 1A):Identical to Ex.1, except that the third constraint is an equation i.e. 3X1+2X2= 18.

Ex. 2. (or ex 2) : Precision Machining Company produces two products – Portable Saw and Table Saw. The average
profit is Rs.900/- for each of the Portable Saw and Rs. 600/- for Table Saw. The production capacity is contained in
two ways, fabrication and assembly. A maximum of 4,000 hours of fabrication capacity is available per month and
each Portable Saw requires 2 hours and each Table Saw requires 1 hour. A maximum of 5,000 hours of assembly
capacity is available per month and each Portable Saw requires 1 hour and each Table Saw requires 2 hours.

The marketing department estimates that there is a maximum market demand next year of 3,500 Saws per month for
both product lines combined. How many Portable Saws and how many Table Saws should be produced next year to
maximize the profit?

The LPP can be formulated as:

Maximize, Z = 900 X1 + 600 X2
s.t.
2 X1 + X2 <= 4,000 (Fabrication Hours)
X1 + 2 X2 <= 5,000 (Assembly Hours)
X1 + X2 <= 3,500 (Market Potential)
and, X1 , X2 >= 0.

Ex. 3. (or ex 3)
Maximize, Z = 2 X1 + X2
s.t. X2 <= 10
2 X1 + 5 X2 <= 60
X1 + X2 <= 18
3 X1 + X2 <= 44
and, X1, X2 >= 0.

Ex. 4. (or ex 4): The Whitt Cloth Company is an organization with only three employees - Ashis, Kamal and Subhas,
who make two different kinds of cloths: a cotton shirt and a silk suit. They earn Rs. 60/- profit for each cotton shirt and
Rs. 30/- for silk suit. Ashis makes the cotton shirt and can make six cotton shirts per day. Kamal makes silk suit and
can make four silk suits per day. Subhas forms and cuts the both the cotton and silk clothing, and can make 48 square
meter of cloth per day. Each cotton shirt uses 6 square feet of cloth and each silk suit uses 8 square feet of cloth.

I. Formulate a LPP for this problem.

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II. The company wishes to determine how many cotton shirts and silk suits to produce per day to maximize the total
profit. Solve graphically as well as by Simplex method.

[Z* = 405; X1 = 6; X2 = 1.5]

III. A new competitor in town has started making cotton shirts as well. This may force the Whitt Cloth Company to
lower the price they charge and so lower the profit made for each cotton shirt. How would the optimal solution
change (if at all) if the profit per cotton shirt decreases from Rs 60 to Rs. 40/-? From Rs. 60/- to Rs. 20/-?
[Z* = 285; X1* = 6; X2* = 1.5]
[Z* = 173.33; X1* = 2.667; X2* = 4]

IV. Ashis is considering lowering his working hours, which would decrease the number of cotton shirts he makes per
day. How would the optimum solution be change if he makes only five cotton shirts per day?
[Z* = 367.5; X1* = 5; X2* = 2.25]
The LPP can be formulated: -
Maximize Z = 60 X1 + 30 X2
s.t.
X1 <= 6
X2 <= 4
6 X1 + 8 X2 <= 48
and X1, X2 >= 0.

Ex. 5. (or ex 5): Bengal Ingot is developing a plan for buying scrap metal for its foundry operation. The foundry can
buy scrap metal in unlimited quantities from two sources – Ambattur (A) and Bhimani (B) and it receives the scrap
daily in railway wagon.
The scrap is melted down, and lead and copper are extracted for use in the foundry processes. Each wagon of scrap
from source A yields 1 MT of copper and 1 MT of lead and costs 10,000/-. Each wagon from source B yields 1 MT of
copper and 2 MT of lead and costs 15,000/-.
If the company need at least 2.5 MT of copper and at least 4 tons of lead per day for the foreseeable future, how many
wagons of scrap should be purchased per day from Source A and Source B to minimize the long range scrap metal
cost?
The LPP can be formulated as: -

Minimum
Extraction quantity of Wagon from Source A Wagon From Source B
Requirement in MT
Copper in MT 1 1 2.5
Lead in MT 1 2 4.0
Unit Cost per MT Rs. 10,000/- Rs. 15,000/-

Minimize, Z = 10,000 X1 + 15,000 X2

s.t. X1 + 2 X2 >= 4
X1 + X2 >= 2.50.
And, X1, X2 >= o.

Ex. 6. (or ex 6): Harihar manages a family-owned firm. To supplement several food products grown on his firm,
Harihar also raises pigs for market. He now wishes to determine the quantities of the available type of feed (i.e. Corn,
Tankage and Alfalfa) that should be given to each pig. Since pigs will eat any mix of these feed types, the objective is
to determine which mix will meet certain nutritional requirements at a minimum cost. The number of units of each type
of basic nutritional ingredient contained within a kilogram of each feed type is given in the following table, along with
the daily nutritional requirement and feed costs: -

Type of Feed Minimum Daily

Nutritional Ingredient
Kg. of Corn Kg. of Tankage Kg. of Alfalfa Requirement
Carbohydrates 90 20 40 200
Protein 30 80 60 180
Vitamins 10 20 60 150
4
 Cost per Kilogram Rs. 84/- Rs. 72/- Rs. 60/-

a. Formulate the LPP.

b. Solve the LPP by Simplex Method.
The LPP may be formulated as,
Minimize, Z = 84 X1 + 72 X2 + 60 X3
s.t. 90 X1 + 20 X2 + 40 X3 >= 200
30 X1 + 80 X2 + 60 X3 >= 180
10 X1 + 20 X2 + 60 X3 >= 150
and X1 , X2 > = 0.

Ex. 7. (or ex 7): The Superior Chemical Company manufactures carpenter’s glue. The company wants to plan for the
mix of ingredients that should go into the glue next year. The following information is important to this decision: -

Mixing Instruction or
Ingredient Cost per Kg.
Requirement
No more than 5 Kg can be used for
Carrier Rs. 0.50/-
each Kg of Adhesive.
Maximum 1,00,000 Kg is available
Filler Rs. 0.40/- per year from the sole source
supplier.
At least one Kg must be used for
Adhesive Rs/. 0.80/-
every 5 kg of Carrier.

