- 15 Downloads
In the simplex method, the indirect costs are found by taking the inner products of the multiplier (pricing) vector with each column of the problem's defining A matrix. This product, for a column j, is usually denoted by zj. For cj, the original objective function coefficient for column j, the term (zj − cj)or (cj − zj) is used to determine if the associated variable is a candidate to enter the basic feasible solution. For any basic variable xk, (zk − ck) = 0. The (zj − cj) terms are called relative costs (relative to the basis) or reduced costs. Prices.