Solution

ID: past-exam-of-the-probability-statistics-and-options-ii-course-of-the-university-of-oxford/2007/s/4/b/solution

Begin with and the printed matching . Grow an alternating tree from unmatched row two. Its tight edge reaches column two, whose matched row is three. Thus the reached row set is and the reached column set is . Among unreached columns the reduced costs are from row two and from row three, so their minimum is two.
Increase by two and decrease by two. The new tight edge reaches an unmatched column. Augment along , replacing by . The matching becomes .
Now grow from unmatched row four. Edge reaches matched row one, and edge reaches unmatched column five. Augment along , replacing by . This yields
No further potential update is needed. The final potentials are and . Their reduced-cost matrix is
Every entry is nonnegative and every chosen entry is zero. The dual sum is , so part (a) certifies optimality.

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