How much of each ingredient will provide at least 7,00,000 kg of glue next year at the minimum cost?
The LPP can be formulated as follows: - Let,
X1 = Kg of Carrier to include in the glue next year.
X2 = Kg. of Filler to include in the glue next year.
X3 = Kg of Adhesive to include in the glue next year.

Minimize, Z = 0.5 X1 + 0.4 X2 + 0.85 X3

s.t. - X1 + 5 X3 >= 0
X2 < = 1,00,000.
X1 + X2 + X3 > = 7,00,000.

And X1 , X2, X3 > = 0.

Ex. 8. (or ex 8): Petukram loves steaks and potatoes. Therefore, he has decided to go on a steady diet of only these
two foods for all his meals. Petukram realizes that isn't the healthiest diet, so he wants to make sure that he eats the
right quantities of the two foods to satisfy some key nutritional requirements. He has obtained the following nutritional
and cost information:-

Grams of Ingredient per serving Daily Requirement

Ingredient
Steak Potatoes (grams)
Carbohydrates 5 15 50
Protein 20 5 40
Fat 15 2 60
Cost per serving Rs. 4/- Rs. 2/-

For carbohydrates and protein the daily requirements are the minimum values, where as for fat the daily
requirement is the maximum value.
Petukram wishes to determine the number of daily servings (may be fractional) of steak and potatoes that will meet
these requirements at a minimum cost.

Minimize, Z = 4 X1 + 2 X2
subject to

5
 1) 5 X1 + 15 X2 >= 50
2) 20 X1 + 5 X2 >= 40
3) 15 X1 + 2 X2 <= 60

and X1 >= 0, X2 >= 0.

Ex. 9. (or ex 9): Mary has just been diagnosed as a having a cancer in the bladder area. Radiation therapy, for cancer
treatment, involves passing two external ionized radiation beams B1 and B2 perpendicular to each other through the
patient’s body. The beams damage both cancerous and healthy tissues.
The design of the radiation therapy is a very delicate issue. The dose strength at any point of the body is measured in
units called kilorads.
Mary’s cancerous tumor has three distinct areas – Critical Tissues, Annular Tumor and Center of Cancer. The medical
team has collected the following data: -

Fraction of entry dose absorbed by

Restriction on total average dosage
Area areas
in kilorads
Beam 1 Beam 2
Healthy Tissues 0.4 0.5 Minimize
Critical Tissues 0.3 0.1 <= 2.7
Annular Tumor 0.5 0.5 =6
Center of Cancer 0.6 0.4 >= 6

For example, if the dose level at the entry point for beam B1 is 1 kilorad, then 0.4 kilorad will be absorbed by Healthy
Tissue (which is harmful and should be minimized), 0.3 kilorad will be absorbed by Critical Tissues, 0.5 kilorad by
Annular Tumor and 0.6 kilorad will be absorbed by the Center of Tumor area.

The last column gives the restrictions on the total dosages from both the beams that are absorbed by the respective
areas. In particular, the average dosage absorption for healthy tissue must be as small as possible, the critical tissues
must not exceed 2.7 kilorads, the annular tumor region must equal 6 kilorad and the center of cancer is at least 6
kilorads.
You are to decide the dose levels of the two beams in kilorads so that the total doses reaching the healthy tissues are
minimized.

The LPP can be formulated: -

Minimize Z = 0.4 X1 + 0.5 X2
s.t.
0.3 X1 + 0.1 X2 <= 2.7
6
 0.5 X1 + 0.5 X2 = 6
0.6 X1 + 0.4 X2 >= 6
and X1, X2 >= 0.

Ex 10. A company has two grades of inspectors I and II to undertake quality control inspection. At least 1,500 pieces
must be inspected in an 8-hour day. Grade I inspector can check 20 pieces in an hour with an accuracy of 96 %. Grade
II inspector checks 14 pieces in an hour with an accuracy of 92 %.

The daily wages of Grade I inspector are Rs. 5/- per hour while those of Grade II inspector are Rs. 4/- per hour. Any
error made by an inspector costs Rs. 3/- to the company. If there are, in all, 10 Grade I inspectors and 15 Grade II
inspectors in the company, set up the LPP for the optimal assignment of inspectors that will minimize the daily
inspection cost.
Ans.: Say, the number of Grade I inspector = X1 and the number of Grade II inspector = X2.
20 x 8 = 160; 14 x 8 = 112;

[20 x 8 x (1- 0.96)] x Rs. 3/- = Rs. 19.20; Cost per Grade I inspector = [Rs 19.20 + Rs. 5/- x 8] = Rs 59.20/-
[14 x 8 x (1- 0.92)] x Rs. 3/- = Rs. 26.88; Cost per Grade II inspector = [Rs 26.88 + Rs. 4/- x 8] = Rs 58.88/-

Therefore, the LPP becomes,

Minimize, Z = 59.20 X1 + 58.88 X2
s.t. 160 X1 + 112 X2 >= 1500
X1 + 0 X2 <= 10
0 X1 + X2 <= 15

X1, X2 >= 0

7
 The Regular Simplex Tableau and the Regular Simplex Method

The Regular Simplex method is a matrix procedure for solving linear programs in the standard form: -

Optimize, Z = CT X
Subject to, A X=B
With, X >= 0

Where, X is the column vector of unknowns; CT is the row vector of the corresponding costs (cost vector); A is the
coefficient matrix of the constraints (matrix of technological coefficients and B is the column vector of the right hand
sides of the constraints (requirement vector).

Where, B >= 0 and a basic feasible solution X0 is known. Starting with X0, the method locates successively other
basic feasible solutions having better values of the objective function, until the optimal solution is obtained. C0 is the
cost vector associated with the variables in X0.
Simplex Tableau for minimization problem
XT
Ratio
CT
X0 C0 A B

CT - CT0 A = (cj - zj) CT0 B

Simplex Tableau for maximization problem

XT
Ratio
CT
X0 C0 A B
CT0 A - CT = (zj – cj ) CT0 B

A Tableau Simplification: For each j (j = 1, 2, 3,…n), define zj = CT0 A, the dot product CT0 with the jth column
of A. The jth entry in the last row of the Tableau is (zj – cj ), for maximization problem, where cj is the cost in the
second row of the tableau, immediately above Aj.

