Operations

Research
Prepared By: Engr. JOSE RYAN R. AMANTE, RME
IEM 632: Fundamentals of Industrial Engineering Management
August 19, 2017
LEARNING OBJECTIVES
 What operations research means?

 Operations Research tools & techniques.

 To know the use and operation of simplex

method.
OPERATIONS
RESEARCH
Introduction
The OR starts when mathematical and quantitative
techniques are used to substantiate the decision being
taken. The main activity of a manager is the decision
making.
Operations Research takes tools from different
discipline such as mathematics, statistics, economics,
psychology, engineering etc. and combines these tools to
make a new set of knowledge for decision making.
Introduction
Today, O.R. became a professional discipline which
deals with the application of scientific methods for making
decision, and especially to the allocation of scarce
resources.
The main purpose of O.R. is to provide a rational
basis for decisions making in the absence of complete
information, because the systems composed of human,
machine, and procedures may do not have complete
information.
Introduction
Operations Research can also be treated as science
in the sense it describing, understanding and predicting
the systems behaviour, especially man-machine system.
Thus O.R. specialists are involved in three classical
aspect of science, they are as follows:
i. Determining the systems behaviour
ii. Analyzing the systems behaviour by developing
appropriate models
iii. Predict the future behaviour using these models
OR Tools & Techniques
Operations Research uses any suitable tools or
techniques available. The common frequently used
tools/techniques are mathematical procedures, cost
analysis, electronic computation. However, operations
researchers given special importance to the development
and the use of techniques like;
OR Tools & Techniques
Is a procedure that studies a
 Linear Programming This is
is a constrained
used in optimization
situations where
problem by creating a
This is used for making decisionsmodel of the
 Game Theory technique,
the
underqueue
process involved
conflicting
Concerned which
is formed
in optimize
the
situations
with (for
makingproblem
where some
example
and
there
decisions
make a decisions that minimize
criterion
customers
then
are
underonethrough
orwithin
waiting
more a some
for
series constraints.
service,
of
players/opponents. aircrafts
organized In
In
 Decision Theory total conditions
inventory ofcost. complete This certainty
model
Linear
waiting
trials
this
about and
thetheprogramming
for landing,
error
motive
future of jobs
solutions
the
outcomes theplayers
objective
waiting
attempt
and for
to
are
under
successfully reduces the total cost of
function
processing
determine
dichotomized. (profit,
in The
the the loss
best or can
computer
solution.
success return on
system,
ofSome
one
 Queuing Theory conditions such that
purchasing, carrying, and out of stockwe make
investment)
etc).
times
player
some The
this
tends is and
objective
a
probability constraints
here
difficult/time
to be atabout is
the cost are linear.
minimizing
consuming
of other
what will
inventory.
 Inventory Models the There
cost
procedure.
players
happen inoffuture.
and are they
waiting
Simulation
hence different
without
are methods
inincreasing
is used when
conflict.
available
the oftoservicing.
solve linear programming.
costexperimentation
actual is not feasible
 Simulation
or solution of model is not possible.
OR Tools & Techniques
In addition to the above techniques, some other
common tools are;
 Non-linear Programming
 Dynamic Programming
 Integer Programming
 Markov Process
 Applications of Operations Research
The following are the abbreviated set of typical
operations research applications to show how widely these
techniques are used today:
 Accounting: • Building
Assigning
Project
Factory cash management
scheduling,
location
audit teams
andmonitoring
size
effectively
models
• decision
Credit
and control
policy analysis
 Construction: • Allocating
Cash flow planning
Determination
Estimation capital
of number
of proper
among
of facilities
work
various
 Facilities Planning force
required
alternatives
• Building
Deployment
Hospital financial
planning
of work
planning
force
 Finance: models
SIMPLEX
METHOD
Introduction
The simplex method of linear programming was
developed in 1947 by George Dantzig. He demonstrated
how to find the optimal solution from among the many
possible solutions to more complex linear programming
problem.
In the simplex method, the computation routine is an
iterative process, that is, it is repeated over and over.
Successive solutions are developed in a systematic
pattern until the best solution is reached.
Standard Maximization Problem
• The objective function is to be maximized .
• All variables involved in the problem are nonnegative.
• Each linear constraint may be written so that the
expression involving the variables is less than that or
equal to a nonnegative constant.
Problem (Simplex Method)
A business firm manufactures three products, A, B, and C. Each of
these products must be processed on three different machines. One machine
has 9 minutes, second machine has 8 minutes, and third machine has 7
minutes of hourly capacities. Each unit of product A requires 3 minutes on
machine 1, 2 minutes on machine 2, and 1 minute on machine 3. Each unit of
product B requires 2 minutes on machine 3, 1 minute on machine 1, and 3
minutes on machine 2. Product C requires 1 minute on machine 2, 2 minutes
on machine 1 and 3 minutes on machine 3. If the profit of each unit of
product A is P20, each unit of product B is P12, and of each unit of product C
is P18. How many units of each product should be produced hourly in order
to maximized the profit?
 Simplex Problem
 Network Representation tA1
A 1

