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Published by: Shyam Pal Singh Tomar on Apr 09, 2013
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Master of Business Administration- MBA Semester 1MB0048
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Operations Research- 4 Credits(Book ID: B1631)Assignment Set - 1 (60 Marks)
Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions.
Q1. a. What do you mean by linear programming problem? Explain the
 
steps involved inlinear programming problem formulation?Ans
.1. Linear Programming (LP) is a mathematical technique designed to help managers intheir planning and decision-making. It is usually used in an organisation that is trying to make themost effective use of its resources. Resources typically include machinery, manpower, money,time, warehouse space, and raw materials. A few examples of problems in which LP has beensuccessfully applied are:(a) Developments of a production schedule that will satisfy future demands for a
firm’s product and at the same time m
inimise total production and inventory costs.(b) Establishment of an investment portfolio from a variety of stocks or bonds that will
maximise a company’s return on investment.
(c) Allocation of a limited advertising budget among radio, TV, and newspaper spotsin order to maximise advertising effectiveness.(d) Determination of a distribution system that will minimise total shipping cost fromseveral warehouses to various market locations.(e) Selection of the product mix in a factory to make best use of machine and man
hours available while maximising the firm’s profit.
 2. The common requirements of LPP are as follows.(a) Decision variables and their relationship.(b) Well-defined objective function.(c) Existence of alternative courses of action.(d) Non-negative conditions on decision variables.3. Basic assumptions of LPP are:(a)
Linearity
. Both objective functions and constraints can be expressed as linear inequalities.(b)
Deterministic
. All co-efficients of decision variables in the objective andconstraints expressions are known and finite.(c)
Additively
. The value of the objective function and the total amount of eachresource used must be equal to the sum of respective individual contributions by decisionvariables.(d)
Divisibility
. The solution values of decision variables can be non- negative valuesincluding fractions.
 
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b. A paper mill produces two grades of paper viz., X and Y. Because of raw materialrestrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper in a week. There are 160 production hours in a week. It requires 0.20 and 0.40hours to produce a ton of grade X and Y papers. The mill earns a profit of Rs. 200 and Rs.500 per ton of grade X and Y paper respectively. Formulate this as a Linear ProgrammingProblem.Ans. Decision variables:
Let x1 and x2 be the number of units of two grades of paper of Xand Y
Objective function:
Since the profit for the two grades of paper X and Yare given, the objectivefunction is to maximize the profit Max(Z) 200x1+500x2
Constraints:
There are 2 constraints one w.r t. to raw material, and the other w.r.t to productionhours.The complete LPP isMax(Z) = 200x1+500x2Subject
to x1 400
 
x2 ≤ 300
 
0.2x1 + 0.4x2 ≤160X1≥ 0, x2 ≥ 0
 
Graphical Solution
4036 (2.5,35)X220 90X1
Q2. a. Discuss the methodology of Operations Research.Ans
. The scientific method translates a given problem into a mathematical representation whichis solved and retransformed into the original context. Problems are as follows:1.
Definition
. The first and the most important step in the OR approach of problem solvingis to define the problem. One needs to ensure that the problem is identified properly because thisproblem statement will indicate the following two major aspects:(a) Description of the goal or the objective of the study(b) Identification of the decision alternative to the system
 
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2.
Construction
. Based on the problem definition, you need to identify and select the mostappropriate model to represent the system. Hence, appropriate models can be constructed.3.
Solution
. After deciding on an appropriate model, you need to develop a solution for themodel and interpret the solution in the context of the given problem. One which maximises or minimises the performance of any measure in a model subject to the conditions and constraintsimposed on the model.4.
Validation
. A model is a good representation of a system. However, the optimal solution
must work towards improving the system’s performance.
5.
Implementation
. You need to apply the optimal solution obtained from the model to thesystem and note the improvement in the performance of the system.
b. Explain in brief the phases of Operations Research.Ans.
The scientific method in OR study generally involves three phases.
Phases of Operations Research
The brief details of the phases:1.
Judgment phase
. This phase includes the following activities:(a) Determination of the operations.(b) Establishment of objectives and values related to the operations.(c) Determination of suitable measures of effectiveness.(d) Formulation of problems relative to the objectives.2
. Research phase
. This phase utilises the following methodologies:(a) Operation and data collection for a better understanding of the problems.(b) Formulation of hypothesis and model.(c) Observation and experimentation to test the hypothesis on the basis of additionaldata.(d) Analysis of the available information and verification of the hypothesis using pre-established measure of effectiveness.(e) Prediction of various results and consideration of alternative methods.
 
Judgment PhaseResearch PhaseAction Phase

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