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Operational research, also known as operations research, is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations.

Employing techniques from other mathematical sciences --- such as mathematical modeling, statistical analysis, and mathematical optimization-- operations research arrives at optimal or near-optimal solutions to complex decision-making problems.

Operations Research is often concerned with determining the maximum (of profit, performance, or yield) or minimum (of loss, risk, or cost) of some realworld objective

Work in operational research and management science may be characterized as one of three categories : Fundamental or foundational work takes place in three mathematical disciplines: probability, optimization, and dynamical systems theory. Modeling work is concerned with the construction of models, analyzing them mathematically, implementing them on computers, solving them using software tools, and assessing their effectiveness with data. This level is mainly instrumental, and driven mainly by statistics and econometrics. Application work in operational research, like other engineering and economics' disciplines, attempts to use models to make a practical impact on real-world problems.

as identified by the journal Operations Research. are: Computing and information technologies Decision analysis Environment. energy.The major subdisciplines in modern operational research. service sciences. and natural resources Financial engineering Manufacturing. and supply chain management Policy modeling and public sector work Revenue management Simulation Stochastic models Transportation .

finance. operational research originated in the efforts of military planners during World War II. moving to a focus on the development of mathematical models that can be used to analyze and optimize complex systems. logistics. operational research has expanded into a field widely used in industries ranging from petrochemicals to airlines. the techniques began to be applied more widely to problems in business. industry and society. and has become an area of active academic and industrial research. and government. Since that time. In the decades after the war. .History As a formal discipline.

establishing the information needs and appropriate systems to supply them within the health service. identifying possible future development paths for parts of the telecommunications industry. identifying and understanding the strategies adopted by companies for their information systems. It includes : scheduling airlines. . factory or fire station. including both planes and crew. managing the flow of water from reservoirs.Applications of Management Science The range of problems and issues to which management science has contributed insights and solutions is vast. deciding the appropriate place to site new facilities such as a warehouse.

during the past 30 years. approaches using cognitive mapping the Strategic Choice Approach robustness analysis . Therefore. which concerns methods for strategic planning. and Problem Structuring Methods (PSM). a number of non-quantified modelling methods have been developed. strategic decision support.Management science is also concerned with so-called ´soft-operational analysis´. These include: stakeholder based approaches including metagame analysis and drama theory morphological analysis and various forms of influence diagrams.

Anthony Stafford Beer-was a British theorist. and he was quick to identify the advantages it could bring to business. cybernetics and management science. systems thinking and management science. consultant and professor at the Manchester Business School. Stafford Beer worked in the fields of operational research. Alfred Blumstein.Researchers in Management Science Russell L. transportation analysis. . Ackoff. He started his career in Operations Research at the end of the 1940s. deterrence. drug-enforcement policy.He was a pioneer in the field of operations research. and he developed "lambda" in criminologyas a measurement of an individual's offending frequency. Blumstein's research centers around modeling criminals. prison population.careers.He is known as one of the top researchers in criminology and operations research. He is best known for his work in the fields of operational research and management cybernetics. He had become aware of operational research while being in the army.

logistics. and combinatorial optimization. facility location. transportation planning.Magnanti's teaching and research interests are in applied and theoretical aspects of large-scale optimization and operations research. an algorithm for solving linear programming problems. . nonlinear programming. operations research and systems theory. Magnanti. George Dantzig-Dantzig is known for his development of the simplex algorithm. West Churchman-Churchman became internationally recognized due to his then radical concept of incorporating ethical values into operating systems. specifically on the theory and application of large-scale optimization. He has conducted research on such topics as production planning and scheduling. particularly in the areas of network flows. and communication systems design. Thomas L. He made significant contributions in the fields of management science.

There are special classes of LP problems such as the Transshipment Problem (a special class of TP). Linear Programming (LP) problems can be solved on the computer using dedicated software such as WhatsBest!. solver (Excel add-on) and many others. . Efficient solutions methods exist to solve the Transshipment Problem.

costs. Transshipment Problem is an example of a network problem. .) associated with the arcs and/or nodes. supplies. a set of arcs.Transshipment Problem A network model is one which can be represented by a set of nodes. and functions (e. etc.g. demands.

and two destinations is shown on the next slide. . three intermediate nodes.Transshipment Problem Transshipment problems are transportation problems in which a shipment may move through intermediate nodes (transshipment nodes) before reaching a particular destination node. Transshipment problems can be converted to larger transportation problems and solved by a special transportation program. The network representation for a transshipment problem with two sources. Transshipment problems can also be solved by general purpose linear programming codes.

Transshipment Problem Network Representation 3 c13 s1 1 c15 4 c23 s2 2 c25 c24 c56 5 c57 DESTINATIONS 7 d2 c14 c46 c47 c37 c36 6 d1 SOURCES INTERMEDIATE NODES .

