Linear programming

BITS Pilani
problems-Simplex Method
Pilani|Dubai|Goa|Hyderabad Dr. Udayan Chanda, Department of Management, BITS Pilani.
 Lecture Outline

 Introduction
 How to Set Up the Initial Simplex Solution
 Simplex Solution Procedures
 The Second Simplex Tableau
 Developing the Third Tableau
 Review of Procedures for Solving LP
Maximization Problems

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 Introduction

• With only two decision variables it is possible to use

graphical methods to solve LP problems
• But most real life LP problems are too complex for simple
graphical procedures
• We need a more powerful procedure called the simplex
method
• The simplex method examines the corner points in a
systematic fashion using basic algebraic concepts
• It does this in an iterative manner until an optimal solution is
found
• Each iteration moves us closer to the optimal solution

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 Introduction

• Why should we study the simplex method?

• It is important to understand the ideas used to produce
solutions
• It provides the optimal solution to the decision variables and
the maximum profit (or minimum cost)
• It also provides important economic information
• To be able to use computers successfully and to interpret LP
computer printouts, we need to know what the simplex
method is doing and why

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 How To Set Up The Initial Simplex
Solution

• Let’s look at the Flair Furniture Company

• This time we’ll use the simplex method to solve the
problem
• You may recall

T = number of tables produced

C = number of chairs produced
and
Maximize profit = $70T + $50C (objective function)
subject to 2T + 1C ≤ 100 (painting hours constraint)
4T + 3C ≤ 240 (carpentry hours constraint)
T, C ≥ 0 (nonnegativity constraint)
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 Flair Furniture Company

 The Flair Furniture Company produces inexpensive

tables and chairs
 Processes are similar in that both require a certain
amount of hours of carpentry work and in the painting
and varnishing department
 Each table takes 4 hours of carpentry and 2 hours of
painting and varnishing
 Each chair requires 3 hours of carpentry and 1 hour of
painting and varnishing
 There are 240 hours of carpentry time available and
100 hours of painting and varnishing
 Each table yields a profit of $70 and each chair a
profit of $50
11/20/2023 Linear Programming Problems 6
 Flair Furniture Company

 The company wants to determine the best

combination of tables and chairs to produce to reach
the maximum profit
HOURS REQUIRED TO
PRODUCE 1 UNIT
(T) (C) AVAILABLE HOURS
DEPARTMENT TABLES CHAIRS THIS WEEK
Carpentry 4 3 240

Painting and varnishing 2 1 100

Profit per unit

$70 $50

11/20/2023 Linear Programming Problems 7

 Converting the Constraints to
Equations
 The inequality constraints must be converted into
equations
 Less-than-or-equal-to constraints (≤) are converted to
equations by adding a slack variable to each
 Slack variables represent unused resources
 For the Flair Furniture problem, the slacks are
S1 = slack variable representing unused hours
in the painting department
S2 = slack variable representing unused hours
in the carpentry department
 The constraints may now be written as
2T + 1C + S1 = 100
4T + 3C + S2 = 240
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 Converting the Constraints to
Equations
 If the optimal solution uses less than the available
amount of a resource, the unused resource is slack
 For example, if Flair produces T = 40 tables and C =
10 chairs, the painting constraint will be

2T + 1C + S1 = 100
2(40) + 1(10) + S1 = 100
S1 = 10

 There will be 10 hours of slack, or unused painting

capacity

11/20/2023 LPP-Simplex Method 9

 Converting the Constraints to
Equations
 Each slack variable must appear in every constraint
equation
 Slack variables not actually needed for an equation
have a coefficient of 0
 So
2T + 1C + 1S1 + 0S2 = 100
4T + 3C + 0S1 + 1S2 = 240
T, C, S1, S2 ≥0
 The objective function becomes

Maximize profit = $70T + $50C + $0S1 + $0S2

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Finding an Initial Solution Algebraically
 There are now two equations and four
variables
 When there are more unknowns than
equations, you must set some of the variables
equal to 0 and solve for the others
 In this example, two variables must be set to 0
so we can solve for the other two
 A solution found in this manner is called a
basic feasible solution