The steps in the Regular Simplex Method:

Step 1: Locate the most negative number in the bottom row of the Simplex tableau, excluding the last column, and call
the column in which this number appears in the pivot or work column. If more than one candidate for most negative
number exists, choose one arbitrarily.
Step 2: Form ratios by dividing each positive number in the work or pivot column, excluding the last row, into
element in the same row and last column. Designate this element in the work column or pivot column that yields the
smallest ratio as the pivot element. If more than one element yields the same smallest ratio, choose one arbitrarily. If
no element in the work column is positive, the program has no solution.
Step 3: Use elementary row operation to convert the pivot element to 1 and then reduce all other elements in the work
column to 0.
Step 4: Replace the x-variable in the pivot row and first column by the x-variable in the first row and pivot column.
The new first column is the current set of basic variables.
Step 5: Repeat steps 1 through 4 until there are no negative number in the last row, excluding the last column.
Step 6: The optimal solution is obtained by assigning to each variable in the first column that value in the
corresponding row and last column. All other variables are assigned the value zero. The associated z*, the optimal
value of the objective function, is the number in the last row and the last column for a maximization program, but the
negative of this number for a minimization program.

Modification in the Regular Simplex Method for Programs with Artificial Variables: Whenever artificial
variables are part of the initial solution X0, the last row of the Tableau will contain the penalty cost M. To minimize
8
round off error, the following modifications are incorporated into the Simplex method, the resulting algorithm is
two-phase method. Say,
(cj – zj) row of an initial tableau 1 is: [- 9 - 8M 0 - 9 – 8M 0 M 0 - 14 - 2M]

Change 1: The last row of Tableau 1 is decomposed into two rows, the first of which involves those terms not
containing M, while the second involves the coefficients of M in the remaining terms.
[ -9 0 -9 0 0 0 -14
-8 0 -9 0 1 0 -2 ]

Change 2: Step 1 of the simplex algorithm method is applied to the last row in change 1 (followed by steps 2, 3 and 4)
until this row contains no negative elements. Then step 1 is applied to those elements in the next-to-last row that are
positioned over zeros in the last row.
Change 3: Whenever an artificial variable ceases to be basic – i.e. is removed from the first column of the tableau as a
result of step 4 – it is deleted from the top row of the tableau, as is the entire column under it.
Change 4: The last row can be deleted from the tableau whenever it contains all zeros.
Change 5: If nonzero artificial variables are present in the final basic set, then the program has no solution. (In
contrast, zero-valued artificial variable may appear as basic variables in the final solution when one or more of the
original constraint equations is redundant).

The DUAL Simplex Method: The regular simplex method moves the initial feasible but nonoptimal solution to an
optimal solution while maintaining feasibility through an iterative procedure. On the other hand, the dual simplex
method moves the initial optimal infeasible solution to a feasible solution while maintaining optimality through
an iterative procedure.
Step 1: Rewrite the linear programming problem by expressing all the constraints in <= form and transforming them
into equations through slack variables..
Step 2: Exhibit the above problem in the form of a Simplex tableau. If the optimality condition is satisfied and one or
more basic variables have negative values, the dual simplex method is applicable.
Step 3 Feasibility condition: The basic variable with the most negative value becomes the departing variable (D.V.).
Call this row in which this value appears the work row. If more than one candidate for D.V. exists, choose arbitrarily.
Step 4: Optimality Condition: Form ratios by dividing all but the last element of the last row of (cj – zj) values
(minimization problem) or the (zj – cj ) values (maximization problem) by the corresponding negative coefficients of
the work row. The nonbasic variable with the smallest absolute ratio becomes the entering variable (E.V.). Designate
this element in the work row at the pivot element and the corresponding column the work column. If more than one
candidate for E.V. exists, choose one arbitrarily. If no element in the work row is negative, this problem has no
feasible solution..
Step 5: Use elementary row operations to convert the pivot element to 1 and then to reduce all the other elements in
the work column to zero.
Step 6: Repeat step 3 through 5 until there are no negative values for the basic variables.

9
 Matrix form of solution by Regular Simplex method

Add slack variables to <= type of inequality constraints; deduct surplus variables from >= type of inequality
constraints; then add artificial variables to constraint equations (i.e. = type) and >= type of inequality constraints.

Q. Solve the following LPP by Simplex method.

Maximize: z = x1 + 9 x2 + x3
Subject to: x1 + 2 x2 + 3 x3  9
3 x1 + 2 x2 + 2 x3  15
with: all variables nonnegative.

Ans: Adding slack variables x4 and x5 in the first & second constraints inequalities respectively and rearranging the
equations, we obtain the required matrix standard form as,

Maximize: z = x1 + 9 x2 + 1 x3 + 0 x4 + 0 x5
Subject to: x1 + 2 x2 + 3 x3 + 1 x4 + 0 x5 9
3 x1 + 2 x2 + 2 x3 + 0x4 + 1 x5 15
with: all variables i.e. x1 , x2, x3, x4 and x5 nonnegative.

For maximization program, the simplex method utilizes the following tableau in which C0 designates the profit vector
associated with the basic variables in X0.
Simplex Tableau
XT
Ratio
CT
X0
A B
C0
CT0 A - CT = (zj – cj ) CT0 B

For Maximization LPP

Matrix A
Simplex Tableau 0
xj x1 x2 x3 x4 x5
B
cj Ratio
Xo i.e. RHS
Co

C0T A = zj CoT B
(zj – cj)

Simplex Tableau 1

B Ratio

10
We define X =[x1 x2 x3 x4 x5]T ; C = [ 1 9 1 0 0]T and form the Simplex tableau 0 as follows. The costs
associated with the components of X0, the slack variables, are zero, hence C0 = [ 0 0]T . We proceed to form
Simplex Tableau 1.

