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The term Operations Research (OR) describes the discipline that is focused
on the application of information technology for informed decision -making.
In other words, OR represents the study of optimal resource allocation. The
goal of OR is to provide rational bases for decision making by seeking to
understand and structure complex situations, and to utilize this
understanding to predict system behavior and improve system

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þ? è   . Linear Programming (LP) is a mathematical
technique of assigning a fixed amount of resources to satisfy a
number of demands in such a way that some objective is optimized
and other defined conditions are also satisfied.


   The transportation problem is a special
type of linear programming problem, where the objective is to
minimize the cost of distributing a product from a number of sources
to a number of destinations.

   Succinctly, when the problem involves the
allocation of ë different facilities to ë different tasks, it is often
termed as an assignment problem.

  The queuing problem is identified by the presence
of a group of customers who arrive randomly to receive some service.
This theory helps in calculating the expected number of people in the
queue, expected waiting time in the queue, expected idle time for the
server, etc. Thus, this theory can be applied in such situations where
decisions have to be taken to minimize the extent and duration of the
queue with minimum investment cost.

þ? D  It is used for decision making under conflicting

situations where there are one or more opponents (i.e., players). In
the game theory, we consider two or more persons with different
objectives, each of whose actions influence the outcomes of the game.
The game theory provides solutions to such games, assuming that
each of the players wants to maximize his profits and minimize his


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    It is concerned with the acquisition,
storage, handling of inventories so as to ensure the availability of
inventory whenever needed and minimize wastage and losses. It help
managers to decide reordering time, reordering level and optimal
ordering quantity.

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Linear Programming is that branch of mathematical programming which is

designed to solve optimization problems where all the constraints as well
as the objectives are expressed as ǮLinear functionǯ .It was developed by
George B. Denting in 1947. Its earlier application was solely related to the
activities of the secondǯ World War. However soon its importance was
recognized and it came to occupy a prominent place in the industry and


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In a third world developing country like India, the various factors of

productions such as skilled labor, capital and raw material etc. are very
precious and scarce. The policy planner is, therefore faced with the
problem of scarce resource allocation to meet the various competing
demands and numerous conflicting objectives. The traditional and
conventional methods can no longer be applied in the changed
circumstances for solving this problem and are hence fast losing their
importance in the current economy. Hence, the planners in our country are
continuously and constantly in search of highly objective and result
oriented techniques for sound and proper decision making which can be
effective at all levels of economic planning. Non -programmed decisions
consist of capacity expansion, plant location, product line diversification,
expansion, renovation and modernization etc. On the other hand, the
programmed decisions consist of budgeting, replacement, procurement,
transportation and maintenance etc.

In These modern times, a number of new and better methods ,techniques

and tools have been developed by the economists all over the globe. All
these findings form the basis of operations research. Some of these well-
known operations research techniques have been successfully applied in
Indian situations, such as: business forecasting, inventory models-
deterministic and probabilistic, Linear Programming. Goal programming,
integer programming and dynamic programming etc. The main
applications of the Linear Programming techniques, in Indian context
are as follows:

  In the formulation of the country's five year plans,
the Linear Programming approach and econometric models are being used
in various diverse areas such as : food grain storage planning,
transportation, multi-level planning at the national, state and district levels
and urban systems.

     Indian Railways, the largest employer in public sector
undertakings, has successfully applied the methodology of Linear
Programming in various key areas. For example, the location of Rajendra
Bridge over the Ganges linking South Bihar and North Bihar in Mokama in
preference to other sites has been achieved only by the help of Linear


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  Linear Programming approach is being extensively
used in agriculture also. It has been tried on a limited scale for the crop
rotation mix of cash crops, food crops and to/ascertain the optimal
fertilizer mix.

  Our national airlines are also using Linear
Programming in the selection of routes and allocation of air-crafts to
various chosen routes. This has been made possible by the application of
computer system located at the headquarters. Linear Programming has
proved to be a very useful tool in solving such problems. '


  The commercial institutions as well as the
individual traders are also using Linear Programming techniques for cost
reduction and profit maximization. The oil refineries are using this
technique for making effective and optimal blending or mixing decisions
and for the improvement of finished products.

   Various process industries such as paint industry
makes decisions pertaining to the selection of the product mix and
locations of warehouse for distribution etc. with the help of Linear
Programming techniques. This mathematical technique is being extensively
used by highly reputed corporations such as TELCO for deciding what
castings and forging to be manufactured in own plants and what should be
purchased from outside suppliers. '

. The major steel plants are using Linear Programming
techniques for determining the optimal combination of the final products
such as : billets, rounds, bars, plates and sheets.

    Big corporate houses such as Hindustan Lever
employ these techniques for the distribution of consumer goods
throughout the country. Linear Programming approach is also used for
capital budgeting decisions such as the selection of one project from a
number of different projects. This minimizes the total risk under different


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ù? A transportation problem is concerned with transportation methods

or selecting routes in a product distribution network among the
manufacturing plants and distribution warehouses situated in
different regions or local outlets.

ù? In applying the transportation method, management is searching for

a distribution route, which can lead to minimization of transportation
cost or maximization of profit.

