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Qunatitative Technbiques in Business
Qunatitative Technbiques in Business
A Linear equation in two variables is in the form ax + by = c, where a, b and c are constants and a and b≠0. The
solution of linear equation in two variables is the set of points on a line that satisfies the given equation. This can be done
by assigning values for x and solving for the corresponding values of y or by finding the intercept.
Example 1. Solve 5x + 3y = 15
Let y = 0 5x + 0 = 15
5x = 15
5 5
x=3
Exercise 1
Solution:
a) Elimination Method
4x + 2y = 8
x – 2y = 7 The first equation is multiplied by 2, so that by adding the two equations,
5x + 0 = 15 the y term in both equation will be eliminated.
5x = 15
5 5
x = 3
b) Substitution Method
Solve x in terms of y in one of the equations.
2x + y = 4
2x = 4-y
2 2
x = 4-y
2
The solution of equations 2x + y = 4 and x – 2y = 7, solved simultaneously, is the point (3, -2).
c) Graphical Method
Find the x and y intercept of the two equations.
2x + y = 4 x-intercept (2,0)
y-intercept (0,4)
x – 2y = 7 x-intercept (7,0)
y-intercept (0,-3½)
The intersection of the lines at (3, -2) is the solution of equation 2x + y = 4 and x – 2y = 7.
Exercise 2
A. Solve the following set of linear equations using elimination and substitution
method:
1. x + y = 4 and x – y = 2
2. 3x + y = 10 and x – 2y = 8
3. 5x + 4y = 9 and 9y – 2y = 7
Graph:
The solution includes all the points on the number lines less than 5, but not including 5. The hollow point shows
that 5 is not part of the solution.
Graph:
The solution includes all the points more than 7 including 7 since the inequality symbol is less than or equal to (≤).
Exercises 3
Example 1: Solve 3x + 2y ≤ 6
Solution: 3x + 2y ≤ 6
3x + 2y = 6
The simplex method of linear programming was developed by George B. Dantzig of Stanford University. It is a
repetitive optimizing technique. It repeats the process of mathematically moving from an extreme point to another point
until an optimal solution is reached.
Example 1:
The Margan Furniture makes two products: tables and chairs, which must be processed through assembly and
finishing departments. Assembly department is available for 60 hours in every production period, while the finishing
department is available for 48 hours of work. Manufacturing one tables requires 4 hours in the assembly and 2 hours in
the finishing. Each chair requires 2 hours in the assembly and 4 hours in the finishing. One table contributes Php80.00 to
profit, while a chair contributes Php 60.00. the problem is to determine the number of tables and chairs to make per
production period in order to maximize profit.
Solution:
time in assembly Ti m e i n f i ni s hi n g profit
Let x = number of table s 4 x 2 x 8 0 x
Let y = number of chair s 2 y 4 y 6 0 y
Before we convert the explicit constraints to equations, you may have the option of removing first the greatest
common factor in each inequality whenever possible, to simplify the coefficients. So, dividing each inequality by 2, (the
common factor) we have the program:
The initial table contains the coefficients of the objective in the Cj row. Note that the slack variables do not
contribute any profit, hence they have zero coefficients in the objective. The second row is composed of the
product, quantity (or constant) column and solution variables.
The initial table should begin with zero contributions to profit, entered in the Cj column. Since the
corresponding variables (with zero profit contribution) are S 1 andS2, then these variables should be the ones
entered in the product column.
We must add two more rows in the table, t5he Zj and Cj – Zj row is obtained by multiplying the profit
contribution in Cj column by each of the coefficients in the constraints, then add their products. Hence:
0 (30 2 1 1 0) = 0 0000
0 (24 1 2 0 1) = 0 0000
Zj = 0 0000
To computer for Cj – Zj row, subtract the entries in Zj row from Cj row entries.
