1.

Briefly describe the three common types of models and give an

example of each

A number of different types of models exist. The most common are;

 Mental models, which we “build” in our heads and use to make decisions. Examples:
The traffic-light situation calls for a mental model. Visual models use graphics or
diagrams to represent real objects or situations. For example, a road atlas represents a
system of roads and other key land features.
 Physical models involve objects that represent other objects, examples: such as an
architect’s scale model of a new building.

 Mathematical models use equations and relationships among quantities to represent

situations.
2. Explain the meaning of operational research and list its contribution for
decision making
Operation research which is concerned with efficient allocation of scarce resource is
both an art and science.
It provides a tool for scientific analysis and provides solution for various business
problems.
It enables proper deployment and optimum allocation of scarce resources.
It helps in minimizing waiting and servicing costs.
It enables the management to decide when to buy and how much to buy through the
technique of inventory planning.
It helps in evaluating situations involving uncertainty.
It enables experimentation with models, thus eliminating the cost of making errors
while experimenting with reality.
It allows quick and inexpensive examination of large numbers of alternatives.
In general OR facilitates and improves the decision making process.

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Is a major field within the discipline of management science. The emphasis is on developing
appropriate mathematical models to describe situations, implementing these models in a
spreadsheet, using a spreadsheet-based solver to solve the optimization problems, and using
human intelligence and judgment to interpret the results. We emphasize a particular type of
optimization problem, called linear programming problems (or linear optimization). In linear
programming (LP) problems, all of the relationships among the variables are linear. Think
briefly about the allocation of study time mentioned in the opening paragraphs. In an
optimization mindset, there is an objective you want to either maximize or minimize, and there
may be constraints within which you need to operate. There are also specific quantities, called
decision variables, over which you have control. Therefore, this is termed a constrained
optimization problem.

3. Your manger has faced a difficulty with making a choice between quantitative
and qualitative decision making approaches. As a student of operational
research please help him under what circumstances would he chose the
quantitative methods and under what circumstance he would chose qualitative
approach.

For Quantitative methods

Under complete certainty

Risk and uncertainty
Extreme uncertainty

For qualitative methods

Dynamic or based on the circumstances

 A purposeful representation of the key factors in a situation and the relationships
among them.
 abstract of the real situation, and should incorporate enough detail so the results meet
the current needs, but omit unnecessary details

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  Simplify complex concepts

Decision variables represent choices in terms of amounts of either inputs to use or

outputs to produce. Each unknown quantity is assigned a decision variable (e.g., x1, x2).
A Linear programming model requires a single goal or objective. An objective is either
maximized and minimized. A maximized objective might involve profit, revenue, etc.
Conversely, a minimized objective might involve cost, time, or distance.

Decision variables, are quantities or factors that a decision maker can change
(usually within limits) for the current situation. For example, in the traffic-light
situation, you obviously have control over whether to stop or go, how much pressure
to apply to the brakes (if you decide to stop), or how fast to accelerate (if you decide to
go). In an order-quantity situation, the decision maker has control over how much
quantity to order

a. System Constraints represent the requirements or limitations that restrict the choices
available. The three types of constraints are less than or equal to (≤), greater than or equal to
(≥), and simply equal to (=). A ≤ constraint implies an upper limit on the amount of some
resource (e.g., machine hours, labour hours, material) available for use. A ≥ constraint
specifies a minimum that must be achieved in the final solution (e.g., the product must
contain at least 50 percent real orange juice). The = constraint is more restrictive in the sense
that it specifies exactly what a mathematical expression of decision variables should equal
(e.g., make 200 units of product A)
b. Variable representation

c. Let x 1 be the number of bags of mixture A that must be purchased

d. x 2 be the amount of bags of mixture B that must be purchased z be the minimum cost