Prepared by Prof C Y Nimkar

SOLVING L. P. PROBLEM BY SIMPLEX METHOD

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MAXIMIZATION CASE

Example:

A firm is engaged in producing two products A and B. Each unit of A requires 2kg of raw material and 4
labour hours. Each unit of B requires 3 kg of raw material and 3 labour hours. Every week the firm has
the availability of 60 kg of raw material and 96 labour hours. One unit of A and B is priced at Rs.40 and
Rs.35 respectively. What quantity of Product A and B should be produced to maximize the sale,
assuming that any quantity produced can be sold?

STEP 1:

To write the objective function to be maximized and the constraints. Here the objective is to maximize
total sales.

Let X1 = quantity of product A to be produced

Let X2 = quantity of product B to be produced

Therefore, the sales function to be maximized is:

Z = 40 X1 + 35 X2

And the constraints are

2 X1 + 3 X2 <= 60

4 X1 + 3 X2 <= 96

X1, X2 > = 0

STEP 2:

To ensure that constraint values (i.e. the right hand side values in constrained inequalities) are non-
negative and then convert constraint inequalities into equalities.

Here, we have

2 X1 + 3 X2 + S1 = 60

4 X1 + 3 X2 + S2 = 96

S1 and S2 are called SLACK VARIABLES, showing surplus or slack resources company may have after
producing optimum quantity of A and B.

S1 and S2 can also be represented as quantities of ‘Imaginary products’, each requiring for its production
1 unit of only one resource and 0 units of other resources and whose sale contribution is 0. For example,
S1 is the quantity of first ‘Imaginary’ product where 1 unit of S1 requires 1 kg of raw material and 0
labour hours. Similarly, S2 is the quantity of second ‘Imaginary’ product where 1 unit of S2 requires 0 kg
of raw material and 1 labour hour. The selling price of S 1 and S2 is 0.

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Modify objective function by adding slack variables. Here the modified function will be:

Z = 40 X1 + 35 X2 + 0 S1 + 0 S2

STEP 3: Main body

To construct first Simplex table as follows:

Solution Coeffs in X1 X2 S1 S2 Quantity

Variables obj fn B
S1 0 2 3 1 0 60
S2 0 4 3 0 1 96
Cj 40 35 0 0 0
Zj 0 0 0 0 0
Cj – Zj 40 35 0 0 0

Please note:

1. Solution Variables are the products to be manufactured. The first Simplex table assumes
that products of interest will not be produced first but only ‘Imaginary’ products will be
produced first.

2. ‘Quantity’ column is the maximum value of constraint. It shows the quantity of products in
the solution to be produced. Since S1 requires one unit of raw material, we can produce 60
units of S1. Similarly, we can produce 96 units of S2.

3. Numbers under the column X1, X2, S1, S2 are the coefficients in constraint equations. They
are called ‘technological coefficients’. It means that if we wish to produce 1 unit of X1,
then 2 units of S1 and 4 units of S2 should be sacrificed.

4. Cj represent the sale earned per unit of each product. They are the coefficients of respective
products in the objective function.

5. Zj represents the sacrifice in sale if the solution variables are taken out in lieu of the
column variable. For example, we have seen in point no. 4 above that 2 units of S 1 and 4
units of S2 should be sacrificed if one unit of X1 is to be produced. Hence, we would
sacrifice sale = 0*2+0*4 = 0 by taking out S1 and S2 in lieu of X1.

6. Cj-Zj represents the net increase in sale by introducing one unit of column variable in
solution set. For example, we will gain Rs.40 if one unit of X1 is produced and lose Rs 0 by
taking out S1 and S2 out of the solution. Thus, the net gain will be Rs. 40.

Similarly, sale will be increased by Rs. 35 if one unit of X 2 is introduced and S1 and S2 are
taken out of the solution.

We will, therefore, prefer to introduce X1 in the solution set since it gives maximum gain.
Thus, X1 is called the ‘Incoming variable’. The column of incoming variable is called
‘Pivotal Column’.

7. We will now find out how many units of X1 can be produced without exceeding the
resource constraints. We have seen that for producing 1 unit of X 1 2 units of S1 should be

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sacrificed. Thus, for every 2 units of S1 we can produce 1 unit of X1. Therefore, we can
produce at the most 60/2 = 30 units of X1 without exceeding the capacity of raw material.

