Chapter 2

Matrix Algebra and Its Application

Matrix Definition
A matrix is a rectangular array of real numbers arranged in m rows & n columns. It is symbolized
by a bold face capital letter enclosed by a bracket or parentheses.
A=(aij) = a11 a12 a13 ..…..a1n
a21 a22 a23 ……...a2n
.
.
am1 am2 am3 …….amn m = represents number of row
n = represents number of column
Each number appearing in the array is said to be an element or component of the matrix. Element
of a matrix are designated using a lower case form of the same letter used to symbolize the matrix
itself. These letters are subscripted as aij, to give the row & column location of the element with in
the array. The first subscript always refers to the raw location of the element; the second subscript
always refers to its column location. Thus, component a ij is the component located at the
intersection of the ith raw and jth column.

Importance of Matrices
Matrices provide a most convenient vehicle for organizing and storing large quantities of data.
Because the basic idea is to organize the data, we cannot over emphasize the importance of the
location of each number with in the matrix. It is not simply a matter of putting numbers in to rows
and columns; each row-column location within each matrix carries with it special interpretation; a
matrix is, in essence, a tool for organizing vast quantities of data. Matrices are used to represent
complex systems and operations by compact entities.
Matrix representations are possible
- Transportation matrix
- Distance matrix
- Cost matrix
- Brand switching
Dimensions and Types of Matrix

If a matrix has “m” rows and “n” column, it is known as a matrix with “m” by “n” or “mxn”
diminutions or order.

Therefore the order of the matrix represents the number of rows and columns.

Eg. B = 3
-2 4 5 find the order it is a 3 by 4
4 6 7 6
10 8 9 -11
Types of Matrix
1. Vector or Special Matrix: - is a matrix which has persistently a single row or column (1xn or
mx1)
 A vector matrix with only one row is known as Row vector.

E.g. A = a11 a12 a13 a14 …an =1xn B= 3 9 10 =1x3

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  A vector matrix:-with only one column is called Column Vector.

Eg. D = a11 E= 4
a21 9
a31 mx1 6 3x1
.
am1
2. Square Matrix: - a matrix with equal No of rows and columns it is nth ordered matrix.
E.g. A= a11 a12 B= 5 -11 -12
a21 a22 2by2 6 -9 10
5 2 19 3 by 3
3. Zero (null) matrix :-is a matrix with every of the elements having zero values and is denoted
represented by 0
E.g. A = 0 0 B = 0 0 0
0 0 2x2 0 0 0 3x3
Null vector:- a row or column vector whose elements are all zero is called a null vector and is also
denoted by 0
4. Identity or unit matrix :- it is a square matrix with the main diagonal elements having a value
of one and the off diagonal elements having the value of zero

E.g. A= 1 0 B= 1 0 0
0 1 2x2 0 1 0
0 0 1 3x3
 Elements which don’t exist in the main diagonal are off-elements.
5. Equal Matrix: - if two or more matrices have the same order or damnation and corresponding
elements have the same value these matrices said to be equal.
E.g. A = 2 4 3 B= 2 4 3
5 6 9 = 5 6 9
6. Scalar Matrix: - is when a given matrix has a single element is called a scalar matrix.
Alternatively a scalar is a 1x1 matrix e.g. C = 10
Scalar Number is a constant number without a parenthesis is called scalar.
E.g. A = 4 or any constant k is a scalar B=6
7. Transposition Matrix: - the transpose of an mxn matrix Denoted by A’ (reads as A prime or
A transpose) is an nxm matrix obtained by interchanging the rows and columns of A, that is
the ith row of A becomes the jth column of A’.
Eg. 4 5 A’= 4 3 5
3 1 5 1 0 2x3
5 0 3x2
8. Sub Matrix: - given any mxn matrix A, if all but r rows and s columns of A are deleted. The
resulting matrix of order rxs is called a sub matrix of A.
Eg, A = 3 5 7 if we delete the 3rd row and the 3rd column of A, we
8 2 1 obtain B = 3 5
3 2 1 3x3 8 2
9. Diagonal Matrix:- A square matrix with at least one none zero element on the main diagonal
(running from the upper-left-hand corner to the lower-right- hand corner and zero else-where is
called Diagonal Matrix.
E.g. A = 2 0 B = -2 0 0
0 3 2x2 0 5 0
0 0 1 3x3

