OPERATIONS RESEARCH
MB0032
SET – 2
MBA – 2 ^{n}^{d} SEM
Name 
Mohammed Roohul Ameen 
Roll Number 

Learning Center 
SMU Riyadh (02543) 
Subject 
Operations Research 
Date of Submission 
28 Feb 2010 
Assignment Number 
MB0032 
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Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
2
Roll Number:
Subject: MB0032
1. Describe in details the OR approach of problem solving. What are the limitations of the Operations Research?
Operations Research encompasses a wide range of problemsolving techniques and methods applied in the pursuit of improved decisionmaking and efficiency. Some of the tools used by operations researchers are statistics, optimization, probability theory, queuing theory, game theory, graph theory, decision analysis, mathematical modeling and simulation. Because of the computational nature of these fields, OR also has strong ties to computer science. Operations researchers faced with a new problem must determine which of these techniques are most appropriate given the nature of the system, the goals for improvement, and constraints on time and computing power.
Work in operations research and management science may be characterized as one of three categories:
Fundamental or foundational work takes place in three mathematical disciplines:
Probability, Optimization, and Dynamical systems theory.
Modeling work is concerned with the construction of models, analyzing them mathematically, gathering and analyzing data, implementing models on computers, solving them, playing with them. This level is mainly instrumental, and driven mainly by statistics and econometrics.
Application work in operations research, like other engineering and economics' disciplines, attempts to use models to make a practical impact on realworld problems.
The basic dominant characteristic feature of operations research is that it employs mathematical representations or models to analyze and solve problems. This distinctive approach represents an adaption of the scientific methodology used by the physical sciences. The scientific method translates a real given problem into a mathematical representation which is solved and transformed into the original context.
The OR approach of problem solving consists of the following steps:
a. 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. Recognize the limitations, restrictions and requirements of the system.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
3
Roll Number:
Subject: MB0032
b. Construction of the model:
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. A model gives a perspective picture of the whole system and helps tackling it in a well organized manner. If the resulting model fits into one of the common mathematical techniques; and if the mathematical relationships of the model are too complex to allow analytic solutions, a simulation model may be more appropriate.
c. Solution of the model:
Once an appropriate model has been formulated, the next step in the analysis calls for its
solution and the interpretation of the solution in the context of given problem. A solution to
a model implies determination of optimum solution is one which maximizes or minimizes the performance of any measure in a model subject to the conditions and constrain imposed on the model.
d. Validation of 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 validity of a model is to compare its performance with some past data available for the actual system. The model will be valid
if under similar conditions of inputs, it can reproduce the past performance of the system.
There is no assurance that the future performance ill replicate past performance. Also, since the models based on the past performance data, the comparison always reveals favorable results. In some instances, this problem may be overcome by using data from the trail runs of the system. It must be noted that such a validation method is not appropriate for nonexistent systems, since data will not be available for comparison.
e. Implementation of the final result:
The optimal solution obtained from a model should be applied to improve the performance
of the system and the validity of the solution should be verified under changing conditions.
It involves the translation of these results into detailed operating instructions issued in an understandable form to the individuals who will administer and operate the recommended system. The interaction between the operations research team and the operating personnel
is at its peak in this phase.
Limitations of Operations Research:
The limitations are more related to the problems of model building, time and money factors.
Magnitude of computation: Modern problems involve large number of variables; and hence to find the interrelationship, among makes it difficult.
Non Quantitative factors and human emotional factor cannot be taken into account.
There is a wide gap between the managers and the operation researchers.
Time and money factors when the basic data is subjected to frequent changes then incorporation of them into OP models is a costlier affair.
Implementation of discussions involves human relations and behavior.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
4
Roll Number:
Subject: MB0032
2. What are the characteristics of the standard form of L.P.P.? What is the standard form of L.P.P.? State the fundamental theorem of L.P.P
Characteristics of standard form of L.P.P.:
The characteristics of the standard form are:
All constraints are equations except for the nonnegativity condition which remain inequalities [>0] only.
The right hand side element of each constraint equation is non negative.
All variables are nonnegative.
The objective function is of the maximization or minimization type.
The inequality constraints can be changed to equations by adding or subtracting the left hand side of each such constraint by a non negative variable. The non negative variable that has to be added to a constraint inequality of the form < to change it to an equation is called a slack variable. The non negative variable that has to be subtracted from a constraint inequality is called a surplus variable. The right hand side of a constraint equation can be made positive by multiplying both sides of the resulting equation with 1 wherever necessary. The remaining characteristics are achieved by using the elementary transformations introduced with the canonical form.
The standard form of L.P.P.:
Any standard form of LPP is given by
Fundamental theorem of L.P.P.:
Given a set of simultaneous linear equations in n unknowns/variables, n >m, AX=b, with r(A) =m. If there is a feasible solution X>0, then there exists a basic feasible solution.
erce,
Trevelyan
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
5
Roll Number:
Subject: MB0032
3. Describe the TwoPhase method of solving a linear programming problem with an example?
Two phase method:
The drawback of the penalty cost method is the possible computational errors that could result from assigning a very large value to the constant M. to overcome this difficulty, a new method is considered, where the use of M is eliminated by solving the problem in two phases. They are:
Phase I: Formulate the new problem by eliminating the original objective function by the sum of artificial variables for a minimization problem and the negative of the sum of the artificial variables for a maximization problem. The resulting objective function is optimized by the simplex method with the constraints of the original problem. If the problem has a feasible solution, the optimal value of the new objective function is zero. Then we proceed to Phase II. Otherwise, if the optimal value of the new objective function is non zero, the problem has no solution and the method terminates.
Phase II: Use the optimum solution of the phase I as the starting solution of the variables and is solved by simplex method.
Example:
Use the two phased method to Maximise Z=3x _{1} x _{2} Subject to 2x _{1} +x _{2} >2; x _{1} +3x _{2} <2; x _{2} <4; x _{1} ,x _{2} >0
Rewriting in the standard form,
Maximise Z=3x _{1} x _{2} +0S _{1} MA _{1} +0S _{2} +0S _{3} Subject to 2x _{1} +x _{2} –S _{1} +A _{1} =2; x _{1} +3x _{2} +S _{2} =2; x _{2} +S _{3} =4; x _{1} ,x _{2}_{,} S _{1} ,S _{2} ,S _{3} ,A _{1} >0
Phase I:
Consider the new objective, Maximise Z* =A _{1} Subject to 2x _{1} +x _{2} –S _{1} +A _{1} =2; x _{1} +3x _{2} +S _{2} =2; x _{2} +S _{3} =4; x _{1} ,x _{2}_{,} S _{1} ,S _{2} ,S _{3} ,A _{1} >0
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
6
Roll Number:
Subject: MB0032
Solving by simplex method, the initial simplex table is given by
x 
1 
x 
2 
S 
1 
A 1 
S 
2 
S 
3 

