ASSIGNMENT

Name: SURAIYA YASHMIN

Registration No.: 1208008219

Learning Centre: NIPSTEC LIMITED

Learning Centre: Code: 001640

Course: MBA

Subject: OPERATION RESEARCH

Semester: II SEMESTER

Module No.: B1631

Date of submission: 15TH MAY 2013

Signature of Centre Signature of Coordinator

Signature of Evaluator
Q1.Explain the scope of Operations Research. What are the features of Operations Research?
Scope of Operations Research
Any problem, either simple or complicated, can use OR techniques to find the best possible solution. This
section will explain the scope of OR by analysing its application in various fields of everyday life.
: In defence operations – In modern warfare, the three major military components namely, Air Force, Army,
and Navy carry out the defence operations. The activities in each of these components can be further divided in
four sub-components - administration, intelligence, operations, training and supply. The applications of
modern warfare techniques in each of the components of military organisations require expert knowledge in
respective fields. Furthermore, each component works to drive maximum gains from its operations and there is
always a possibility that the strategy beneficial to one component may be unfeasible for another component.
Thus in defence operations, there is a requirement to co-ordinate the activities of various components.
: In industry – The system of modern industries is so complex that an individual cannot intuitively judge the
optimum point of operation in its various components. The business environment is always changing and any
decision useful at one time may not be suitable some time later. There is always a need to check the validity of
decisions continuously against the situations. The industrial revolution with increased division of labour and
introduction of management responsibilities has made each component an independent unit having its own
goals The application of OR techniques helps in overcoming this difficulty by integrating the diversified
activities of various components to efficiently serve the interest of the organisation as a whole. OR methods in
industry can be applied in the fields of production, inventory controls and marketing, purchasing,
transportation, and competitive strategies.
: Planning – In modern times, it has become necessary for every government to carefully plan, for the economic
development of the country. OR techniques can be fruitfully applied to maximise the per capita income, with
minimum sacrifice and time. A government can thus use OR for framing future economic and social policies.
: Agriculture – With increase in population, there is a need to increase agriculture output. However, this cannot
be done arbitrarily. There are several restrictions. Hence, the need to determine a course of action that serves
the best under the given restrictions. You can solve this problem by applying OR techniques
: In hospitals – OR methods can solve waiting problems in out patient department of big hospitals and
administrative problems of the hospital organisations.
: In transport – Different OR methods can be applied to regulate the arrival of trains and processing times, to
minimise the passengers waiting time and reduce congestion, and to formulate suitable transportation policy,
thereby reducing the costs and time of transhipment.
: Research and development – OR methodologies can be applied in the field of R&D for several purposes, such
as to control and plan product introductions.
Features of Operation Research
Some key features of OR are as follows:
: OR is system-oriented. OR scrutinises the problem from an organisation’s perspective. The results can be
optimal for one part of the system, while the same can be unfavourable for another part of the
system.
: OR imbibes an inter–disciplinary team approach. Since no single individual can have a thorough knowledge of
all the fast developing scientific know-how, personalities from different scientific and managerial cadre form a
team to solve the problem.
: OR uses scientific methods to solve problems.
: OR increases effectiveness of the management’s decision-making ability.
: OR uses computers to solve large and complex problems.
: OR offers a quantitative solution.
: OR also takes into account the human factors.
Q2.Six Operators are to be assigned to five jobs with the cost of assignment in Rs. given in the matrix
below. Determine the optimal assignment. Which operator will have no assignment.
Ans. 2: Optimal assignment is the one that has the minimum cost of assignment. There are different methods to
find optimal assignment.
Problem statement is an unbalanced assignment problem as the Number of Operators ≠ Number of Jobs. We
thus introduce a dummy column to make it a balanced assignment problem.
 Operators Jobs
1 2 3 4 5
1 6 2 5 2 6 0
2 2 5 8 7 7 0
3 7 8 6 9 8 0
4 6 2 3 4 5 0
5 9 3 8 9 7 0
6 4 7 4 6 8 0