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 Matrix Operations and Properties
Matrix is well on the three mathematical operations (+, -, x)
a. Matrix Addition
Matrix Addition:- two or more matrices can be added, if and only if they have the same
dimension. When this dimensional requirement is met the matrices are said to be conformable for
addition. In addition the corresponding elements will be added.
e.g. A = 4 5 7 B= 3 5 11
6 9 12 2 3 7 2x3
2x3
Find A+B A+B = 4+3 5+5 7+11 = 7 10 18
6+2 9+3 12+7 8 12 19
The sum of the matrix is the same resulting dimension
E.g.2.1 Suppose the purchase price and delivery cost of a product A, B, &C per unit are given by
the table below. If the supplier decides to increase the purchase price by 0.5 birr per unit and deliver y
cost increases by 0.1 birr per unit, write the matrix that describes the new unit prices and costs.
A B C
Purchas Price 8 5 6
Delivery Cost 9 1 0.5
Solution
Original purchase price and delivery cost Per unit O = 8 5 6
matrix is 9 1 0.5
Product A B C Matrix form of increase in price & cost
Increase in purchase price 0.5 0.5 0.5 I = 0.5 0.5 0.5
Increase in distribution cost 0.1 0.1 0.1 0.1 0.1 0.1
The new purchase price and delivery cost is the sum N = O + I = 8+0.5 5+0.5 6+0.5
of O and I Matrix equal to N matrix 9+0.1 1+0.1 0.5+0.1
N = 8.5 5.5 6.5
9.1 1.1 0.6
Properties of matrix addition
 For mxn matrices A, B and C, the following properties hold
 Closure property: A+B is again an mxn matrix.
 Associative property: (A+B)+C = A+(B+C)
 Commutative property: A+B = B+A
 Additive identity: the mxn matrix consisting of all zeros has the property that A+0 = A
 Additive inverse: the mxn matrix (-A) has the property that A+ (-A) = 0
b. Matrix Subtraction
Matrix subtraction follows the same principle as matrix addition except that C= A-B; that is, we
subtract the elements of B from the corresponding elements of A to obtain C, provided that A & B
are the same order or dimension.

e.g. M = 2 5 N= 8 7
3 9 2x2 6 10 2x2
Find M-N M-N = 2-8 5-7 = -6 -2
3-6 9-10 -3 -1 2x2
Find N-M N-M = 8-2 7-5 = 6 2
6-3 10-9 3 1 2x2

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In matrix subtraction we do not have both commutative and associative laws
i) A-B ≠ B-A ii) A-(B-C) ≠ (A-B) – C
E.g.2.2Abeba has three stores A, B & C. Her stock levels for Dresses, Skirts and Blouses are given
by the matrix.
Stock level at each store Her sales matrix for the week
Items A B C A B C
Dresses 29 51 19 15 12 6
Skirts 31 28 32 20 16 19
Blouses 40 17 29 19 8 14
What are the current stock levels?
Solution
Initial stock level matrix; I = 29 51 19 One week sales matrix; S = 15 12 6
31 28 32 20 16 19
40 17 29 19 8 14

The current stock level matrix (C) is I – S = 29-15 51-12 19-6

31-20 28-16 32-19
40-19 17-8 29-14
14 39 13
= 11 12 13
21 9 15
c. Matrix Multiplication
i. By a Constant (Scalar) Multiplication of a Matrix

A matrix can be multiplied by a constant by multiplying each component in the matrix by a constant.
The result is a new matrix of the same dimension as the original matrix.

If K is any real number & A is an M x n matrix, then the product KA is defined to be the matrix
whose components are given by K times the corresponding component of A; i.e.

KA = K aij (m x n)

e.g. R = 5 9 Find 3R? ; 3R = 5x3 9x3 = 15 27

-5 10 -5x3 10x3 -15 30
E.g.2.3 A builder builds a block of 12 identical flats; each flat is to contain 1 table, 4 chairs, 2 beds
and 1 wardrobe if F = 1 4 2 1 is the matrix representing the furniture in one flat, what in terms
of F, is the matrix representing the furniture in all flats?
Properties of scalar Multiplication
 For mxn matrices A&B and for Scalars k & c the following properties hold.
 Closure property:- kA is again an mxn matrix
 Associative property:- (kc)A = k(cA)
 Distributive property:- k(A+B) = kA + kB scalar multiplication is distributive over matrix
addition (k+c)A = kA + cA matrix multiplication is distributive over scalar addition
 Identity property:- 1A =A number one is an identity element under scalar multiplication.
ii. Vector by Vector Multiplication
 Each component of a raw vector is multiplied by the corresponding component of column vector
to obtain a result known as partial product

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 The sum of all partial product is call Dot/ Inner
 The product of the two vectors result a single number (scalar) not a vector or a matrix with m
by n dimension, when raw vector multiplied by column vector
Notation: A = a11 a12 a13 a14 …an =1xn X = 2 3 6 1x3 Find XY?
a11
a21 Y= 4 XY = 2x4+3x(-2)+6x1
a31 -2 = 8-6+6 is the partial Product
. 1 3x1 = 8 is Dot/ Inner
am1 mx1
8 12 24
YX = 4 X= 2 3 6 =
4x2 4x3 4x6 -4 -6 -12
-2 =
-2x2 -2x3 -2x6 2 3 6
1 3x3
1x2 1x3 1x6 3x3

E.g.2.4 Star business group sales products x1 , x2 &x3 at a price of br. 20, br. 10, & br. 30 per unit
respectively. If the quantity of x1 , x2 &x3 :- 50, 60 &40 units respectively.
a) Write this in a matrix form Price (P) 1by3 and Quantity (Q) 3by1order?
b) What is the revenue for x1 , x2 &x3 (PQ)?
c) What is the total revenue of star business?
iii. Matrix by Matrix Multiplication
If A & B are two matrices the product AB is defined if and only if the number of column of A is
equals to the number of rows in B. if this is fulfill, we say that the two matrices are conformable for
multiplication.
General Notation: if A is a matrix with mxn dimension and B is nxp dimension matrix, then C
equals to AB I a matrix with with mxp order, C ij is found by multiplying the ith row of A in to jth
column B.
Important Notice
1. The number of columns of A is equals to number of rows of B
2. The matrix C has the order mxp, where
m is the number of rows of A and
p is the number of columns of B
3. The elements of C are found by multiplying raw vector of A by the column vector of B

e.g. A = 2 5 B= 4 3 1 Check conformability

1 0 2x2 2 0 2 2x3 Find AxB?
E.g.2.5 Africa business group has three stations at three cities of Ethiopia: Addis, Jimma and
Hawassa. The quantity sold and price per unit of each goods sold is seen as follows.
Cities Quantity Sold
Stations Addis Jimma Hawassa
#1 200 150 160
#2 400 120 110
#3 500 240 260
Price per unit at each City 250 280 270
a) Write the problem in matrix form Quantity (Q) 3x3 and Price (P) 3x1 order?
b) What is the sales revenue at each station? using QP

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 c) What is the sales revenue at each city?

