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V.PAVITHRA SUKANYAH .V.K RIZWANA SULTANA SHILPA JAIN

INTRODUCTION

Modern technological advance growth of scientific techniques Operations Research (O.R.) recent addition to scientific tools O.R. new outlook to many conventional management problems Seeks the determination of best (optimum) course of action of a decision problem under the limiting factor of limited resources

WHAT IS OR?

Operational Research can be considered as being the application of scientific method by inter-disciplinary teams to problems involving the control of organized systems so as to provide solutions which best serve the purposes of the organization as a whole.

CHARACTERISTIC NATURE OF OR

InterInter-disciplinary team approach Systems approach Helpful in improving the quality of solution Scientific method Goal oriented optimum solution Use of models Require willing executives Reduces complexity

PHASES TO OR

Judgment phase

Determination of the problem Establishment of the objectives and values Determination of suitable measures of effectiveness

Research phase

Observation and data collection Formulation of hypothesis and models Observation and experimentation to test the hypothesis Prediction of various results, generalization, consideration of alternative method

Action phase

Implementation of the tested results of the model

METHODOLOGY OF OR

Formulating the problem Constructing the model Deriving the solution Analytical method Numerical method Simulation method Testing the validity Controlling the solution Implementing the result

PROBLEMS IN OR

Allocation Replacement Sequencing Routing Inventory Queuing Competitive Search

OR TECHINIQES

Linear programming Waiting line or queuing theory Inventory control / planning Game theory Decision theory Network analysis Program Evaluation and Review Technique Critical Path Method (CPM) etc. Simulation Integrated production models

SIGNIFICANCE OF OR

Provides a tool for scientific analysis Provides solution for various business problems Enables proper deployment of resources Helps in minimizing waiting and servicing costs Enables the management to decide when to buy and how much to buy? Assists in choosing an optimum strategy Renders great help in optimum resource allocation Facilitates the process of decision making Management can know the reactions of the integrated business systems. Helps a lot in the preparation of future managers.

LIMITATIONS OF OR

The inherent limitations concerning mathematical expressions High costs are involved in the use of O.R. techniques O.R. does not take into consideration the intangible factors O.R. is only a tool of analysis and not the complete decision-making process Other limitations Bias Inadequate objective functions Internal resistance Competence Reliability of the prepared solution

INTRODUCTION TO LINEAR PROGRAMMING

Today many of the resources needed as inputs to operations are in limited supply. Operations managers must understand the impact of this situation on meeting their objectives. Linear programming (LP) is one way that operations managers can determine how best to allocate their scarce resources.

Linear programming

We use graphs as useful modeling abstractions to help us develop computational solutions for a wide variety of problems A linear program is simply another modeling abstraction (tool in your toolbox) Developing routines that solve general linear programs allows us to embed them in sophisticated algorithmic solutions to difficult problems (e.g. like we did for TSP) The cutting edge algorithmic solutions to many problems use the ideas from mathematical programming, linear programming forming the foundation.

BASIC CONCEPT OF LP PROGRAM Objective function Constraints Optimization Solution of lpp. Feasible solution Optimal solution

**LP PROBLEMS IN OM: PRODUCT MIX
**

Objective To select the mix of products or services that results in maximum profits for the planning period Decision Variables How much to produce and market of each product or service for the planning period Constraints Maximum amount of each product or service demanded; Minimum amount of product or service policy will allow; Maximum amount of resources available

Objective function:

the linear functions which is to be optimized i.e maximized or minimized this may be expressed in linear expression.

Solution of Lpp:

The set of all the values of the variable x1,x2 xn which satisy the constraints is called the solution of Lpp.

Feasible solution:

The set of all the values of the variable x1,x2 xn which satisy the constraints and also the non negative conditions is called the feasible solution of lpp.

Recognizing LP Problems

Characteristics of LP Problems in OM A well-defined single objective must be stated. There must be alternative courses of action. The total achievement of the objective must be constrained by scarce resources or other restraints. The objective and each of the constraints must be expressed as linear mathematical functions.

