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UNIT – I
Mathematical models, which are essence of OR, do not take into account qualitative factors (or)
emotional factors which are quite real. All influencing factors which cannot be quantified find no
place in OR.
Mathematical models are applicable to only specific categories of problems.
Linear programming problem deals with the optimization of a function of decision variables known
as objective function, subject to a set of simultaneous linear equations (or) inequalities known as
constraints.
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Linear programming techniques are widely used to solve the problems arising in the following
fields:
If xj ( j = 1, 2, … , n ) are the n decision variables of the problem and if the system is subject to m
constraints, the general mathematical model can be written in the form:
A linear programming problem with only two variables can be effectively solved by a graphical
method which provides a pictorial representation of the problem and solution and gives the basic
concepts used in solving general LPP.
A region in which all the constraints are satisfied simultaneously is called a feasible region.
The simplex method provides an algorithm which consists in moving from one vertex of the
region of feasible solutions to another vertex in such a way that the value of the objective function at
the succeeding vertex is less in a minimization problem (or) more in a maximization problem than at
the preceding vertex.
This procedure of jumping from one vertex to another is then repeated. Since the number of
vertices is finite, this method leads to an optimal vertex in a finite number of steps (or) indicates the
existence of an unbounded solution.
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A solution obtained by setting any n variables (among m + n variables) equal to zero and
solving for remaining m variables is called a basic solution.
These m variables are called basic variables and the remaining n variables that have been put
equal to zero each are called non – basic variables.
A set of variables ( x1, x2, … , xn+m ) is called a feasible solution to L.P problem if it satisfies the
constraints as well as non – negativity restrictions.
The basic solution that also satisfies the non – negativity restrictions are called basic feasible
solution.
It is a basic feasible solution in which all the m basic variables are positive (> 0) and the
remaining n variables are zero each.
It is a basic feasible solution in which one or more of the m basic variables are equal to zero.
19) Define optimal basic feasible solution (or) optimal solution in LPP.
It is the basic feasible solution that also optimizes the objective function.
If the value of the objective function can be increased or decreased indefinitely, the solution is
called unbounded solution.
By performing optimality test we can find whether the current feasible solution can be improved
or not.
In case of maximization problems, if (Z j – Cj) ≥ 0, then the current basic feasible solution is
optimal.
In case of minimization problems, if (Zj – Cj) ≤ 0, then the current basic feasible solution is
optimal.
Slack variable:
The non – negative variable which is added to LHS of the constraint having ≤ to convert the
inequality into an equality is called slack variable.
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Surplus variable:
The non – negative variable which is subtracted from the LHS of the constraint having to
convert the inequality into an equality is called surplus variable.
23) What is the difference between simplex procedure for a maximization and minimization
problem?
In an LPP, if at least one of the constraints is of (≥) or (=) type, then we introduce another type of
variables called artificial variables to the problem. These variables are fictitious and have no physical
meaning.
25) What are the techniques available to solve the LPP involving artificial variables?
If atleast one artificial variable appears in the basis at non – zero level and the optimality
condition is satisfied, then the original problem has no feasible solution. The solution that satisfies the
constraints but does not optimize the objective function since it contains a very large penalty M and is
called pseudo – optimal solution.
Artificial variables are added to convert the Artificial variables are added to convert the
problem to standard form and then eliminate problem to standard form and then eliminate
them from the solution. them from the solution.
For every linear programming problem, there is a unique linear programming problem associated
with it, involving the same data and closely related optimal solutions. The original problem is then
called the primal problem while the other is called its dual problem. But in general, two problems are
said to be duals of each other.
The dual simplex method is used to solve problems which start dual feasible i.e., whose primal is
optimal but infeasible. In this method the solution starts optimum but infeasible and remains infeasible
until the true optimum is reached at which the solution becomes feasible.
Parametric programming.
Integer programming algorithms.
Some non – linear programming algorithms.
The study of the effect of discrete (or) continuous changes in parameters on the optimal solution
is called the sensitivity analysis, while that of continuous changes in parameters is called parametric
programming.