At this stage, we are ready to apply the simplex method. The most negative element in the last row of Simplex tableau
1 is (- 9), corresponding to the x2 column; hence this column becomes the pivot column (thus x2 is the next entering
variable). Forming the ratios 9/2 and 15/2 (we form ratios by dividing with each positive element of the work column
the corresponding element of last column i.e. B and designate the element in the work column that yield the smallest
ratio as the pivot element). We find that element 2, marked by * in Tableau 1, is the pivot element, since it yields the
smallest ratio of 4.5. Thus x4 is the next leaving variable.

Now we form tableau 2 by using elementary row operation to the pivot row.

Simplex Tableau 0
xj x1 x2 x3 x4 x5
B
cj 1 9 1 0 0
i.e. RHS
Co
x4 0 1 2* 3 1 0 9
x5 0 3 2 2 0 1 15

For Maximization LPP

Matrix A
Simplex Tableau 1
xj x1 x2 x3 x4 x5
B
cj 1 9 1 0 0 Ratio
i.e. RHS
Co
x4 0 1 2* 3 1 0 9 9/2
x5 0 3 2 2 0 1 15 15/2
C0T A = zj 0 0 0 0 0 CoT B
(zj – cj) -1 -9 -1 0 0 =0

Simplex Tableau 2
xj x1 x2 x3 x4 x5
1 9 1 0 0 B Ratio

x2 9 ½ 1 3/2 ½ 0 9/2
x5 0 2 0 -1 -1 1 6
9/2 9 27/2 9/2 0
81/2
7/2 0 25/2 9/2 0

Since the last row of Simplex tableau 2 contains no negative elements, it follows that optimum solution is x2* = 9/2,
x5* = 6 and x3* = x4* = x5* = 0 with Z* = 81/2.

Ex: Minimize, Z = 80 X1 + 60 X2
Subject to: 0.20 X1 + 0.32 X2 <= 0.25
X1 + X2 = 1
With: X1 and X2 non-negative.
11
Ans: Solution by Big M method. Adding a slack variable x3 and an artificial variable x4 to the first and second
constraints, respectively, we convert the LPP to standard matrix form as follows;
Minimize, Z = 80 X1 + 60 X2 + 0 X3 + M X4
Subject to: 0.20 X1 + 0.32 X2 + 1 X3 + 0 X4 = 0.25
1 X1 + 1 X2 + 0 X3 + 1 x4 = 1.00
And X1 and X2 non-negative.
For Minimization LPP
Simplex Tableau 1
xj x1 x2 x3 x4 B
cj M i.e. Ratio
80 60 0 RHS
Co
x3 0 1/5 8/25* 1 0 1/4 25/32
x4 M 1 1 0 1 1 1
CoT A =
M M 0 M CoT B =
zj
-M
(cj – zj) 80 - M 60 - M 0 0

Simplex Tableau 2
xj x1 x2 x3 x4 B
cj 80 60 0 M i.e. Ratio
Co RHS
x2 60 5/8 1 25/8 0 25/32 5/4
x4 M 3/8* 0 -25/8 1 7/32 7/12
CoT A = (300/8 + 3/8 x (375/2 – 25/8 CoT B =
60 M
zj M) x M) - (375/8
(6100/8 - 3/8 x (-375/2 + 25/8 + 7/32 x
(cj – zj) 0 0
M) x M) M)

Simplex Tableau 3
xj x1 x2 x3 x4 B
cj 80 60 0 M i.e. Ratio
Co RHS
x2 60 0 1 25/3 -5/3 5/12
x1 80 1 0 -25/3 8/3 7/12
CoT A = CoT B =
80 60 -500/3 340/3
zj -
(cj – zj) 0 0 500/3 M - 340/3 (860/12)

Optimal Solution is Z* = 860/12; x1* = 7/12; x2* = 5/12.

Q. Ashoke Chemical Company manufactures two chemicals A and B which are sold to the manufacture of soaps and
detergents. On the basis of the next month’s demand, the management has decided that the total production for
chemicals A and B should be at least 350 Kgs. Moreover, a major customer’s order for 125 Kgs of product A must
also be supplied. Product A requires 2 hours of processing time per Kg and product B requires one hour of processing
time per kg. For the coming month, 600 hours of processing time are available.

12
The company wants to meet the above requirements at minimum total production cost. The production costs are Rs 2/-
per Kg for Product A and Rs 3/- per Kg for product B. Ashoke chemicals Company wants to determine its optimal
product mix and the total minimum cost relevant thereto.

Minimize: z = 2x1 + 3x2

Subject to: 1x1  125
1x1 + 1x2  350
2x1 + 1x2  600
with: all variables nonnegative.

Ans: For minimization program, the simplex method utilizes the following tableau in which C0 designates the cost
vector associated with the variables in X0.

Simplex Tableau for minimization problem

XT
Ratio
CT
X0
A B
C0
CT - CT0 A = (cj - zj) CT0 B

We subtract surplus variables x3 and x4 from the LHS of the first and second constraint equations respectively and add
a slack variable x5 from the LHS of the third constraint equation. Then we add artificial variables x6 and x7 to the left
hand side of the first and second constraint equations respectively.
The objective function and the constraint equations become as follows: -

Minimize: Z = 2 x1 + 3 x2 + 0 x3 + 0 x4 + 0 x5 + M x6 + M x7
Subject to: 1 x1 + 0 x2 - 1 x3 + 0 x4 + 0 x5 + 1 x6 + 0 x7 = 125
1 x1 + 1 x2 + 0 x3 -1 x4 + 0 x5 + 0 x6 + 1 x7 = 350
2 x1 + 1 x2 + 0 x3 + 0 x4 + 1 x5 + 0 x6 + 0 x7 = 600
with: all variables nonnegative.

Rearranging to obtain an obvious identity matrix for the initial basic solution, we finally get,

Minimize, Z = 2 x1 + 3 x2 + 0 x3 + 0 x4 + M x6 + M x7 + 0 x5

Subject to 1 x1 + 0 x2 - 1 x3 + 0 x4 + 1 x6 + 0 x7 + 0 x5 = 125
1 x1 + 1 x2 + 0 x3 - 1 x4 + 0 x6 + 1 x7 + 0 x5 = 350
2 x1 + 1 x2 + 0 x3 + 0 x4 + 0 x6 + 0 x7 + 1 x5 = 600

and, x1, x2, x3, x4, x5, x6, and x7  0 i.e. nonnegative.