0 
0 
0 
1 
0 
0 
Ratio 

A _{1} 1 
2* 
1 
1 
1 
0 
0 
2 
2/2 =1 

S _{2} 0 
1 
3 
0 
0 
1 
0 
2 
2/1 = 2 

S _{3} 0 
0 
1 
0 
0 
0 
1 
4 

2 
1 
1 
0 
0 
0 
2 

Work column * Pivot element 

x _{1} enters the basic set replacing A _{1} The first iteration gives the following table: 

x 1 
x 2 
x 
1 
A 
1 
S 2 
S 3 

0 
0 
0 
1 
0 
0 

x _{1} 
0 
1 
½ 
½ 
½ 
0 
0 
1 

S _{2} 0 
0 
5/2 
½ 
½ 
1 
0 
1 

S _{3} 0 
0 
1 
0 
0 
0 
1 
4 

0 
0 
0 
1 
0 
0 
0 
Phase I is complete, since there are no negative elements in the last row. The optimal solution of the new objective is Z* =0.
Phase II:
Consider the original objective function, Maximise Z=3x _{1} x _{2} +0S _{1} MA _{1} +0S _{2} +0S _{3} Subject to x _{1} +(x _{2} /2) –(S _{1} /2)=1; (5/2)x _{2} + S _{1} /2 + S _{2} =1; x _{2} +S _{3} =4; x _{1} ,x _{2}_{,} S _{1} ,S _{2} ,S _{3} ,A _{1} >0 With the initial solution x _{1} = 1, S _{2} = 1, S _{3} = 4, the corresponding simplex table is
x 
1 
x 
2 
S 
1 
S 
2 
S 
3 

3 
1 
0 
0 
0 
Ratio 

x _{1} 
3 
1 
½ 
1/2 
0 
0 
1 

S _{2} 0 
0 
5/2 
½* 
1 
0 
1 
1/(1/2) = 2 

S _{3} 0 
0 
1 
0 
0 
1 
4 

0 
5/2 
3/2 
0 
0 
3 
Proceeding to the next iteration
Work column, * Pivot table
x 
1 
x 
2 
S 
1 
S 
2 
S 
3 

