OPERATIONS RESEARCH THEORY AND APPLICATIONS Fourth Edition JK SHARMA Formery Professor Faculty of Management Studies University of Delhi, Delhi MACMILLAN(© Macmillan Publishers India Led, 1987, 2003, 2007, 2009 ‘All rights reserved. No part ofthis pubicatin may be reproduced or tmansmited, n any for or by any means, without permission. ABy ‘etson who does any inauthorised act in relation to this publication nay be liable to eiminal prosecution and civil elas for damages. First published, 1997 Reprined, 1998, 2000.2002 (sir mes) ‘Second edition, 2003 ‘Reprinted, 2003-2006 fight times) ‘Third edition, 2007 Reprined, 2008 Fourthedition, 2009 Reprnied, 2009 (nice) MACMILLAN PUBLISHERS INDIA LTD. Delhi Bangalore Chennai Kotkat, Mumbai ‘Anmesabad Bhopal Chandigarh Coimbatore Cuttack CGuwabati Hubli Hyderabad Jaipur Lacknow Madurai [Nagpu: Patsa Pune Thirwvananthapuram Visakhapatzam Companies and representatives throughout the weld ISBN 10; 0280-63885.6 ISBN 13: 978-0230-63885-3 Published by Rajiv Beri for Macmillan Publishers Inia Lid 210 Aasar Road, Daryagan} New Deli 110 002 Lasertypeset by Sara Assignments ‘A4(B-49, Johi Colony, Patarganj Ext, Delhi 110 092 Printed at Baba Barkha Nath Printre 37, MIE, Bahadurgarh, Haryana 124 SOT “Ts bok ant ec aig pues Te aba) fe nk vv ei esol caro es tbe Get Be bak do ve any xg copyright oe nelle pope igs aay pene in my mana woo, eee be mor) sae Ben ule ‘Chek any soa al apy ba een ene nin pe ol he plier ning er ese onContents Preface to Fourth Edition Preface to First Edition Chapter Chapter 1 Operations Research: An Introduction 1.1 Operations Research — A Quantitative Approach to Decision Makin 12 The History of Operations Research 3 13 Definitions of Operations Research 14 Features of Operations Research Approach 6 13 Operations Research Approsch wo Problem Solving 7 Conceptual Questions A 7 16 Models and Modelling in Operations Research 8 = Classification Besed on Structure 9» Classification Based on Function or Parpose_10 * Classification Based on Time Reference 1 + Classification Based on Degree of Certainty * Classification Based on Method of Soluion or Quantification V1 1.7 Advantages of Model Building 12 18 Methods for Solving Operations Research Models 12 ‘+ Anelytical (or Deductive) Method 12 + Numerical (or lerative) Method 12 # Monte Carlo Method 12 1.9 Methodology of Operations Research 12 L109 Advantages of Operations Research Study 15 LIL Opportunities and Shortcomings of the Operations Research Approach 16 L12 Features of Operations Research Solution 16, 1.13 Applications of Operations Research 16 114. Operations Research. Models in Practice 17 115 Computer Software for Operations Research 19 Conceptual Questions B19 Chapter Summary 20 Chapter Concep’s Quiz 20 Case_Study 22 Puzzles in Operations Research 24 2 Linear Programming: Applications and Model Formulation 21 Introduction 28 22. Structure of Linear Programming Model 28 * General Structure of an LP Model 28 + Assumptions of an LP Model 29 23 Advantages of Using Linear Programming 29 24 Limitations of Linear Programming 30 25 Application Areas of Linear Programming 30 26 General Mathematical Model of Linear Programming Problem 31 2.7 Guidelines on Linear Programming Model Formulation 32 28 Examples of LP Model Formulation 33 + Examples on Production 33» Examples on