For Minimization LPP

Simplex Tableau 1
xj x1 x2 x3 x4 x6 x7 x5 B
cj 2 3 0 0 M M 0 i.e. Ratio
Co RHS
x6 M 1* 0 -1 0 1 0 0 125 125
x7 M 1 1 0 -1 0 1 0 350 350
x5 0 2 1 0 0 0 0 1 600 300

13
 CoT A =
2M M -M -M M M 0 CoT B =
zj
475 M
(cj – zj) 2 – 2M 3-M M M 0 0 0

Simplex Tableau 2
xj x1 x2 x3 x4 x6 x7 x5
cj 2 3 0 0 M M 0 B Ratio
Co
x1 2 1 0 -1 0 1 0 0 125 -
x7 M 0 1 1 -1 -1 1 0 225 225
x5 0 0 1 2* 0 -2 0 1 350 175
CoT A = CoT B =
2 M M-2 -M 2-M M 0
zj (225 M
(cj – zj) 0 3-M 2-M M 2M-2 0 0 + 250)

Simplex Tableau 3
xj x1 x2 x3 x4 x6 x7 x5
cj 2 3 0 0 M M 0
B Ratio
Co
x1 2 1 ½ 0 0 0 0 ½ 300 600
x7 M 0 ½* 0 -1 0 1 -1/2 50 100
x3 0 0 ½ 1 0 -1 0 1/2 175 350
CoT A = (1+ (1-
2 0 -M 0 M CoT B =
zj ½ M) ½ M)
(50 M
(cj – zj) (2 – (½ M + 600)
0 0 M M 0
½ M) -1)

Simplex Tableau 4
xj x1 x2 x3 x4 x6 x7 x5
cj 2 3 0 0 M M 0
B Ratio
Co
x1 2 1 0 0 1 0 -1 1 250
x2 3 0 1 0 -2 0 2 -1 100
x3 0 0 0 1 1 -1 -1 1 125
CoT A =
2 3 0 -4 0 4 -1 CoT B =
zj
800
(cj – zj) 0 0 0 4 M (M-4) 1

Since the last row i.e. [cj – zj] row of the Simplex Tableau 4 contains no negative elements, it follows that optimal
solution has been reached as

x1 = 250; x2 = 100; x3 = 125; x4 = 0; x5 = 0; x6 = 0; and x7 = 0 with Z* = 800.

Q. Solve the following PRIMAL-LPP by Simplex method.

Maximize: z = 2 x1 + x2
Subject to: x1 + 5 x2 

14
 x1 + 3 x2  6
2 x1 + 2 x2  8
with: all variables nonnegative.

Ans: Adding slack variables x3, x4 and x5 in the three constraints inequalities respectively and rearranging the
equations, we obtain the required matrix standard form as,

Maximize: z = 2 x1 + 1 x2 + 0 x3 + 0 x4 + 0 x5
Subject to: x1 + 5 x2 + 1 x3 + 0 x4 + 0 x5 10
x1 + 3 x2 + 0 x3 + 1 x4 + 1 x5 6
2 x1 + 2 x2 + 0 x3 + 0 x4 + 1 x5 8

with: all variables i.e. x1 , x2, x3, x4 and x5 nonnegative.

For maximization program, the simplex method utilizes the following tableau in which C0 designates the profit vector
associated with the basic variables in X0.

Simplex Tableau for maximization

XT
Ratio
CT
X0
A B
C0
CT0 A - CT = (zj – cj ) CT0 B

We define X =[x1 x2 x3 x4 x5]T ; C = [ 2 1 0 0 0]T and form the Simplex tableau 0 as follows. The costs
associated with the components of X0, the slack variables, are zero, hence C0 = [ 0 0]T . We proceed to form
Simplex Tableau 1.

At this stage, we are ready to apply the simplex method. The most negative element in the last row of Simplex tableau
1 is (- 2), corresponding to the x1 column; hence this column becomes the pivot column (thus x1 is the next entering
variable). Forming the ratios 10, 6 and 4 (we form ratios by dividing with each positive element of the work column
the corresponding element of last column i.e. B and designate the element in the work column that yield the smallest
ratio as the pivot element). We find that element 2, marked by * in Tableau 1, is the pivot element, since it yields the
smallest ratio of 4. Thus x5 is the next leaving variable. Now we form tableau 2 by using elementary row operation to
the pivot row.

Simplex Tableau 1
xj x1 x2 x3 x4 x5
B
cj 2 1 0 0 0 Ratio
i.e. RHS
Co
x3 0 1 5 1 0 0 10 10
x4 0 1 3 0 1 0 6 6
x5 0 2 2 0 0 1 8 4
T
Co B
C0T A = zj 0 0 0 0 0
=0
(zj – cj) -2 -1 0 0 0

15
 Simplex Tableau 2
xj x1 x2 x3 x4 x5
B
cj 2 1 0 0 0 Ratio
i.e. RHS
Co
x3 0 0 4 1 0 - 0.5 6
x4 0 0 2 0 1 - 0.5 2
x1 2 1 1 0 0 0.5 4
CoT B
C0T A = zj 2 2 0 0 1
=8
(zj – cj) 0 1 0 0 1

Since the last row of Simplex tableau 2 contains no negative elements, it follows that optimum solution is x1* = 4,
x2* = 0, x3* = 6, x4* = 2, x5* = 0 with Z* = 8.

Q. Solve the following DUAL-LPP (i.e. of the above PRIMAL-LPP) by Simplex method.

Minimize: z = 10 x1 + 6 x2 + 8 x3
Subject to: 1 x1 + 1 x2 + 2 x3  2
5 x1 + 3 x2  2 x3 1
with: all variables nonnegative.

Ans: For minimization program, the simplex method utilizes the following tableau in which C0 designates the cost
vector associated with the variables in X0.

