Master of Business Administration-MBA Semester 2 MB0048-Operation Research Assignment Set-1

Q1. a. hat do !ou mean "! #inear programming pro"#em$ %&p#ain the steps in'o#'ed in #inear programming pro"#em formu#ation$ Ans( A problem consists of a linear function of variable called objective function subject to set of linear equation or inequalities called constraints, are known as linear programming problem. In LP model the various parameters namely the objective function coefficients, .!.", coefficients of the constraints and resource values are certainly known and their value do not change with time. #hus the profit or cost per unit of product, availability of labour and material, market demand is known with certainty. )inear *rogramming *ro"#em +ormu#ation $e are not going to be concerned in this class with the question of how LP problems are solved. Instead, we will focus on problem formulation %% translating real%world problems into the mathematical equations of a linear program %% and interpreting the solutions to linear programs. $e will let the computer solve the problems for us. #his section introduces you to the process of formulating linear programs. #he basic steps in formulation are& '( Identify the decision variables) *( +ormulate the objective function) and ,( Identify and formulate the constraints. -( A trivial step, but one you should not forget, is writing out the non%negativity constraints. Steps in formu#ating a )inear *rogramming Mode# './iapetto0s $oodcarving Inc. manufactures two types of wooden toys& soldier and trains. A soldier sells for 1*2 and uses 1'3 worth of raw materials. 4ach solider that is manufactured increases /iapetto0s variable labour and overhead costs by 1'-. A train sells for 1*' and uses 15 worth of raw material. 4ach train built increases /iapetto0s variable labour and overhead costs by 1'3. #he manufacture of wooden soldiers and trains requires two types of skilled labour& carpentry and finishing. A soldier requires * hours of finishing labour and ' hour of carpentry labour. A train requires ' hour of finishing and ' hour of carpentry labour. 4ach week, /iapetto can obtain all the needed raw material but only '33 finishing hours and 63 carpentry hours. 7emand for trains is unlimited but at most -3 soldiers are bought each week. +ormulate a mathematical method of /iapetto0s situation that can be used to ma8imi9e /iapetteo0s weekly profit. Step 1. It is always good to place all information in a table format, if it is not given to you, to better understand the problem ooden ,o! "ale price aw materials cost So#diers 1*2 1'3 ,rains 1*' 15

Labour and overhead costs 1'-

1'3

+inishing hours :arpentry hours

* '

' '

Step 2. )ist the constraints '. aw material is unlimited

*. +inishing hours ; '33 hrs <wk ,. :arpentry hours ; 63 hrs <wk -. 7emand for trains is unlimited =. 7emand for soldiers ; -3 <wk Step -. .ecide /hat the decision 'aria"#es are going to "e. 7ecision variables tell us how much of a quantity we should produce or use. #hey are usually quantities such as >no. of gallons of milk?. #o choose the best decision variable, first ask yourself what the problem requires. If the problem requires you to ma8imi9e profit, and then ask yourself, what production quantity influences the profit@ #his will usually set you on the right path to determining the decision variables but deciding the right decision variables usually comes with lots of practice. In this case the quantity of trains and soldiers sold influences /iapetto0s profit. "ince we are required to know the weekly profit, then we can let& A B no. of soldiers sold <wk B no. of trains sold <wk Step 4. .etermine the o"0ecti'e function In this case we are ma8imi9ing profits for each wooden toy sold i.e. soldiers and trains. In this case Profit CP( B C"ale price D overhead and labour costs D raw material costs( #hus for each soldier sold, the profit is B C1*2 % 1'3 % 1'-( B 1, +or each train, the profit is B C1*' % 15 % 1'3( B 1* #herefore for each train sold, /iapetto will gain 1*, and for each soldier that is sold 1,. #hus, our total profit P B ,A E * CFbjective +unction( Step 1. 7evelop equations for the numerical valued constraints Ci.e. constraints with ; or G signs(. 4ach constraint should have either A or . #he first constraint is the finishing hours Csee "tep *(. #he number of finishing hours used is dependent on the number of soldiers or trains produced. "ince we are assuming all trains and soldiers would be sold within the week, the number of finishing hours required is dependent on the number of soldiers or trains sold per week. "ince each soldier requires * hrs of finishing labour hours and trains requires ', we can write the constraint as follows *A E ; '33 C+inishing labour hours constraint( Cnote& the full units of measurements is as follows * hrs wk%'< soldier sold wk%' H no. of soldiers sold wk%' E ' hr wk%'< train sold wk%' H no. of trains sold wk%' ; '33 hrs wk%'( "imilarly, the carpentry constraint is found to be& A E ; 63 C:arpentry labour hours constraint( #he last constraint requires that soldiers sold be limited to -3<wk. #hus, A ; -3 C"oldiers 7emand :onstraint(

