Quantitative Methods, BBA - 207
(Prepared by Prof. Sreeparna Guha, IEM Kolkata)
Simplex Algorithm for solving Linear programming problem:
**Follow the following steps while solving problem
𝒄𝒋 − 𝐶𝑜𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑡 (𝐶𝑜𝑠𝑡) 𝑜𝑓 𝑡ℎ𝑒 𝑑𝑒𝑐𝑖𝑠𝑖𝑜𝑛 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑜𝑏𝑗𝑒𝑐𝑡𝑖𝑣𝑒 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛
𝐵 − 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐵𝑎𝑠𝑖𝑐 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒𝑠
𝐶𝐵𝑗 − 𝐶𝑜𝑒𝑓𝑓𝑒𝑐𝑖𝑒𝑛𝑡(𝑐𝑜𝑠𝑡) 𝑜𝑓 𝑡ℎ𝑒 𝑏𝑎𝑠𝑖𝑐 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑜𝑏𝑗𝑒𝑐𝑡𝑖𝑣𝑒 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛
𝑋𝑗 − 𝑐𝑜𝑙𝑢𝑚𝑛 𝑐𝑜𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑣𝑒𝑐𝑡𝑜𝑟𝑠 𝑓𝑜𝑟 𝑑𝑒𝑐𝑖𝑠𝑖𝑜𝑛 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑐𝑜𝑛𝑠𝑡𝑟𝑎𝑖𝑛𝑡𝑠
Step – 1 (Preparation of constraints & objective function)
Prepare & adjust the objective function and the constraints by introducing slack/surplus
variables.
Step – 2
Construct the initial simplex table (Table – I). The format is below
𝑐𝑗 Solution
𝐶𝐵𝑗
Basic Variables
𝑋𝑗
(B)
𝑍𝑗
𝑍𝑗 − 𝑐𝑗
Step – 3(Optimality Check)
Calculate 𝑍𝑗 = ∑ 𝐶𝐵𝑗 𝑋𝑗
Calculate 𝑍𝑗 − 𝑐𝑗
For optimality: 𝑍𝑗 − 𝑐𝑗 ≥ 0 , (𝑀𝑎𝑥𝑖𝑚𝑖𝑠𝑎𝑡𝑖𝑜𝑛 𝑝𝑟𝑜𝑏𝑙𝑒𝑚). If for all ‘j’ the optimality condition
satisfies then terminate the process. But if for any ‘j’ 𝑍𝑗 − 𝑐𝑗 < 0 then proceed to next step.
Step – 4(Key Row & Key Column)
Choose 𝑍𝑗 − 𝑐𝑗 value with the most negative value.
Mark the corresponding column as “Key Column”
Calculate ratio of corresponding members of solution column & key column. Observe the
minimum value of ratios.
Mark the row with minimum ratio value as “Key Row”
Mark the element common to both key row & key column as “Key element”
**The variable corresponding to key element will enter the basic variable column in
place of corresponding basic variable in the key row.
Step – 5 (Building Iteration Table)
New values in the iteration table –
Divide the key row of the initial table by key element.
For the other rows –
𝑐𝑜𝑟𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑖𝑛𝑔 𝑘𝑒𝑦 𝑟𝑜𝑤 𝑣𝑎𝑙𝑢𝑒 × 𝑐𝑜𝑟𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑖𝑛𝑔 𝑘𝑒𝑦 𝑐𝑜𝑙𝑢𝑚𝑛 𝑣𝑎𝑙𝑢𝑒
New value = Old value –
𝐾𝑒𝑦 𝑒𝑙𝑒𝑚𝑒𝑛𝑡
After completion of the above calculation go back to Step – 3
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