Simplex Tableau for minimization

XT
Ratio
CT
X0
A B
C0
CT - CT0 A = (cj - zj) CT0 B

We subtract surplus variables x4 and x5 from the LHS of the first and second constraint equations respectively and add
artificial variables x6 and x7 to the left hand side of the first and second constraint equations respectively. The
objective function and the constraint equations become as follows: -

Minimize: Z = 10 x1 + 6 x2 + 8 x3 + 0 x4 + 0 x5 + M x6 + M x7
Subject to: 1 x1 + 1 x2 + 2 x3 - 1 x4 + 0 x5 + 1 x6 + 0 x7 = 2
5 x1 + 3 x2 + 2 x3 + 0 x4 - 1 x5 + 0 x6 + 1 x7 = 1
with: all variables nonnegative.

Rearranging to obtain an obvious identity matrix for the initial basic solution, we finally get,

Minimize, Z = 10 x1 + 6 x2 + 8 x3+ M x6 + 0 x3 + M x7 + 0 x4
Subject to 1 x1 + 1 x2 + 2 x3 + 1 x6 - 1 x4 + 0 x7 + 0 x5 = 2
5 x1 + 3 x2 + 2 x3 + 0 x6 + 0 x4 + 1 x7 - 1 x5 = 1
and, x1, x2, x3, x4, x5, x6, and x7  0 i.e. nonnegative.

For Minimization LPP

16
 Simplex Tableau 1
xj x1 x2 x3 x6 x4 x7 x5 B
cj i.e. Ratio
10 6 8 M 0 M 0 RHS
Co
x6 M 1 1 2 1 -1 0 0 2 2
x7 M 5* 3 2 0 0 1 -1 1 1/5
CoT A =
6M 4M 4M M -M M -M CoT B =
zj
3M
(cj – zj) 10-6M 6-4M 8-4M 0 M 0 M

Simplex Tableau 2
xj x1 x2 x3 x6 x4 x7 x5
cj B Ratio
10 6 8 M 0 M 0
Co
x6 M 0 0.4 1.6 1 -1 - 0.2 0.2 1.8 1.125
x1 10 1 0.6* 0.4 0 0 0.2 - 0.2 0.2 0.5
CoT A = 0.4M + 1.6M + - 0.2 0.2M
10 M -M CoT B =
zj 6 4 M+2 -2
1.8 M +
(cj – zj) - 0.4 - 1.6 0.8 M - 0.2 2
0 0 M
M M+4 -2 M+2

Simplex Tableau 3
xj x1 x2 x3 x6 x4 x7 x5
cj
10 6 8 M 0 M 0 B Ratio
Co
x6 M -4 -2 0 1 -1 -1 1* 1 1
x3 8 2.5 1.5 1 0 0 0.5 - 0.5 0.5 -
CoT A = - 4M -2M -M+
8 M -M M-4
zj + 20 + 12 4 CoT B =
4M- 2M- 2M- -M+ M+4
(cj – zj) 0 0 M
10 6 4 4

Simplex Tableau 4
xj x1 x2 x3 x6 x4 x7 x5
cj
10 6 8 M 0 M 0 B Ratio
Co
x5 0 -4 -2 0 1 -1 -1 1* 1
x3 8 0.5 0.5 1 0.5 - 0.5 0 0 1
CoT A =
4 4 8 4 -4 0 0 CoT B =
zj
8
(cj – zj) 6 2 0 M-4 4 M 0

Since the last [cj – zj] row of the Simplex Tableau 4 contains no negative elements, it follows that optimal solution of
the DUAL - LPP has been reached as: x1* = 0; x2*= 0; x3*= 1; x4*= 0; x5 *= 1; x6*= 0; and x7*= 0 with Z* = 8.

17
Comments on the Results of Dual solutions:

1. If the optimal solution exists to either the PRIMAL or symmetric DUAL then the other program has also an
optimal solution and the two objective function has the same value Z*. [ Z x = Z y = 8]
2. Given that a pair of symmetric DUALs has optimal solutions, then if the kth constraint of one system holds as
inequality i.e. the associated slack or surplus variable is positive – then the kth component of the optimal solution
of its symmetric DUAL is zero.
3. Observe the final tableau of both the PRIMAL and DUAL LPP s:

Final Simplex Tableau of the PRIMAL LPP

xj x1 x2 x3 x4 x5
B
cj 2 1 0 0 0 Ratio
i.e. RHS
Co
x3 0 0 4 1 0 - 0.5 6
x4 0 0 2 0 1 - 0.5 2
x1 2 1 1 0 0 0.5 4
CoT B
C0T A = zj 2 2 0 0 1
=8
(zj – cj) 0 1 0 0 1

Final Simplex Tableau of the DUAL LPP

yj y1 y2 y3 y6 y4 y7 y5
cj
10 6 8 M 0 M 0 B Ratio
Co
y5 0 -4 -2 0 1 -1 -1 1* 1
y3 8 0.5 0.5 1 0.5 - 0.5 0 0 1
CoT A =
4 4 8 4 -4 0 0 CoT B =
zj
8
(cj – zj) 6 2 0 M-4 4 M 0

Optimal Solution of PRIMAL Optimal Solution of DUAL Remark

x1 Original 4 y1 Original 0
x2 Original 0 y2 Original 0
y3 Original 1

x3 Slack 6 y4 Surplus 0
x4 Slack 2 y5 Surplus 1
x5 Slack 0
y6 Artificial 0; Must be zero
y7 Artificial 0: Must be zero

18
The optimal values of the original variables of the PRIMAL-LPP i.e. x1 and x2 can be read from the values under the
surplus variables i.e. y4 and y5 columns in (cj – zj) row of the final Simplex tableau of the DUAL-LPP.

The optimal values of the original variables of the DUAL-LPP i.e. y1, y2 and y3 can be read from the values under the
slack variables i.e. x3, x4 and x5 columns in (zj – cj) row of the final Simplex tableau of the PRIMAL-LPP.

The optimal values of the slack variables of the PRIMAL-LPP i.e. x3, x4 and x5 can be read from the values under
the original variables i.e. y1, y2 and y3 columns in (cj – zj) row of the final Simplex tableau of the DUAL-LPP.

The optimal values of the surplus variables of the DUAL-LPP i.e. y4 and y5 can be read from the values under the
original variables i.e. x1 and x2 columns in (zj – cj) row of the final Simplex tableau of the PRIMAL-LPP.