Transshipment Problem Linear Programming Formulation xij represents the shipment from node i to node j Min 77cijxij ij s. 7xij < si j for each source (origin) i 7xik .t.7xkj = 0 for each intermediate i j node k (conservation of flow) 7xij > dj i xij > 0 for each destination j for all i and j (nonnegativity) .

. array2. Array1.array2. products.. .. array3.array2.Useful Excel/Solver Functions: Sumproduct SUMPRODUCT Multiplies corresponding components in the given arrays.array3.) SUMPRODUCT(array1.array3. and returns the sum of those products. are 2 to 30 arrays whose components you want to multiply and then add. .. Syntax: SUMPRODUCT(array1..

They both order shelving from the same two manufacturers. Additional data is shown on the next slide. and 40 for Rockwright. Inc. Hewes. Arnold Manufacturers and Supershelf. Currently weekly demands by the users are 50 for Zrox. Rockwright) with customized shelving for its offices. 60 for Hewes. Both Arnold and Supershelf can supply at most 75 units to its customers.Example : Thomas & Washburn Thomas Industries and Washburn Corporation supply three firms (Zrox. .

Example : Thomas & Washburn Because of long standing contracts based on past orders. . unit costs from the manufacturers to the suppliers are: Thomas Washburn Arnold 5 8 Supershelf 7 4 The cost to install the shelving at the various locations are: Zrox Hewes Rockwright Thomas 1 5 8 Washburn 3 4 4 Find the quantities to be shipped from each source to each destination to minimize the total shipping cost.

Example 1: Thomas & Washburn 5 Network Representation 1 -75 ARNOLD ZROX 3 5 8 1 Thomas 8 5 Zrox +50 Arnold 6 Hewes HEWES +60 2 -75 Super Shelf 7 4 4 WashWashWASH BURN Burn 3 4 7 4 RockRockWright +40 Demand nodes Supply nodes Transshipment nodes .

2 (Supershelf) j = 3 (Thomas).Example : Thomas & Washburn Linear Programming Formulation Decision Variables Defined xij amount shipped from manufacturer i to supplier j xjk = amount shipped from supplier j to customer k where i = 1 (Arnold). 6 (Hewes). 4 (Washburn) k = 5 (Zrox). 7 (Rockwright) Objective Function Defined Minimize Overall Shipping Costs: Min 5x13 + 8x14 + 7x23 + 4x24 + 1x35 + 5x36 + 8x37 + 3x45 + 4x46 + 4x47 .

x35 .Example: Thomas & Washburn Constraints Defined Amount Out of Arnold: Amount Out of Supershelf: Amount Through Thomas: Amount Through Washburn: Amount Into Zrox: Amount Into Hewes: Amount Into Rockwright: x13 + x14 < 75 x23 + x24 < 75 x13 + x23 .x46 .x37 = 0 x14 + x24 . for all i and j.x47 = 0 x35 + x45 > 50 x36 + x46 > 60 x37 + x47 > 40 Non-negativity of Variables: xij > 0. .x45 .x36 .

Example: Thomas & Washburn problem via LP The solver formulation is: The Transshipment Problem Ship 0 0 0 0 0 0 0 0 0 0 From 1 1 2 2 3 3 3 4 4 4 Arnold Arnold SuperShelf SuperShelf Thomas Thomas Thomas Washburn Washburn Washburn To 3 4 3 4 5 6 7 5 6 7 Unit Cost Thomas $5 Washburn $8 Thomas $7 Washburn $4 Zrox $1 Hewes $5 Rock-Wright $8 Zrox $3 Hewes $4 Rock-Wright $4 Nodes 1 2 3 4 5 6 7 Arnold uper helf Thomas Washburn Zrox Hewes Rock-Wright Net low 0 0 0 0 0 0 0 upply/Demand -75 -75 0 0 50 60 40 Tota l Tra nsporta tion ost $0 .

Example: Thomas & Washburn problem via LP The solver solution is: The Transshipment Problem Ship 75 0 0 75 50 25 0 0 35 40 From 1 1 2 2 3 3 3 4 4 4 Arnold Arnold SuperShelf SuperShelf homa homa homa a hburn a hburn a hburn To 3 4 3 4 5 6 7 5 6 7 homa a hburn homa a hburn rox Hewe Ro k right rox Hewe Ro k right Unit Cost $5 $8 $7 $4 $1 $5 $8 $3 $4 $4 Nodes 1 2 3 4 5 6 7 Arnold uper helf Thomas Washburn Zrox Hewes Rock-Wright Net low -75 -75 0 0 50 60 40 upply (-) or Demand (+) -75 -75 0 0 50 60 40 T o ta l T ra n sp o rta ti o n o st $ 1 .1 5 0 .

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