**Steps in Formulating LP Problems
**

Define the objective. (min or max) Define the decision variables. (positive) Write the mathematical function for the objective. Write a 1- or 2-word description of each constraint. Write the right-hand side (RHS) of each constraint. Write <, =, or > for each constraint. Write the decision variables on LHS of each constraint. Write the coefficient for each decision variable in each constraint.

Linear Programming

An optimization problem is said to be a linear program if it satisfied the following properties: There is a unique objective function. Whenever a decision variable appears in either the objective function or one of the constraint functions, it must appear only as a power term with an exponent of 1, possibly multiplied by a constant.

**LP Problems in General
**

Units of each term in a constraint must be the same as the RHS Units of each term in the objective function must be the same as Z Units between constraints do not have to be the same LP problem can have a mixture of constraint types

No term in the objective function or in any of the constraints can contain products of the decision variables. The coefficients of the decision variables in the objective function and each constraint are constant. The decision variables are permitted to assume fractional as well as integer values

Examples of lpp

We are already familiar with the graphical representation of equations and inequations. here we describe the application of linear equations and inequations in solving different kinds of problems. The examples are stated below. Example 1: Find two positive numbers such that whose sum is atleast 15 and whose difference is at the most 7 such that the product is maximum. Step1: we have to choose the positive two numbers. Let the 2 positive numbers be x and y. this x and y are decision variables.

Step 2: our objective is to minimize the product x ,y Let z=xy we have to maximize z Step3: we have the following conditions on the variables as x and y. step 4: x+y>=15 x-y<=7 x,y>0 as the linear constraints .the mathemetical constraint of this equation is to maximize the objective function z=xy.

PROBLEMS

1. A producer wants to maximise revenues producing two goods x 1and x2 in the market. Market prices of goods are 10 and 5 respectively. Production of x 1and x2 requires 25 and 10 units of skilled labour and total endowment of skilled labour is1000. Similarly production of x1 and x2 also requires 20 and 50 units of unskilled labour and whose total endowment is 1500. How much should this firm produce x 1and x 2 in order to maximise the total revenue. Max R =10x1 + 5x2 Subject to: Skilled labour constraint: 25x1 +10x2<=1000 Unskilled labour constraint: 20x1 +50x2 <=1500 Non-negativity constraints: x1 ,x2 >=0

SOLUTION Max R =10x1 + 5x2

Subject to:

Skilled labour constraint: 25x1 +10x2<=1000 Unskilled labour constraint: 20x1 +50x2 <=1500 Non-negativity constraints: x1 ,x2 >=0

Example: LP Formulation

Pounds of each alloy needed per frame Aluminum Alloy Steel Alloy Deluxe 2 3 deluxe

Professional

4

2

Define the objective Maximize total weekly profit Define the decision variables x1 = number of Deluxe frames produced weekly x2 = number of Professional frames produced weekly Write the mathematical objective function Max Z = 10x1 + 15x2

Write a one- or two-word description of each constraint Aluminum available Steel available Write the right-hand side of each constraint 100 80 Write <, =, > for each constraint < 100 < 80

Write all the decision variables on the left-hand side of each constraint x1 x2 < 100 x1 x2 < 80 Write the coefficient for each decision in each constraint + 2x1 + 4x2 < 100 + 3x1 + 2x2 < 80

LP in Final Form Max Z = 10x1 + 15x2 Subject To 2x1 + 4x2 < 100 ( aluminum constraint) 3x1 + 2x2 < 80 ( steel constraint) (non-negativity x1 , x2 > 0 constraints