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Finding an Initial Solution Algebraically
 The simplex method starts with an initial feasible
solution where all real variables are set to 0
 While this is not an exciting solution, it is a corner
point solution
 Starting from this point, the simplex method will move
to the corner point that yields the most improved profit
 It repeats the process until it can further improve the
solution
 On the following graph, the simplex method starts at
point A and then moves to B and finally to C, the
optimal solution

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Finding an Initial Solution Algebraically
 Corner points for C
the Flair
100 –
Furniture
–
Company B = (0, 80)

Number of Chairs
80 –
problem 2T + 1C ≤ 100
–
60 –
–
40 –
C = (30, 40)
–
20 – 4T + 3C ≤ 240
– D = (50, 0)
(0, 0) A |– | | | |
0 20 40 60 80 T
Figure 9.1 Number of Tables
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The First Simplex Tableau

• Constraint equations
• It simplifies handling the LP equations if we put them in
tabular form
• These are the constraint equations for the Flair Furniture
problem

QUANTITY
SOLUTION MIX T C S1 S2 (RIGHT-HAND SIDE)
S1 2 1 1 0 100

S2 4 3 0 1 240

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 The First Simplex Tableau

• The first tableau is called a simplex tableau

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l u l va

lu k v

l u s ta
l u uc
lu it p

co rod

c o l ac

c o on
c o ea
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C
R
P
P

S
Cj SOLUTION $70 $50 $0 $0 Profit per
QUANTITY unit row
MIX T C S1 S2
$0 S1 2 1 1 0 100 Constraint
equation rows
$0 S2 4 3 0 1 240
Gross
Zj $0 $0 $0 $0 $0
profit row
Cj - Zj $70 $50 $0 $0 $0
Net profit row
Table 9.1
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The First Simplex Tableau
• The numbers in the first row represent the coefficients in
the first constraint and the numbers in the second the
second constraint
• At the initial solution, T = 0 and C = 0, so S1 = 100 and S2 =
240
• The two slack variables are the initial solution mix
• The values are found in the QUANTITY column
• The initial solution is a basic feasible solution
T 0
C 0
=
S1 100
S2 240
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The First Simplex Tableau
• Variables in the solution mix, called the basis in LP
terminology, are referred to as basic variables
• Variables not in the solution mix or basis (value of 0) are
called nonbasic variables
• The optimal solution was T = 30, C = 40, S1 = 0, and S2 = 0
(Using the Graphical Method as discussed), then the final
basic variables would be

T 30
C 40
=
S1 0
S2 0

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The First Simplex Tableau
• Substitution rates
–The numbers in the body of the tableau are the
coefficients of the constraint equations
–These can also be thought of as substitution rates
–Using the variable T as an example, if Flair were to
produce 1 table (T = 1), 2 units of S1 and 4 units of S2
would have to be removed from the solution
–Similarly, the substitution rates for C are 1 unit of S1 and
3 units of S2
–Also, for a variable to appear in the solution mix, it must
have a 1 someplace in its column and 0s in every other
place in that column

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The First Simplex Tableau
• Adding the objective function
–We add a row to the tableau to reflect the objective
function values for each variable
–These contribution rates are called Cj and appear just
above each respective variable
–In the leftmost column, Cj indicates the unit profit for
each variable currently in the solution mix

Cj $70 $50 $0 $0
SOLUTION
MIX T C QUANTITY
S1 S2
$0 S1 2 1 1 0 100
$0 S2 4 3 0 1 240
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The First Simplex Tableau

• The Zj and Cj – Zj rows

• We can complete the initial tableau by adding two final
rows
• These rows provide important economic information
including total profit and whether the current solution is
optimal
• We compute the Zj value by multiplying the contribution
value of each number in a column by each number in
that row and the jth column, and summing