Solution
a) 200 150 160 250
Q= 400 120 110 P = 280
500 240 260 3x3 270 3x1
b) QP = 200 150 160 200x250+ 150x280 +160x270
250 400x250+ 120x280 +110x270
400 120 110 280
500 240 260 500x250+ 240x280 +260x270
270 3x1
3x3 =
= 50,000+ 42,000 +43,200 135,200 #1 revenue
100,000+ 33,600 +29,700 163,300 #2 revenue
125,000+ 67,200 +70,200 3x1 = 262,400 3x1 #3 revenue
c) Each cities revenue cannot be determined using matrix rather we can determined in the other way
Properties of Matrix Multiplication
1. Matrix multiplication is not necessarily commutative; that is, in general, AB ≠ BA. Therefore,
the order in which the matrices are multiplied is very important. AB means that A is post
multiplied by B or B is pre multiplied by A.
2. Even if AB and BA exist, the resulting matrices may not be of the same order. Thus, if A is mxn
and B is nxm AB is mxm where as BA is nxn, hence of different order.
3. Even if A and B are both square matrices will not be necessarily equal

e.g. A = 4 7 B= 1 5 AB = 46 76 BA = 19 17
3 2 6 8 15 31 48 58
AB ≠ BA an example of AB = BA is when both A&B are identity matrices.

4. A row vector post multiplied by a column vector is a scalar

e.g. A = -2 3 B= 7 4 AB = (-2x7) + (3x5) + (4x8)

1x3 5
8 3x1 AB = -14 + 15 + 32 = 33
5. A column vector post multiplied by a row vector is a matrix

e.g A = 3 B = -1 12 9 AB = 3x1 3x12 3x9 = 3 36 27

7 1x3 7x1 7x12 7x9 7 84 49
10 3x1 10x1 10x12 10x9 10 120 90 3x3
a) Which is a matrix of order 3x3; Note that the preceding matrix is symmetrical.

6. A matrix post multiplied by a column vector is a column vector

e.g. A =
2 3 B= 9 AB = (2x9) + (3x10) = 48
1 4 2x2 10 2x1 -(1x9) + (4x10) 49
7. A row vector pot multiplied by a matrix is a row vector
8. Matrix multiplication is associative; that is (AB)C = A(BC); where A is mxn, B is nxp and C is
PxK

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9. Matrix multiplication is distributive with respect to addition; that is A(B+C) = AB + AC and
(B+C)A BC + CA

Inverse of a Matrix
If A is a square matrix of order n, then an inverse of a square matrix A, denoted by A-1 (read A
inverse) of the same order n is said to be the inverse of A, if and only if A x A-1 = I = A-1 x A
Two square matrices are inverse of each other, if their product is the identity matrix.
AA-1 = A-1 A = I
That is, whether A is pre or post multiplied by A-1 , the product will be the same identity matrix.
This is another exception to the rule that matrix multiplication is commutative.
All square matrices have no inverse. If a matrix has an inverse, it is said to be invertible or non-
singular. A matrix that doesn’t have an inverse is said to be singular or no- invertible. An
invertible matrix will have only one inverse; that is, if a matrix does have an inverse, that inverse
will be unique.
The Following Points are worth Noting

1. Note every square matrix has no inverse queerness is a necessary (pre) condition but not a
sufficient condition, for the existence of an inverse.
2. If A-1 does exist, then the matrix A can be regarded the inverse of A-1 , just as A-1 is the
inverse of A. in short A & A-1 are inverses of each other.
3. If A is nxn, then A-1 must also be nxn; otherwise it cannot be conformable for both pre and
post multiplication.
4. The identity matrix produced by the multiplication will also be nxn.

Determining the Inverse

There are different ways of determining inverse of a matrix the following will discuss in this
chapter. 1) Short Cut Method and 2) Gauss Jordan Method
1. The Short Cut Method
This method is primary used to determine inverse of 2x2 order matrixes only; which means it
cannot be applied for more than 2x2 order matrices.
2. Gauss Jordan Method
The Gauss Jordan method involves applying elementary row operation to find the inverse. The
Gauss Jordan method starts by:
1. Write the given matrix as the left and corresponding unit matrix at the right.
2. Changing the given matrix in to Identity matrix and Identity matrix in to inverse.
3. Carry out row operation to do this.
Steps to change the given matrix in to identity matrix & to get the inverse in the place of
identity matrix using Gauss Jordan method

1. Find one (1) at the top left corner of the give matrix using appropriate elementary row
operations.
2. Use the multiple of the 1st row by some k to get zero in all places below the one obtained in
step 1 (or find zero (0) below one that we obtained in step one using the multiple of some non-
zero constant k)
3. Deletes ideally the top row and first column of the matrix and repeat step 1&2 on the sub
matrix.
4. Continuous this process step 1-3 until you get unit matrix in place of the original matrix.
In a matrix Algebra there are 3 types of row operations.
i. Any pair of row in a matrix may be interchanged /Exchange operations/. Interchanging rows.