Step 2. $rite out the full LP problem and include the subject to Cs.t.( statement and the desired sign of the decision variables. Iariables are usually required to be positive especially if they are physical quantities and thus, A and G 3 Ja8 P B ,A E * ".t. *A E ; '33 C+inishing Labour( AE ; 63 C:arpentry Labour( A ; -3 C"oldier 7emand( A, G 3

". A paper mi## produces t/o grades of paper 'i3.4 5 and 6. Because of ra/ materia# restrictions4 it cannot produce more than 400 tons of grade 5 paper and -00 tons of grade 6 paper in a /ee7. ,here are 120 production hours in a/ee7. 8t re9uires 0.20 and 0.40 hours to produce a ton of grade 5 and 6 papers.,he mi## earns a profit of Rs. 200 and Rs. 100 per ton of grade 5 and 6 paper Respecti'e#!. +ormu#ate this as a )inear *rogramming *ro"#em. Ans ( O"0ecti'e function is to ma&imi3e the profit #hus Ja8. KB*33L'E=33L* :onstraints '. aw materials *. Production hour. LPP is Ja8. KB*33L'E=33L* "ubject to constraints& L'MB-33 L*MB,33 3.*3L'E3.-3L*MB'N3Cin hrs( L', L* OB3

Q2. a. .iscuss the methodo#og! of Operations Research. Answer & 4ssential characteristics #hree essential characteristics of operations research are a systems orientation, the use of interdisciplinary teams, and the application of scientific method to the conditions under which the research is conducted. J4#!F7FLF/P F+ FP4 A#IFQ" 4"4A :! #here are si8 phases of the operations research& '. :ollection of data prior to the introduction of the partograph. *. Introduction of the partograph by means of a training programme. ,. 4valuation of the training programme. -. :ollection of data after the introduction of the partograph. =. Analysis of data both before and after introduction of partograph. N. 7issemination of results and discussion of implications.

". %&p#ain in "rief the phases of Operations Research. Ans( #he phases of F are & ' Fbserve the problem environment * Analyse and define the problem , 7evelop a model - "election of data input = solution and testing N Implementation of the solution In detail Step 8. O"ser'e the *ro"#em %n'ironment

