Operations research for business decisions

Theory
UNIT I
Mathematical formulation of LPP
Assumption of LPP

UNIT II
Mathematical formulation of transportation problem
What do you mean by non-degeneracy
Balanced vs unbalanced transportation problem

UNIT III
2 person 0 sum game
Decision tree
3 types of decision theory
Situation of decision theory

UNIT IV
Difference between PERT and CPM
Total float, free float, independent float
2 machine N job

UNIT V
Sudden failure
Gradual failure
 Pwf ? formula
Individual replacement policy vs group replacement policy
Components of queuing system
Queue discipline – briefly explain with example
Customer behaviour – Jockey, Renege, Balking
Mathematical formulation
Applications of queuing theory
Single server infinite calling population model
 Model 1
 Model 2

Problems
UNIT I
LPP formulation
LPP graphical solution
LPP simplex method
LPP II phase method
LPP big M method

UNIT II
Transportation problem
i. Initial Basic Feasible Solution (IBFS)
 North West Corner Rule (NWCR)
 Least Cost Method (LCM)
 Vogel’s Approximation Method (VAM)
ii. Optimum Solution (OS)
 MODI METHOD
a. Degeneracy
b. Looping
 iii. Transhipment model
Assignment problem
i) Hungarian
ii) Travelling salesman

UNIT III
Dominance rule
 Saddle point exist – pure strategy
 Saddle point doesn’t exist – mixed strategy
 Dominance rule
 Graphic rule
Game theory
Decision making
i) Under uncertainity
o Pay off table/profit (maxi min criteria)
o Pay off table/profit (maxi max criteria) (optimistic)
o Loss table (mini max regret criterian) (pessimistic)
o Laplace criteria
o Hurwiez criteria/coefficient of optimisum = alpha
ii) Under risk
o Expected monetary value (EMV*)

UNIT IV
Only network diagram – 4M
Float calculation / time calculation – Part B
Sequencing – 2 machine N job, 3 machine N job, 4 machine N job, 5
machine N job
UNIT V
Replacement
 Type 1 – gradual failure
 Type 2 – time value
 Type 3 – individual vs group policy
Queueing
 Model 1 – single server model
 Model 2 – multiple server points