Operations Research
Dr.G.V.R.K.ACHARYULU
Reader
School of Management Studies
University of Hyderabad, Hyderabad-500046
Email: acharyulu_gvrk@yahoo.com
Problem
Quant.Analysis
Logic
Historic Data
Marketing Research
Scientific Analysis
Modeling
Qual. Analysis
Satisfaction
Honesty
smoking
Liking
Severity
Decision
?
The Decision-Making Process
Scientific Approach to Managerial Decision
Making
Consider both Quantitative and Qualitative
Factors
Raw Data
Quantitative
Analysis
Meaningful
Information
Quantitative Analysis
The QA Approach
Define
the Problem
Develop
a Model
Acquire
Input Data
Develop
a Solution
Test
the Solution
Analyze
the Results
Implement
the Results
. Quantitative methods for business involve rational
approaches to decision making based on the
scientific method of solving problem or
opportunity. It is a reflection before action.
Carpenters say, "Measure twice, cut once."
This analytical approach to decision making is
known as management science, operations research
or decision science
Potential Reasons for a Quantitative Analysis
The problem is complex.
The problem is very important.
The problem is new.
The problem is repetitive.
Operations Research
Basically, operations research is a scientific
approach to analyzing problems and making
decisions.
It uses mathematics and mathematical modeling on
computers to forecast the implications of various
choices and find best alternative(s).
Developed during World War II, operations
research helped take the guesswork out of
deploying radar, searching for enemy submarines,
getting supplies where they were most needed, and
the like. And following the war, numerous
peacetime applications emerged.
Operations Research
Manufacturers used operations research to make
products more efficiently, schedule equipment
maintenance, and control inventory and
distribution. And success in these areas led to
expansion into strategic and financial
planning...and into such diverse areas as
healthcare, insurance, education, meteorology,
and communications.
operations research is interdisciplinary - often
drawing solutions from engineering, logic,
psychology, and other social and political sciences.
Operations Research
Most of the problems OR tackle are complex,
often involving considerable uncertainty.
OR uses quantitative methods, modelling,
problem structuring, simulation along with
many other analytical techniques to
thoroughly analyse the problem, and decide
on practical action
Studying Operational Research will enhance
problem solving skills
Operations Research
The problems tackled usually involve designing
systems to operate in the most effective way or
deciding how to allocate scarce human resources,
money, equipment, or facilities.
To determine the various alternatives that are
available - and then carry out an analysis that
would enable to assess them objectively and
recommend the most suitable one.
The role of OR is to look at an organisation's
operations and find practical solutions to the
tactical and strategic problems that the organisation
faces.
Problems Areas
How often should check-ups be scheduled for members of a
group health plan, and what should be included?
How can a dress manufacturer lay out its patterns to minimize
wasted material?
How often should the sales force of a company call on its
customers?
How many elevators should be installed in a new office building
to cut waiting time?
What are the most cost-effective precautions to reduce the
occurrence and environmental impact of oil spills?
What's the most efficient method for routing a long-distance
telephone call?
Or how long should the warranty on an automobile or
appliance run, what should it cover, and what will it cost the
manufacturer?
Problems Areas contd
Determining the optimum schedule for an hospital
operations
Assessing the minimum time for completion of a
construction project and the relative risks and effects of
delays in various parts of the project
Assessing the requirements of various blood types of a
regional blood transfusion unit
OR solve problems in businesses, usually large
businesses, regarding strategy, forecasting, resource
allocation, facilities layout, inventory control, personnel
schedules and distribution systems. The methods
generally revolve around a mathematical model or set of
equations that explain how things happen within the
organization.
Operations Research
In today's global marketplace, businesses must compete
more effectively for their share of profits than ever
before. And public and non-profit agencies must compete
for ever-scarcer funding money.
This means that all of us must become more productive.
Volume must be increased. Consumers' demands for
better products and services must be met. Manufacturing
and distribution must be faster. Products and people
must be available "just in time." And accuracy must be
made a priority to satisfy increasingly narrow tolerances
for error.
But fortunately, new technologies developed over the past
few decades have given operations researchers
sophisticated tools to cope with these challenges.
OR-Soft wares
The field relies so heavily on computers, an
understanding of how software work is
essential and familiarity with soft wares
such as AMPL, LINDO, CPLEX, SAS and
Medcalc.com as a decision tools.
OR-Models
Models are simplified representations that enable the
analyst to break down systems into their component parts,
assign numerical values to each component, and examine
the mathematical relationships between them. These values
can be altered to determine what will happen to the system
under different sets of circumstances.
1990
1980
1970
1960
1950
1940
1930
1920
1910
1900
Expert Systems and Artificial Intelligence
Decision Support
Information System
Goal Programming
Decision Theory
Network Models
Dynamic Programming
Game Theory
Transportation
Assignment Technique
Inventory Control
Queuing Theory
Markov Analysis
The Evolution of OR models
A strange Over crowded
place for a new person
Registration?
Which Queue??
Is there an
Enquiry? Where is it?
when will it open?
Laboratory??Pharmacy?
TESTS?? When--where
A place that is overcrowded
Confusing system
Inadequate/unreliable diagnosis &
case management
Waiting time high
Confusion in movements
Inadequate assistance
REGISTRATION
OPD
SAMPLE
COLLECTION
HOME
?A LABRYNTH
HOSPITALS
Overcrowding
Long waiting times
Poor cleanliness
Equipment/consumables not
available
Understaffing
How can we improve it?