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 ii. A row can be multiplied by any non-zero real number /Multiple operations/. The multiplica tio n
of any row by a non-zero number.
iii. A multiple of any row can be added to any other row /Add-A-Multiple operations/. The addition
/subtraction of (a multiple of) one row to/from) another row.
a) Inverse of 2x2 Order Square Matrix
To determine the inverse of 2x2 order matrix we can use the short cut method and Gauss Jordan
methods. First we can determine the determinant of the matrix to check whether the given matrix
has an inverse or not because every square matrix has no inverse.
Determinant: is the difference of the product of diagonal elements.

main diagonal elements Det(A) = a11 xa22 – a21 xa12


A= a11 a12  If Det (A) is not equal to zero the matrix has an inverse.
a21 a22 2by2 (it is invertible or it is non-singular)
 If Det (A) is equal to zero the matrix has no inverse.
(it is not invertible or it is singular)
e.g. A = 1 2 B= 3 2 Short cut method of determining the inverse of a 2x2
1 2 1 1 matrix is
Find inverse of matrix A & B use both A-1 = 1/ Det (A) a22 -a12
short cut & Gauss Jordan methods -a21 a11

b) Inverse of Square Matrix of Order 3

E= 3 1 2 Find the determinant of matrix E using Cramer’s rule to check
4 0 1 whether it has an inverse or not
1 1 2 3x3 Find the inverse of matrix E using the Gauss Jordan method
Finding the determinant using Cramer’s rule 3 1 2 3 1
Det(E) = 3x0x2+1x1x1+2x4x1 – (1x0x2+1x1x3+2x4x1) 4 0 1 4 0
Det(E) = 0+1+8 – (0+3+8) = 9-11 = -2 1 1 2 1 1
The determinant is not equal to zero; so, it has an invers
Change to I/E-1
3 1 2 1 0 0
4 0 1 0 1 0
1 1 2 0 0 1
Step1: Find 1 on R1C1 3 to 1 Step4: Find 0 on R1C2&R3C2 1&-2 to 0
 Inter change R1 & R3  -1R2 + R1 = R1
 2R2 + R3 = R3
C1 C2 C3
R1 1 1 2 0 0 1 1 0 1/4 0 1/4 0
R2 4 0 1 0 1 0 0 1 7/4 0 -1/4 1
R3 3 1 2 1 0 0 0 0 -1/2 1 -1/2 -1
Step2: Find 0 on R2C1&R3C1 4&3to 0 Step5: Find 1 on R3C3 -1/2 to 0
 -4R1 + R2 = R2  Multiply R3 by -2 = R3
 -3R1 + R3 = R3
1 0 1/4 0 1/4 0
1 1 2 0 0 1 0 1 7/4 0 -1/4 1
0 -4 -7 0 1 -4 0 0 1 -2 1 2
0 -2 -4 1 0 -3
Step3: Find 1 on R2C2 -4 to 1 Step6: Find 0 on R1C3&R2C3 1/4&7/4 to 0
 Divide R2 by -4 (R2/-4) = R2  -1/4R3 + R1 = R1
 -7/4R3 + R2 = R2

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 1 1 2 0 0 1 1 0 0 1/2 0 -1/2
0 1 7/4 0 -1/4 1 0 1 0 7/2 -2 -5/2
0 -2 -4 1 0 -3 0 0 1 -2 1 2

Matrix Application for Solving Linear Equation System

Under this section we discuss how to solve the linear equation system by applying matrix algebra.
There are two major methods to solve the linear equation systems using the application of matrix
algebra. These are the Inverse method and Gaussian method
Case1:- Inverse Method
 n by n Linear Question System
n by n means that the linear equation system have equal number of equations and unknown
variables. Which means n = No of equations and n = No of unknown variables; and then
determining the value of unknown variables by using inverse method.
e.g. 2x1 + 3x2 = 10
3x1 – 4x2 = 5
This is the case where the number of equations is equal with the number of variables.
Steps we need to follow using the inverse method to determine the values of the unknown
variables.
Step1: - Change the system of linear equation in to a matrix form
Step2: - Find the inverse of the coefficient matrix.
Step3: - Multiply the inverse of coefficient matrix with the column vector of constant.
Look at the above example it should be 2 3 x1 10 b-Vector of
written Constant
AX = b where A= Coefficient Matrix 3 -4 x x2 = 5
X= Unknown Variables
b= Vector of Constant A –coefficient matrix X-Unknown
Variables
e.g. x + 2y = 14
-2x + 3y = 21 Required: Find the value of x & y using inverse method.

