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INTRODUCTION TO OPERATIONS
RESEARCH AND MODELLING
• What is a model?
– A representation of an object, a system, or an idea
in some form other than that of the entity itself.
- Shannon
– A model is a limited approximation of reality.
– Models do not and cannot represent every aspect
of reality.
• The reason being the innumerable and changing
characteristics of the real life problems
Cont…
• For example:
S = a + bA +cI
• is a model that describes how the sales (S) of a
product changes in advertising expenditures (A) and
disposal personal income (I).
• Here, a, b, and c are parameters whose values must
be estimated.
• These models do not have an objective function as a
part of the model.
Cont…
Queuing models,
AT&T 1993 Call center design $750 million
Simulation
Yellow Freight Systems, Network models,
1992 Design trucking network $17.3 million
Inc. Forecasting, Simulation
United Airlines 1986 Scheduling reservation personnel LP, Queuing, Forecasting $6 million
Retailing
• In supermarkets, data from store loyalty card schemes is
analyzed by OR groups to advise on merchandising policies &
profitability improvement. OR methods are also used to
decide when and where new store developments should be
made.
Health
• Hospital managers use OR to make decisions such as
determining the optimal utilization of operating rooms and
personnel, assessing the risks posed by patients with various
medical conditions, and deciding necessary levels of
perishable medicine in stock.
Cont…
Government
• OR is a key contributor in modernizing government services
and making them more efficient. Some OR applications
include modeling the impact of performance related
paying for employees, evaluating government call-centers,
projecting the size of the prison population, and national
defense…..
Production Systems
• Such problems may arise in settings that include, but are
not limited to, manufacturing, telecommunications,
health-care delivery, facility location, layout, and staffing
Common Operations Research Models
2. Probabilistic Models
– Decision Analysis models
– Queuing Theory
3. Inventory Model
– EOQ
– EPQ
4. Network Models
– CPM
– PERT
5. Competitive (Game Theory) Model
6. Simulation Models
Algorisms and OR Software Packages