#he first step of F study is the observation of the environment in which the problem e8ists. #he activities that constitute this step are visits, conferences, observations, research etc. with the help of such activities, the F analyst gets sufficient information and support to proceed and is better prepared to formulate the problem. Step 88. Ana#!se and .efine the *ro"#em In this step not only the problem is defined but also uses, objectives and limitations of the study that are stressed in the light of the problem. #he end results of this step are clear grasp of need for a solution and understanding of its nature. Step 888. .e'e#op a Mode# #he ne8t step is to develop model, which is representation of same real or abstract situation. F models are basically mathematical models representing systems, process or environment in form of equations, relationships or formulae. #he activities in this step is to defining interrelationships among variables, formulating equations, using known F models or searching suitable alternate models. #he proposed model may be field tested and modified in order to work under stated environmental constraints. A model may also be modified if the management is not satisfied with the answer that it gives. Step 8:. Se#ection of .ata 8nput It is a established fact that without authentic and appropriate data the results of the F models cannot be trusted. !ence, taping right kind of data is a vital step in F process. Important activities in this step are analysing internal%e8ternal data and facts, collecting opinions and using computer data banks. #he purpose of this step is to have sufficient input to operate and test the model. Step :. So#ution and ,esting In this step the solution of the problems is obtained with the help of model and data input. "uch a solution is not implemented immediately and this solution is used to test the model and to find its limitations if any. If the solution is not reasonable or if the model is not behaving properly, updating and modification of the model is considered at this stage. #he end result of this step is solution that is desirable and supports current organisational objectives. Step :8. 8mp#ementation of the So#ution #his is the last phase of the F study. In F the decision%making is scientific but implementation of decision involves many behavioural issues. #herefore, implementation authority has to resolve the behavioural issues, involving the workers and supervisors to avoid further conflicts. #he gap between management and F scientist may offer some resistance but must be eliminated before solution is accepted in totality. Roth the parties should play positive role, since the implementation will help the organisation as a whole. A properly implemented solution obtained through F techniques results in improved working conditions and wins management support.

Q-. So#'e the fo##o/ing )inear *rogramming *ro"#em using Simp#e method. Ma&imi3e ;< -&1 = 252 Su"0ect to the constraints( 51= 52 > 4 51= 52 > 2 514 52 ? 0

Ans & Ja8. 9 B '', 8 ' B ,, 8 *B'

Q4. %&p#ain the procedure of MO.8 method of finding so#ution through optima#it! test. Ans ( #ransportation Algorithm for Jinimi9ation Problem CJF7I Jethod( Step 1 Jake the transportation table entering the origin capacities ai, the cost cij and destination requirement bj Step 2 7etermine an initial basic feasible solution by vogelSs technique or by any of the known method. Step +or all the basic variables 8ij, solve the system of equations ui E vj B cij, for all i, j for which cell Ci, j( is in the basis, starting at first with some ui B 3, compute the values of ui and vj on the transportation table Step 4 :alculate the cost differences dij B cij % C ui E vj ( for all the non%basic cells Step 1 Apply optimality test by testing the sign of each dij If all dij G 3, the present basic feasible solution is optimal or best If at least one dij M 3, choose the variable 8rs Cmost negative( to enter the basis. "olution under test is not optimal if any of the dij is negative and subsequent improvement is needed by repeating the above procedure. Step 2 Assume the variable 8rs enter the basis. Assign an unknown quantity @ to the cell Cr, s(. #hen make a loop that begins and ends at the cell Cr, s( and links some of the basic cells. #he amount @ is added to and subtracted from the transition cells of the loop in such a way that the availabilities and necessities remain fulfilled. Step @ Allocate the largest possible value to the @ in such a manner that the value of at least one basic variable comes out to be 9ero and the other basic variables remain non%negative. #he basic cell whose allotment has been made 9ero will leave the basis. "tep 6 Qow, go back to step , and repeat the process until an optimal solution is achieved. $orked 48amples Illustration ' 7etermine an optimal solution 7etermine an optimal solution A'ai#a"i#i 1 2 4 t! +' '5 ,3 =3 '3 2 +* 23 ,3 -3 N3 5 +, -3 6 23 *3 '6 equirement = 6 2 '-

Q1. a. %&p#ain the steps in Aungarian method. Ans ( #he !ungarian algorithm allows a Tminimum matchingT to be found. #his can be used in instances where there are multiple quotes for a group of activities and each activity must be done by a different person, to find the minimum cost to complete all of the activities.

'(Arrange your information in a matri8 with the TpeopleT on the left and the TactivityT along the top, with the TcostT for each pair in the middle.

*(4nsure that the matri8 is square by the addition of dummy rows<columns if necessary. :onventionally, each element in the dummy row<column is the same as the largest number in the matri8.

,( educe the rows by subtracting the minimum value of each row from that row.

-( educe the columns by subtracting the minimum value of each column from that column

=(:over the 9ero elements with the minimum number of lines it is possible to cover them with. CIf the number of lines is equal to the number of rows then go to step 5(

N(Add the minimum uncovered element to every covered element. If an element is covered twice, add the minimum element to it twice.

