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Name Syed Khaleelullah

Roll No. 530910706

Program MBA 2nd Sem
Subject Operation Research, set1

Code MB0032

Roll No: 530910706

1. Describe the broad classification of Operations Research models in
details. Name the different steps needed in OR approach of problem
Answer: A model is known as the representation of the reality. It is known as an
idealized representation or abstraction of a real life system. The main objective
of this model is to identify significant factors and their interrelationship. A model
is helpful is decision making as it provides a simplified description of complexities
and uncertainties of a problem in logical structure.

A broad classification of OR models:

a) Physical modes include all form of diagrams, graphs and charts. They are
designed to deal with specific problems. They bring out significant factors and
inter-relationship in pictorial firm so as to facilitate analysis.
There are two types:
1) Ieonic models and 2) Analog models
Iconic model is known as an image of an object or system that is represented on
a small scale. We can say that these models can simulate the actual performance
of a product.
On the other hand analog models are small physical systems that have similar
characteristics and work like an object. For example- Toy.
b) Mathematical Model or Symbolic models represent the decision variable of the
system. The model employs a set of mathematical symbols also. The variables
are related by mathematical system also. For example - Allocation, sequencing,
replacement models etc.
c) It is by nature of Environment We have 1) Deterministic model in which every
thing is defined and the results are certain. Eg: EOQ model 2) Probabilistic
models in which the input and output variables follow a probability distribution
Eg: Games Theory.
d) By the extent of Generality: The tow models belonging to this class are
1) General model canbe applied in general and does not pertain to one problem
only. Eg: Linear Programming
2) Specific model is applicable under specific condition only. For example - Sales
can response curve or equation which can be known as a function of advertising
that is applicable in the marketing function alone.

The scientific method translates a real given problem into a mathematical

representation which is solved and retransformed into the original context. The
OR approach to problem solving consists of the following steps:
1) Definition of the problem
The first and the most important requirement is that the root problem should be
identified and understood. The problem should be identified properly, this
indicates three major aspects:
1) A description of the goal or the objective of the study,
2) an identification of the decision alternative to the system, and
3) a recognition of the limitations, restrictions and requirements of the system.

2) Construction of the model

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Depending on the definition of the problem, the operations research team should
decide on the most suitable model for representing the system. Such a model
should specify quantitative expressions for the objective and the constraints of
the problem in terms of its decision variables.
3) Solution of the model
Once an appropriate model has been formulated the next stage in the analysis
calls for its solution and the interpretation of the solution in the context of the
given problem – A solution to a model implies determination of a specific set of
decision variables that would yield on optimum solution. An optimum solution is
one which maximizes or minimizes the performance of any measure in a model
subject to the condition and constraints imposed on the model.
4) Validation the model
A model is a good representative of a system, and then the optimal solution
must improve the system’s performance. A common method for testing the
validity of a model is to compare its performance with some post data available
for the actual system.
5) About Implementation of the final result
The optimal solution obtained from a model should be applied practice to
improve the
performance of the system and the validity of the solution should be verified
under changing conditions.

2. Describe the graphical method to solve the Linear Programming

Problem. Use the following example –
Maximize Z = 30x1 + 40x2
Subject to the constraints
1.5x1 + 1.9x2 ≤600
0.3 x1 + 0.2x2 ≤100
0.0x1 + 0.2x2 ≤30
and x1 ≥0, x2 ≥0

Answer: A LPP with 2 decision variables x1 and x2 can be solved easily by

graphical method.
We consider the x1 x2 – plane where we plot the solution space, which is the
space enclosed by the constraints. Usually the solution space is a convex set
which is bounded by a polygon; since a linear function attains extreme
(maximum or minimum) values only on boundary of the region, it is sufficient to
consider the vertices of the polygon and find the value of the objective function
in these vertices.

By comparing the vertices of the objective function at these vertices, we obtain

optimal solution of the problem.

The method of solving a LPP on the basis of the above analysis is known as the
method. The working rule for the method is as follows:
Working Rule:
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Step I: Write down the equations by replacing the inequality symbols by the
equality symbol in the given constraints.
Step II: Plot the straight lines represented by the equations obtained in step I.
Step III: Identify the convex polygon region relevant to the problem. We must
decide on which side of the line, the halfplane is located.
Step IV: Determine the vertices of the polygon and find the values of the given
function Z at each of these vertices. Identify the greatest and least of these
values. These are respectively the maximum and minimum value of Z.
Step V: Identify the values of (x1, x2) which correspond to the desired extreme
value of Z. This is an optimal solution of the problem.
Solution by Graphical Method

Let the horizontal axis represent x1and vertical axis represent x2. plot the
constraint lines,
feasibility region has been shown in fig.