Marketing 44 » Examples on Finance 48 + Examples on Agriculture $4 « Example on Trarsportation $6 + Examples on Personnel Conceptual Questions 59 Self Practice Problems 60 ‘Hints_and_Answers 66 Chapter Summary 69 Chapter Conceps Quiz 69 vi 1-26 27-70 37Contents Chapter Chapter 4 Linear Programming: The Sim Chapter 3 Linear Programming: The Graphical Method 71-102 3.1 Introduction 72 32 Important Definitions 72 33 Graphical Solution Methods of LP Problems 72 + Extreme Point Solution Method 13 + Examples on Maximization LP Problem 73 + Examples on Minimization LP Problem 78 » Examples on Mized Constraints LP Problem 81 « Iso-profit (Cost) Function Line Method 88 + Comparison of Two Graphical Solution Methods 89 34 Special Cases in Linear programming 90 + Alternative (or Multiple) Optimal Solutions 90 + Unbounded Solution 91 + Infeasible Solution 93» Redundancy 95 Conceptual Questions 95 ‘Self Practice Problems 9§ Hints_and_Answers _99 (Chapter Summary 101 Chapter Concepts Quiz_101 41_Iniroduetion 104 42. Standard form of an LP Problem 104 4.3 Simplex Algorithm (Maximization Case) 106 44 Simplex Algorithm (Minimization Case) 115 Two-Phase Method IIT + The Big-M Method 122 Selr Practice problems A 130 ‘Hinis_and_Answers 133 45 Some Complications and Their Resolution _135 ‘= Unrestricted Variables 135 + Tie for Entering Basie Variable (Key Column) 137 = Me for L Basic Variable (Key Row) ~ Degeneracy 138 46 Types of Linear Programming Solutions 139 = Altemative (Multiple) Optimal Solutions 139 © Unbounded Soluion 140 + Infeasible Solution 141 ‘Conceptual Questions 142 ‘Self Practice Problems B 143 ‘Hints_and_Answers 144 Chapter Summary _145 ‘Chapter Concepts Quiz 145 Case Study 147 5 Duality in Linear Programming 149-172 .1__Introduction 150 52 Formulation of Dual Linear Programming Problem 150 « Syrmetrical Form 150» Econonic Interpretation of Duol Voriobles_\51 + Economic Interpretation of Dual Constrains 152 + Rules for Constrcting the Dual from Primal ‘Self Practice Problems A156 Hints_and Answers 156 53 Sundaxd Resuls on Duality 157 + Printiple of Comblementary Slackness 181 54 rial Significance of Dual 55 _Advaniages of Duality 163 Conceptual Questions 168 Self Practice Problems B 164 ‘Mims_and_Answers_166 ‘Chapter Summary 168 Chapter Concepts Quiz 168 ry ‘Theorems of Duality 170Contents Chapter 6 Sensitivity Analysis in Linear Programming 173-204 6 soduction 174 62__ Sensitivity Analysis _174 ‘s Change in Objective Function Coefficient (cj) 174 = Change in the Availability of Resources (6) 181 © Change inthe Inpur-Out Coeficienis (ays) 8 + Addition of a New Variable 217 = Addition of a New Variable (Column) 191 + Addition of a New Consirain (Row) 194 Conegpival_ Questions 200 ‘Self Practice Problems —200 ‘Hints_and_Answers 203 Chapter Summary 203 Chapter Concepts Quiz _203 Chapter 7 Integer Linear Programming 205-238 21_Introduction 206 72 Types of Imeger Programming Problems 206 73 Enumeration ard Cutting Plane Solution Concept 207 74 Gomory’s All Integer Cutting Plane Method 207 ‘= Method for Constructing Additional Constraint (Cut) 208 = Steps_of Gomory’ All_Inieger Programming Algorithm 208 Self Practice Problems A” 216 ‘Hints_and_Answers 219 75 Gomony’s Mixed-Inieger Cutting Plane Method 220 = Method for Constructing Additional Constraint (Cut) 220 = Steps of Gomory’ Mixed Integer Programming Algoritln 222 26 Tanck and Bound Method 225 7.7 Applications of Zero-One Integer Programming _232 + Capital Budgeting Problen 232 + Fixed Cost (or Charge) Problem 232 ‘= Plant Location Problem 233 Conceptual Questions 234 ‘Self Practice Problems B 234 ‘Hiin's_and_Answers 235 Chapter Summary 236 Chapter Concepts Qui Case Study 237 Chapter 8 Goal Programming 239-258 81_Introduction 240 32 _ Difference Beween LP and GP Approach 249 83 Concept of Goal Programming 240 « Distinction Among Ohjectives, Goals and Constraints 241 84 Goal Programming Model Formulation 241 * Single Goal with Multiple Subgoals 241 + Equally Ranked Multiple Goals 242 = Ranting and Weighting of Unequal Multiple Goals 243 = Algorithy to Formulate GP Model 244 + General GP Model 244 ‘Graphical Solution Method for Goal Programming 244 Ke Modified Simplex Method of Goal Programming 74% 37 _Altemative Simplex Method for Goal Programming 250 ‘Conceptual Questions 253 ‘Self Practice Problems 253 Chapter Summary _255 ‘Chapter Concepts Quiz _256 Case Study 257 Chapter 9 Transportation Problem 259-312 21_Inireduction 260 92 Mathematical Model of Transportation Problem _260 236 CopyrightContents Chapter Chapter ‘+ General Mathematical Model of Transportation Problem 261 93 The Transportation Algorithm 262 9.4 Methods for Finding Initial Solution 262 ‘= North-West Corner Method (NWCM) 262. « Least Cost Method (LCM) 263 = Vogel's Approximation Method (VAM) 268 Conceptual Questions A 268 ‘Self Practice Problems A268 ‘Hinis_and_Answers 268 95 Test for Optimality 269 ~ Dual of Transporation Model 269 + Economie Inerpretation of u,¥ and vjs 210 {Sep of MOD) Method (Wrantporiaion Algor) “21 = Close-loop in Transportation Table and lis Properties 272 Conceptual Questions B28} ‘Self Practice Problems B_ 281 ‘Hinls_and_Answers 283 96 Variations in Transportation Problem _283 = Unbalanced Supply and Demand 283» Degeneracy and its Resolution 286 = Alternative Optimal Solutions 290 + Prohibited Transportation Routes 293 9.7_Maximization Transportation Problem 297 98 Trans-Shipment Problem 209 Conceptual Questions C_301 ‘Self Practice Problems C301 ‘Hins and Answers 305 Chapter Summary _307 Chapter Concepts Quiz _307 Case Study _ 308) ‘Appendix: Theorems and Results 310 10 Assignment Problem 10.1 Introduction 314 10.2 Mathematical Models of Assignment Problem 314 10.3 Solution Methods of Assignment Problem 315 ‘= Hungarian Method for Solving Assignment Problem 315 Conceptual Questions A321 Self Practice Problems A 321 ‘Hinis_and_Answers 323 10.4 Variations of the Assignment Problem _323 Multiple Optimal Solutions 323 + Maximization Case in yment Problem 323 ‘© Unbalanced Assignment Problem 326 + Restrictions on Assignmenis 326 Conceptual Questions B 330 ‘Self Practice Problems B33 Hims and Answers 332 10.5 A Typical Assignment Problem 333, 106 Travelling Salesman Problem 337 Self Practice Problems C 339 Hinws and Answers 340 Chapter Summary 340 Chapter Concepts Quiz 341 Appendix: Important Results and Theorems 342 11 Decision Theory and Decision Trees 11 Introduction 344 112. Steps of Decision-Making Process 345 113 Types of Decision-Making Environments 345 114 Decision-Making Under Uncertainty 346 313-342 343-390 ‘= Optimism (Maximax or Minimin) Criterion 346 + Pessimism (Maxinin or Minimax) Criterion 346