3 
1 
0 
0 
0 

x _{1} 
3 
1 
3 
0 
1 
0 
1 
2 

S _{2} 0 
0 
5 
1 
2 
0 
1 
2 

S _{3} 0 
0 
1 
0 
0 
1 
4 
4 

0 
10 
0 
3 
0 
3 
6 
Since all elements of the last row are non negative, the current solution is optimal.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
7
Roll Number:
Subject: MB0032
4. What do you understand by the transportation problem? What is the basic assumption behind the transportation problem? Describe the MODI method of solving transportation problem.
This model studies the minimization of the cost of transporting a commodity from a number of
sources to several destinations. The supply at each source and the demand at each destination are known. The transportation problem involves m sources, each of which has available
ai (i = 1, 2, …
bj (j = 1, 2…., n) units of products. Here ai and bj are positive integers. The cost cij of transporting one unit of the product from the i th source to the j th destination is given for each I and j. The objective is to develop an integral transportation schedule that meets all demands
from the inventory at a minimum total transportation cost.
It is assumed that the total supply and the total demand are equal.
units of homogeneous product and n destinations, each of which requires
,m)
The condition (1) is guaranteed by creating either a fictitious destination with a demand equal to the surplus if total demand is less than the total supply or a (dummy) source with a supply equal to the shortage if total demand exceeds total supply. The cost of transportation from the fictitious destination to all sources and from all destinations to the fictitious sources are assumed to be zero so that total cost of transportation will remain the same.
The Transportation Algorithm (MODI Method) The first approximation to (2) is always integral and therefore always a feasible solution. Rather than determining a first approximation by a direct application of the simplex method it is more efficient to work with the table given below called the transportation table. The transportation algorithm is the simplex method specialized to the format of table it involves:
i) Finding an integral basic feasible solution ii) Testing the solution for optimality iii) Improving the solution, when it is not optimal iv) Repeating steps (ii) and (iii) until the optimal solution is obtained.
The solution to T.P is obtained in two stages. In the first stage we find Basic feasible solution by any one of the following methods a) Northwest corner rule b) Matrix Minima Method or least cost method c) Vogel’s approximation method. In the second stage we test the B.Fs for its optimality either by MODI method or by stepping stone method.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
8
Roll Number:
Subject: MB0032
Modified Distribution Method / Modi Method / U – V Method.
Step 1: Under this method we construct penalties for rows and columns by subtracting the least value of row / column from the next least value.
Step 2: We select the highest penalty constructed for both row and column. Enter that row / column and select the minimum cost and allocate min (ai, bj)
Step 3: Delete the row or column or both if the rim availability / requirements is met.
Step 4: We repeat steps 1 to 2 to till all allocations are over.
Step 5: For allocation all form equation ui + vj = cj set one of the dual variable ui / vj to zero and solve for others.
Step 6: Use these values to find Δij = cij – ui – vj of all Δij >, then it is the optimal solution.
Step 7: If any Dij ￡ 0, select the most negative cell and form loop. Starting point of the loop is +ve and alternatively the other corners of the loop are –ve and +ve. Examine the quantities allocated at –ve places. Select the minimum. Add it at +ve places and subtract from –ve place.
Step 8: Form new table and repeat steps 5 to 7 till Δij > 0
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
9
Roll Number:
Subject: MB0032
5. Describe the NorthWest Corner rule for finding the initial basic feasible solution in the transportation problem.
Consider a T.P. involving morigins and ndestinations. Since the sum of origin capacities equals to the sum of requirements, a feasible solution always exists. Any feasible solution satisfying m+n1 of the m+n constraints is a redundant one an hence can be deleted. This also means that a feasible solution to a transportation problem can have at the most only m+n1 strictly positive compliments, otherwise the solution will degenerate.
It is always possible to assign an initial feasible solution to a transportation problem in such a manner that the rim requirements are satisfied. This can be achieved either by inspection or by following some simple rules.
NorthWest corner rule is one of the simplest procedures for initial allocation of feasible solution.
NorthWest Corner Rule:
Step 1:
The first assignment is made in the cell occupying the upper left hand (north west) corner of the transportation table. The maximum feasible amount is allocated there, that is x _{1}_{1} = min (a _{1} ,b _{1} ) So that, either the capacity of origin O _{1} is used up; or the requirement at the destination D _{1} is satisfied or both. This value of x _{1}_{1} is entered in the upper left hand corner (small square) of cell (1,1) in the transportation table.
Step 2:
If b _{1} >a _{1} the capacity of origin O, is exhausted but the requirement at destination D _{1} is still not satisfied, so that one more other variable in the first column will have to take on a positive value. Move down vertically to the second row and make the second allocation of magnitude x _{2}_{1} = min (a _{2} , b _{1} x _{2}_{1} ) in the cell (2,). This either exhausts the capacity of origin O _{2} or satisfies the remaining demand at destination D _{1}_{.}
If a _{1} >b _{1} the requirement at destination D _{1} is satisfied but the capacity of origin O1 is no completely exhausted. Move to the right horizontally to the second column and make the second allocation of magnitude x _{1}_{2} =min (a _{1} x _{1}_{1} ,b _{2} ) in the cell(1,2). This either exhausts the remaining capacity of origin O _{1} , or satisfies the demand at destination D _{2} .
If b _{1} =a _{1} , the origin capacity of O _{1} is completely exhausted as well as the requirement at destination is completely satisfied. There is a tie for second allocation. An arbitrary the breaking choice is made. Make the second allocation of magnitude x _{1}_{2} =min (a _{1} a _{2} ,b _{2} ) =0 in the cell (1,2) or x _{2}_{1} = min(a _{2} , b _{1} b _{2} ) =0 in the cell (2,1).
Step 3:
Start from the new northwest corner of the transportation table satisfying destination requirements and exhausting the origin capacities one at a time, move down towards the lower right corner of the transportation table until al the rim requirements are satisfied.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
10
Roll Number:
Subject: MB0032
6. Describe the Branch and Bound Technique to solve an I.P.P. problem.
Branch and bound (BB) is a general algorithm for finding optimal solutions of various optimization problems, especially in discrete and combinatorial optimization. It consists of a systematic enumeration of all candidate solutions, where large subsets of fruitless candidates are discarded en masse, by using upper and lower estimated bounds of the quantity being optimized.
The method was first proposed by A. H. Land and A. G. Doig in 1960 for linear programming.
Sometimes a few or all variables of an IPP are constrained by their upper or lower bounds or by both. The most general technique for the solution of such constrained optimisation problems is the branch and bound technique. The technique is applicable to both all IPP as well as mixed IPP. The technique for a maximisation problem is discussed below:
Let the IPP be
Maximise Z= Subject to constraints a _{i}_{j} x _{j} < b _{i} ,i=1,2,
X _{j} is integer valued j = 1,2,3
X _{j} >0
Further let us suppose that for each integer valued x _{j} , we can assign lower and upper bounds for the optimum values of the variable by
L _{j} <x _{j} <U _{j}
The following idea is behind “the branch and the bound technique” Consider any variable x _{j} , and let l be the some integer value satisfying L _{j} <l<U _{j} 1. Then clearly an
optimum solution to (1) through (5) shall also satisfy either the linear constraint.
_{=}_{1}
C _{j} X _{j}  (1)
m
(2)
r
(<n) (3)
_{=}_{1}
j=r+1,
n(4)
r
(5)
j = 1,2,
X _{j} >l+1 (6) Or the linear constrain x _{j} <l(7)
To explain how this partition helps, let us assume that there were no integer restrictions (3), and suppose that this then yields an optimal solution to LPP (1), (2), (4) and (5). Indicating, x _{1} =1.66 (for example). Then we formulate and solve two LPP’s each containing (1), (2) and (4). But (5) for j =1 is modified to be 2<x _{1} <U _{1} in one problem and L _{1} <x _{1} <1 in the other. Further each of these problems process an optimal solution satisfying integer constants (3).
Then the solution having the larger value for z is clearly the optimum solution for the given IPP. However, it usually happens that one of these problems has no optima solution satisfying (3), and thus some more computations are necessary. We now discuss step wise the algorithm that specifies how to apply the partitioning (6) and (7) in a systematic manner to finally arrive at an optimum solution.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
11
Roll Number:
Subject: MB0032
We start with an initial lower bound for z, say z ^{(}^{0}^{)}^{,} we also have a list of LPP’s differing only in the bounds (5). Th start with the master list contains a single LPP, consisting of (1), (2), (4) and (5). We now discuss below ,the step by step procedure that specifies how the partitioning (6) and (7) can be applied systematically to eventually get an optimum integer – valued solution.
Branch & Bound Algorithm:
At the t ^{t}^{h} iteration (t=0,1, 2
)
Step 0:
If the master list is not empty, choose an LPP out of it. Otherwise stop the process, Go the step
1.
Step 2:
Obtain the optimum solution to the objective function z is less than or equal to z ^{(}^{t}^{)} , then let z ^{(}^{t}^{+}^{1}^{)} = z ^{(}^{t}^{)} and return to step 0 otherwise go to step 3.
Step 3:
Select any variable x _{j} , j = 1,2,
solution to the LPP chosen in step 0. Let x _{j} * denote his optimal value of x _{j} . Add two LPP’s to the master list; these LPP’s are identical with the LPP chosen in step 0, except that in one, the lower bound on xj is replaced by [x _{j} *] +1. Let z ^{(}^{t}^{+}^{1}^{)} = z ^{(}^{t}^{)} , return to step 0.
that does not have an integer value in the obtained optimum
p.
At the termination of algorithm, if feasible integer valued solution yielding z ^{(}^{t}^{)} has been recorded it is optimum, otherwise no integer valued feasible solution exists.
Mohammed Roohul Ameen
Assignment MBA 2 ^{n}^{d} Semester
12
Roll Number:
Subject: MB0032
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