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Introduction to OR

Pre world war II


During world war II
Post world war II

Pre world war II


Fredric W Taylor 1885 Application of
scientific analysis to methods of
production
Henry L Gantt Job scheduling
( Mapping each job from machine to
machine to minimize delay)
F W Haris 1915 Inventory control
A K Erlang 1917 Queue

During world war II


First OR Team ( Blackettes circus)
P M S Blackette Manchester university
Military management of England approached
3 Physiologists, 2 mathematical physicists, 1
astrophysicist, 1 army officer, 1 surveyor, 1
general physicist and 2 mathematicians
Objective : most effective allocation of
limited resources to the various military
operations and activities
The name OR coined in 1940.

Post world war II


Industries application
1947 LP by Prof A K
1950 subject of study

Scope of OR

Agriculture
Finance
Marketing
Personnel Management
Production Management
Public utilities Hospitals, transport,
LIC and
departmental
store etc

Agriculture
Optimum allocation of land to various
crops in accordance with the climatic
conditions
Optimum distribution of water from
various resources like canal for
irrigation

Finance
Maximize the per capita income with
minimum resources availability
Find the profit plan of the company
Determine the best replacement
policies

Industry
Optimum allocation of resources
Men, machines, materials, money
and time
Maximize the profit
Minimize the production cost

Marketing
Optimum distribution of products for
sale
Size of stock to meet the future
demand
Selection of best advertising media
with respect to time and cost
How, when and what to purchase at
the minimum possible cost?

Personnel management
Appoint suitable candidates on
minimum salary
Determine the best age of retirement
for the employees
Find the number of persons to be
appointed on full time basis when the
workload
is
seasonal
(not
continuous)

Production management
Find the number size of items to be
produced
Scheduling and sequencing the
production run by proper allocation
of machines
Calculating the optimum product mix
Select , locate and design the sites
for the production plants.

Public utilities
To reduce waiting time of out door patients
To regulate the train arrivals and their
running times
What should be the premium rates for
various modes of policies?
How best the profits could be distributed in
the cases of with profit policies?
Employing additional sales persons, use of
transport vechicle etc

Phases of OR

Formulating the problem


Constructing a mathematical model
Deriving the solutions
Testing the model and its solutions
Controlling the solution
Implementing the solution

Formulate the Problem


Situation

Formulatethe
Problem

Problem
Statement

Data

Define the
problem
Delimit the
system
Select measures

Determine
variables
Identify
constraints

Construct a
Model

Situation

Formulatethe
Problem

Problem
Statement

Data

Math. Programming Model


Stochastic Model
Deterministic Model
Simulation Model

Objective function
Constraints (or) restrictions
Decision variables and
parameters

Construct
aModel

Model

Find a
Solution

Situation

Formulatethe
Problem

Problem
Statement

Data

Linear
Programming
Nonlinear
Programming
Regression
Direct Search
Stochastic
Optimization

Construct
aModel

Model

Find
aSolution

Solution

Tools

Establish a
Procedure
Production
software
Easy to use
Easy to
maintain
Acceptable
to the user

Situation

Formulatethe
Problem

Problem
Statement

Data

Construct
aModel

Model

Solution
Find
aSolution

Establish
aProcedure
Solution

Tools

Controlling the solution


It must be established to indicate
the limits within which the model
and its solution can be considers as
reliable.

Implement
the Solution

Situation

Change for the Data


organization
Implement
theSolution
Change is difficult
Establish controls
Solution
to recognize
Establish
change in the
aProcedure
situation

Formulatethe
Problem

Problem
Statement

Construct
aModel

Model

Find
aSolution

Solution

Tools

Operations Research Models


Deterministic Models

Stochastic Models

Linear Programming Discrete-Time Markov Chains


Network Optimization Continuous-Time Markov Chains
Integer Programming Queuing
Nonlinear Programming Decision Analysis

Deterministic vs. Stochastic


Models
Deterministic models 60% of course
Stochastic (or probabilistic) models 40% of course
Deterministic models
assume all data are known with certainty
Stochastic models
explicitly represent uncertain data via
random variables or stochastic processes
Deterministic models involve optimization
Stochastic models characterize / estimate
system performance.