A linear programming problem in which some or all of the variables in the optimal solution are
restricted to assume non – negative integer values is called an integer programming problem.
In a linear programming problem, if all the variables in the optimal solution are restricted to
assume non – negative integer values then it is called a pure integer programming problem.
In an linear programming problem, if only some of the variables in the optimal solution are
restricted to assume non – negative integer values, while the remaining variables are free to take any
non-negative values then it is called a mixed integer programming problem.
37) Define cutting plane method (or) Gomory’s cutting plane method.
Cutting plane method consists of solving the I.P.P as ordinary L.P.P by ignoring the integrality
restriction and then introducing additional constraints one after the other to cut (or) eliminate certain
part of the solution space until an integral solution is obtained.
UNIT – II
The revised simplex method is the modification of the normal simplex method is used for
solving a linear programming problem involving large number of variables and constraints. It
computes and stores only the relevant information needed currently for testing and improving the
current solution.
Transportation deals with the transportation of a commodity (single product) from „m‟ sources
(origins or supply or capacity centres) to „n‟ destinations (sinks or demand or requirement centres).
Total quantity of the item available at different sources is equal to the total requirement at
different destinations.
Item can be transported conveniently from all sources to destinations.
The unit transportation cost of the item from all sources to destinations is certainly and precisely
known.
The transportation cost on a given route is directly proportional to the number of units shipped on
that route.
The main objective is to minimize the total transportation cost for the organisation as a whole
and not for individual supply and distribution centres.
∑∑
∑
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∑ ∑
The above condition is the necessary and sufficient condition for a transportation problem to
have a feasible solution.
A set of non – negative allocations, xij that satisfies the rim (row and column) restrictions is
called a feasible solution to the transportation problem.
A feasible solution that minimizes the transportation cost (or) maximizes the profit is called an
optimal solution.
A basic feasible solution in which the total number of non – negative allocations is less than
m + n – 1 is called degenerate basic feasible solution.
12) Name the various techniques available to find the initial basic feasible solution in transportation
problem.
The purpose of MODI method is to determine whether the current basic feasible solution of the
transportation problem is optimal or not.
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To resolve degeneracy, we allocate an extremely small quantity ϵ (close to zero) to one or more
empty cells of the transportation table, so that the total number of occupied cells becomes (m + n – 1)
at independent positions.
The problem of assigning a number of tasks (jobs or origins or sources) to an equal number of
facilities (machines or persons or destinations) at a minimum cost (or) maximum profit is known as
assignment problem.
∑∑
()
Hungarian method.
Demand at any destination may be any Demand at any destination (job) will be 1
2
positive quantity bj i.e., bj = 1
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One or more source to any number of One source (machine) to only one
3
destinations destination (job)
21) What is unbalanced assignment problem? How it can be converted into a balanced one?
If the number of rows is not equal to the number columns in the cost matrix of the given
assignment problem, then the given assignment problem is said to be unbalanced.
It can be converted into a balanced one by adding dummy rows or dummy columns with zero
cost elements in the cost matrix depending upon whether m < n or m > n .
22) How do you convert the maximization assignment problem into a minimized one?
The problem of finding the shortest distance if the salesman starts from his headquarters and
passes through each city under his jurisdiction exactly once and returns to the headquarters is called
the Travelling Salesman Problem.
Many decision making problems involve a process that takes place in multiple stages in such a
way that at each stage, the process is dependent on the strategy chosen. Such types of problems are
called dynamic programming problems.
26) State the principle of optimality (or) Bellman’s optimality principle used in dynamic
programming.
Optimality principle states that, “An optimal policy (set of decisions) has the property that
whatever be the initial state and initial decisions, the remaining decisions must constitute an optimal
policy for the state resulting from the first decision”.
In the production area, this technique has been used for production, scheduling and employment
smoothening problems.
It is used to determine the optimal combination of advertising media (TV, radio, newspapers) and
the frequency of advertising.
Scheduling methods, markovian decision models, infinite stage system, probabilistic decision
problems, etc.,
A stage is defined as a portion of decision problem for which a separate decision can be made.
