MBA 650: Quantitative Analysis

1
MBA 650 Quantitative Analysis
2
Linear Programming 5-Step Solution Procedure

• 1. Formulate problem
• Objective function
• Set of constraints
• 2. Convert formulation to standard form
• 3. Convert standard form to tableau form
• 4. Establish initial, basic, feasible solution
• Initial tableau
• 5. Solve problem using the simplex method

3
Step 1 Formulate Reddy Mikks

• Max z 3x1 2x2
• subject to
• x1 2x2 lt 6 (RM A in tons)
• 2x1 x2 lt 8 (RM B in tons)
• - x1 x2 lt 1 (Demand in tons)
• x2 lt 2 (Demand in tons)
• x1, x2 gt 0

4
Step 5 Solve Reddy Mikks Using Simplex Method
(Maximization Procedure)

• 1. Start at origin (Step 4 initial tableau)
• 2. Select entering variable (optimality)
• Choose nonbasic variable with largest cj - zj
• 3. Determine leaving variable (feasibility)
• Calculate bi/aij for all aij gt 0
• Choose basic variable with smallest bi/aij
• 4. Solve for new set of basic variables
• 5. Calculate zj and cj zj
• If all cj zj lt 0, Stop!
• If not, return to STEP 2!

5
Daphne Jewelry, Part e.

• 1. Add the following constraint
• Sell at least 20K worth of merchandize in sales
  territory 4.
• 2. Assume that product line capacity can be
• adjusted, i.e., the total capacity of 950K
• can be divided in any way among the
• 9 product lines (see Table 4).