O R- Hospitals
The type of problems varies from industry to industry.
For example, an operations research in a hospital would
work on problems involving scheduling admissions,
managing patient flow, assigning shifts, monitoring the
use of pharmacy and laboratory services, or forecasting
demand for new hospital services.
Operations Research for a medical supplies
manufacturer is to determine the best inventory level for
each of the materials for a new production line, or, more
specifically, to determine how many surgical masks
should be kept in inventory.
LP Applications
1. Development of a production schedule that will
satisfy future demands for a firms production and
at the same time minimize total production and
inventory costs
2. Selection of the product mix in a factory to make
best use of machine-hours and labor-hours
available while maximizing the firms products
LP Applications ..contd
3. Determination of grades of petroleum products to
yield the maximum profit
4. Selection of different blends of raw materials to
feed mills to produce finished feed combinations
at minimum cost
5. Determination of a distribution system that will
minimize total shipping cost from several
warehouses to various market locations
LP Problem
Hours Required to Produce One Unit
Department
T
Tables
C
Chairs
Available
Hours This
Week
Carpentry
Painting
&Varnishing
4
2
3
1
240
100
Profit Amount $7 $5
Constraints: 4T + 3C 240 (Carpentry)
2T + 1C 100 (Paint & Varnishing)
Objective: Max: 7T + 5C
Number of Tables
120
100
80
60
40
20
0
N
u
m
b
e
r
o
f
C
h
a
i
r
s
20 40 60 80 100
Painting/Varnishing
Carpentry
120
100
80
60
40
20
0
N
u
m
b
e
r
o
f
C
h
a
i
r
s
20 40 60 80 100
Number of Tables
Painting/Varnishing
Carpentry
Feasible
Region
N
u
m
b
e
r
o
f
C
h
a
i
r
s
120
100
80
60
40
20
0
20 40 60 80 100
Number of Tables
Painting/Varnishing
Carpentry
Solution
(T = 30, C = 40)
1
2
3
4
Transportation and
Assignment Models
Transportation Problem
Distribution of items from several sources to
several destinations. Supply capacities and
destination requirements known.
Assignment Problem
One-to-one assignment of people to jobs, etc.
Transportation Problem
A transportation problem basically to find the best
way to fulfill the demand of n demand points
using the capacities of m supply points.
While trying to find the best way, generally a
variable cost of shipping the product from one
supply point to a demand point should be taken
into consideration.
Transportation Problem
s1
(100 units)
capacity
d2
(200 units)
required
d3
(200 units)
required
s2
(300 units)
capacity
s3
(300 units)
capacity
d1
Unit Shipping Cost:Factory to Warehouse
s1
s2
s3
Warehouse
Req.
d1
d2
d3
Factory
Capacity
5 4 3
5 7
4 8
9
3
Total Demand and Total Supply
s1
s2
s3
Warehouse
Req.
d1
d2
d3
Factory
Capacity
300 200 200 700
300
300
100
Transportation Table
s1
s2
s3
Warehouse
Req.
d1
d2
d3
Factory
Capacity
300 200 200 700
300
300
100
5 4 3
3
5 7
4 8
9
Assignment Problem
Laboratory has four jobs to be completed on four
machines. Each machine must be assigned to job.
The time required to setup each machine for
completing each job is shown in the table. Lab wants
to minimize the total setup time needed to complete
the four jobs.
Setup times
(Also called the cost matrix)
Time (Hours)
Job1 Job2 Job3 Job4
Machine 1 14 5 8 7
Machine 2 2 12 6 5
Machine 3 7 8 3 9
Machine 4 2 4 6 10
Goal of queuing analysis is to minimize the
sum of two costs
Customer waiting costs
Service capacity costs
Queuing Models
Simulation
Major issues in health care are waiting times
(waiting for surgery, wait lists for transplants,
location of emergency services, etc.), and
most health care queuing problems are too
complex to be analyzed theoretically.
Simulation is the best alternative for
providing solutions.
Inventory Management
ABC, VED for optimal decision making in supplies
Drug expiry FIFO method
Applied to problems like facility location and staff
(nurse and physician) scheduling problems,. locating
emergency medical services, and ambulance location
in particular.
The optimization of radiation beams that travel
through the body to treat cancer patients. These
beams can travel through the body at a variety of
directions and intensities. The objective is to
maximize the radiation on the tumor and minimize
the impact on healthy tissue, especially vital organs.
Today, these calculations are typically done by
hand. Linear and mixed integer models have been
developed to improve patient treatment.
Integer Programming
Decision Trees
People make a series of decisions at
different points of time.
Decision trees can often be used to
determine optimal decisions.
A decision tree enables a decision maker
to decompose a large complex decision
problem into several smaller problems.
Markov Analysis
Determine future states or conditions using Markov
analysis.
Compute long-term or steady-state conditions using
only the matrix of transition.
Understand the use of absorbing state analysis in
predicting future conditions.
Project Network
1
2
3
4
5 6
A
C
F
B
E
D
H
1
2
3
4
5 6
8 min
6 min
3 min
4 min
9 min
11 min
1 min
Path Length
(min)
Slack
1-2-3-4-5-6
1-2-5-6
1-3-5-6
18
20
14
2
0
6
Solution
Critical Path