tB1
tA2 tC2
The network representation for
a Simplex problem with three tB2
products to be processed in three B tC3 2
different machine
tA3 tA3
How many units of each product should be tB3
produced in a specific time (hourly) in order to C 3
maximized the profit?

Product Machine Optimum

No. of Product
Assignment
Problem
Introduction
 An assignment problem seeks to minimize the total cost
assignment of workers to jobs, given that the cost of worker
performing job.

 It assumes all workers are assigned and each job is

performed.

 An assignment problem is a special case of a transportation

problem in which all supplies and all demands are equal to 1;
hence assignment problems may be solved as linear programs.
 Assignment Problem
50
A
A 36
1
1

Network Representation 16
28
30
BB
18
2
2
How should the contractors be
assigned to minimize total costs? 35 32
C
C 20

25 3
3
25 14
D
D
Summary
 Assignment means allocating various jobs to various people in the organization.
Assignment should be done in such a way that the overall processing time is less,
overall efficiency is high, overall productivity is high, etc.

In assignment problem management aims at assignment jobs

to various people

 When no. of jobs is not equal to no. of workers, it is a

unbalanced problem.
Transportation
Problem
Introduction
The transportation problem seeks to minimize the
total shipping costs of transporting goods from origins or
sources (each with a supply) to destinations (each with a
demand), when the unit shipping cost from source, to a
destination.
 Transportation Problem
1 d1
 Network Representation cA1
sA A cA2
cA3
The network representation for 2 d2
a transportation problem with two cB1 c
B2
sources and three destinations
sB B
cB3
3 d3

SOURCES DESTINATIONS
(Supply) (Demand)
Summary
 A transportation problem is concerned with transportation method or
selecting routes in a product distribution network among the manufacture
plant and distribution warehouse situated in different regions or local outlets.

In transportation method, management is searching for a

distribution route, which can lead to minimization of cost and
maximization of profit.
 When the total demand is not equal to total supply it is
unbalanced problem.
REFERENCE:
• Tan, S. T. (2009), Finite Mathematics for the Managerial, Life and Social Science, Stonehill
College, Cengage Learning. Retrieved from https://books.google.com.ph/books?id=SawgZ-
uOF1EC&printsec=frontcover#v=onepage&q&f=false
• Qualitative Techniques for managers. Retrieved from
http://www.pondiuni.edu.in/storage/dde/downloads/mbaii_qt.pdf
• What is OPERATIONS RESEARCH? What does OPERATIONS RESEARCH mean?
OPERATIONS RESEARCH meaning. Retrieved from https://www.youtube.com/watch?
v=tbUcC7C01vk&t=158s
• www.quora.com/What-is-the-difference-between-LPP-assignment-and-transportation-
problem-in-operation-research
• Dr. Mohamed Abdel Salam, Operations Research (OR), Chapter 8
Transportation, Assignment, and Transshipment Problems
If the Plan doesn’t work
change the Plan not the Goal
– Unknown
Thank You!
Questions