19
 Formation of DUAL problem from PRIMAL LPP

A linear programming problem is said to be in standard form if either (i) all constraints involve the  sign in
maximization problem, or (ii) all constraints involve the sign in minimization problem. Two important results are:-
a) If some constraints in the Primal problem be perfect equalities, then the corresponding dual variables are
unrestricted in sign.
b) If any variable of the Primal problem be unrestricted in sign, then the corresponding constraints of the Dual will
be equalities.

If the Primal LPP is Then the DUAL LPP is

Maximize, Z = CX Minimize, W = BT Y
s.t. AX  B s.t. AT Y  CT
X 0 Y  0

Ez 1 : Find the Dual of the LPP

Maximize, Z = 3 X1 – X2 + X3
s.t. 4 X1 – X2  8
8 X1 + X2 + 3X3  12
5 X1 - 6 X3  13
X1, X2, X3 0

Ans: The LPP can be written as

Maximize, Z = 3 X1 – X2 + X3
s.t. 4 X1 – X2 + 0 X3  8
-8 X1 - X2 - 3X3 12
5 X1 + 0X2 - 6X3  13
X1, X2, X3 0
So the DUAL LPP can be written as,
Minimize, W = 8 Y1 – 12Y2 + 13Y3
s.t. 4 Y1 – 8 Y2 + 5 Y3  3
-1 Y1 - 1Y2 + 0Y3 1
0 Y1 – 3Y2 – 6Y3  1
Y1, Y2, Y3 0
It can be rearranged as
Minimize, W = 8 Y1 – 12 Y2 + 13 Y3
s.t. 4 Y1 – 8 Y2 + 5 Y3 3
Y1 + 1Y2 1
-3Y2 – 6Y3  1
Y1, Y2, Y3 0

Ex 2 : Write the DUAL of the following PRIMAL LPP

Minimize, Z = 4 X1 + 5 X2 - 3 X3
s.t. 1 X1 + 1 X2 + 1 X3 = 22
3 X1 + 5 X2 – 2 X3 
1 X1 + 7 X2 + 4 X3  12
X1, X2  0 and X3 is unrestricted in sign.

Ans:
The PRIMAL can be written as
Minimize, Z = 4 X1 + 5 X2 - 3 X3
s.t. 1 X1 + 1 X2 + 1 X3 = 22
-3 X1 - 5 X2 + 2 X3 
1 X1 + 7 X2 + 4 X3  120

20
 X1, X2  0 and X3 is unrestricted in sign
So the DUAL LPP can be written as
Maximize, W = 22 Y1 – 65 Y2 + 120 Y3
s.t. 1 Y1 – 3 Y2 + 1 Y3  4
1 Y1 – 5 Y2 + 7 Y3  5
1 Y1 + 2 Y2 + 4 Y3  -3
Y1 is unrestricted in sign and Y2, Y3  0.

Ex 3 : Write the DUAL of the following PRIMAL LPP

Minimize, Z = 1 X1 - 2 X2 - 1 X3 + 2 X4 + 1 X5
s.t. 1 X1 - 2 X2 - 1 X3 + 2 X4 + 1 X5  17
1 X1 + 2 X2 - 1 X3 + 5 X4 + 2 X5 
2 X1 - 1 X2 + 5 X3 - 1 X4 + 3 X5  57
X1, X2, X4, X5  0 and X3 is unrestricted in sign.

Ans: The given PRIMAL may be written as

Minimize, Z = 1 X1 - 2 X2 - 1 X3 + 2 X4 + 1 X5
s.t. -1 X1 + 2 X2 + 1 X3 - 2 X4 - 1 X5  -17
1 X1 + 2 X2 - 1 X3 + 5 X4 + 2 X5  25
   1 X1 -2 X2 + 1 X3 - 5 X4 - 2 X5  -25
2 X1 - 1 X2 + 5 X3 - 1 X4 + 3 X5  57
X1, X2, X4, X5  0 and X3 is unrestricted in sign.
So the DUAL LPP may be written as
Maximize, W = -17 Y1 + 25 Y2 - 25 Y3 + 57 Y4
s.t. -1 Y1 + 1 Y2 - 1 Y3 + 2 Y4  1
2 Y1 + 2 Y2 - 2 Y3 - 1 Y4  -2
1 Y1 – 1 Y2 + 1 Y3 + 5 Y4  -1
-2 Y1 + 5 Y2 - 5 Y3 - 1 Y4  2
-1 Y1 + 2 Y2 - 2 Y3 + 3 Y4 
Y1 Y2, Y3 and Y4  0.

21
 Example explaining the properties of PRIMAL-DUAL LPP

Primal Dual
Minimize, Z = 3 x1 + 1 x2 Maximize, W = 2 y1 + 1 y2
s.t. 2 x1 + 3 x2 >= 2 s.t. 2 y1 + 1 y2 <= 3 ; Labour Hour Limitation
1 x1 + 1 x2 >= 1 3 y1 + 1 y2 <= 1 : Fund Limitation.
x1, x2 >= 0 y1, y2 >= 0
Solution of Primal Solution of Dual
We put the PRIMAL in standard form by subtracting two We put the Dual in standard form by adding two slack
surplus variables x3 and x4 and adding two artificial variables y3 and y4.
variables x5 and x6 respectively.
Optimal solution: Optimal solution:
x1 = 0; x2 = 1; x3 = 1; x4 = 0; x5 = 0; x6 = 0 and Z* = 1. y1 = 0; y2 = 1; y3 = 2; y4 = 0 and W* = 1.