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At each stage there are a number of alternatives and the decision – making process involves the
selection of one feasible alternative which may be called as stage decision.
The variables which specify the condition of decision process and summarize the current status
of the system are called state variables.
The problem of replacement is to decide the best policy to determine the period at which
replacement of a machine is most economical instead of continuing at increased cost.
31) What are the situations which make the replacement of items necessary?
UNIT – III
1) Define Inventory.
Inventory may be defined as the stock of goods, commodities or other economic resources that
are stored or reserved for smooth and efficient running of business affairs.
Overbuying without regard to the forecast or proper estimate of demand to take advantage of
favourable market.
Overproduction (or) production of goods much before the customer requires them.
Overstocking may also result from the desire to provide better service to the customers.
Bulk production to cut down production costs will also result in large inventories.
Cancellation of orders and minimum quantity stipulations by the suppliers may also give rise to
large inventories.
The cost associated with carrying or holding the goods in stock is known as holding cost (or)
carrying cost per unit per unit of time.
The penalty costs that are incurred as a result of running out of stock (i.e., shortage) are known
as shortage or stock – out costs.
These costs are associated with obtaining goods through placing an order or purchasing or
manufacturing or setting up a machinery before starting production. So they include costs of purchase,
requisition, follow up receiving the goods, quality control etc. These are called as set-up cost ordering
costs or replenishment costs.
Controlled Variables:
Uncontrolled Variables:
These include holding costs, shortage cost, set up cost and demand.
Elapsed time between the placement of the order and its receipts in inventory is known as Lead
time.
This is the time when we should place an order by taking into consideration the interval between
placing the order and receiving the supply.
12) Define economic order quantity (EOQ) (or) optimum order quantity?
Economic order quantity (EOQ) is that size of order which minimises total annual cost of
carrying inventory and the cost of ordering under the assumed conditions of certainty and that annual
demands are known.
Economic batch quantity (EBQ) is a measure used to determine the quantity of units that can be
produced at minimum average costs in a given batch (or) production run.
The inventory problems in which the purchase cost (or) production cost is variable and depends
upon the quantity manufactured (or) purchased. This happens when discounts are offered for the
purchase of large quantities. These discounts are known as price breaks.
Game theory is a mathematical theory that deals with the general features of competitive
situations. In such situations, a decision made by one decision-maker affects the decision made by one
or more of the remaining decision-makers and the final outcome depends upon the decision of all the
parties.
It is an activity between two (or) more persons involving actions by each one of them according
to a set of rules, which results in some gain (+ve, -ve or zero) for each.
A finite game has a finite number of moves and choices, while an infinite game contains an
infinite number of moves and choices.
Each participant (or) competitor playing a game is called a player. Each player is intelligent and
rational in approach.
The predetermined rule by which a player decides his course of action from his list of courses of
actions during the game.
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Pure strategy is the decision rule to always select a particular course of action. It is usually
represented by a number with which the course of action is associated.
Mixed strategy is the decision, in advance of all plays, to choose a course of action for each play
in accordance with some probability distribution. Thus, a mixed strategy is a selection among pure
strategies with some fixed probabilities.
The strategy that puts the player in the most preferred position irrespective of the strategy of his
opponents is called an optimal strategy.
If the algebraic sum of gains and losses of all the players is zero in a game, then the game is
called as zero – sum game. Otherwise the game is said to be a non – zero sum game.
It is a game involving only two players, in which the gain of one player is equal to the loss of the
other player. It is also called as rectangular game (or) matrix game.
The gains resulting from a game is called payoff, and when it is presented in the form of a table
it is called payoff matrix.
A saddle point of a payoff matrix is that position in the payoff matrix where maximum of row
minima coincides with the minimum of the column maxima.
UNIT – IV
Project planning involves a listing of tasks or jobs that must be performed to complete a project
under consideration.
Project scheduling involves the laying out of the actual activities of the projects in a logical
sequence of time in which they have to be performed.