2("ubtract the minimum element from every element in the matri8.

6(:over the 9ero elements again. If the number of lines covering the 9ero elements is not equal to the number of rows, return to step N.

5("elect a matching by choosing a set of 9eros so that each row or column has only one selected.

'3(Apply the matching to the original matri8, disregarding dummy rows. #his shows who should do which activity, and adding the costs will give the total minimum cost.

". So#'e the fo##o/ing assignment pro"#em.

Fperators Jachine A R : ' N3 -3 == * =3 -= 23 , -= == N3 -= ,= =3

7 Ans ( Step 1(

-=

-=

-3

-=

Step(

A #o , R #o ' : #o 7 #o *

-= -3 =3 -= '63

Q2. a. %&p#ain the steps in'o#'ed in :oge#Bs appro&imation method C:AMD of solving #ransportation Problem. Ans ( IogelSs Appro8imation Jethod CIAJ( #his method is based on the SdifferenceS associated with each row and column in the matri8 giving unitcost of transportation cij. #his SdifferenceS is defined as the arithmetic difference between the smallest and ne8tto the smallest element in that row or column. #his difference in a row or column indicates the minimum unitpenalty incurred in failing to make an allocation to the smallest cost cell in that row or column. #hisdifference also provides a measure of proper priorities for making allocations to the respective rows and column.In other words, if we take a row, we have to allocate to the cell having the least cost and if we fail to do so, e8tracost will be incurred for a wrong choice, which is called penalty. #he minimum penalty is given by thisdifference. "o, the procedure repeatedly makes the ma8imum feasible allocation in the smallest cost cell of theremaining row or column, with the largest penalty. Fnce an allocation is fully made in a row or column, theparticular row or column is eliminated. !ence and allocation already made cannot be changed. #hen we have areduced matri8. epeat the same procedure of finding penalty of all rows and columns in the reduced matri8,choosing the highest penalty in a row or column and allotting asmuch as possible in the least cost cell in thatrow or column. #hus we eliminate another fully allocated row or column, resulting in further reducing the si9eof the matri8. $e repeat till all supply and demand are e8hausted. A summary of the steps involved in IogelSs Appro8imation Jethod is given below&

S,%* 1( epresent the transportation problem in the standard tabular form. S,%* 2( "elect the smallest element in each row and the ne8t to the smallest element in that row. +ind the difference. #his is the penalty written on the right hand side of each row. epeat the same for each column. #he penalty is written below each column. S,%* -( "elect the row or column with largest penalty. If there is a tie, the same can be broken arbitrarily. S,%* 4( Allocate the ma8imum feasible amount to the smallest cost cell in that row or column. S,%* 1( Allocate 9ero elsewhere in the row or column where the supply or demand is e8hausted. S,%* 2( emove all fully allocated rows or columns from further consideration. #hen proceed with the remaining reduced matri8 till no rows or columns remain.

". So#'e the fo##o/ing transportation pro"#em using :oge#Bs appro&imation method. +actories 7istribution :entres "upply :' :* :, :+' +* +, equirements Ans ( So#ution ( +actories , 2 * N3 * = = -3 2 * *3 N , = '= =3 N3 *=

7istribution :entres :' :* 3 = N3 = * * -3

"upply :, 3 = , *3 :' * '= =3 N3 *=

+' +* +, equirements

In above problem the highest contribution or per unit profit is 2 and now we subtract all the contribution no from 2, now applying the IAJ method in the above table. +actories 7istribution :enters :' :'B* +' +* +, *B3 *B3 *B' 3 = :* :*B, = * * :, :,B* 3 = , ::-B' ' * =3 N3 *= * 3 3 * F ' 8 ' ' 8 ' ' "upply P' P* P, P-

equirements P' P* P, P-

N3 ' ' ' '

-3 ' ' ' '

*3 ' ' ' '

'= = L L L