Case 2: Gaussian Method

I. n by n linear equation system
To determine the value of the unknown variable using the Gaussian method following these steps
worth important.
Step1: - change the system of linear equation in to a matrix form.
Step2: - Augment the coefficient matrix with the vector of constants.
Step3: - Change the Coefficient matrix in to identity form by applying elementary row operations
and apply the same on the vector of constant.
Step4: - The resulting values of the vector of constants will be the solution or the value of
unknown variables.
e.g. 1 2x+3y = 4 e.g.2 x+y = 3 e.g.3 x+y = 6
-x+2y = 6 2x+2y = x+y = 10 Find x & y using the Gaussian
6 method
Summary
i) An “n by n” matrix with unique solution
e.g. 1 0 0 3
0 1 0 8
0 0 1 5

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 ii) A row is all zeros including the constant column, indicate there are unlimited/infinite
number of solution
e.g. 1 0 0 -11
0 1 0 3
0 0 0 0
iii) A row that is all zeros except in the constant column, indicating that there are no solution.
e.g. 1 0 0 8
0 1 0 11
0 0 0 4
Exercise (Home Work)
1) x+2y -3z= -6 2) x +y +z = 6 3) 2x+6y-z =18
3x+2y+z = 16 5x+y-2z = 20 Y+3z = 9
2x+y-5z = 6 x-y+3z = 8 3x+5y+8z = 4
II. m by n Linear Equation System
m by n linear systems are those system were the number of rows (m) and the number of columns
(n) are unequal or it is the case were the number of the equations (m) and the number of variables
(n) are unequal.
a) m>n Linear Equation System
(i) A unique solution case: - when the m-n bottom rows that are all zeros, indicating unique
solution.
General Notion: 1 0 0 8 e.g. 3x1 + 2x2 + x3 = 23
0 1 0 5 x1 + 3x2 + 2x3 = 26
0 0 1 9 2x1 + x2 + 2x3 = 16
0 0 0 0 4x1 + 5x2 + 3x3 = 49 Find the solution?
(ii) A row m-n that is all zero except in the constant column, indicate that there are no solution
General Notion: 1 0 0 4 e.g. 2x1 + x2 = 30
0 1 0 3 x1 + 2x2 = 24
0 0 1 7 4x1 + 5x2 = 72 Find the solution?
0 0 0 -2 m-n
0 0 0 0 bottom rows
(iii) A matrix different from (i) and (ii) above, indicating that there are unlimited numbers of
solutions.
General Notion: 1 0 2 6 e.g. 3x1 + 2x2 + x3 = 6
0 1 0 11 6x1 + 4x2 + 3x3 = 12
0 0 1 0 9x1 + 6x2 + 3x3 = 18
0 0 0 0 15x1 + 10x2 + 5x3 = 30 Find the
0 0 0 0 solution?
b) m<n linear equation system
i. Our attempt to transform A/b to I/S which result in row which is all zeros except in the
constant column, indicating that there are no solutions.
e.g. 4x1 + 6x2 – 3x3 = 12
6x1 + 9x2 – 9/2x3 = 20
ii. A matrix in a form different from (i) above indicate that there are infinite many solutions.
e.g. x1 + 3x2 + x3 = 6
-x1 + x2 + x3 = 2
E.g.2.6 A given manufacturer manufactures two products X and Y each unit of X requires in its
production 2 units of raw material A, 1 unit of raw material B and 1 unit of raw material C. each
units of product Y requires 3 units of raw material A, 5 units of raw material B and 2 units of raw

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material C. There is a limited supply of 120 units of raw material A, 95 units of raw material B
and 65 units of raw material C are available. How many units of X and Y can be produced if you
want to exhaust the supply of raw materials (use the Gaussian Method) Solution
Given
Products
Raw Materials X Y Maximum Available
A 2 3 120
B 1 5 95
C 1 2 65
First write the problem situation in linear equation system
2x+3y = 120
X+5y = 95
X+2y = 65
Finding the values of unknown variables using Gaussian method
Step1: change the linear equation system in to matrix form
Ax = b
A X = b
2 3 x 120
1 5 y 95
1 2 65

Step2: Augment the coefficient matrix with vector of constant (A/b change into I/S (Identity with
solution))
C1 C2
Step3: R1 2 3 120 Change the coefficient matrix to identity matrix by applying
R2 1 5 95 elementary row operation
R3 1 2 65
Find 1 on R1C1 2 to 1 Find 1 on R2C2 -7 to 1
 Inter change R1 & R2  Divide R2 by -7 (R2/-7)
1 5 95 1 5 95
2 3 120 0 1 10
1 2 65 0 3 30
Find 0 on R2C1&R3C1 2&1 to 0 Find 0 on R1C2 &R3C2 5&3 to 0
 -2R1 + R2 = R2  -5R2 + R1 = R1
 R1-R3 =R3  -3R2 + R3 = R3
1 5 95 1 0 45 = I/S X=45
0 -7 -70 0 1 10 Y=10
0 3 30 0 0 0
E.g.2.7 Tewodros School bought 2 foot balls, 1 base ball and 3 basket balls for a total cost of br. 90.
Minillik School bought 3 foot balls, 2 base balls and a basket ball for br. 81. Tsehaytu School bought
5 foot balls and 2 basket balls for br. 104.

a) Write in equation form and state clearly the variables

b) Find the price of foot balls, base ball and basket ball (using Gaussian Method).
c) If Jiffar International School needs 4 foot balls, 5 base balls and wishes to order as many as
basket balls as they can afford, if there is a total of br. 315 to be spent?