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The First Simplex Tableau

• The Zj value for the quantity column provides the total

contribution of the given solution
Zj (gross profit) = (Profit per unit of S1)  (Number of units of S1)
+ (profit per unit of S2)  (Number of units of S2)
= $0  100 units + $0  240 units
= $0 profit
 The Zj values in the other columns represent the
gross profit given up by adding one unit of this
variable into the current solution
Zj = (Profit per unit of S1)  (Substitution rate in row 1)
+ (profit per unit of S2)  (Substitution rate in row 2)

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The First Simplex Tableau

• Thus,
Zj (for column T) = ($0)(2) + ($0)(4) = $0
Zj (for column C) = ($0)(1) + ($0)(3) = $0
Zj (for column S1) = ($0)(1) + ($0)(0) = $0
Zj (for column S2) = ($0)(0) + ($0)(1) = $0
 We can see that no profit is lost by adding one unit of
either T (tables), C (chairs), S1, or S2

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The First Simplex Tableau

• The Cj – Zj number in each column represents the net profit

that will result from introducing 1 unit of each product or
variable into the solution
• It is computed by subtracting the Zj total for each column
from the Cj value at the very top of that variable’s column

COLUMN
T C S1 S2
Cj for column $70 $50
$0 $0
Zj for column 0 0
0 0
Cj – Zj for column $70 $50
$0 $0
11/20/2023 LPP-Simplex Method 23
The First Simplex Tableau

• Obviously with a profit of $0, the initial solution is not

optimal
• By examining the numbers in the Cj – Zj row in Table 9.1, we
can see that the total profits can be increased by $70 for
each unit of T and $50 for each unit of C
• A negative number in the number in the Cj – Zj row would
tell us that the profits would decrease if the corresponding
variable were added to the solution mix
• An optimal solution is reached when there are no positive
numbers in the Cj – Zj row

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Simplex Solution Procedures

• After an initial tableau has been completed, we

proceed through a series of five steps to compute
all the numbers needed in the next tableau
• The calculations are not difficult, but they are
complex enough that even the smallest arithmetic
error can produce a wrong answer

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Five Steps of the Simplex Method for
Maximization Problems
1. Determine the variable to enter the solution mix next. One
way of doing this is by identifying the column, and hence
the variable, with the largest positive number in the Cj - Zj
row of the preceding tableau. The column identified in this
step is called the pivot column.
2. Determine which variable to replace. This is accomplished
by dividing the quantity column by the corresponding
number in the column selected in step 1. The row with the
smallest nonnegative number calculated in this fashion will
be replaced in the next tableau. This row is often referred
to as the pivot row. The number at the intersection of the
pivot row and pivot column is the pivot number.

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Five Steps of the Simplex Method for
Maximization Problems
3. Compute new values for the pivot row. To do this, we
simply divide every number in the row by the pivot column.
4. Compute the new values for each remaining row. All
remaining rows are calculated as follows:

(New row numbers) = (Numbers in old row)

Number above Corresponding number in

– or below x the new row, that is, the row
pivot number replaced in step 3

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Five Steps of the Simplex Method for
Maximization Problems

5. Compute the Zj and Cj - Zj rows, as demonstrated in the

initial tableau. If all the numbers in the Cj - Zj row are 0 or
negative, an optimal solution has been reached. If this is
not the case, return to step 1.

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 The Second Simplex Tableau
• We can now apply these steps to the Flair Furniture problem
Step 1. Select the variable with the largest positive Cj - Zj
value to enter the solution next. In this case, variable T with
a contribution value of $70.

