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ASSIGNMENT SET – 1 1. Describe in details the different scopes of application of Operations Research.
Ans : - The application of Operations research methods helps in making decisions in such complicated situations. Evidently the main objective of Operations research is to provide a scientific basis to the decision-makers for solving the problems involving the interaction of various components of organization, by employing a team of scientists from different disciplines, all working together for finding a solution which is the best in the interest of the organization as a whole. The solution thus obtained is known as optimal decision. The different scopes of application of Operations Research are: i) In Defence Operations: In modern warfare the defence operations are carried out by a number of independent components namely Air Force, Army and Navy. The activities in each of these components can be further divided in four sub-components viz.: administration, intelligence, operations and training, and supply. The application of modern warfare techniques in each of the components of military organizations requires expertise knowledge in respective fields. Furthermore, each component works to drive maximum gains from its operations and there is always a possibility that strategy beneficial to one component may have an adverse effect on the other. Thus in defence operations there is a necessity to co-ordinate the activities of various components which gives maximum benefit to the organization as a whole, having maximum use of the individual components. The final strategy is formulated by a team of scientists drawn from various disciplines who study the strategies of different components and after appropriate analysis of the various courses of actions, the best course of action, known as optimum strategy, is chosen. ii) In Industry: The system of modern industries is so complex that the optimum point of operation in its various components cannot be intuitively judged by an individual. The business environment is always changing and any decision useful at one time may not be so good some time later. There is always a need to check the validity of decisions continually, against the situations. The industrial revolution with increased division of labour and introduction of management responsibilities has made each component an independent unit having their own goals. For example: Production department minimize cost of production but maximizes output. Marketing department maximizes output but minimizes cost of unit sales. Finance department tries to optimize capital investment and personnel department appoints good people at minimum cost. Thus each department plan their own objectives and all these objectives of various department or components come to conflict with each other and may not conform to the overall objectives of the organization. The application of OR techniques helps in overcoming this difficulty by integrating the diversified activities of various components so as to serve the interest of the organization as a whole efficiently. OR methods in industry can be applied in the fields of production, inventory controls and marketing, purchasing, transportation and competitive strategies etc. iii) Planning: In modern times it has become necessary for every government to have careful planning, for economic development of the country. OR techniques can be fruitfully applied to maximize the per capita income, with minimum sacrifice and time. A government can thus use OR for framing future economic and social policies. iv) Agriculture: With increase in population there is a need to increase agriculture output. But this cannot be done arbitrarily. There are a number of restrictions under which agricultural production is to be studied. Therefore there is a need to determine a course of action, which serves
the best under the given restrictions. The problem can be solved by the application of OR techniques. v) In Hospitals: The OR methods can be used to solve waiting problems in out-patient department of big hospitals. The administrative problems of hospital organization can also be solved by OR techniques. vi) In Transport: Different OR methods can be applied to regulate the arrival of trains and processing times, minimize the passengers waiting time and reduce congestion, formulate suitable transportation policy, reducing the costs and time of trans-shipment. vii) Research and Development: Control of R and D projects, product introduction planning etc. and many more applications.
2. What do you understand by Linear Programming Problem? What are the requirements of L.P.P.? What are the basic assumptions of L.P.P.?
Ans : - One of the most important problems in management decision is to allocate limited and scarce resource among competing agencies in the best possible manner. Resources may represent man, money, machine, time, technology on space. The task of the management is to derive the best possible output (or set of outputs) under given restraints on resources. The output may be measured in the form of profits, costs, social welfare, effectiveness, etc. In many situations the output (or the set of outputs) can be expressed as a linear relationship among a number of variables. The amount of available resources can also be expressed as a linear relationship among some system variables. The management problem may be to optimize (maximize or minimize) the out-put or the objective function subject to the set of constraints An optimization problem in which both the objective function and the constraints are represented by linear forms is a problem in linear programming. Requirements of L.P.P. a. Decisions variables and their relationship b. Well defined objective function c. Existence of alternative courses of action d. Non-negative conditions on decision variables. Basic assumptions of L.P.P a. Linearity: Both objective function and constraints must be expressed as linear inequalities. b. Deterministic: All coefficient of decision variables in the objective and constraints expressions c. should be known and finite. d. Additivity: The value of objective function for the given values of decision variables and the e. total sum of resources used, must be equal to sum of the contributions earned from each f. decision variable and the sum of resources used by decision variables respectively. g. Divisibility: The solution of decision variables and resources can be any non-negative values including fractions.
3. Describe the different steps needed to solve a problem by simplex method.
Ans:- The different steps needed to solve a problem by simplex method are: a. Introduce stack variables (Si’s) for” £” type of constraint. b. Introduce surplus variables (Si’s) and Artificial Variables (Ai) for” ³” type of constraint. c. Introduce only Artificial variable for “=” type of constraint. d. Cost (Cj) of slack and surplus variables will be zero and that of Artificial variable will be “M” e. Find Zj – Cj for each variable. f. Slack and Artificial variables will form Basic variable for the first simplex table. Surplus variable will never become Basic Variable for the first simplex table. g. Zj = sum of [cost of variable x its coefficients in the constraints – Profit or cost coefficient of the variable]. h. Select the most negative value of Zj – Cj. That column is called key column. The variable corresponding to the column will become Basic variable for the next table. i. Divide the quantities by the corresponding values of the key column to get ratios select the minimum ratio. This becomes the key row. The Basic variable corresponding to this row will be replaced by the variable found in step 6. j. The element that lies both on key column and key row is called Pivotal element. k. Ratios with negative and “a” value are not considered for determining key row. l. Once an artificial variable is removed as basic variable, its column will be deleted from next iteration. m. For maximization problems decision variables coefficient will be same as in the objective function. For minimization problems decision variables coefficients will have opposite signs as compared to objective function. n. Values of artificial variables will always is – M for both maximization and minimization problems. o. The process is continued till all Zj – Cj >0.
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