Solution
a)

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 Given Products
Schools Foot ball Base ball Basket ball Maximum Available
Tewodros School 2 1 3 90
Minillik School 3 2 1 81
Tsehaytu School 5 -- 2 104
First write the problem situation in linear equation system
2x1 +x2 + 3x3 = 90 Where: x1 = represent price of foot ball
3x1 +2x2 + x3 = 81 x2 = represent price of base ball
5x1 + 3x3 = 104 x3 = represent price of basket ball
b) Finding the values of unknown variables using Gaussian method
Step1: change the linear equation system in to matrix form
Ax = b
A X = b
2 1 3 x 90
3 2 1 y 81
5 0 2 104

Step2: Augment the coefficient matrix with vector of constant (A/b change into I/S (Identity with
solution))
C1 C2 C3
R1 2 1 3 90
R2 3 2 1 81
R3 5 0 2 104
Step3: Change the coefficient matrix to identity matrix by applying elementary row operation
Find 1 on R1C1 2 to 1 Find 0 on R1C2&R3C2 ½&-5/2 to 0
 Divide R1 by 2 (R1/2)  -1/2R2 + R1 = R1
1 1/2 3/2 45  5/2R2 + R3 = R3
3 2 1 81 1 0 5 99
5 0 2 104 0 1 -7 -108
0 0 -23 -391
Find 0 on R2C1&R3C1 3&5 to 0 Find 1 on R3C3 -23 to 1
 -3R1+R2 = R2  Divide R3 by -23
 -5R1+R3 = R3 1 0 5 99
1 1/2 3/2 45 0 1 -7 -108
0 1/2 -7/2 -54 0 0 1 17
0 -5/2 -11/2 -121
Find 1 on R2C2 ½ to1 Find 0 on R1C3&R2C3 5&-7 to 0
 Multiply R2 by 2  -5R3 +R1 = R1
1 1/2 3/2 45  7R3 + R2 = R2
0 1 -7 -108 1 0 0 14
0 -5/2 -11/2 -121 0 1 0 11 = I/S X1 = 14
0 0 1 17 X2 = 11
X3 =17
4X1 + 5X2 + aX3 = 315 4(14) + 5(11) + a(17) = 315 17a = 315-111
Where: a = Number of basket balls 56 + 55 +17a = 315 17a = 204 a = 12
X1 = 14; X2 = 11; X3 =17 111+17a = 315 17 17
Jiffar International school can purchase as many as 12 basket balls

Business Math’s Lecture Notes and Class Examples Page 12 of 18

 Markov Chains
Concept, Model and Solutions
This model is a forecasting model. It is probabilistic/ stochastic model. A Russian mathematic ia n
called Andrew Markov around 1907 developed this model.

Markov chains are models which are useful in studying the evolution of certain system over repeated
trials. These repeated trails are often successive time periods where the state (outcome, conditio n)
of the system in any particular time period cannot be determined with certainty. Therefore, a set of
transition probabilities is used to describe the manner in which the system makes transition from
one period to the next. Hence, we can predict the probability of the system being in a particular state
at a given time period. We can also talk about the long run/equilibrium, steady state.
Important Terms
1) State: - it refers to each individual outcome or condition.
2) System: - it can be an individual, machine, market brand performance and anything under
consideration.
3) Trials: - any convenient period of time (week, month, year) this repeated trials are often
successive time periods where the state of the system in any particular time period cannot be
determine with certainty.
4) Initial (current state vector): - it is a condition or situation at the beginning and it is also
called zero period state vector.
5) Transition Probability Matrix (Rate): - it shows the movement of one system from one state
“i” to another state “j” and therefore is represented by P ij. This probability matrix is a square
matrix such that each entry indicates the probability of the system moving from one given state
to another state and the sum of rows in the transition matrix should be one.
6) Steady State/Long Run/ Equilibrium State: - a situation or equilibrium condition that does
not change overtime.

The necessary assumptions of the chain are:

1. The system has a finite number of states - the outcomes of the system should be finite.
2. The system condition/outcome, state in any given period depends on its state in the preceding
period and on the transition probabilities
3. The transition probabilities are constant over time.
4. Changes in the system will occur once and only once each period.
5. The transition period occurs with regularities.
6. The states are both mutually exclusive and collectively exhaustive.
7. The system is a closed one, that is, there will be no arrival or exits from the system.
Information flow in the Analysis

The Markov model is based on two sets of input data

Business Math’s Lecture Notes and Class Examples Page 13 of 18

  The set of transition probabilities.
 The existing or initial or current conditions or states.
The Markov process, therefore, describes the movement of a system from a certain state in the
current state/ time period to one of the possible states in the next stage. The system move in an
uncertain environment all that is known is the probability associated with any possible move or
transition. This probability is known as transition probability symbolized by Pij. It is the
likelihood that the system which is currently in state i will Smoke to state j in the next period.

From these inputs the model makes two predictions usually expressed as vectors:
1. The probabilities of the system being in any state at any given future time period.
2. The long run / equilibrium, steady state probabilities.
The set of transition probabilities are necessary for both predictions (time period n, and steady state),
but the initial state is needed for only the first prediction.