**Example:graphical method
**

max 20 x y y : e u 9 y

x , y

subject to 3 x 2 x

20 0

e 15

x , y

**Example:graphical method
**

max 20 x 9 y

x, y

20

sub ect to : 3 x y e 20 2 x y e 15 x, y u 0

0 x

**Example:graphical method
**

max 20 x 9 y

x, y

y 20 15 (5,5) 0 x

sub ect to : 3 x y e 20 2 x y e 15 x, y u 0

**Example:graphical method
**

max 20 x 9 y

x, y

y 20 15 (5,5) 0 x

subject to : 3 x y e 20 2 x y e 15 x, y u 0

**Example:graphical method
**

20 15 (5,5) 0 x

max 20 x 9 y

x, y

sub ect to : 3 x y e 20 2 x y e 15 x, y u 0

**Example:graphical method
**

max 20 x 9 y

x, y

20 15

subject to : 3 x y e 20 2 x y e 15 x, y u 0

0 x

**Example:graphical method
**

max 20 x 9 y

x, y

20 15 (5,5) 0 x

subject to : 3 x y e 20 2 x y e 15 x, y u 0

**Example:graphical method
**

max 20 x 9 y

x, y

y 20 15 (5,5) 0 x

subject to : 3 x y e 20 2 x y e 15 x, y u 0

THE SIMPLEX METHOD

So far we find an optimal point by searching among feasible intersection points. The search can be improved by starting with an initial feasible point and moving to a better solution until an optimal one is found. The simplex method incorporates both optimality and feasibility tests to find the optimal solution(s) if one exists

An optimality test shows whether an intersection point corresponds to a value of the objective function better than the best value found so far. A feasibility test determines whether the proposed intersection point is feasible. The decision and slack variables are separated into two nonoverlapping sets, which we call the independent and dependent sets

**THE SIMPLEX METHOD
**

Transform Linear Program into a system of linear equations using slack variables:

max 20 x 9 y

x, y

3x y s1 ! 20 2 x y s2 ! 15 20 x 9 y P ! 0 x, y, s1 , s2 u 0

sub ect to : 3 x y e 20 2 x y e 15 x, y u 0

THE SIMPLEX METHOD

1 1 0 0 20» « 3 ¬ 2 ¼ 1 0 1 0 15 ¼ ¬ ¬ 20 9 0 0 1 0 ¼ ½

3 x y s 1 ! 20 2 x y s 2 ! 15

20 x 9 y x , y , s1 , s 2 u 0

!0

THE SIMPLEX METHOD Start from the vertex (x=0 , y=0) Move to the next vertex that increases profit as much as possible.

« 3 ¬ 2 ¬ ¬ 20

20 » ¼ 1 0 1 0 15 ¼ 9 0 0 1 0 ¼ ½ 1 1 0 0

At (0,0), P = 0 Increasing x can increase P the most (x coefficient has larger magnitude than the y coefficient) Compute check ratios to find pivot row (smallest ratio)

1 1 0 0 20» « 3 ¼ ¬ 2 1 0 1 0 15 ¼ ¬ ¬ 20 9 0 0 1 0 ¼ ½

**Basic Idea: Start from a vertex (x=0, y=0) Move to next vertex that increases profit as much as possible
**

At (0,0), P = 0 Increasing x can increase P the most (x coefficient has larger magnitude than the y coefficient) Compute check ratios to findpivot row (smallest ratio) Pivot around the element inboth pivot column and row

Pivoting means solve for that variable, Then substitute into the other equations

x

y

s1

s2

P

RHS

« 3 ¬ 2 ¬ ¬ 20

1 1 9

1 0 0

0 1 0

0 0 1

20 » 15 ¼ ¼ 0 ¼ ½

3 x y s1 ! 20 1 1 20 x y s1 ! 3 3 3

Pivoting means solve for that variable, Then substitute into the other equations

x

y

s1

s2

P

RHS

« 1 1 / 3 1 / 3 0 0 20 / 3» ¬ 2 ¼ 1 0 1 0 15 ¼ ¬ ¬ 20 9 0 0 1 0 ¼ ½

1 1 20 x ! y s1 3 3 3

Pivoting means solve for that variable, Then substitute into the other equations

x

y

s1

s2 P

RHS

«1 1/ 3 1/ 3 0 0 20/ 3 » ¬0 1/ 3 2/3 1 0 5/ 3 ¼ ¼ ¬ ¬0 7/3 20/ 3 0 1 4003¼ /½

1 1 20 x ! y s1 3 3 3

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