Row Ruled Matrix by subtracting the minimum value:

Operators Jobs
1 2 3 4 5 Dummy
1 4 0 3 0 4 0
2 0 3 6 5 5 0
3 1 2 0 3 2 0
4 4 0 1 2 3 0
5 6 0 5 6 4 0
6 0 3 0 2 4 0

Column ruled matrix by subtracting the minimum value from columns

Operators Jobs
1 2 3 4 5 Dummy
1 4 0 3 0 2 0
2 0 3 6 5 3 0
3 1 2 0 3 0 0
4 4 0 1 2 1 0
5 6 0 5 6 2 0
6 0 3 0 2 2 0

1 to 2 – 2, 2 to 1 – 2 ,3 to 3 – 6
4 to 2 – (This is discarded as Job 2 is already performed by Operator 1)
5 to 2 – 3, 6 to 1- 4, Total Cost – 17
Operator 4 does not have any assignment.
Q3.a. Explain the Monte Carlo Simulation.
Ans: The Monte-Carlo method is a simulation technique in which statistical distribution functions are created
by using a series of random numbers. This approach has the ability to develop many months or years of data in
a matter of few minutes on a digital computer.
The method is generally used to solve the problems that cannot be adequately represented by mathematical
models or where solution of the model is not possible by analytical method.
The Monte-Carlo simulation procedure can be summarised in the steps:
Step 1: Define the problem:
a) Identify the objectives of the problem.
b) Identify the main factors that have the greatest effect on the objectives of the problem.
Step 2: Construct an appropriate model:
a) Specify the variables and parameters of the model.
b) Formulate the appropriate decision rules, i.e., state the conditions under which the experiment is to be
performed.
c) Identity the type of distribution that will be used. Models use either theoretical distributions or empirical
distributions to state the patterns of occurrence associated with the variables.
d) Specify the manner in which time will change.
e) Define the relationship between the variables and parameters.
Step 3: Prepare the model for experimentation:
a) Define the starting conditions for the simulation.
b) Specify the number of runs of simulation to be made.
Step 4: Using steps 1 to 3, experiment with the model:
a) Define a coding system that will correlate the factors defined in step 1with the random numbers to be
generated for the simulation.
b) Select a random number generator and create the random numbers to be used in the simulation.
c) Associate the generated random numbers with the factors identified instep1 and coded in step 4(a).
Step 5: Summarise and examine the results obtained in step 4.
Step 6: Evaluate the results of the simulation.
Step 7: Formulate proposals for advice to management on the course of action to be adopted and modify the
model, if necessary.
b. A Company produces 150 cars. But the production rate varies with the distribution.

Production Rate 147 148 149 150 151 152 153

Probability 0.05 0.10 0.15 0.20 0.30 0.15 0.05

At present the track will hold 150 cars. Using the following random numbers determine the average
number of cars waiting for shipment in the company and average number of empty space in the truck.
Random Numbers 82, 54, 50, 96, 85, 34, 30, 02, 64, 47.
Ans: Table depicts the production rate and probability.
Table : Production Rate and Probability
Production rate Probability Cumulative Random No.
Probability Assigned
147 0.05 0.05 00 – 04
148 0.10 0.15 05-14
149 0.15 0.30 15-29
150 0.20 0.50 30-49
151 0.30 0.80 50-79
152 0.15 0.95 80-94
153 0.05 1.00 95-99

Table depicts the simulation worksheet.

Table : Simulation Worksheet
Trial No. Random No. Simulated Number of
Production Car Waiting in example
Rate the factory spaces in
the truck
1 82 152 2 -
2 54 150 2 -
3 50 153 2 -
4 96 153 5 -
5 85 152 7 -
6 34 150 7 -
7 30 150 7 -
8 02 147 4 3
9 64 151 5 -
10 47 150 7 -
Total 3

Therefore, average number of cars waiting = 7/10 =0.7/day

Average number of empty space = 3/10 = 0.3/day

Q4. Explain the Characteristics and Constituents of a Queuing System.

