OR-for IBS 2010

Operations Research

Prof G R C Nair

What is OR / MS ? Why OR / MS ? Applications What is a Model ? 


Types of Models 

/ Mathematical  Deterministic / Probabilistic  Allocation / Optimization / Inventory / Sequencing / Queuing / Replacement / Investment / Competitive / Net working

Steps in O.R 

Define the problem Identify Measurable Objectives Identify the Constraints and Variables Collect Data Establish inter relationships Make a Model Solve Test / Analyse / Modify Implement

Linear Programming
Linear programming is an Optimization Model. It is a deterministic model.All the relationships / variations are to be straight line or linear. Objective ± Maximization / Minimization. Constraints ± Limitations. There is a Graphic Solution when the variables involved are just two. If there are more variables, Simplex Algorithm is used.

Formulation of L.P Model
1. Maximization Case A manufacturer produces two products Chair and Table each requiring processing by two sections, carpentry and painting.Carpentry section has 32 hours and painting section has has 34 hours of time available per week.A chair needs 3 hours in carpentry and 1 hour in painting section,while a table needs 2 and 4 hours respectively.The profit margin from the sale of a chair is Rs 5 and table is Rs 6. Find the product mix for the maximum profit.Formulate it as a LP model.

Let the number of chairs and tables made be x&y. Objective.Maximize Profit, subject to limitations of processing capacity. Profit Z = 5x+ 6y. So Maximize Profit, Z = 5x + 6y, Subject to constraints, 1.Carpentry capacity, 3x+2y < 32 2. Painting capacity, X+4y < 34 3.Nonnegative constraints, X > 0, Y > 0

2. Minimization case. Vitamins A and B are required for broiler chicken at the rate of 40 and 50 units per day.There are 2 feeds F1 and F2 which have vitamin A at the rate of 2 and 4 units and vitamin B at the rate of 3 and 2 units per Kg of feed. The cost of feed F1 and F2 are Rs 3 and 2.5 respectively per Kg.Minimize the cost of feed. Formulate it as a LP model.

Let the optimum quantity of feed F1 and F2 be x and y. Objective function

Minimize cost Z=3x+2.5y, Subject to constraints, 1. 2x+4y > 40 ( Mini requirement of Vitamin A ) 2. 3x+2y > 50 (Mini requirement of Vitamin B) 3. Non negative constraints x>0,y>0  

Graphic Solution. Maximization case
Draw the constraint lines 3x+2y=32 at its limit when x = 0, y = 16, when y=0, x = 10.667. Draw a line joining points (0,16) and (10.667,0). x+4y = 34 at its limit When x=0, y = 8.5, when y = 0, x = 34 Draw a line joining (0,8.5) and (34,0).

Feasible area

Within these two lines, above X axis and right of Y axis is the feasible area. Any point here, by its coordinates, gives the possible combination of chairs and tables that can be made. Optimum will be at any corner, which can be found out graphically or by solving the equations of the lines concerned. Here, x = 6 and y = 7. Profit = 72.

Graphic Solution. Minimization Case. Draw the constraint lines 1. 2x+4y = 40. Put x = 0, y = 10, y = 0, x =20. Points (0,10) and (20,0) define this line 2. 3x+2y = 50 Put x = 0, y = 25, y = 0, x = 16.67 Points (0,25) and (16.67,0) define this line.

Feasible area 

The feasible area is above these lines. (why?) Any point here, by its coordinates, shows a possible combination of the two feeds that satisfy the vitamin requirements. Optimum will be at any corner, which can be found out graphically or by solving the equations of the lines concerned.
Here, x = 15 and y = 2.5 Cost= 51.25 

1.More constraints. We can have any number of constraints. It may further limit the feasible area. 2.Redundant Constraint - A constraint which does not affect in any way the feasible area.It does not supply any new information. 3. > and < constraints together. Mark feasible area appropriately.

Formulation Examples 

2007 Terminal (Make-up) Q 4 2007 Terminal Q 4 2009 Terminal Q 7 (HW)

Transportation Model 

Allocation and Optimizing Technique. Special case of L.P model. The total µSupply¶ and total µDemand¶ must be equal or else made equal. Basically the algorithm is for minimization case. ( Algorithm for solving this model are VAM, MODI, NWCR, Stepping Stone etc).

Problem 2  


Formulate a transportation model for the least cost transportation plan satisfying the following requirements. Availability of commodity Delhi-100, Mumbai- 25, Bangalore ± 75 Requirement at Jaipur-80, Calcutta-30, Kanpur-90 Cost of transportation: From Delhi - to Jaipur, Calcutta, and Kanpur (Rs 000¶s / Unit) - 5,10,2 From Mumbai - 3,7,5 From Bangalore - 6, 8, 4.

Minimize the cost of transportation Pay off Matrix Rs 000¶s
To From

Jaipur Calcutta Kanpur
5 3 6 10 7 8 2 5 4

Total Available

Delhi Mumbai
Bangalore Total Required

100 25 75
200 200




Special Cases   

For case of maximisation, subtract all profits from the highest value in profit matrix. This gives the opportunity cost of not making the most efficient allocation. This opportunity cost is to be minimized by the method. When the total supply and total demand are not the same, introduce a dummy row or dummy column with zero cost for the balance quantity.

Assignment Model
Special case of LP and transportation models. Here, part allocation and part fulfilling not possible -one to one allocation only. Basicaly for minimising. Men to Jobs, Funds to Projects, boy to girl etc. Minimising case - Cost, Time, Loss. Condition ± The number of rows and columns should be the same. ie, the matrix should be square or else made square by adding dummy. ( Algorithm for solving this model is known as the Hungarian technique / Floods technique).

Problem 1. Assigning Projects to Competing Contractors. 4 contractors have quoted for all the 4 projects to be executed. But the management wants to give one project only to each contractor for speedy completion of all the projects and to avoid putting all eggs in one basket.The rate quoted by the contractors for these projects are different as given in the pay off matrix.The objective is to assign the projects to the various contractors such that the total cost is the minimum. Formulate an Assignment Model.

Pay off Matrix
Bids in Rs Crores


Gammons IVR CL GMR


48 56 96 42

48 60 94 44

50 60 90 54

44 68 85 46

Special Cases
Maximization case - convert it to minimization case by subtracting all values in the given pay off matrix from the highest value in the table. This gives the opportunity cost of not making the most efficient allocation.This opportunity cost is to be minimized. Unbalanced Assignment -If the number of rows and columns differs, then the matrix has to be made square by adding a dummy row or a dummy column as the case may be, with zero cost.

General Remarks    

L.P is the most general form of all these three models. Transportation Model is a special Case of L.P Assignment Model is a special Case of Transportation Model. Hence all the above can be solved by L.P.

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