Any point on the thick line or inside the shaded portion will satisfy all the
restrictions of the problem then ABCDE is the feasibility region carried out by the
constraints operating on the objective function. This depicts the limits within
which the values of the decision variables are permissible. The intersection points
C and D can be solved by the linear equations 0.1x2 < 30, 0.1x1 + 1.5x2 = 600,
and 0.2x1 + 0.2x2 < 100 i.e. C(150,300) and D(300,180).

We work out the revenues at different corners points as tabulated below

From the above table we find that revenue is maximum at Rs.31500 when 150
unit of X1 and 300 units of X2 are produced.
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3. Describe the Penalty Cost method (Big M Method) for solving L.P.P.
Answer: Penalty Cost Method Or Big-M Method
Consider a L.P.P. when atleast one of the constraints is of the type > or = . While
expressing in the standard form, add a non negative variable to each of such
constraints. These variables are called artificial variables. Their addition causes
violation of the corresponding constraints, since they are added to only one side
of an equation, the new system is equivalent to the old system of constraints if
and only if the artificial variables are zero. To guarantee such assignments in the
optimal solution, artificial variables are incorporated into the objective function
with large positive coefficients in a minimization program or very large negative
coefficients in a maximization program. These coefficients are denoted by ± M.

Whenever artificial variables are part of the initial solution X0, the last row of
simplex table will contain the penalty cost M. The following modifications are
made in the simplex method to minimize the error of incorporating the penalty
cost in the objective function. This method is called Big M method or Penalty cost
1) The last row of the simplex table is decomposed into two rows, the first of
which involves those terms not containing M, while the second involves those
containing M.
2) The Step 1 of the simplex method is applied to the last row created in the
above modification and followed by steps 2, 3 and 4 until this row contains no
negative elements. Then step 1 of simplex algorithm is applied to those elements
next to the last row that are positioned over zero in the last row.
3) Whenever an artificial variable ceases to be basic, it is removed from the first
column of the table as a result of step 4, it is also deleted from the top row of
the table as is the entire column under it.
4) The last row is removed from the table whenever it contains all zeroes.
5) If non zero artificial variables are present in the final basic set, then the
program has no
solution. In contrast, zero valued artificial variables in the final solution may exist
when one or more of the original constraint equations are redundant.

4. Why Duality concept is important in OR? Describe the economic

importance of the Duality concept.
Answer: The Importance of Duality Concept Is Due To Two Main Reasons
i. If the primal contains a large number of constraints and a smaller number of
variables, the labor of computation can be considerably reduced by converting it
into the dual problem and then solving it.
ii. The interpretation of the dual variable from the loss or economic point of view
extremely useful in making future decisions in the activities being programmed.
Economic importance of duality concept
The linear programming problem can be thought of as a resource allocation
model in which the objective is to maximize revenue or profit subject to limited
resources. Looking at the problem from this point of view, the associated dual
problem offers interesting economic interpretations of the L.P resource allocation

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model. We consider here a representation of the general primal and dual
problems in which the primal takes the role of a resource allocation model.

From the above resource allocation model, the primal problem has n economic
activities and m resources. The coefficient cj in the primal represents the profit
per unit of activity j. Resource i, whose maximum availability is bi, is consumed
at the rate aij units per unit of activity
j.Interpretation of Duel Variables –
For any pair of feasible primal and dual solutions,
(Objective value in the maximization problem) ≤ (Objective value in the
minimization problem) At the optimum, the relationship holds as a strict
equation. Note: Here the sense of optimization is very important. Hence clearly
for any two primal and dual feasible solutions, the values of the objective
functions, when finite, must satisfy the following inequality.

The strict equality, z = w, holds when both the primal and dual solutions are
Consider the optimal condition z = w first given that the primal problem
represents a resource allocation model, we can think of z as representing profit
in Rupees. Because bi represents the number of units available of resource i, the
equation z = w can be expressed as profit (Rs) = Σ
(units of resource i) x (profit per unit of resource i) This means that the dual
variables yi,
represent the worth per unit of resource i [variables yi are also called as dual
prices, shadow prices and simplex multipliers]. With the same logic, the
inequality z < w associated with any two feasible primal and dual solutions is
interpreted as (profit) < (worth of resources) This relationship implies that as
long as the total return from all the activities is less than the worth of the
resources, the corresponding primal and dual solutions are not optimal.
Optimality is reached only when the resources have been exploited completely,
which can happen only when the input equals the output (profit). Economically
the system is said to remain unstable (non optimal) when the input (worth of the
resources) exceeds the output (return). Stability occurs only when the two
quantities are equal.

5. Describe the Matrix Minimum method of finding the initial basic

feasible solution in the transportation problem.
Answer: The Initial basic Feasible solution using Matrix Minimum Method
Let us consider a T.P involving m-origins and n-destinations. Since the sum of
origin capacities equals the sum of destination requirements, a feasible solution
always exists.

