Idea of a Dual

Maximize 500X1 + 600X2

3X1 + 3X2 ≤ 27 Without solving the problem, can you give an upper
2X1 + 4X2 ≤ 32 estimate of Z ?
X1, X2 ≥ 0

Multiply constraint 2 by 300 to get 600X1 + 1200X2 ≤ 9600

Multiply constraint 1 by 200 to get 600X1 + 600X2 ≤ 5400
Multiply constraint 1 by 100, Multiply constraint 2 by 100 and
add to get 500X1 + 700X2 ≤ 5900
If we multiply constraint 1 by Y1 and multiply constraint 2 by Y2
and add. If 3Y1 + 2Y2 ≥ 500 and 3Y1 + 4Y2 ≥ 600 and Y1, Y2 ≥ 0,
then 27Y1 + 32Y2 is an upper estimate of Z.

A good estimate gives minimum value of 27Y1 + 32Y2

Given problem (Primal) Dual

Maximize 500X1 + 600X2 Minimize 27Y1 + 32Y2

3X1 + 3X2 ≤ 27 3Y1 + 2Y2 ≥ 500
2X1 + 4X2 ≤ 32 3Y1 + 4Y2 ≥ 600
X1, X2 ≥ 0 Y1, Y2 ≥ 0
Solution is (2, 7) Z = 5200
Minimize 27Y1 + 32Y2
3Y1 + 2Y2 ≥ 500
Maximize 500X1 + 600X2 3Y1 + 4Y2 ≥ 600
3X1 + 3X2 ≤ 27
2X1 + 4X2 ≤ 32 Y1, Y2 ≥ 0
Solve the dual. What is the objective
X1 , X 2 ≥ 0 function value of the dual at the optimum?
Write the dual of the problem

Maximize 6X1 + 8X2

Subject to
X1 + X2  10
2X1 + 3X2  25
X1 + 5X2  35
X1, X2  0
Maximize 500X1 + 600X2
Primal solution is (2, 7) Z = 5200
3X1 + 3X2 ≤ 27
2X1 + 4X2 ≤ 32 Dual solution is (400/3, 50) W = 5200
X1 , X 2 ≥ 0
When 27 becomes 28, the solution is (8/3,
Minimize 27Y1 + 32Y2 20/3) Z = 5333.33
3Y1 + 2Y2 ≥ 500 Increase in Z is 1333.33 = 400/3 = Y1 at
3Y1 + 4Y2 ≥ 600 optimum
Y1, Y2 ≥ 0
When 32 becomes 33, the solution is (3/2,
15/2) with Z = 5250. The increase is 50
What happens if the RHS
which is the value of Y1 at optimum
of the first constraint
becomes 28?
Maximize 6X1 + 8X2 Primal solution is (5, 5) Z = 70
Subject to Dual solution is (2, 2, 0) W = 70
X1 + X2  10
2X1 + 3X2  25 When 35 becomes 36, the solution is (5, 5) Z =
X1 + 5X2  35 70. Increase in Z is 0 = Y3 at optimum
X1 , X 2  0
Is it because the third resource was not fully
Minimize 10Y1 + 25Y2 + 35Y3 utilized?
Y1 + 2Y2 + Y3 ≥ 6
Y1 + 3Y2 + 5Y3 ≥ 8 Dual has two constraints and only two
variables will be in the solution. Is this true?
Y1, Y2, Y3 ≥ 0 Then the primal has three constraints. There
are only 2 variables. What happens?
Maximize 500X1 + 600X2
Can we read the dual solution from excel
3X1 + 3X2 ≤ 27 output of the primal? (without actually
2X1 + 4X2 ≤ 32 solving the dual)
X1 , X 2 ≥ 0
Concept of shadow price
Minimize 27Y1 + 32Y2
3Y1 + 2Y2 ≥ 500 Price of an extra unit of resource at
3Y1 + 4Y2 ≥ 600 optimum
Y1, Y2 ≥ 0
Marginal worth of a unit at optimum