Similarly, we can produce at the most 96/4 = 24 units of X1 without exceeding the labour
hours capacity.

Thus, we can produce minimum between 30 and 24 units of X 1 without exceeding any
resource capacity. We will, therefore, decide to produce 24 units of X 1. Hence, we will
take out S2 from the solution set. Hence, the lowest non-negative ratio of
‘Quantity/technological ratios in pivotal column’ should be taken out from the solution set.
The reason that only non-negative ratios should be considered is that only non-negative
values are constraints.

The row pertaining to outgoing variable is called ‘Pivotal row’. The element on the
intersection of pivotal row and pivotal column is called ‘Pivotal’ element.

Solution Per unit X1 X2 S1 S2 Quantity B/a

Variables sale B
S1 0 2 3 1 0 60 60/2=30
S2 0 4 3 0 1 96 96/4=24
Cj 40 35 0 0 0
Zj 0 0 0 0 0
Cj – Zj 40 35 0 0 0


Pivotal column Pivotal element

STEP 4:

To construct next Simplex table as follows:

Divide the pivotal row by pivotal element. In our example the new row will be

Solution Per unit X1 X2 S1 S2 Quantity B/a

Variables sale B
X1 40 1 ¾ 0 ¼ 24

This row is known as transformed pivotal row.

STEP 5:

Construct other rows in the new table. This is done as follows:

Let us say we want to find out element in the first row & fourth column in the new table (i.e. row S 1 and column
X2). Then,

1. Select the element from old table at the corresponding cell position (i.e. element in first row and fourth
column in old table. This element is 3)
2. Draw perpendiculars from corresponding cell from old table on pivotal row and pivotal column. You will get
two elements. Let us call them (A) and (B). (Here (A) = 2 and (B) = 3)
3. Apply following formula:

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Element in new row

= (Corresponding element in old table) – {(A)*(B) / Pivotal element}
= (3) – {2 * 3 / 4}
= 3/2

You will get new table as follows:

Solution Per unit X1 X2 S1 S2 Quantity B/a

Variables sale B
S1 0 0(a) 3/2(b) 1(d) -1/2 (e) 12
X1 40 1 ¾ 0 ¼ 24
Cj 40 35 0 0 0
Zj 40(z1) 30(z2) 0(z3) 10(z4) 960(z5)
Cj – Zj 0 5 0 -10 -960

The calculations are shown below:

(a) = 2 - (2*4/4) (b) = 3 – (2*3/4) (d) = 1 – (2*0/4)

(e) = 0 – (2*1/4) (f) = 60 – (2*96/4)

Zj’s are calculated as follows:

Z1 = 0 * 0 + 1 * 40 Z2 = 3/2 * 0 + ¾ * 40 Z3 = 1*0 + 0*40 Z4 = -1/2*0 + ¼*40

Solution Per unit X1 X2 S1 S2 Quantity B/a

Variables sale B
S1 0 0(a) 3/2(b) 1(d) -1/2 (e) 12 (f) 12/(3/2)=8
X1 40 1 ¾ 0 ¼ 24 24/(3/4)=32
Cj 40 35 0 0 0
Zj 40(z1) 30(z2) 0(z3) 10(z4) 960(z5)
Cj – Zj 0 5 0 -10 -960

The current solution is X1 = 24 and S1 = 12. The value of objective function is 960 which is the value
obtained in ‘Quantity’ column except the negative sign.

Since one of the (Cj-Zj) is positive, we can further improve the sale to the extent of Rs 5/- per unit of X2.

STEP 6:

With the similar steps given above the next Simplex table will be as follows:

Solution Per unit X1 X2 S1 S2 Quantity B/a

Variables sale B
X2 35 0 1 2/3 -1/3 8
X1 40 1 0 -1/2 ½ 18
Cj 40 35 0 0 0
Zj 40 35 3.3 8.33 1000
Cj – Zj 0 0 -3.3 -8.33 -1000

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Since all (Cj-Zj) are non-positive, there is no further scope to increase the sale. Hence, this is the optimal
solution. The maximum sale is achieved by producing 18 units of X1 and 8 units of X2. The maximum
sale is Rs.1000/-