Ans:A queuing model has the following operating characteristics which enables us to understand and
efficiently manage a queue:
: Queue length: The number of customers in the waiting line reflects one of the two conditions. Short
queues could mean either good customer service or too much capacity. Similarly, long queues could
indicate either low server efficiency or the need to increase capacity
: Number of customers in system: The number of customers in queue and also those being served in the
queue relates to the service efficiency and capacity. Large values imply congestion, potential customer
dissatisfaction and a need for more capacity.
: Waiting time in queue: Long lines do not reflect long waiting times if the service rate is fast. However,
when waiting time seems long to customers, they perceive that the quality of service is poor. Long waiting
times may indicate a need to adjust the service rate of the system or change the arrival rate of customers.
: Waiting time in system: The total elapsed time from entry into the system until exit from the system
may indicate problems with customers, server efficiency or capacity. If some customers are spending too
much time in the service system, there may be a need to change the priority discipline, increase
productivity or adjust capacity in some way.
: Service facility utilisation: The collective utilisation of the service facilities reflects the percentage of
time the facilities are busy.
Management is interested in maintaining high utilisation but this objective may adversely impact the other
operating characteristic. A queuing system is said to be in transient state when its operating
characteristics are dependent upon time. If the operating characteristics become independent upon time,
the queuing system is said to be in a steady state.
Constituents of a Queuing System
In the previous section, you learnt the operating characteristics of a queuing system. You will now learn
the constituents of a queuing system. The constituents of a queuing system include arrival pattern, service
facility and queue discipline.
: Arrival pattern: It is the average rate at which the customers arrive.
: Service facility: Examining the number of customers served at a time and the statistical pattern of time
taken for service at the service facility.
: Queue discipline: The common method of choosing a customer for service amongst those waiting for
service is ‘First Come First Serve’.
Q5. a. What do you mean by dominance? State the dominance rules for rows and columns.
Dominance
In a rectangular game, the pay-off matrix of player A is pay-off in one specific row ( r row ) the exceeding
the corresponding pay-off in another specific row( s row ) th. This means that whatever course of action is
adopted by player B, for A, the course of action Ar yields greater gains than the course of action As .
Therefore, Ar is a better strategy than As irrespective of B’s strategy. Hence, you can say that Ar dominates
As .Alternatively, if each pay-off in a specific column ( p column ) this less than the corresponding pay-off in
another specific column( q column ) the, it means strategy Bp offers minor loss than strategy Bq
irrespective of A’s strategy. Hence, you can say that Bp dominates Bq. Therefore, you can say that:
a) In the pay-off matrix, if each pay-off in r row this greater than(or equal to) the corresponding pay-off in
this row th, Ar dominates As .
b) In the pay-off matrix, if each pay-off in p column this less than(or equal to) the corresponding pay-off in
the q column th, Bp dominates Bq.
At times, a convex combination of two or more courses of action may dominate another course of action.
Whenever a course of action (say As or Bq) is dominated by others, then that course of action ( As or Bq)
can be deleted from the pay-off matrix. Such a deletion will not affect the choice of the solution, but it
reduces the order of the pay-off matrix. Successive reduction of the order using dominance property helps
in solving games.
Solving games using dominance
Consider a two-person zero-sum game with players A and B.
Let A1 ,A2 ,......Am be the courses of action for player A. Let B1 ,B2 , ...Bn be the courses of action for player
B. Suppose the game has a saddle point. Use the dominance property in sequence to delete the courses of
action of A as well as B till the pair comprising the saddle point remains alone. The procedure to arrive at
the saddle point is as follows:
a) In the pay-off matrix, if each pay-off in r row th is greater than (or equalto) the corresponding pay-off in
the row th,Ardominates As , hence A is deleted.
b) In the pay-off matrix, if each pay-off in p column this less than (or equalto) the corresponding pay-off in
 theq column th,BpdominatesBq,henceBqis deleted.
c) Repeat the above steps in succession to achieve the saddle point.
b. Find the saddle point of the following game and state the optimum strategies for players A and B
9 3 1 8 0
6 5 4 6 7
2 4 4 3 8
5 6 2 2 1

