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This lecture covers the basics of the Simplex algorithm, starting with the initialization of a free solution and the addition of edges to form cycles. It explains how the algorithm solves flow problems and deals with negative cost cycles. The instructor demonstrates the process step by step, emphasizing the importance of maintaining feasibility throughout. The lecture also introduces the concept of unsaturated negative cost cycles and discusses the convergence of the Negative Cost Cycle Algorithm (NCCA) in solving linear programming problems.