Cj $70 $50 $0 $0
SOLUTION QUANTITY
MIX T C S1 S2 (RHS)
$0 S1 2 1 1 0 100
$0 S2 4 3 0 1 240
Zj $0 $0 $0 $0 $0
Cj - Zj $70 $50 $0 $0 total profit
Pivot column

Table 9.2
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The Second Simplex Tableau
Step 2. Select the variable to be replaced. Either S1 or S2 will
have to leave to make room for T in the basis. The following
ratios need to be calculated.
For the S1 row
100(hours of painting time available)
 50 tables
2(hours required per table)
For the S2 row
240(hours of carpentry time available)
 60 tables
4(hours required per table)

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 The Second Simplex Tableau
We choose the smaller ratio (50) and this determines the S1
variable is to be replaced. This corresponds to point D on the
graph in Figure 9.2.
Cj $70 $50 $0 $0
SOLUTION QUANTITY
MIX T C S1 S2 (RHS)
$0 S1 2 1 1 0 100
$0 S2 4 3 0 1 240
Pivot number Pivot row
Zj $0 $0 $0 $0 $0
Cj - Zj $70 $50 $0 $0
Pivot column

Table 9.3

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The Second Simplex Tableau
Step 3. We can now begin to develop the second, improved
simplex tableau. We have to compute a replacement for the
pivot row. This is done by dividing every number in the pivot
row by the pivot number. The new version of the pivot row is
below.

2 1 1* 0 100
1  0 .5  0 .5 0  50
2 2 2 2 2

Cj SOLUTION MIX T C S1 S2 QUANTITY

$70 T 1 0.5 0.5 0 50

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The Second Simplex Tableau
Step 4. Completing the rest of the tableau, the S2 row, is
slightly more complicated. The right of the following
expression is used to find the left side.
Number in Number in Corresponding Number
= – Number Below 
New S2 Row Old S2 Row Pivot Number in the New T Row
0 = 4 – (4)  (1)
1 = 3 – (4)  (0.5)
–2 = 0 – (4)  (0.5)
1 = 1 – (4)  (0)
40 = 240 – (4)  (50)

Cj SOLUTION MIX T C S1 S2 QUANTITY

$70 T 1 0.5 0.5 0 50
$0 S2 0 1 –2 1 40
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The Second Simplex Tableau
1
The T column contains and the S2 column
0
0
contains , necessary conditions for variables to
1
be in the solution. The manipulations of steps 3 and 4
were designed to produce 0s and 1s in the appropriate
positions.

11/20/2023 LPP-Simplex Method 34

The Second Simplex Tableau
Step 5. The final step of the second iteration is to introduce
the effect of the objective function. This involves computing
the Cj - Zj rows. The Zj for the quantity row gives us the gross
profit and the other Zj represent the gross profit given up by
adding one unit of each variable into the solution.

Zj (for T column) = ($70)(1) + ($0)(0) = $70

Zj (for C column) = ($70)(0.5) + ($0)(1) = $35
Zj (for S1 column) = ($70)(0.5) + ($0)(–2) = $35
Zj (for S2 column) = ($70)(0) + ($0)(1) = $0
Zj (for total profit) = ($70)(50) + ($0)(40) = $3,500
11/20/2023 LPP-Simplex Method 35
The Second Simplex Tableau
COLUMN
T C S1 S2
Cj for column $70 $50
$0 $0
Zj for column $70 $35
$35 $0

• Completed
C – Zsecond $0 $15
j simplex tableau
for column
j
–$35 $0

Cj $70 $50 $0 $0
SOLUTION QUANTITY
MIX T C S1 S2 (RHS)
$70 T 1 0.5 0.5 0 50
$0 S2 0 1 –2 1 40
Zj $70 $35 $35 $0 $3,500
Cj - Zj $0 $15 –$35 $0
Table 9.4
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Interpreting the Second Tableau

• Current solution
• The solution point of 50 tables and 0 chairs
(T = 50, C = 0) generates a profit of $3,500. T is a basic
variable and C is a nonbasic variable. This corresponds to
point D in Figure 9.2.
• Resource information
• Slack variable S2 is the unused time in the carpentry
department and is in the basis. Its value implies there is
40 hours of unused carpentry time remaining. Slack
variable S1 is nonbasic and has a value of 0 meaning
there is no slack time in the painting department.