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Any feasible solution satisfying m + n – 1 of the m + n constraints is a redundant
one and hence can be deleted. This also means that a feasible solution to a T.P
can have at the most only m + n –
1 strictly positive component, otherwise the solution will degenerate. It is always
possible to assign an initial feasible solution to a T.P. in such a manner that the
rim requirements are satisfied.
This can be achieved either by inspection or by following some simple rules. We
begin by imagining that the transportation table is blank i.e. initially all xij = 0.
The simplest procedures for initial allocation discussed in the following section.
Matrix Minimum Method
Step 1:Determine the smallest cost in the cost matrix of the transportation
table. Let it be cij , Allocate xij = min ( ai, bj) in the cell ( i, j)
Step 2: If xij = ai cross off the ith row of the transportation table and decrease
bj by ai go to step 3. if xij = bj cross off the ith column of the transportation
table and decrease ai by bj go to step 3.
if xij = ai= bj cross off either the ith row or the ith column but not both.
Step 3: Repeat steps 1 and 2 for the resulting reduced transportation table until
all the rim
requirements are satisfied whenever the minimum cost is not unique make an
arbitrary choice among the minima.

6. What do you understand by the Integer Programming Problem?

Describe the Gomory’s All-I.P.P. method for solving the I.P.P. problem.
Answer: Integer Programming Problem
The Integer Programming Problem I P P is a special case of L P P where all or
some variables are constrained to assume nonnegative integer values. This type
of problem has lot of applications in business and industry where quite often
discrete nature of the variables is involved in many decision making situations.
Eg. In manufacturing the production is frequently scheduled in terms of batches,
lots or runs; In distribution, a shipment must involve a discrete number of trucks
or aircrafts or freight cars .
An integer programming problem can be described as follows:
Determine the value of unknowns x1, x2, … , xn so as to optimize z = c1x1
+c2x2 + . . .+ cnxn
subject to the constraints ai1 x1 + ai2 x2 + . . . + ain xn =bi , i = 1,2,…,m and
xj > 0 j = 1, 2,
… ,n where xj being an integral value for j = 1, 2, … , k ≤ n.
If all the variables are constrained to take only integral value i.e. k = n, it is
called an all (or pure) integer programming problem. In case only some of the
variables are restricted to take integral value and rest (n – k) variables are free
to take any non negative values, then the problem is known as mixed integer
programming problem.
Gomory’s All – IPP Method
An optimum solution to an I. P. P. is first obtained by using simplex method
ignoring the
restriction of integral values. In the optimum solution if all the variables have
integer values, the current solution will be the desired optimum integer solution.
Otherwise the given IPP is modified by inserting a new constraint called Gomory’s
or secondary constraint which represents necessary condition for integrability
and eliminates some non integer solution without losing any integral solution.
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After adding the secondary constraint, the problem is then solved by dual
simplex method to get an optimum integral solution. If all the values of the
variables in this solution are integers, an optimum inter-solution is obtained,
otherwise another new constrained is added to the modified L P P and the
procedure is repeated. An optimum integer solution will be reached eventually
after introducing enough new constraints to eliminate all the superior non integer
solutions. The construction of additional constraints, called secondary or
constraints, is so very important that it needs special attention.

The iterative procedure for the solution of an all integer programming problem is
as follows:
Step 1: Convert the minimization I.P.P. into that of maximization, if it is in the
minimization form. The integrality condition should be ignored.
Step 2: Introduce the slack or surplus variables, wherever necessary to convert
the inequations into equations and obtain the optimum solution of the given
L.P.P. by using simplex algorithm.
Step 3: Test the integrality of the optimum solution
a) If the optimum solution contains all integer values, an optimum basic feasible
integer solution has been obtained.
b) If the optimum solution does not include all integer values then proceed onto
next step.
Step 4: Examine the constraint equations corresponding to the current optimum
solution. Let these equations be represented by

Where n’ denotes the number of variables and m’ the number of equations.

Choose the largest fraction of bis ie to find {bi}i
Let it be [bk 1]
or write is as
f ko
Step 5: Express each of the negative fractions if any, in the k th row of the
optimum simplex
table as the sum of a negative integer and a nonnegative fraction.
Step 6: Find the Gomorian constraint

and add the equation

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to the current set of equation constraints.
Step 7: Starting with this new set of equation constraints, find the new optimum
solution by dual simplex algorithm. (So that Gsla (1) is the initial leaving basic
Step 8: If this new optimum solution for the modified L.P.P. is an integer
solution. It is also feasible and optimum for the given I.P.P. otherwise return to
step 4 and repeat the process until an optimum feasible integer solution is

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