Project controlling consists of reviewing the progress of the project whether the actual
performance is according to the planned schedule and finding the reasons for difference, if any,
between the schedule and performance.
7) Define a network.
A network is the graphical representation of logically and sequentially connected arrows and
nodes representing activities and events of a project.
8) Define an activity.
Activity is a task or item of work to be done in a project, which requires time and resources for
its execution. It is represented by an arrow in a network diagram.
9) Define an event.
The beginning and end points of an activity are called events (or) nodes. Event is a point in time
and does not consume any resources.
An unbroken chain of activity arrows connecting the initial event to some other event is called a
path.
Activities which must be completed before a particular activity starts are called the predecessor
activities and those which must follow a particular activity are called successor activities.
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An activity which only determines the dependency of one activity on the other, but does not
consume any time is called a dummy activity. Dummy activity is usually represented by dotted line
arrows.
The path connecting the first initial node to the very last terminal node of longest duration in any
project network is called the critical path.
All the activities in any critical path are called critical activities.
If only one activity converges on an event, its earliest start time „E‟ is given by „E‟ of the tail
event of the activity plus activity duration. If more than one activity converges on it, E‟s via all the
paths would be computed and the highest value chosen and put around the node.
If only one activity emanates from an event, compute „L‟ by subtracting activity duration from
„L‟ of its head event. If more than one activity emanates from an event, compute L‟s via all the paths
and choose the smallest and put it around the event.
Slack (S) is the difference between the latest occurrence time and earliest occurrence time of an
event.
S = L – E of an event
Float has been used in connection with the activities and slack with the events.
2 Probabilistic Deterministic
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Crash time is the minimum activity duration to which an activity can be compressed by
increasing the resources and hence by increasing the direct cost.
Direct cost is the cost directly associated with each activity such as machine cost, labour cost,
etc., for each activity.
Indirect cost is the cost due to management services, rentals, insurance including allocation of
fixed expenses, cost of security, etc.
If the constraint may be on the availability of certain resources, then the project duration is not
treated as an invariant, but the demand on certain specified resources should not go beyond the
specified level. This operation of resource scheduling is called resource levelling.
UNIT – V
A queuing system can be described as composed of customers arriving for service, if it is not
immediate, waiting for service and leaving the system after being serviced. The queue along with the
service facility is called a queuing system.
Queuing models are aids to determine the optimal number of counters so as to satisfy the
customers keeping the total cost minimum.
4) Define the terms: (a) Customer, (b) Queue, (c) Service channel.
Customer:
The arriving unit that requires some service to be performed is called as customer. The
customers may be persons, machines, vehicles, parts, etc.
Queue:
Queue is defined as the number of customers waiting to be serviced. Queue does not include the
customers being serviced.
Service channel:
The process or facility which is performing the services to the customer is known as service
channel. This may be single (or) multi channel.
Service discipline (or) order of service is the rule by which customers are selected from the
queue for service.
FIFO - First in, First out or (First come, First served - FCFS)
LIFO - Last in, First out, or (Last come, First served - LCFS)
SIRO - Service in Random order.
7) Define the terms: (a) Balking, (b) Reneging, (c) Priorities, (d) Jockeying. (OR) What is meant by
customer’s behavior?
Balking:
Reneging:
This occurs when the waiting customer leaves the Queue due to Impatience.
Priorities:
In certain applications some customers arc served before others regardless of their order of arrival.
Jockeying:
The average number of customers in the queue waiting to get service excluding the customers
being served is known as queue length.
The average number of customers in the system including those waiting as well as those being
served is known as system length.
𝜌
If the operating characteristics (or) behaviour of the system are dependent on time, it is said to be
in transient state.
If the operating characteristics (or) behaviour of the system independent on time, it is said to be
in steady state.
(a/b/c) : (d/e/f)
where
a = arrival distribution.
b = departure distribution.
c = number of parallel service channels in the system.
d = service discipline.
e = maximum number of customers allowed in the system.
f = calling source (or) population.
A poisson distribution is a discrete probability distribution which predicts the number of arrivals
in a given time. The poisson distribution involves the probability of occurrence of an arrival