Examples of OR
Applications
Rescheduling aircraft in response to
groundings and delays
Planning production for printed circuit
board assembly
Scheduling equipment operators in
mail processing & distribution centers
Developing
routes
for
propane
delivery
Adjusting nurse schedules in light of
daily fluctuations in demand

The Process: Recognize the


Problem
Manufacturing
Situation

Data

Planning
Design
Scheduling
Dealing with
Defects
Dealing with
Variability
Dealing with
Inventory

Other applications
Situation

Data

Service Industries
Logistics
Transportation
Environment
Health Care
Situations with
complexity
Situations with
uncertainty

Introduction to Linear Programming


In any organization, limited resources best
allocation of resources maximize profit, minimize
loss and maximize the utilization of production
capacity.
A Linear Programming model seeks to maximize or
minimize a linear function, subject to a set of linear
constraints.
Developed and applied LP by Prof A K Dantzig
The linear model consists of the following
components
A set of decision variables.
An objective function.
A set of constraints.
25

LP contd.,
Linear Relationship among two or more
variables which are directly proportioned
i.e. Increase the production capacity increases
the profit
Programming Planning of activities in a manner
that achieves optimum results
Definition
A method of optimizing(max (or) min) a linear
function with a number of constraints(limitations)
expressed in the form of inequalities.

LPP formulation

A furniture manufacturing company plans


to make chairs and tables from its
available resources which consist of 400
ft of timber and 450 man hours. For
making a chair require 5 ft of wood and
10 man hours yield a profit of Rs. 45
while each table uses 20 ft of wood and
15 man hours yield a profit of Rs. 80.
Formulate a LP model so that it maximize
its profit.

Problem
A manufacturer produces two types of
models X & Y. Each X model requires 4 hrs of
grinding and 2 hrs of polishing whereas each
Y model requires 2 hrs of grinding and 5 hrs
of polishing. The manufacturer has 2
grinders and 3 polishers. Each grinder works
for 40 hrs a week and each polisher works
for 60 hrs a week. Profit of an X model is Rs.
3 and Y model is Rs. 4. Formulate a LP
model to maximize a profit in a week.

Problem
A firm produces three products. These products are processed
on three different machines. The time required to manufacture
one unit of each of the three products and daily capacity of the
three machines are given in the table below
Time per unit (min)
Machi
ne

Produ Produ Produ


ct 1
ct 2
ct 3

Machine
capacity
(min/day)

M1

440

M2

470

2
3
It is required to determine
the5 daily - number430
of units to be
manufactured for each product. The profit per unit for product
1,2 and 3 is Rs.4, Rs.3 and Rs. 6 respectively. It is assumed that
all the amounts produced are consumed in the market.
Formulate the mathematical (LP) model that will maximize the
daily profit

Problem
An animal feed company must
produce 200 kg of mixture consisting
of ingredients X1, X2 daily. X1 costs
Rs 3/kg and X2 Rs 8/kg. No more
than 80 kg of X1 can be used and at
least 60 kg of X2 must be used.
Formulate a LP model to minimize
the cost

Problem
A company has three operational departments namely
weaving, processing and packing. The capacity to
produce three different types of clothes namely
suiting, shirting and woolens yielding a profit of Rs. 2,4
and 3 per meter respectively. One meter of suiting
requires 3 min in weaving, 2 min of processing and 1
min of packing. Similarly 1 meter of shirting requires 4
min in weaving, 1 min of processing and 3 min of
packing whereas 1 m of woolen requires 3 minutes in
each department. In a week, the total runtime of each
department is 60, 40 and 80 hours of weaving,
processing and packing respectively. Formulate the
problem as a LP model to maximize the profit.

Answer
Max Z = 2 X1 + 4 X2 + 3X3
ST
3X1 + 4X2 + 3X3 3600
2X1 + X2 + 3X3 2400
X1 + 3X2 + 3X3 4800
X1 , X2, X3 0

Solving of LPP
If the no. of variables (X 2)
Graphical method
If the no. of variables X = 1,2,3 . n
Simplex method
Similarity = no. of variables
Difference = inequality constraints

33

Problem
Min Z = 4X1 + 2X2
ST
X1 + 2X2 2
3X1 + X2 3
4X1 + 3X2 6
X1 , X 2 0
Ans : Min Z = 4.8, X1 = 3/5, X2 = 6/5

Problem
Max Z = 20X1 + 10X2
ST
10X1 + 5X2 50
6X1 + 10X2 60
4X1 + 12X2 48
X1 , X2 0
Ans : Alternate optimum feasible solution
X1 = 5, X2 = 0 (or) X1 = 3.6,X2 = 2.8 Max Z=100

Problem
An automobile manufacture makes automobiles and
trucks in a factory that is divided into two shops A &
B. Shop A, which performs the basic assembly
operation must work 5 man-days on each truck but
only 2 man-days on each automobile. Shop B, which
performs the finishing operation must work 3 mandays on each truck(or)automobile that it produces.
Because of men and machine limitations shop A has
180 man-days/week available while shop B has 135
man-days/week. If the manufacturer makes a profit
of Rs.300 on each truck and Rs. 200 on each
automobile, how many of each should he produce to
maximize his profit?