11/20/2023 LPP-Simplex Method 37

Interpreting the Second Tableau
• Substitution rates
–Substitution rates are the coefficients in the heart of the
tableau. In column C, if 1 unit of C is added to the
current solution, 0.5 units of T and 1 unit of S2 must be
given up. This is because the solution T = 50 uses up all
100 hours of painting time available.
–Because these are marginal rates of substitution, so only
1 more unit of S2 is needed to produce 1 chair
–In column S1, the substitution rates mean that if 1 hour
of slack painting time is added to producing a chair, 0.5
less of a table will be produced

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Interpreting the Second Tableau

• Net profit row

• The Cj - Zj row is important for two reasons
• First, it indicates whether the current solution is optimal
• When there are no positive values in the bottom row, an
optimal solution to a maximization LP has been reached
• The second reason is that we use this row to determine
which variable will enter the solution next

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Developing the Third Tableau
• Since the previous tableau is not optimal, we repeat the
five simplex steps
Step 1. Variable C will enter the solution as its Cj - Zj
value of 15 is the largest positive value. The C column is
the new pivot column.
Step 2. Identify the pivot row by dividing the number in
the quantity column by its corresponding substitution rate
in the C column.
50
For the T row :  100 chairs
0 .5
40
For the S2 row :  40 chairs
1
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Developing the Third Tableau
These ratios correspond to the values of C at points F
and C in Figure 9.2. The S2 row has the smallest ratio so
S2 will leave the basis and will be replaced by C.

Cj $70 $50 $0 $0
SOLUTION
MIX T C S1 S2 QUANTITY
$70 T 1 0.5 0.5 0 50
$0 S2 0 1 –2 1 40
Pivot number Pivot row
Zj $70 $35 $35 $0 $3,500
Cj - Zj $0 $15 –$35 $0
Pivot column

Table 9.5
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Developing the Third Tableau

Step 3. The pivot row is replaced by dividing every

number in it by the pivot point number

0 1 2 1 40
0 1  2 1  40
1 1 1 1 1

The new C row is

Cj SOLUTION MIX T C S1 S2 QUANTITY

$5 C 0 1 –2 1 40

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Developing the Third Tableau
Step 4. The new values for the T row may now be
computed

Number in Number in Number above Corresponding number

new T row
=
old T row
–
pivot number  in new C row
1 = 1 – (0.5)  (0)
0 = 0.5 – (0.5)  (1)
1.5 = 0.5 – (0.5)  (–2)
–0.5 = 0 – (0.5)  (1)
30 = 50 – (0.5)  (40)

Cj SOLUTION MIX T C S1 S2 QUANTITY

$70 T 1 0 1.5 –0.5 30
$50 C 0 1 –2 1 40
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Developing the Third Tableau
Step 5. The Zj and Cj - Zj rows can now be calculated
Zj (for T column) = ($70)(1) + ($50)(0) = $70
Zj (for C column) = ($70)(0) + ($50)(1) = $50
Zj (for S1 column) = ($70)(1.5) + ($50)(–2)= $5
Zj (for S2 column) = ($70)(–0.5) + ($50)(1)= $15
Zj (for total profit) = ($70)(30) + ($50)(40) = $4,100
And the net profit per unit row is now
COLUMN
T C S1 S2
Cj for column $70 $50
$0 $0
Zj for column $70 $50
$5 $15
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Cj – Zj for column $0 $0 –
Developing the Third Tableau
 Note that every number in the Cj - Zj row is 0 or
negative indicating an optimal solution has been
reached
 The optimal solution is

T = 30 tables
C = 40 chairs
S1 = 0 slack hours in the painting department
S2 = 0 slack hours in the carpentry department
profit = $4,100 for the optimal solution

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Developing the Third Tableau
 The final simplex tableau for the Flair Furniture
problem corresponds to point C in Figure 9.2

Cj $70 $50 $0 $0
SOLUTION
MIX T C S1 S2 QUANTITY
$70 T 1 0 1.5 –0.5 30
$50 C 0 1 –2 1 40
Zj $70 $50 $5 $15 $4,100
Cj - Zj $0 $0 –$5 –$15
Table 9.6
 Arithmetic mistakes are easy to make
 It is always a good idea to check your answer by going back
to the original constraints and objective function
11/20/2023 LPP-Simplex Method 46
Example:
Maximize Z = 7X1+5X2 , subject to the constraints,
X1+2X2 < = 6
4X1+3X2 < = 12 and X1 & X2 are non-negative.