Can we see the dual in the algebraic form

of simplex?
Maximize 500X1 + 600X2 Can we see the dual in the algebraic form
3X1 + 3X2 ≤ 27 of simplex?
2X1 + 4X2 ≤ 32
Primal solution is (2, 7) Z = 5200
X1 , X 2 ≥ 0
Dual solution is (400/3, 50) W = 5200
Minimize 27Y1 + 32Y2
3Y1 + 2Y2 ≥ 500   400
3Y1 + 4Y2 ≥ 600 𝑍 =5200 − 𝑋 − 5 0 𝑋4
3 3
Y1, Y2 ≥ 0
Relationship between Y1 and X3 as well as
between Y2 and X4
Economic Interpretation of the dual

Use both the examples

Explain Y3 = 0 using the second example

Marginal worth vs notional worth

New product idea and worth

Case: Auto Assembly

 Marginal worth vs notional worth

Maximize 500X1 + 600X2

3X1 + 3X2 ≤ 27
2X1 + 4X2 ≤ 32
X1 , X 2 ≥ 0

Worth of resources of product 1 = 400/3 x 2 + 40 x 2 = 500. I sell for 500.

Where is my profit?

You can consider your organization as a resource and hence the profit
comes. I buy these resources at the notional cost and want to minimize the
total cost of the resources. The constraint becomes 3Y1 + 2Y2 ≥ 500;
otherwise I wont produce. Finally it becomes equal.
 Sensitivity table in Excel output

 Dual in game theory formulation and capital investment example

Strategy for Stone paper Scissor

Player A
Stone 0 -2 3
paper 3 0 -2
Scissor -2 4 0
Let p1, p2, p3 be the proportion of times A plays the three strategies. If B consistently
plays stone, A’s profit will be 3p2 - 2p3. If B consistently plays paper, A’s profit will be -2p1
+ 4p3. If B consistently plays scissor, A’s profit will be 3p1 - 2p3. Since A and B are
“rational”, A will play in such a way to Maximize A’s minimum profit (because B would
allow minimum profit). A plays what is called “maximin’ strategy.
Maximize u
u ≤ 3p2 - 2p3;
u ≤ -2p1 + 4p3;
u ≤ 3p1 - 2p2;

p1 + p2 + p3 = 1.
p1, p2, p3 ≥ 0. u unrestricted in sign
Let q1, q2, q3 be the proportion of times B plays the three strategies. If A consistently
plays stone, B’s loss will be -2q2 + 3q3. If A consistently plays paper, B’s loss will be 3q1 –
2q2. If A consistently plays scissor, B’s loss will be -2q1 + 4q2. Since A and B are “rational”,
B will play in such a way to Minimize B’s maximum loss (because A would like to give
maximum loss to B). B plays what is called “minimax’ strategy.
Minimize v
v ≥ -2q2 + 3q3;
v ≥ 3q1 – 2q3;
v ≥ -2q1 + 4q2;

q1 + q2 + q3 = 1.
q1, q2, q3 ≥ 0. v unrestricted in sign
 capital Investment example

Maximize 44X1 + 70X2 + 35X3 + 35X4 + 88X5 + 35X6 + l3 – b3

12X1 + 54X2 + 6X3 + 6X4 +30X5 + 6X6 + l1 – b1 ≤ 35
3X1 + 10X2 + 6X3 + 2X4 +35X5 + 10X6 – 1.05l1 +1.05b1 + l2 – b2 ≤ 20
5X1 + 4X2 + 6X3 + 5X4 +10X5 + 4X6 – 1.05l2 +1.05b2 + l3 – b3 ≤ 20
0 ≤ Xj ≤ 1

Solution: X1 = X3 = X4 = X5 = X6 = 1; b1 = 25, b2 = 62.25, b3 = 75.36

and Z = 161.63

Dual solution is Y1 = 1.102, Y2 = 1.05, Y3 = 1, u1 = 22.62, u3 = 16.08,

u4 = 21.28, u5 = 8.17 u6 = 13.88 with W = 161.63