E.g.2.8 Currently it is known that 80% of customers shop at store 1 and 20% shop at store 2. In
reviwing the past data, suppose we find that out of all customers who shopped at store 1 in a given
week 90% remains loyal for the next week (store 1 again) 10% switch to store 2 on the other hand
out of all customers who shopped at store 2 in a given week 80% remains loyal for the next week
(store 2 again), 20% switch to store 1.
Required:
a) Write the initial state vector and transition probability matrix
b) What will be the proportion of customers shopping at store 1&2 in each of the next two
weeks?
c) What will be the long run market share of store 1&2
Solution
a) Initial state vector (Vo) = [Market share of Store 1 Market share of Store 2]
Vo = [80% 20%]; Vo = [0.8 0.2]

Transition Probability Matrix

Next Week Store 1 Store 2 0.9 0.1
Store 1 90% 10% P = 0.2 0.8
Store 2 20% 80%
b) Determining market share of store 1 and store 2 in the long run

nth state of a M arkov Chain.

V (n) = V (n-1) x pij, or V (n) = V (0) x (Pij)
Or
V (n) = V (0) x (Pij) Where: P = transition Probability
V (n) = state probability for period n.
V (n-1) = state probability for period n-1.
 Market share of S1 & S2 in the first week  Market share of S1 & S2 in the second week
V (0) = (0.8 0.2) V(2) = V(2-1) x P; V(2) = V(1) x P
V (1) = V (0) x Pij  .9 .1
 .9  
 .1 = (.76) .24)  
= (0.8 0.2)    .2 .8 
 
 .2 
.8
 = (.76x.9 + .24x.2 .76x.1 + .24x.8)
= (.8 x .9) + (.2x.2) (.8x.1) + (.2x.8) = (.684 + .048 .076 + .192)
= .72 + .04 .08 +. 16 = (0.732 0.268)

Business Math’s Lecture Notes and Class Examples Page 14 of 18

 = 0.76 = 0.24  Market share of Store 1 in the first week =
V (1) = (.76 .24) 73.2%
 Market share of Store 1 in the first week = 76%  Market share of Store 2 in the first week =
 Market share of Store 2 in the first week = 24% 26.8%

c. In the long run (V1 V2 ) = P(V1 V2 ) .9V1 +.2(1-V1 ) =V1 since V2 = 1-V1
where: .9V1 + .2 - .2V1 = V1
V1 = Market share of Store 1 in the long run .7V1 + .2 = V1
V2 = Market share of Store 2 in the long run .2 = .3V1
 .9 .1
V1 = 2/3 = 0.6667 = 66.67%

(V1 V2 )   = (V1 V2 ) V2 = 1 - V1
 .2 .8 
  = 1 - 2/3
0.9V1 + .2V2 = V1 V2 = 1/3 = 0.3333 = 33.33%
.1V1 + .8V2 = V2 Market share store 1 in the long run = 66.67%
V1 + V2 = 1 Market share store 2 in the long run = 33.33%
-.1V1 + .2V2 = 0 
 one is the - ve of the other.
.1V1 + -.2V2 = 0 
Cramer’s Rule for Solving Linear Equation
Cramer’s rule is a method that is useful primarily for low order system, with two or three unknowns.
Cramer’s rules states that each unknown can be expressed as the ratio of two matrix determinants.
e.g Assume there are two linear equations having two unknown variables.
a11 X1 + a12 X2 = b1
a21 X1 + a22 X2 = b2
Here the unknown are x1 &x2 , the right hand sides are b1 & b2 and the coefficients are a ij
 Cramer’s rule requires finding the quotient of the determinants of matrices associated to the system and
can be used when the determinant of the coefficient matrix is none zero.
The coefficient matrix A= a 11 a12
a21 a22
Assume the determinant of A is different from 0 the Cramer’s rule gives the solution for unknown
variables.
Use the Cramer’s rule to solve the 2x2 Use the Cramer’s rule to solve the 3x3 system of linear
system of linear equation equation
e.g. 3x1 + 7x2 = 41 e.g. 4x1 + 2x2 + 7x3 = 35
8x1 + 9x2 = 61 3x1 + x2 +8 x3 = 25
5x1 + 3x2 + x3 = 40
Required: Find the values of the unknown variables for the above all examples?
Solution
Solving 2x2 linear equation system using Cramer’s rule
First change the linear equation system to matrix Find the determinant of the coefficient matrix
form 3 7
A X b 8 9
3 7 X1 41 Det(A) = 3x9-8x7 = 27-56 = -29
8 9 X2 61

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 To determine the value of X1 replace the To determine the value of X2 replace the
coefficient of X1 by the vector of constant, then we coefficient of X2 by the vector of constant, then we
can get the new matrix A 1 matrix. can get the new matrix A2 matrix.
A1 = 41 A2 = 3 41
7
61 9 8 61
Then find the determinant of A 1 matrix Then find the determinant of A 1 matrix
Det(A1 ) = 41x9-61x7 = 369-427 = -58 Det(A2 ) = 3x61- 8x41 = 183-328 = -145
X1 = Det(A1 ) /Det(A) = -58/-29 = 2 X2 = Det(A2 ) /Det(A) = -145/-29 = 5