Step1: Convert the LP problem into a system of linear

equations.
We do this by rewriting the constraint inequalities as equations by
adding new "slack variables" and assigning them zero
coefficients(profits) in the objective function as shown below:
X1+2X2+S1 =6
4X1+3X2 +S2 = 12
And the Objective Function would be:
Z=7X1+5X2+0.S1+0.S2
Step 2: Obtain a Basic Solution to the problem.
We do this by putting the decision variables X 1=X2=0,
so that
S1= 6 and S2=12.
These are the initial values of slack variables.

Step 3: Form the Initial Tableau as shown.

Initial Tableau
Cj 7 5 0 0
Min.Ratio
Basic
Basic (XB/Pivotal
CB Variable X1 X2 S1 S2
Soln(XB) Col.)
(B)
0 S1 6 1 2 1 0 6/1=6
0 S2 12 4 3 0 1 12/4=3
Zj 0 0 0 0
(Net Evaluation)Cj - Zj 7 5 0 0
Step 4: Find (Cj-Zj) having highest positive value.
The column corresponding to this value,is called the Pivotal
Column and enters the table. In the previous table,column
corresponding to variable X1 is the pivotal column.

Step 5: Find the Minimum Positive Ratio.

Divide XB values by the corresponding values of Pivotal
Column.The row corresponding to the minimum positive
value is the Pivotal Row and leaves the table. In the
previous table,row corresponding to the slack variable S2 is
the pivotal row.
Step 6: First Iteration or First Simplex Tableau.
In the new table,we shall place the incoming variable(X1) instead of the outgoing variable(S2). Accordingly,new values of this row have to be obtained in the following way :
R2(New)=R2(Old)/Pivotal Element = R2(Old)/4
R1(New)=R1(Old) - (Intersecting value of R1(Old) & Pivotal
Col)*R 2(New)
=R1(Old) - 1*R2(New)

Cj 7 5 0 0
Min.Ratio
Basic
Basic (XB/Pivotal
CB Variable X1 X2 S1 S2
Soln(XB) Col.)
(B)
0 S1 3 0 54 1 - 1/4
7 X1 3 1 3/4 0 1/4
Zj 7 21 4 0 74
(Net Evaluation)Cj - Zj 0 - 1/4 0 -74
Step 7: If all the (Cj-Zj) values are zero or negative,an
optimum point is reached otherwise repeat the process
as given in Step 4,5 & 6.
Since all the (Cj-Zj) values are either negative or zero,hence an
optimum solution has been achieved.The optimum values are:

X1=3,
X2=0 and,
Max Z=21.
 Review of Procedures for Solving LP
Maximization Problems

I. Formulate the LP problem’s objective function and

constraints
II. Add slack variables to each less-than-or-equal-to
constraint and to the objective function
III. Develop and initial simplex tableau with slack variables in
the basis and decision variables set equal to 0. compute
the Zj and Cj - Zj values for this tableau.
IV. Follow the five steps until an optimal solution has been
reached

11/20/2023 LPP-Simplex Method 52

 Review of Procedures for Solving LP
Maximization Problems

1. Choose the variable with the greatest positive Cj - Zj to

enter the solution in the pivot column.
2. Determine the solution mix variable to be replaced and
the pivot row by selecting the row with the smallest
(nonnegative) ratio of the quantity-to-pivot column
substitution rate.
3. Calculate the new values for the pivot row
4. Calculate the new values for the other row(s)
5. Calculate the Zj and Cj - Zj values for this tableau. If
there are any Cj - Zj numbers greater than 0, return to
step 1. If not, and optimal solution has been reached.

11/20/2023 LPP-Simplex Method 53