For Minimization LPP (PRIMAL)

Simplex Tableau 1
xj x1 x2 x3 x4 x5 x6 B
cj i.e. Ratio
3 1 0 0 M M RHS
Co
x5 M 2 3* -1 0 1 0 2 2/3
X6 M 1 1 0 -1 0 1 1 1
CoT A = zj 3M 4M -M -M M M CoT B =
(cj – zj) 3 - 3M 1 - 4M M M 0 0 3M

Simplex Tableau 2
xj x1 x2 x3 x6 x4 x7
cj B Ratio
3 1 0 0 M M
Co
x2 1 2/3* 1 -1/3 0 1/3 0 2/3 -
x6 M 1/3 0 1/3* -1 -1/3 1 1/3 1
2/3 -1/3 + 1/3 - 1/3
CoT A = zj 1 -M M
+1/3M 1/3M M 2/3 +
7/3 – 1/3 – 4/3M – 1/3M
(cj – zj) 0 M 0
1/3M 1/3M 1/3

Simplex Tableau 3
xj x1 x2 x3 x4 x5 x6
cj
3 1 0 0 M M B Ratio
Co
x2 1 1 1 0 -1 0 1 1
x3 0 1 0 1 -3 -1 3 1
CoT A = zj 1 1 0 -1 0 1
1
(cj – zj) 2 0 0 1 M M-1

For Maximization LPP (DUAL)

Simplex Tableau 1
yj y1 y2 y3 y4 B Ratio
i.e.
RHS
22
 cj 2 1 0 0
Co
y3 0 2 1 1 0 3 1.5
y4 0 3* 1 0 1 1 1/3
CoT A = zj 0 0 0 0
CoT B = 0
(zj - cj) -2 -1 0 0

Simplex Tableau 2
xj y1 y2 y3 y4
cj B Ratio
2 1 0 0
Co
y3 0 0 1/3 1 -2/3 7/3 7
Y1 2 1 1/3* 0 1/3 1/3 1
CoT A = zj 2 2/3 0 2/3
2/3
(zj - cj) 0 -1/3 0 2/3

Simplex Tableau 3
xj y1 y2 y3 y4
cj
2 1 0 0 B Ratio
Co
y3 0 -1 0 1 -1 2
Y2 1 3 1 0 1 1
CoT A = zj 3 1 0 1
1
(zj - cj) 1 0 0 1

Optimum solution of the PRIMAL: x1 = 0; x2 = 1; x3 = 1; x4 = 0; x5 = 0; x6 = 0 and Z* = 1.

Optimum solution of the DUAL: y1 = 0; y2 = 1; y3 = 2; y4 = 0 and W* = 1.

Comments on the Results of Primal-Dual solutions:

1. If the optimal solution exists to either the PRIMAL or symmetric DUAL then the other program has also an
optimal solution and the two objective functions have the same value. Here, [Zx = Wy = 1].
2. Given that a pair of symmetric DUALs has optimal solutions, then if the kth constraint of one system holds as
inequality i.e. the associated slack or surplus variable is positive – then the kth component of the optimal
solution of its symmetric DUAL is zero. Here as x3 = 1, so y1 must be zero. Conversely, as y3 = 2, so x1 must be
zero.
3. The optimal values of the original variables of the PRIMAL-LPP i.e. x1 and x2 can be read from the values
under the surplus variables i.e. y3 and y4 columns in (zj - cj) row of the final Simplex tableau of the DUAL-LPP.
4. The optimal values of the original variables of the DUAL-LPP i.e. y1 and y2 can be read from the values under
the surplus variables i.e. x3 and x4 columns in (cj – zj) row of the final Simplex tableau of the PRIMAL-LPP.
5. The optimal values of the surplus variables of the PRIMAL-LPP i.e. x3 and x4 can be read from the values
under the original variables i.e. y1 and y2 columns in (zj – cj) row of the final Simplex tableau of the DUAL-LPP.
6. The optimal values of the slack variables of the DUAL-LPP i.e. y3 and y4 can be read from the values under the
original variables i.e. x1 and x2 columns in (cj – zj) row of the final Simplex tableau of the PRIMAL-LPP.

23
Shadow Prices: In a business application, a shadow price is the maximum price that management is willing to pay for
an extra unit of a given limited resource. For example, if a production line is already operating at its maximum
40-hour limit, the shadow price would be the maximum price the manager would be willing to pay for operating it
for an additional hour, based on the benefits he would get from this change. The value of the shadow price can
provide decision-makers with insights into problems. For instance if a constraint limits the amount of labor available
to you to 40 hours per week, the shadow price will tell you how much you should be willing to pay for an additional
hour of labor. If your shadow price is Rs. 10 for the labor constraint, for instance, you should pay no more than Rs.
10 an hour for additional labor. Labor costs of less than Rs. 10/hour will increase the objective value; labor costs of
more than Rs. 10/hour will decrease the objective value. Labor costs of exactly Rs. 10 will cause the objective
function value to remain the same.

We take the DUAL LPP as our reference: Shadow prices for resource i (denoted by xi) measures the marginal value
of this resource i.e. the rate at which W could be increased by (slightly) increasing the amount of this resource (bi)
being made available. The Simplex method identifies this shadow price by xi* [coefficient of the slack variable in (cj –
zj) row of the final simplex tableau of the DUAL LPP]..

Thus, in our case, the shadow prices of the two resources are as follows: - x1
x1* = Shadow price of Labour hour = 0 and x2* = Shadow price for Fund = 1.

Verification:

1. Let us relax the labour hour limitation by 1 unit i.e.

Maximize, W = 2 y1 + 1 y2
s.t. 2 y1 + 1 y2 <= 4 ; Labour Hour Limitation
3 y1 + 1 y2 <= 1 : Fund Limitation.
y1, y2 >= 0
Then the optimal solution results: W* = 1.

2. Let us relax the labour hour limitation by 2 units i.e.

Maximize, W = 2 y1 + 1 y2
s.t. 2 y1 + 1 y2 <= 5 ; Labour Hour Limitation
3 y1 + 1 y2 <= 1 : Fund Limitation.
y1, y2 >= 0
Then the optimal solution results: W* = 1.

3. Let us relax the fund limitation by 1 unit i.e.

Maximize, W = 2 y1 + 1 y2
s.t. 2 y1 + 1 y2 <= 3 ; Labour Hour Limitation
3 y1 + 1 y2 <= 2 : Fund Limitation.
y1, y2 >= 0
Then the optimal solution results: W* = 2.

4. Let us relax the fund limitation by 2 units i.e.

Maximize, W = 2 y1 + 1 y2
s.t. 2 y1 + 1 y2 <= 3 ; Labour Hour Limitation
3 y1 + 1 y2 <= 3 : Fund Limitation.
y1, y2 >= 0
Then the optimal solution results: W* = 3.

24
25