Introduction to Quantitative

Decision Making (IQDM)

Session 1

Amit Vatsa
 Introduction to Quantitative Decision Making

About me
Teaching at IIM Indore (core courses)
• PGP: IQDM
• IPM: Linear programming, Introduction to Algorithms
• FPM: Optimization

Hobbies
• Tennis, Swimming
• Problem solving

Academic background
• B.Tech, Chemical engineering, IIT Kharagpur (2005)
• PGDM, IIM Lucknow (2010)
• Doctorate, IIM Ahmedabad (2015)

Industry experience
• Functional architect in a software product company (JDA software)
• Process design engineer in Oil and Gas (Engineers India Ltd.)

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 Introduction to Quantitative Decision Making

Evaluation

Individual Component Weightage

Class Participation 10 %

Quizzes (2) 50 %

End-term examination 40 %

Total 100 %

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 Introduction to Quantitative Decision Making

Course Introduction
• Credits: 3
• Content
– Linear Programming
– Applications of Linear programming
– ILP/MILP
– Decision trees
• Textbook:
– Anderson, Sweeney and Williams. Introduction to Management Science: Quantitative
Approaches to Decision Making.
• For Advanced reading
– Taha H.A., “Operations Research: An Introduction”, 10th Edition. Pearson Education
India.
– Bazaraa, M. S., Jarvis, J. J., & Sherali, H. D. (2011). “Linear programming and
network flows”, 4th Edition, John Wiley & Sons.

Amit Vatsa/ Operations Management & Quantitative Techniques

 Introduction to Quantitative Decision Making

Operations Research/ Mgmt. Science

 It is a discipline that deals with the application of advanced
analytical methods to help make better decisions.
 Some facts from WW II
– During the World War II close to 1,000 men and women in
Britain were engaged in operational research.
– About 200 operational research scientists worked for
the British Army.
– Operational research sections of the Army Operational
Research Group (AORG) of the Ministry of Supply (MoS)
were landed in Normandy in 1944, and they followed British
forces in the advance across Europe. 
• Source: https://en.wikipedia.org/wiki/Operations_research

Amit Vatsa/ Operations Management & Quantitative Techniques

 Introduction to Quantitative Decision Making

Problem1: Revenue management

• For an airline operator

– demand as a function of price (demand curve) is
available (say, )
• How to answer these questions:
1. How should the price be set so as to maximize revenue.
2. Can we do better than (1) with a smart idea?

Amit Vatsa/ Operations Management & Quantitative Techniques

 Introduction to Quantitative Decision Making

Problem -2: Flight ticket booking

• Imagine you have a consulting assignment that requires 5
visits (from Indore) to the client site in Delhi. Dates are
fixed, you need to be there for Monday to Wednesday on 5
consecutive weeks.
– Ticket prices are Rs 5000, for on-way trip, 8,000 for the
round trip. However, if the round trip dates span a weekend,
there is 25% discount (i.e. round trip will cost Rs 6,000).
– Monday morning there is a flight Indore-Delhi, and
Wednesday evening there is a flight Delhi-Indore. Use them.
– You want to be in Indore (and not on client site) for the
weekend!!

Amit Vatsa/ Operations Management & Quantitative Techniques

 Introduction to Quantitative Decision Making

Problem 3: Dozers to sites

• A construction company has 4 bulldozers currently parked at
different parking locations. The current distances between the
bulldozers and the sites (in Km):
Dozer\site A B C D
1 60 45 45 50
2 5 55 25 35
3 95 65 55 75
4 15 80 65 85

How should the bulldozers be moved to the construction sites in order

to minimize the total distance travelled?

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 Introduction to Quantitative Decision Making

Problem 4: Subset sum problem

• You are managing logistics operations and have 10
items with following weights
7 10 3 11 8 14 10 17 6 9

• Can you fill your 40-ton truck completely (full-

truck) with any combination of the above items?
• In other words
– Is there a subset of the above numbers whose
sum of elements is 40?

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 Introduction to Quantitative Decision Making

Applications of LP
• Linear Programming is the most widely used O.R.
Model
Production and Manpower planning
Distribution/Logistics Planning
Investment Planning
Telecommunications Network Planning
Airline Flight and Crew Scheduling
Many others

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 Thank You

Prof. Amit Vatsa amitv@iimidr.ac.in