Ans. 5b
B
A 9 3 1 8 0
6 5 4 6 7
2 4 4 3 8
5 6 2 2 1

Let’s find out the minimum payoff in each row and maximum payoff in each column and mark it out.
Minimum Payoff in row – Circled out
Maximum payoff in column – Boxed out
B
A 9 1
9 8
3 0
1
6 5 7
6 4 4

4 3
8
2 4

5 6 6 2 2
1

The payoff at position (2, 3) is circled as well as Boxed. So, the game has a saddle point at position (2,3).
The Solution to the game is :
a) Optimum Strategy for A is A2
b) Optimum Strategy for B is B3
c) Value of the game is = 4 Rupees.

Q6.a What are the differences between PERT and CPM?

Ans: Basic Difference between PERT and CPM

Though there are no essential differences between PERT and CPM as both of them share in common the
determination of a critical path. Both are based on the network representation of activities and their scheduling
that determines the most critical activities to be controlled so as to meet the completion date of the project.

PERT
Some key points about PERT are as follows:

1. PERT was developed in connection with an R&D work. Therefore, it had to cope with the uncertainties that
are associated with R&D activities. In PERT, the total project duration is regarded as a random variable.
Therefore, associated probabilities are calculated so as to characterise it.
2. It is an event-oriented network because in the analysis of a network, emphasis is given on the important
stages of completion of a task rather than the activities required to be performed to reach a particular event or
task.
3. PERT is normally used for projects involving activities of non-repetitive nature in which time estimates are
uncertain.
4. It helps in pinpointing critical areas in a project so that necessary adjustment can be made to meet the
scheduled completion date of the project.

CPM
1. CPM was developed in connection with a construction project, which consisted of routine tasks whose
resource requirements and duration were known with certainty. Therefore, it is basically deterministic.
2. CPM is suitable for establishing a trade-off for optimum balancing between schedule time and cost of the
project.
3. CPM is used for projects involving activities of repetitive nature.
b. A project has eleven activities whose duration is given in the following table:
0- 1- 1- 2- 2- 3- 3- 4- 5- 6- 7-
Activity 1 2 3 4 5 4 6 7 7 7 8

Duration-
days 2 8 10 6 3 3 7 5 2 8 3
i. Draw the network
ii. Identify the critical activities and critical path.

Ans.: (A)Network Diagram :

4
C
2
A D G 5
1 7 8
1 H J 1
E

F I
3 6
2 6
3 9
(B)Project Duration & Project Schedule :
Forward Pass : 3
D01 = 2 weeks , D12 = 8 Weeks, D13 = 10 Weeks, D24 = 6 Weeks, D25 = 3 Weeks,
D34 = 3 weeks, D36 = 7 weeks , D47 = 5 Weeks, D57 = 2 Weeks, D67 = 8 Weeks, D78 = 3 weeks.
So, Project Duration as per the below table comes out to be :
Activity Duration Start Completion

(0,1) 2 0 2

(1,2) 8 2 10

(1,3) 10 2 12

(2,4) 6 10 16

(2,5) 3 10 13

(3,4) 3 12 15

(4,7) 5 15 20

(5,7) 2 13 15

(3,6) 7 12 19

(6,7) 8 19 27
(7,8) 3 15 18

Project Duration comes out to be = 18 Weeks

(C) CPM: Critical Path is the shortest possible path of the Network diagram and all the activities on this path
are critical and time bound.
As per the analysis, Critical path in the network is the sequence of activities followed by (1,2)(2,5)(5,7) and
(7,8) and the Duration comes out to be 16 weeks.