SIMPLEX METHOD – SOLVED PROBLEM

HighTech Industries imports electronic components that are used to assemble two different
models of personal computers. One model is called the DeskPro, and the other model is called
the Portable. HighTech’s management is currently interested in developing a weekly production
schedule for both products.

The DeskPro generates a profit contribution of $50 per unit, and the Portable generates a profit
contribution of $40 per unit. For next week’s production, a maximum of 150 hours of assembly
time can be made available. Each unit of the DeskPro requires 3 hours of assembly time, and
each unit of the Portable requires 5 hours of assembly time. In addition, HighTech currently has
only 20 Portable display components in inventory; thus no more than 20 units of the Portable
may be assembled. Finally, only 300 square feet of warehouse space can be made available for
new production. Assembly of each DeskPro requires 8 square feet of warehouse space; similarly,
each Portable requires 5 square feet. How many units of the DeskPro and Portable should
HighTech industries assemble to maximize profit?

The problem is formulated as follows:

Max 50 x1 + 40 x2

s, t

3 x1 + 5 x2 �150 Assembly time

1x2 �20 Display components

8 x1 + 5 x2 �300 Warehouse capacity

x1 , x2 �0

Solution

In standard form,

Max 50 x1 + 40 x2 + 0 s1 + 0s2 + 0 s3
s, t

3 x1 + 5 x2 + 1s1 = 150

1x2 + 1s2 = 20

8 x1 + 5 x2 +1s3 = 300

x1 , x2 , s1 , s2 , s3 �0

Let number of variables be n .i.e. n = 5

Let number of equations be called n i.e. m = 3

Basic Solution

To determine a basic solution, set n - m of the variables equal to zero, and solve the m linear
constraint equations for the remaining n variables.

Set n - m = 5 - 3 = 2 variables to zero.

In terms of the problem above, a basic solution can be obtained by setting any two variables
equal to zero and then solving the system of three linear equations for the remaining three
variables. We refer to the n - m variables that we set to zero as the non-basic variables and the
remaining n variables as the basic variables.

Basic Feasible Solution

A basic solution can either be feasible or infeasible. A basic feasible solution is a basic solution
that also satisfies the non-negativity conditions.

Suppose x1 = 0 and x2 = 0 , then the three constraint equations reduce to

1s1 = 150

1s2 = 20

1s3 = 300

The complete solution with x1 = 0 and x2 = 0 is

x1 = 0
x2 = 0
s1 = 150
s2 = 20
s3 = 300

This is a basic feasible solution because all the variables satisfy the non-negativity conditions.

3 Steps necessary to prepare an LP problem for solution using the Simplex Method

Step 1: Formulate the problem

Step 2: Set up the standard form by adding slack and/or subtracting surplus variables

Step 3: Set up the initial tableau.

Setting up the Initial Tableau

Part of the initial simplex tableau is a table containing all the coefficients shown in the tableau form of a
linear program. The general notation is as follows

c row
A matrix b column

c j = Objective function coefficient for variable j

b j = Right- hand side value for constraint i

aij = Coefficient associated with variable j in constraint i

cB = Coefficient of basic variables

The initial simplex tableau for the problem is as shown below

x1 x2 s1 s2 s3
Basis cB Capacity 50 40 0 0 0
s1 0 150 3 5 1 0 0
s2 0
20 0 1 0 1 0
s3 0
 300 8 5 0 0 1

zj 0 0 0 0 0 0
cj - z j 50 40 0 0 0

Note that for each basic variable, a corresponding column has a 1 in the only nonzero position.
Such columns are known as unit columns or unit vectors. Also each row of the tableau is
associated with each basic variable. This row has a 1 in the unit column corresponding to the
basic variable.

Next, calculate the z j values. This represents the decrease in the value of the objective function
that will result if one unit of the variable corresponding to the jth column of the A matrix is
brought into the basis. Next is to find the values, which represents the net change in the value of
the objective function if one unit of the variable corresponding to the jth column of the A matrix
is brought into the solution.

c j - z j is referred to as the net evaluation row.

Below is how the z j s are calculated

z1 = 0(3) + 0(0) + 0(8) = 0

z2 = 0(5) + 0(1) + 0(5) = 0
z3 = 0(1) + 0(0) + 0(0) = 0
z4 = 0(0) + 0(1) + 0(0) = 0
z5 = 0(0) + 0(0) + 0(1) = 0

The completed initial basic feasible solution ( x1 = 0, x2 = 0, s1 = 150, s2 = 20 and s3 = 300 has an
objective function value, or profit of $0.

