MID TERM NOTES

I. What is decision making process?

The process of decision-making you've outlined is a structured approach to making informed

choices. Here's a summary of these steps:
1. Identify and Define the Problem:
• Begin by clearly identifying and defining the problem or the decision you need to
make. Understanding the problem is the first and crucial step in the decision-making
process.
2. Determine the Set of Alternative Solutions:
• Once you have a clear understanding of the problem, brainstorm and create a list of
potential alternative solutions or courses of action. These are the different options
you can consider to address the problem.
3. Determine the Criterion or Criteria:
• Establish the criteria or metrics that you will use to evaluate and compare the
alternative solutions. Criteria define the factors or attributes that are important in
making your decision. They reflect your goals and objectives.
4. Evaluate the Alternatives:
• Assess each of the alternative solutions against the established criteria. Analyse the
advantages, disadvantages, benefits, and drawbacks of each option. This step
involves a thorough analysis to determine how well each alternative aligns with your
goals.
5. Choose an Alternative:
• Based on the evaluations, select the alternative that best meets your objectives and
criteria. This is the solution or course of action you intend to implement.

II. What is problem solving process?

The problem-solving process you've outlined consists of seven key steps to address
important problems effectively:
1. Identify and Define the Problem:
• Begin by clearly understanding and defining the problem you're facing. What is the
issue or challenge? Why is it important to solve? What are the specific symptoms or
aspects of the problem?
2. Determine the Set of Alternative Solutions:
• Once the problem is well-defined, brainstorm and generate a list of possible
solutions or approaches. Encourage creativity and explore various options.
3. Determine the Criteria for Evaluation:
• Establish a set of criteria or metrics that will be used to assess and compare the
alternative solutions. What factors are most important in making your decision?
4. Evaluate the Alternatives:
• Assess each alternative against the established criteria. Analyse the pros and cons,
advantages, and disadvantages of each option. Quantitative and qualitative analysis
may be used.
5. Choose an Alternative:
 • After evaluating the alternatives, select the one that best meets the defined criteria
and aligns with your goals and objectives. This is the solution you intend to
implement.
6. Implement the Selected Alternative:
• Put the chosen solution into action. Develop a detailed plan for execution, allocate
resources, and assign responsibilities. Ensure that the implementation process is
well-managed.
7. Evaluate the Results:
• Once the solution has been implemented, monitor the outcomes and results closely.
Assess whether the chosen alternative has resolved the problem as expected and
whether the desired objectives have been achieved.
8. Iterate if Necessary:
• If the problem persists or if the chosen solution does not yield the desired results, be
prepared to revisit the process. You may need to go back to earlier steps, redefine
the problem, generate new alternatives, or adjust your criteria.

III. What are the steps of transportation problem?

The steps you've outlined describe a common approach to solving transportation problems,
which are optimization problems involving the efficient allocation of goods from multiple sources
to multiple destinations while minimizing costs. Here's a summary of each step:

1. Define the Objective Function and Constraints:

• Clearly specify the objective to be minimized (usually transportation costs) and any
constraints (e.g., supply and demand limits) associated with the problem.

2. Set Up the Transportation Table:

• Create a table with rows representing sources (e.g., factories) and columns
representing destinations (e.g., distribution centres or customers). Fill in the table
with supply and demand figures for each source and destination, as well as the unit
transportation costs in the corresponding cells. If necessary to balance the problem,
add a dummy row or column.

3. Develop the Initial Feasible Solution:

• Generate an initial feasible solution using one of the three common methods:

• Northwest Corner Method (NWCM): Start in the top-left corner of the table
and allocate as much as possible to each cell while maintaining supply and
demand constraints.

• Least Cost Method (LCM): Allocate to the cell with the lowest transportation
cost and continue until supply and demand constraints are met.

• Vogel's Approximation Method (VAM): Calculate the penalties for each row
and column based on the difference between the two lowest costs, then
allocate to the cell with the highest penalty.

4. Examine the Feasibility of the Initial Solution:

 • Check if the initial solution is feasible by ensuring that there are allocations in (m+n-
1) cells, where m is the number of sources and n is the number of destinations. Each
allocation should be at an independent position.

5. Test the Solution for Optimality:

• If the initial solution is feasible, calculate the opportunity cost (shadow price) for
each unallocated cell. The opportunity cost represents the change in the objective
function value (total cost) if that cell were allocated. If all unallocated cells have non-
negative opportunity costs, the solution is optimal.

These steps are part of the transportation algorithm, a widely used method in operations
research for solving transportation problems efficiently. The goal is to find an optimal allocation
that minimizes transportation costs while satisfying supply and demand constraints.

IV. Procedure to solve linear programming method.

The procedure of linear programming involves several key steps, as you've outlined. Here's a
summary of the linear programming process:
1. Problem Statement:
• Begin by defining the specific problem you want to solve using linear programming.
This should include a clear understanding of the decision you need to make and the
constraints or limitations involved.
2. Decision Variables:
• Identify and define the decision variables. These are mathematical symbols that
represent the levels or quantities of activities or operations you want to optimize or
analyse. Decision variables are typically denoted by letters (e.g., x, y, z).
3. Objective Function:
• Create the objective function, which is a linear relationship that reflects the primary
goal of your operation or decision. The objective function can be either to maximize
(e.g., profit) or minimize (e.g., cost) a certain quantity. It's typically represented in
the form of an equation.
4. Constraints:
• Define the constraints, which are linear relationships that represent restrictions on
decision-making. Constraints define the boundaries within which the decision
variables must operate. Constraints can be inequalities (≤, ≥) or equalities (=) and are
based on real-world limitations.
5. Mathematical Model:
• Combine the decision variables, objective function, and constraints into a complete
mathematical model. The mathematical model provides a formal representation of
the problem, allowing you to analyse and optimize it using linear programming
techniques.

REST QUESTIONS ARE BASED ON PRACTICALS