ù? The problem involved belongs to a family of specially structured LPP

called network flow problems

The two commonly used methods to make initial assignments

(1) Northwest corner rule
(2) Vogelǯs Approximation Method (VAM)

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ù ? Lcm or matrix minima method is certainly an Improvement over the
(north-west corner Rule) ,but is not yet the lowest possible shipping
ù ? It is used to compute transportation route in such away so as to
minimize cost but not in an optimum way.
ù ? In lcm method reduction of total cost is definitely the primary criteria
but it is not dealt in a optimum way, which can be derived through
VAM method.


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ù? It is used to compute transportation routes in such a way as to
minimize transportation cost for finding out locations of warehouses.
ù? It is used to find out locations of transportation corporations depots
where insignificant total cost difference may not matter.

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ù? The assignment problem can be stated as a problem where different
jobs are to be assigned to different machines on the basis of the cost
of doing these jobs. The objective is to minimize the total cost of
doing all the jobs on different machines
ù? The peculiarity of the assignment problem is only one job can be
assigned to one machine i.e., it should be a one -to-one assignment
ù? The cost data is given as a matrix where rows correspond to jobs and
columns to machines and there are as many rows as the number of
columns i.e. the number of jobs and number of Machines should be
ù? This can be compared to demand equals supply condition in a
balanced transportation problem. In the optimal solution there
should be only one assignment in each row and columns of the given
assignment table. one can observe various situations where
assignment problem can exist e.g., assignment of workers to jobs like
assigning clerks to different counters in a bank or salesman to
different areas for sales, different contracts to bidders.


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ù? Match jobs to machines.

ù? Match personnel to tasks.

ù? Match PU students to writing seminars.

ù? Vehicle routing.

ù? Signal processing.

ù? Virtual output queueing.

ù? Multiple object tracking.

ù? Approximate string matching.

ù? Enhance accuracy of solving linear systems of equations


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Game theory is the mathematical analysis of a conflict of interest to find

optimal choices that will lead to a desired outcome under given condition.
To put it simply, it's a study of ways to win in a situation given the
conditions of the situation. While seemingly trivial in name, it is actually
becoming a field of major interest in fields like economics, sociology, and
political and military sciences, where game theory can be used to predict
more important trends.

Though the title of originator is given to mathematician John von

Neumann, the first to explore this matter was a French mathematician
named Borel. In the 1930s, Neumann published a set of papers that
outlined the tenets of game theory and thus made way for the first
simulations which considered mathematical probabilities. This was used by
strategists during the second World War, and since then has earned game
theory a place in the context of Social Science.

It may at first seem arcane to involve mathematics in

something that seems purely based on skill and chance, but game theory is
in actuality a complex part of many branches of mathematics including set
theory, probability and statistics, and plain algebra. This results from the
fact that games are dictated by a given set of rules that can be used to
outline a set of possible moves which can be ranked by desirability and
effectiveness, and with information available, such a set can also be
constructed for the opponent, thus allowing predictions about the possible
outcomes within a certain number of moves with a probabilistic accuracy.


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Though at first glance the idea of game theory sounds trivial,
applications of game theory are extensive. Von Neumann and Morgenstern
originally applied their models of games to economic analysis. Each factor
in the market, such as seasonal preferences, buyer choice, changes in
supply and material costs, and other such market factors can be used to
describe strategies to maximize the outcome and thus the profit. However,
game theory can be also used to simply study economics of the past and
interactions of different factors in a matter. It can also be used to
investigate matters such as monetary distributions and their effects on
other outcomes.

Military strategists have turned to game theory to play "war games."

Usually, such games are not zero-sum games, for loses to one side are not
won by the other, and they have been criticized as potentially dangerous
oversimplification of necessarily factors. Economic situations are also more
complicated than zero-sum games, but those factors only require
readjustments to the strategy over time. Sociologists have taken an interest
in game theory, and have developed an entire branch dedicated to group
decision making. Immunization procedures and vaccine or other
medication tests are analyzed by epidemiologists using game theory.


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£ueueing theory (also commonly spelled queuing theory) is the
mathematical study of waiting lines (or queues). There are several related
processes, arriving at the back of the queue, waiting in the queue
(essentially a storage process), and being served by the server at the front
of the queue. It is applicable in transport and telecommunication and is
occasionally linked to ride theory.

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The Public Switched Telephone Networks (PSTNs) are designed to

accommodate the offered traffic intensity with only a small loss. The
performance of loss systems is quantified by their Grade of Service (GoS),
driven by the assumption that if insufficient capacity is available, the call is
refused and lost. Alternatively, overflow systems make use of alternative
routes to divert calls via different paths -- even these systems have a finite
or maximum traffic carrying capacity. However, the use of queuing in
PSTNs allows the systems to queue their customer's requests until free
resources become available. This means that if traffic intensity levels
exceed available capacity, customerǯs calls are here no longer lost; they
instead wait until they can be served. This method is used in queuing
customers for the next available operator. A queuing discipline determines
the manner in which the exchange handles calls from customers. It defines
the way they will be served, the order in which they are served, and the
way in which resources are divided between the customers. Here are
details of three queuing disciplines:

c - Customers are serviced according to their order
of arrival.

èc - The last customer to arrive on the queue is the
one who is actually serviced first.

     - Customers are serviced equally, i.e. they
experience the same amount of delay.

A.I.A.I.M.S MUMBAI Page 10