80 60 0 0
- (0 0 0 0)
80 60 0 0
The column containing the greatest positive entry in the Cj - Zj is the optimum column. In our table, 80 is
the greatest positive, hence we encircle the column. If we devide 30 and 24 by 2 and 1 respectively, 30÷2 has a
smaller quotient, hence the first constraints row is the pivotal row.
Initial Table with the indicated optimum column and pivotal row.
Entering variable
C j 8 0 6 0 0 0
Prod Qty x y S 1 S2
0 S 1 3 0 2 1 1 0 Pivotal row
Outgoing
variable 0 S 2 2 4 1 2 0 1
Z j 0 0 0 0 0
Cj - Zj 8 0 6 0 0 0
Optimum column
C j 8 0 6 0 0 0
Prod Qty x y S 1 S2
8 0 x 1 5 1 ½ ½ 0 Replacing row
0 S 2
Z j
Cj - Zj
The second constraint row or S2 row is the row to be replaced. Since the numeral found below the pivot is 1 (in the
old row) we must multiply the replacing row by -1, (additive inverse of 1) and add the result to the row top be replaced in
order that the entry below the pivot becomes zero. Hence:
Computing S2 row
Replacing row
Row to be replaced
15(-1) + 24 = 9
1(-1) + 1 = 0
½(-1) + 2 = 1½ or 3/2
½(-1) + 0 = -½
0(-1) + 1 = 1
C j 8 0 6 0 00
Prod Qty x y S 1 S2
8 0 x 1 5 1 ½ ½ 0
3
0 S 2 9 0 / 2 - ½ 1
Z j
Cj - Zj
Table II
C j 8 0 6 0 0 0
P r o d Qty x y S 1 S2
8 0 x 1 5 1 ½ ½ 0
3
0 S 2 9 0 / 2 - ½ 1 Pivotal row
Z j 1200 8 0 4 0 4 0 0
Cj - Zj 0 2 0 -40 0
Optimum column
Divide 15 by ½ and 9 by 3/2 to locate the pivotal row. Since the lower quotient is 9 ÷ 3/2 = 6 so, the second
constraint row is the pivotal row and 3/2 is the pivot.
Again the variable above the optimum column is the entering variable and the variable to the left of the pivotal row
is the outgoing variable. We now reduce the pivot to 1 by dividing the pivotal row by 3/2 . (9 0 3/2 -½ 1) ÷ 3/2
= 6 0 1 -1/3 2/3
C j 8 0 6 0 0 0
Prod Qty x y S 1 S2
8 0 x
6 0 y 6 0 1 -1/3 2
/3 Replacing row
Z j
Cj - Zj
Table III (with new entries in the first constraint row or x-row)
Table I
C j 8 0 6 0 0 0
Prod Qty x y S 1 S2
0 S 1 3 0 2 1 1 0 Pivot row
0 S 2 2 4 1 2 0 1
Z j 0 0 0 0 0
Cj - Zj 8 0 6 0 0 0
Optimum column
Table II
C j 8 0 6
0 0 0
Prod Qty x y S 1 S2
8 0 x 1 5 1 ½ ½ 0 Replacing row
3
0 S 2 9 0 / 2 - ½ 1 Pivot row
Z j 1200 8 0 4 0 4 0 0
Cj - Zj 0 2 0 -40 0
Optimum column
Table III
C j 8 0 6 0 0 0
Prod Qty x y S 1 S2
2
8 0 x 1 2 1 0 / 3 -1 /3
6 0 y 6 0 1 -1/3 2
/3 Replacing row
100
Z j 1320 8 0 6 0 / 3 40/3
Cj - Zj 0 0 - 1 0 0 / 3 - 40/3
Exercises5
Solve by the simplex method by filling up the subsequent tables:
Table I 100 80 0 0
Cj Prod Qty x y S1 S2
Decision:
0 S1
0 S2
x = _______
Table II Zj
y = _______
Cj-Zj
Z = _______
100 x
0 S2
Table III Zj
Cj-Zj
100 x
80 y
Zj
Cj-Zj