P olytechnique University of the P hilippines

S to. Tomas Branch

LINEAR
PROGRAMMING:
Simplex
Method
CHAPTER 3

Jhun Jhun M. Quiatchon, MBA

 LEARNING
OBJECTIVES
• At the end of this chapter, the student should
be able to:
1. State the basic steps involved in the
simplex method
2. Demonstrate how to prepare simplex
tableau
3. Determine the optimal solution using the
simplex method
 • Simplex Method is appropriate when
numerous variables and constraints
are present.
Definition • It involves a repetitive process of
finding the optimal solution to a
problem
Basic Steps involved in the simplex method
1. Construct the objective function and constraints of the problem
2. Convert the explicit constraints from an equality to an equality
3. Prepare simplex tableau and compute for the value of �� , �� and
�� - �� .
4. Check the simplex tableau needs to be improved.
5. Determined the incoming column and the outgoing row.
6. Improve the table and repeat step 3
�� refers to the contribution margin
or profit contribution per unit of
product,

�� values are the amount of profit

that will be reduced if one unit of
any variable is added to the mix

�� - �� is the difference between the

contribution margin and the
expected reduction of one unit of
variable
BASIC
PROCEDURES IN
CONVERTING
CONSTRAINTS
TO EQUATIONS
 To convert the constraints to equations in the
maximization problem, consider the following
procedures
Maximization 1. Add a slack variable if the symbol used is ≤
Problem 2. Add a slack variable if the symbol used is =
3. Multiply the equation by negative 1 and add a
slack variable if the symbol sign is ≥
Slack Represents the unused resources needed to
fill the gap between the left and the right
Variable elements of the inequalities
 Max Profit: P= 40x +20y
Subject to: 4x + y ≤ 20
x + y = 20
x + 4y ≥ 20
Example
The linear programming problem will appear
as follows:
Max Profit: P= 40x +20y +0�1 + 0�2 + 0�3
Subject to: 4x + y + �1 = 20
x + y + �2 = 20
-x - 4y + �3 = -20
 Maximization of Profit (Simplex Method)
Jenny Furniture Shop produces two types of tables: an
elegant table and an ordinary table. The table, whether
elegant or ordinary, passes through two departments,
namely, the assembly department and finishing
department . Each elegant table requires 8 hours of
assembly work and 4 hours of finishing task. Each
ordinary table requires 6 hours in the assembly
department and 2 hours in the finishing department.
Every production period , the shop has 480 hours of
assembly time and 200 hours of finishing time. The
elegant table contributes Php700 to the company’s profit,
while the ordinary table has a profit of Php500

Required: Using the simplex method of linear

programming, determine the number of units needed to
produced to maximized profits
Step 1
Let x = number of elegant tables
y = number of ordinary tables

Max Profit: P = Php700x +Php500y

Subject to: 8x + 6y ≤ 480
4x + 2y ≤ 200
x, y ≥ 0
Step 2

Max Profit: P = Php700x +Php500y +��1 + ��2

Subject to: 8x + 6y + �1 = 480
4x + 2y + �2 = 200
 Max Profit: P = Php700x +Php500y +��1 + ��2
Step 3 Subject to: 8x + 6y + �1 = 480
4x + 2y + �2 = 200
Table 1. Initial Table
�� 700 500 0 0
Product Solution x y �1 �2
Quantity
0 �1 480 8 6 1 0
0 �2 200 4 2 0 1
�� 0 0 0 0 0
�� -�� 700 500 0 0

The value of �� is computed as follows:

�1 0 (480 8 6 1 0) = 0 0 0 0 0
�2 0 (200 4 2 0 1) = 0 0 0 0 0
The value of �� -�� is computed as follows:
�� 700 500 0 0
- �� 0 0 0 0
�� -�� 700 500 0 0
Step 4

If there is a positive value in �� -�� row, the table needs to be improved.

However, once the �� -�� values are already equal to zero or negative, an
optimal solution has been reached already.

In this problem, there are positive values in the �� -�� row (700 and 500): hence,
the table needs to be improved.
Step 5

• To improve the table, determine the incoming column and outgoing

row.
• In a maximization problem, the incoming column, or the so-called
optimum column, is the column that has the highest positive value in
the �� -�� row.
• Because 700 is the highest positive value, the incoming variable is x.
After determining the incoming column, the outgoing row shall then be
determined by dividing the values in the quantity column with the
pivot value of the incoming column.
• The pivot value is the intersectional element of the incoming column
and the corresponding row. The variable with the lowest value is the
outgoing variable.
• The determination of the outgoing variable appears as follows:

Product Solution Pivot Value Quotient

Quantity

�1 480 ÷ 8 = 60
�2 200 ÷ 4 = 50
• �2 has the lowest value; thus, it is the outgoing variable that is replaced by variable x
as the incoming variable.
�� 700 500 0 0

Product Solution Qty. x y �1 �2

0 �1 480 8 6 1 0
0 �2 200 4 2 0 1
�� 0 0 0 0 0
�� −�� 700 500 0 0
incoming variable outgoing variable
Step 6

Table 2. Table Before Improvement

�� 700 500 0 0

Product Solution Qty. x y �1 �2

700 x
0 �1
��
�� −��
When the tableau is improved, there will be new values for the variables. The new
values of the incoming variable x that will replace �2 are determined first as follows:
Old Values of Pivot Value Quotient
Outgoing Variable
(�2 )

200 ÷ 4 = 50
4 ÷ 4 = 1
2 ÷ 4 = ½
0 ÷ 4 = 0
1 ÷ 4 = 1/4
Table 3. After Computing for the Values of the Incoming Variable X
�� 700 500 0 0

Product Solution Qty. x y �1 �2

700 X 50 1 ½ 0 ¼
0 �1
��
�� −��
When the given values in the problem are not expressed in decimals, the
computed values for the incoming variable should be expressed in fractions to
facilitate the computation. The new values of �1 are determined as follows:
Old Values of Pivot Value New Values of New Values of
Retained of Incoming Retained
Variable (�1 ) Retained Variable (x) Variable (�1 )
Value (�1 )
480 - 8 X 50 = 80
8 - 8 X 1 = 0
6 - 8 X ½ = 2
1 - 8 X 0 = 1
0 - 8 X 1/4 = -2
Table 4. After Computing for the New Values of �1
�� 700 500 0 0 In table 4, the �� −��
row still has a non-
negative value of 150.
Product Solution Qty. x y �1 �2
Hence, the optimal
solution has not been
700 X 50 1 ½ 0 ¼
reached yet. The table
still needs improvement.
0 �1 80 0 2 1 -2
�� 35,000 700 350 0 175
�� −�� 0 150 0 -175
Step 7
To improve the table, repeat step 3. The incoming variable is y, as it has the
non-negative value. The outgoing variable is determined as follows:
Product Solution Pivot Value Quotient
Quantity

X 50 ÷ ½ = 100
�1 80 ÷ 2 = 40

The outgoing variable, therefore, is �1 because it has the lowest value.

Table 5. Before Improvement for the Second Iteration

�� 700 500 0 0

Product Solution Qty. x y �1 �2

500 Y
700 x
��
�� −��
The new values of the incoming variable y, which will replace �1 , are determined first
as follows
Old Values of Pivot Value of Values of Incoming
Outgoing Variable Incoming Variable
(�1 ) Variable (y)

80 ÷ 2 = 40
0 ÷ 2 = 0
2 ÷ 2 = 1
1 ÷ 2 = ½
-2 ÷ 2 = -1
Table 6. After Computing for the Values of Variable y

�� 700 500 0 0

Product Solution Qty. x y �1 �2

500 Y 40 0 1 1/2 -1
700 x
��
�� −��
Old Values of Pivot Value New Values of New Values of
Retained of Incoming Retained
Variable (x) Retained Variable (y) Variable (x)
Variable (x)
50 - ½ X 40 = 30
1 - ½ X 0 = 1
½ - ½ X 1 = 0
0 - ½ X ½ = -1/4
1/4 - ½ X -1 = ¾
Table 7. After Computing for the Values of Variable x

�� 700 500 0 0 This time, the �� −�� row does

not have positive values
anymore. This indicates that
the optimal solution has been
Product Solution Qty. x y �1 �2 r e a c h e d a l r e a d y. T h e
recommendation is to produce
500 Y 40 0 1 1/2 -1 40 units of product y and 30
units of product x to realize a
700 x 30 1 0 - ¾ profit of Php41,000.00. This
1/4 result is the same with the
graphical approach as
�� 41,000 700 500 75 25 discussed in Chapter 2.
�� −�� 0 0 -75 -25
Summary
Table 8. Initial Table

�� 700 500 0 0

Product Solution x y �1 �2
Quantity

0 �1 480 8 6 1 0

0 �2 200 4 2 0 1

�� 0 0 0 0 0

�� -�� 700 500 0 0

Table 9. First Iteration
�� 700 500 0 0

Product Solution Qty. x y �1 �2

700 X 50 1 ½ 0 ¼

0 �1 80 0 2 1 -2
�� 35,000 700 350 0 175
�� −�� 0 150 0 -175
Table 10. Second Iteration