Solving 3x3 linear equation system using Cramer’s rule

First change the linear equation system to Then find the determinant of the coefficient
matrix form matrix
A X b 4 2 7 4 2
4 2 7 X1 35 3 1 8 3 1
3 1 8 X 2 25 5 3 1 5 3
5 3 1 X3 40 Det(A) = 4x1x1+2x8x5+7x3x3 –
(5x1x7+3x8x4+1x3x2) =
Det(A) = 4+80+63 – (35+96+6) = 147-137 =
10
To determine the value of X1 replace the To determine the value of X2 replace the
coefficient of X1 by the vector of constant, coefficient of X2 by the vector of constant,
then we can get the new matrix A1. Matrix then we can get the new matrix A2. Matrix.
35 2 7 4 35 7
25 1 8 3 25 8
A1 = A2 =
40 3 1 5 40 1
Then find the determinant of A1 matrix Then find the determinant of A1 matrix
35 2 7 35 2 4 35 7 4 35
25 1 8 25 1 3 25 8 3 25
40 3 1 40 3 5 40 1 5 40
Det(A1 ) = 35x1x1+2x8x40+7x25x3 –
(40x1x7+3x8x35+1x25x2) Det(A2 ) = 4x25x1+35x8x5+7x3x40 –
Det(A1 ) = 35+640+525- (280+840+50) (5x25x7+40x8x4+1x3x35) =
= 1200-1170 = 30 Det(A2 ) = 100+1400+840 – (875+1280+105)
X1 = Det(A1 ) /Det(A) = 30/10 = 3 = 2340-2260 = 80
X2 = Det(A2 ) /Det(A) = 80/10 = 8
To determine the value of X3 replace the Then find the determinant of A3
coefficient of X3 by the vector of constant, 4 2 35 4 2
then we can get the new matrix A3 matrix.
3 1 25 3 1
5 3 40 5 3
4 2 35
A3 = Det(A3 ) = 4x1x40+2x25x5+35x3x3 –
3 1 25 (5x1x35+3x25x4+40x3x2) =
5 3 40 Det(A3 ) = 160+250+315 – (175+300+240)
= 725-715 = 10
X3 = Det(A3 ) /Det(A) = 10/10 = 1

Individual Assignment on Chapter 2 for Business Mathematics

Business Math’s Lecture Notes and Class Examples Page 16 of 18
 Q1.
a) 3x1 + 8x2 + 2x3 = 67 b) 5p1 + p2 + 2p3 = -6 c) 16x – 3y + 10z = 8
4x1 + 6x2 +9 x3 = 36 2p1 +px3 – 9p2 = -14 -4x + 18y + 14z3 = 12
7x1 + x2 + 5x3 = 49 3p1 + p2 – 8px3 = -58 28x + 42y – 6z = 18
Required: Find the values of the unknown variables for the above all?

Q2. You and your friend each go to your local hardware stores A&B to price items you wish to
purchase. You want to buy 1 hammer, 1 screwdriver and 2 cans of white point and your friend wants
to buy 1 hammer, 2 screwdriver and 3 cans of white point. The prices of these goods are:
Hammer Screwdriver Can of paint
Store A $7 $3 $19
Store B $6 $2 $22
a) Write the requirements matrix R as a 3x2 matrix
b) Write the price matrix P as a 2x3 matrix
c) Find PR
d) What are your costs at store A and your friend’s costs at store B?
e) Should you buy from store A or store B?
Q3. A TV advertising company is conducted foot ball season to promote brand X. for each
several weeks a survey is made and it is found that each week 100% those of use of brand X
continue using brand X. it is also found that of those not using brand X, 20% switch to brand X
while the other 80% continue using other brand.

a) Write the transition matrix assuming the transaction percentage continues to hold for
succeeding week.
b) If 20% of the people are using brand X at the state of advertizing company. What percentage
will be using brand X one week and two weeks later? If the total population using the brand X
and other is 10,000, what is the number of people who use brand X and other brands one week
and two weeks later?
c) What portion of the market using brand x at the end of the season/ long run/steady state/
equilibrium
Q4. A manufacturer makes two type of products X and Y at each of the two different locations A
and B. the materials used to make each of the products are steel, glass and plastic. Suppose it takes
three units of steel, one unit of glass and two units of plastic to make one unit of product X; and
four units of steel, one-half (1/2) unit of glass, and three units of plastic to make one unit of
product Y. Suppose further that steel, glass and plastic cost birr10, 2, and 3 per unit respectively at
location A. At location B, steel, glass and plastic cost birr9, 3, and 4 per unit respectively. Using
matrix algebra, find the material cost of making one unit of each product at each of the two
locations.
Q5. A manufacturer produces three products, A,B,C. each unit of products A,B,C requires the
following amounts of time in hours in each of the indicated departments.
Product
Department A B C
Machining 0.2 0.3 0.5
Assembly 0.4 0.2 0.4
Painting 0.3 0.5 0.2

Business Math’s Lecture Notes and Class Examples Page 17 of 18

Suppose that the total time available per week in each department is 105 hrs, 116 hrs, and 83 hrs
respectively. Determine the number of units of each product to be produced in a week to use up all
the available time. (Use the Gaussian method)
Q6. There are two competing brands of soap in a market. The brands are B-29 and saba. A survey
was undertaken to determine the extent of customers switch over from one brand to another to
another every month. The survey identified that every month only 45% of customers of saba in the
previous month continue to purchase saba and 45% of the customers of B-29 in the previous
month become customers of saba. Moreover, it was identified that the two brands have a constant
total customers of 10,000 and no one stops purchasing one or the other brand. At present the
number of customers of B-29 and saba are 4,000 and 6,000 person respectively.
A. What will be the number of customers of B-29 and saba after two transitions.
B. What share of the market will each brand have in the long run?

Business Math’s Lecture Notes and Class Examples Page 18 of 18