Contd.
Maximize Z = 300 x1 + 200 x2
Subject to the constraints
5x1+2x2 180
3x1+ 3x2
135
x1 ,x2 0
Ans: II iteration:
Max Z = 12000
X1 = 30, X2 = 15

Problem
Maximize Z = 5 x1 + 6 x2 + x3
Subject to the constraints
9x1+3x2 -2 x3 5
4x1+2x2 - x3 2
x1- 4x2+x3 3
x1 ,x2, x3 0
Ans : Unbounded solution because all = ve

Problem
A Company makes 2 kinds of leather belts. Belt A is
high quality and B is low quality. The respective
profits are Rs.4 and Rs.3 per belt. Each type of A
requires twice as much as a belt type of B and if all
belts were of type B, the company could make 1000
per day. The supply of leather is sufficient for only
800 belts per day (both A and B combined). Belt A
requires a fancy buckle and only 400 buckles are
available per day. There are only 700 buckles
available per day for belt B. What would be the daily
production of each type of belt? Formulate the LP
problem and solve using the simplex method.

Maximize Z = 4 x1 + 3 x2
Subject to the constraints
2x1+x2 1000
x1 400
x2 700
x1 , x2 0
Ans: III iteration:
Max Z = 2600
X1 = 200, X2 = 600

x1+ x2 800

Degeneracy in LPP
Tie between two (or) more basic variables
for leaving the basis
Problem 1
Maximize Z = x1 + 2x2 + x3
Subject to the constraints
2x1+x2- x3 2
-6
4x1+x2+ x3 6
x1 ,x2 ,x3 0

-2x1+x2- 5x3

Maximize Z = x1 + 2 x2 + x3 +0S1 +0S2 +0S3


Subject to the constraints
2x1+x2- x3 +S1 = 2
2x1-x2+
5x3 +S2 = 6
4x1+x2+ x3 +S3 = 6
x1 ,x2 ,x3 , S1 , S2 , S3 0
Ans: II iteration:
Max Z = 10
X2 = 4, S2 = 0 , X3 =2

Suggested conditions for Entering


variable
Tie between two (or) more decision
variables, choose arbitrarily
Tie between decision variables &
slack/surplus variable, choose only
decision variable
Tie
between
two
(or)
more
slack/surplus
variables,
choose
arbitrarily

Leaving variable
Perturbation method
Calculation

Problem 2
Maximize Z = 2 x1 + x2
Subject to the constraints
4x1+3x2 12
4x1 - x2 8
x1 ,x2 0

4x1+ x2 8

Ans : In iteration II, select KR as S1 (slack


shouldnt
replace decision variable)
III iteration X1 = 1.5, X2= 2, Max Z = 5

Formative Assessment
OperationsResearchprovides
a)Earliestsolution
b)Feasiblesolutions
c)Scientificapproachto solutions
d)Statisticalapproachto solution

Linear programming deals with the optimization of a function of variables known as


a) Constraints
b) Objective function
c) Effectiveness
d) Profit/loss
Operations Research approaches problem solving and decision making from
a) Individuals view
b)Departmentalview
c)Technicalview
d)Thetotal systems view

Formative Assessment
In the graphical method of linear programming problem, the optimum solution would lie in the
feasible polygon at
a. its one corner
b. its center
c. middle of any side
d. bottom

Optimal solution always occurs


a.Withinthefeasible region
b.On theboundaries of feasible region
c.At corner pointsof feasible region
d. Anywhere
Product A takes 5 M/chours and Product B takes 6 labour hours.The total time available for M/c
hours is 36.The constraint equation for this is
a.5X+ 6Y= 36
b.5X+6Y<=36
c.5X+6Y>=36
d.Dataincomplete

Formative Assessment
A basic feasible solution in simplex method is one, when
a. all the decision variables are in the base
b. all the decision variables and slack/surplus variables are assigned zero values
c. all the base variables are non negative
d. all the base variables satisfy the constraint equations

Linear programming can be applied to


a. steel industry
b. oil industry
c. chemical industry
d. all of the above
In the simplex method, the variables which have not been assigned the value zero, during an
iteration, are called as
a. basic variable
b. artificial variable
c. actual variable
d. slack/surplus variable

Formative Assessment
Simplex method is not applied when number of decision variables is equal to
a) 4
b) 2
c) 1
d) 6