�� 700 500 0 0

Product Solution Qty. x y �1 �2

500 Y 40 0 1 1/2 -1
700 x 30 1 0 - ¾
1/4
�� 41,000 700 500 75 25
�� −�� 0 0 -75 -25
 Minimization of Cost(Simplex Method)
To operate the newly imported state of the art machinery recently
purchased by ABC Company, two types of fuels are needed namely,
Fuel A and Fuel B. The machine specifications and requirements
show that for every one hour of production time each gallon of
Fuel A emits 6 units of chemical gas and generated a mechanical
energy equivalent to 8 horsepower. The cost Ph320. In similar
manner, each gallon of Fuel B emits 10 units of chemical gas
generates 8 horsepower of mechanical energy. This costs Php300.
The maximum number of units of such type of chemical gas
allowed by the government to be emitted by such type of
machinery is 30 units. The operating activities of the company
require atleast 32 horsepower of mechanical energy per hour.
Required: Using the simplex method, determine the number of
gallons of Fuel A and Fuel B that are needed to operate the
machine at the lowest possible cost
 Following procedures are done to convert the
constraints to equation
1. Add slack variable if the symbol used is ≤
Minimization
2. Add an artificial variable if the symbol
Problem used is =
3. Subtract a slack variable and add an
artificial variable if the symbol sign is ≥
 Prevents the slack variable from becoming a
zero and prevents an equality constraints from
resulting in an constant zero.
Artificial
Variable It is equal to the power of the ten greater than
the coefficient value found in the objective
and constraints
 Min total cost: C= 10x +20y
Subject to: 4x + y ≥ 10
3x + y ≤ 10
x + y = 10
Example
The linear programming problem will appear as
follows:

Min total cost: C= 10x +20y +0�1 + 0�2 + 100�1 + 100�2

Subject to: 4x + y - �1 + �1 = 20
3x + y + �2 = 12
x + y + � = 10
Step 1
Let x = number of gallons of Fuel A to be used to operate the machine
y = number of gallons of Fuel B to be used to operate the machine
Min Total Cost: C = Php320x +Php300y
Subject to: 6x + 10y ≤ 30
8x + 8y ≥ 32
x, y ≥ 0

Step 2

Min Cost: C = Php320x +Php300y +��1 + ��2 + 1,000�1

Subject to: 6x + 10y + �1 = 30
8x + 8y - �2 + �1 = 32
 �� 320 300 0 0 1,000

Product Solution Qty. X Y �1 �2 �1

0 �1 30 6 10 1 0 0
1,000 �1 32 8 8 0 -1 1
�� 32,000 8,000 8,000 0 -1,000 1,000
�� −�� -7,680 -7,700 0 1,000 0

• The highest negative value in the �� −�� row is the incoming variable, which is
variable y with -7,700. The outgoing variable is determined as follows:
Product Solution Quantity Pivot Value Quotient
�1 30 ÷ 10 = 3
�1 32 ÷ 8 = 4
Old Values of Pivot Value New Values of New Values of
Retained of Incoming Retained
Variable (A1) Retained Variable (y) Variable (y)
Variable
(A1)
32 - 8 X 3 = 8
8 - 8 X 6/10 = 3 1/5
8 - 8 X 1 = 0
0 - 8 X 1/10 = -4/5
-1 - 8 X 0 = -1
1 - 8 X 0 = 1
The outgoing variable �1 which has the smaller quotient. The improved table appears as
follows:
Table 12. First Iteration
�� 320 300 0 0 1,000

Product Solution Qty. X Y �1 �2 �1

300 y 3 6/10 1 1/10 0 0

1,000 �1 8 3 1/5 0 -4/5 -1 1
�� 8,900 3,380 300 -770 -1,000 1,000
�� −�� -3,060 0 770 1,000 0
The highest negative value is variable x. It is the incoming variable. The outgoing
variable is determined as follows:

Product Solution Quantity Pivot Value Quotient

y 3 ÷ 6/10 = 5
�1 8 ÷ 3 1/5 = 2 1/2
The outgoing variable is �1 which has the smaller quotient. The improved table appears
as follows:
Table 13. Second Iteration
�� 320 300 0 0 1,000

Product Solution Qty. X Y �1 �2 �1

320 X 2½ 1 0 -1/4 -5/16 5/16

300 y 1½ 0 1 -1/4 3/16 -3/16
�� 1,250 320 300 -155 -43 ¾ 43 ¾
�� −�� 0 0 155 43 ¾ 956 ¼
Since the �� −�� column does not contain negative values, this indicates that the
optimal solution has been achieved. Table 13 shows that the company should use 2.5
gallons of Fuel A (X) and 1.5 gallons of Fuel B (Y); this will be the minimum total cost
that the company will incur to operate the state of the art machine.