The Art and Science of Operations Research

Operations Research (OR) uses mathematical techniques to model and analyze decision
problems and seeks the determination of the best (optimum) course of action of a decision
problem under the restriction of limited resources

Principal Components of Decision Problems.

1) Objective – the end result we desire to achieve by selecting a specific course of action for
the system under study.
2) Variables – identification of the relevant variables will most likely depend on the bias and
training of the decision maker. (interdisciplinary team effort)

Art of Modeling
The heart of OR is the model that provides a concise framework for analyzing a decision
problem in a systematic manner.
1) The objective of the system.
2) The constraints imposed on the system.

Types of OR models.
1) Symbolic or Mathematical model
2) Simulation models

Effect of Data Availability on Modeling

Models of any kind, regardless of their sophistication and accuracy in representing the
real system, may prove of little value if they are not supported by a reliable data.

Computations in OR
No closed form solution for the model. Instead, the solution is reached in steps or
iterations.

Phases of OR study
1) Problem definition
Three major aspects
a) description of the goal or the objective of the study
b) identification of the decision alternatives of the system
c) recognition of the limitations, restrictions, and requirement of the system

2) Model construction
Choose the most suitable model for representing the system.

3) Model solution
Achieved by using well-defined optimization techniques and the model is said to yield an
optimum solution.

4) Model Validity
Compare its performance with some past data for the actual system

5) Implementation
Involve 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.
Linear Programming
A minimization or maximization problem can be classified as linear programming if
it has the following properties:
1) The objective of the decision-maker must be either to maximize or to minimize.

2) The decision alternatives of the decision-maker must be constrained and the decision
variables must not violate the limitations or constraints.

3) All variables have a value greater than or equal to 0.

4) The relationship of the variables could be expressed in terms of equations or inequalities.

LP Model has the following components.

The objective of the system.

The constraints imposed on the system.

Formulate the LP model of the following:.

1. The Kal-Q Company produces two types of calculators: the standard model
on which profit is PhP150 and the scientific model on which the profit is
PhP240. Weekly supply of chips necessary for the calculators is limited to
6,000 units. Each standard calculator requires 3 chips and each scientific
type needs 6 chips. It takes 3 hours to assemble a standard calculator and 2
hours to assemble a scientific calculator. The company has 75 skilled
workers, each working 40 hours a week with the company. Furthermore, the
company estimates that at most 1,200 calculators can be sold each week. At
most 700 standard calculators and at most 900 scientific calculators can be
assembled weekly. How many standard and scientific calculators must be
produced each week in order to maximize profit?

2. A small generator burns two types of fuel: low sulfur and high sulfur to
produce electricity. For one hour, each gallon of low sulfur emits 3 units of
sulfur dioxide, generates 4 kilowatts electricity and cost PhP160. Each
gallon of high sulfur emits 5 units of sulfur dioxide, generates 4 kilowatts
and costs PhP150. The environmental protection agency insists that the
maximum amount of sulfur dioxide that can be emitted per hour is 15 units.
Suppose that at least 16 kilowatts must be generated per hour, how many
gallons of high sulfur and low sulfur must be utilized per hour in order to
minimize the cost of fuel?
 3. The RedyMiks Company owns a small paint factory that produces both
interior and exterior house paints for wholesale distribution. Two basic
materials, A and B, are used to manufacture the paints. The maximum
availability of A is 6 tons a day; that of B is 8 tons a day. The daily
requirements of the raw materials per ton of interior and exterior paints are
summarized in the following table.

Tons of Raw Material per ton of paint Maximum

Exterior Interior Availability (tons)
Raw material A 1 2 6
Raw material B 2 1 8

A market survey has established that the daily demand for interior paint
cannot exceed that of exterior paint by more than 1 ton. The survey also
shows that the maximum demand for interior paint is limited to 2 tons daily.
The profit contribution per ton is 3 thousand for exterior and 2 thousand for
interior paint. How much exterior and interior paints should the company
produce to maximize profit?

4. A manufacturer of commercial chemicals has an order for a certain mixture

consisting of two ingredients, x and y which cost PhP4 and PhP5 per kilo,
respectively. The following are the specifications: a) The weight of the
mixture must be 100 kilos, b) It cannot contain more than 30 kilos of x, and
c) It must contain at least 20 kilos of y. Find the mixture of the two
ingredients, which satisfies the customers’ requirement and still yield a
minimum total cost of raw materials.

5. Mr. Investor has ₱500,000 that he intends to invest in one or both of two
opportunities. The minimum amount that can be invested in opportunity 1 is
₱200,000, while the maximum in opportunity 2 is ₱300,000. Interest rates
per year are 8% for opportunity 1 and 10% for opportunity 2. How much
should he invest in each in order to maximize his earnings?
6. A hospital is minimizing the cost of its beef and pork diet. The average diet
requires 2 kilos of lean meat and 1 ½ kilos of fat meat per person. The beef,
which cost PhP450 per kilo, is 20% of fat and 80% lean meat. The pork,
which costs PhP250 per kilo, is 60% fat and 40% lean meat. If the hospital
has 300 patients on this diet and if it cannot purchase more than 1,250 kilos
of meat because of refrigerator space, how many kilos of beef and how
many kilos of pork should be purchased to keep the cost at a minimum.

7. A person is planning to invest up to ₱6,000,000 in two types of bonds: A &

B. Bond A is safer than Bond B and carries a dividend of 8%: Bond B
carries a dividend of 10%. Suppose that the funds rule states that no more
than ₱4,000,000 may be invested in Bond B, while at least ₱1,500,000 must
be invested in Bond A. The amount invested in Bond B cannot exceed one
half of the amount invested in Bond A. How much should be invested in
each type of Bond to maximize the fund’s return?