IMPROVING THE SOLUTION – 1st ITERATION

First look at the c j - z j values and select the largest value. In this case the largest c j - z j value is
50, as shown in the table above.
Next, find the q ratio by using the numbers in the largest c j - z j to divide the corresponding
numbers on the right hand side of the tableau.

x1 x2 s1 s2 s3
Basis cB Capacity 50 40 0 0 0 Rep. ratio
s1 0 150 3 5 1 0 0 150
= 50
3
s2 20 0 1 0 1 0 -
0

s3 300
0 300 8 5 0 0 1 = 37.5
8

zj 0 0 0 0 0 0
cj - z j 50 40 0 0 0

The variable corresponding to the largest c j - z j value enters the basis and the variable
corresponding to the lowest q ratio, leaves the basis.

In this example since x1 corresponds to the largest c j - z j value, it enters the basis. Also since s3
corresponds to the variable with the smallest q ratio, it leaves the basis.

The intersection of the largest c j - z j value and the smallest q ratio is the pivot element.

In this example the pivot element is 8.

After identifying the pivot element, our goal is to make the column in the A matrix
0
corresponding to x1 appear as 0
1

So the first thing is to divide whatever number that is at the pivot element through all the
3
numbers on the pivot row. This produces the column matrix 0 . Since we already have 0 above 1,
1
the next thing is to ensure that the 3 becomes a zero.

0
The elementary row operations to obtain 0 is explained below:
1
We perform the first elementary row operation by multiplying the pivot row (row 3) by 18 to

obtain the equivalent equation 18 ( 8 x1 + 5 x2 + 0s1 + 0 s2 + 1s3 ) = 1 8 ( 300 )

Or 1x1 + 5 8 x2 + 0s1 + 0s2 + 18 s3 = 75 2 . This is referred to as the new pivot row.

We perform the second elementary row operation by first multiplying the new pivot row by 3 to
obtain the equivalent equation

(
3 x1 + 5 x2 + 0 s1 + 0 s2 + 1 s3 = 3 75
8 8 ) (
2 or )
3 x1 + 15 x2 + 0s1 + 0s2 + 3 s3 = 225 .Subtracting this from the equation represented by row 1
8 8 2

( )
we obtain the following: ( 3 x1 + 5 x2 + 1s1 ) - 3x1 + 15 8 x2 + 0s1 + 0 s2 + 3 8 s3 = 150 - 225 2

Or 0 x1 + 25 8 x2 + 1s1 - 3 8 s3 = 75 3 .

This is all represented in the simplex tableau below:

x1 x2 s1 s2 s3
Basis cB Capacity 50 40 0 0 0 q ratio
s1 0 75 0 25 1 0 -3
2 8 8
s2 0 20 0 1 0 1 0

x1 50
75 1 5 0 0 1
2 8 8
zj 1875 50 250 50
8 0 0 8
cj - z j 0 70 0 0 -50
8 8

Next calculate the z j values

z1 = 0 ( 0 ) + 0 ( 0 ) + 50 ( 1) = 50

z2 = 0 25 ( 8 ) + 0 ( 1) + 50 ( 5 8 ) = 250 8
z3 = 0 ( 1) + 0 ( 0 ) + 50 ( 0 ) = 0

(
z4 = 0 -3
8 ) + 0 ( 0) + 50 ( 18 ) = 0
Assigning zero values to the non-basic variables x2 and s3 permits us to identify the following
new basic feasible solution: s3 = 0 , x2 = 0

s1 = 75 , s2 = 20 and x1 = 75
2 2

We get an optimal solution when all the c j - z j values are negatives or zeros or a combination of
both.

From the table above, the optimal solution has not been found because of the x2 column, which

has a positive number, 70 8 .

Hence we perform one more iteration to reach the optimal solution.

IMPROVING THE SOLUTION – 2nd ITERATION

Since x2 is the variable which corresponds to the largest c j - z j values, i.e. 70 8 , it enters the
basis.

We the use the numbers in the x2 column to calculate the Repl. ratio. An intersection of the
lowest q ratio with the largest c j - z j values gives the pivot element.

x1 x2 s1 s2 s3
Basis cB Capacity 50 40 0 0 0 Rep.ratio
s1 0 75 0 25 1 0 -3 75
2 8 8 2 = 12
25
s2 0 8
20 0 1 0 1 0 20 = 20
1

x1 50 75 5 1 75
2 1 8 0 0 8 2 = 60
5
8

zj 1875
cj - z j
x2 enters the basis and s1 leaves the basis.

IMPROVING THE SOLUTION – 3rd ITERATION

x1 x2 s1 s2 s3
Basis cB Capacity 50 40 0 0 0 Repl. ratio
x2 40 12 0 1 8 0 -3
25 8
s2 0
8 0 0 -8 1 1
25
x1 50 1 0 - 5 0 1
30 25 8

zj 1980 50 40 14 0 26
8 5
cj - z j 0 0 -14 0 -26
5 5
c
Considering the j - z j values, we notice that they are all zeros and negatives, this means that we

have now obtained the optimal solution.

In conclusion, we find that the optimal solution to the problem, consisting of the basic variables
x1 , x2 and s2 and non-basic variables s1 and s3 is as follows: x1 = 30, x2 = 12, s1 = 0, s2 = 8, s3 = 0