Optimality is reached when all the index values are


a. zero
b. negative
c. positive
d. none of the above
The simplex method is the basic method for
a.value analysis
b.operation research
c. linear programming
d. model analysis

Artificial variables
Purpose is to just obtain an initial
basic feasible solution
Variables once driven out in an
iteration,
may
re-enter
the
subsequent iteration. But an AV once
driven can never re-enter
Big M method (A Charnes)
Two phase method (Dantzig,
Orden and Wolfe)

Problem
Big M Method (or) Charnes M
technique (or) Method of penalties
Maximize Z = 2 x1 + 3 x2 + 4 x3
Subject to the constraints
3x1+x2+4 x3 600
2x1+4 x2+2 x3 480
2x1 +3x2+3x3 = 540
x1 ,x2, x3 0

Maximize Z = 2 x1 + 3 x2 + 4 x3 + 0S1 +0S2


- mA1 mA2

Subject to the constraints


3x1+x2+4 x3 + S1
= 600
2x1+4 x2+2 x3 S2 + A1 = 480
2x1 +3x2+3x3 + A2
= 540
x1,x2,x3,S1, S2,A1,A2
0

Ans : II iteration
S1 = 60
X2=60
X3 = 120

Max Z = 660

Problem
Food X contains 6 units of vitamin
A per gram and 7 units of vitamin B
per gram and costs 12 paise per
gram. Food Y contains 8 units of
vitamin A per gram and 12 units of
vitamin B per gram and costs 20
paise per gram. The minimum daily
requirements of vitamin A & B is 100
& 120 units respectively. Find the
minimum cost of product mix by the

Problem
Min Z = 12X1 + 20X2
ST
6X1 + 8X2 100
7X1 + 12X2 120

X 1 , X2 0

Ans : II iteration

X1=15, X2 = 1.25
205

Min Z =

Problem
Max Z = 3X1 + 2X2
ST
2X1 + X2 2
3X1 + 4X2 12

X 1 , X2 0

Ans : Pseudo optimal solution (In feasible


solution)
I iteration Solution with presence of artificial
variable

Problem
During festival season, a company combines
two items A and B to from gift packs. Each
pack must weigh 5 kg and should contain at
least 2 kg of A and not more than 4 kg of B.
The net contribution to the company is Rs.10
per kg of A and Rs.12 per kg of B. The
company wants to determine the optimum
mix.
Formulate the above as a LPP to maximize net
contribution per pack and solve the same by
using the simplex method.

Answer
Max Z = 10X1 + 12X2
ST
X1 + X 2 = 5
X1 2
X2 4
X1 , X 2 0
Ans : II iteration

X1=2, X2 = 3

Max Z = 56

Problem
Min Z = 2X1 + 5X2
ST
X1 40
X2 30
X1 + X2 60

X 1 , X2 0

Ans : III iteration

X1= 40, X2 = 30

Max Z = 230

Two Phase method


Minimize Z = 5 x1 - 6x2 - 7x3
Subject to the constraints
x1+5x2 - 3 x3 15
5x1 - 6x2+10 x3 20
x1 +x2+x3

=5

x1 ,x2, x3 0

Phase I
I step : convert inequality into equality
II step : Formation of revised objective function by assigning -1 to artificial
variables and 0 to other variables (decision /slack/surplus)
III step : solve it by simplex method until the following conditions are
satisfied
Max Z 0 & atleast one artificial variable appears in the optimum basis at
the zero level, No solution (Stop the Procedure)
Max Z = 0 & atleast one artificial variable is at zero, proceed to Phase II
Max Z = 0 & no artificial variable appears in the basis, proceed to Phase
II

Phase II
Assign actual costs to the variable in the objective function & zero cost to
artificial variable

Solution
Phase I II iteration ( 0 & -ve)
Phase II X2 = 3.75
S2 = 30
X3 = 1.25
Max Z = 31.25
Min Z = -31.25

Problem
Maximize Z = 5 x1 + 3 x2
Subject to the constraints
2x1+x2 1
x1+4 x2 6
x 1 ,x 2 0

Solution
All values of Cj-Zj is 0 & negative. So
optimal solution is reached
But Max Z < 0 i.e., -2 also one
artificial variable (A1 = 2) appear in
the basis at the +ve level
So LPP doesnt have feasible
solution

Problem
Minimize Z = x1 + x2
Subject to the constraints
2x1+ x2 4
x1+ 7x2 7
x1 ,x2 0

Solution
Phase I II iteration ( 0 & -ve)
Phase II X1 = 21/13
X2 = 10/13
Max Z = 31/13
Min Z = -31/13