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SHIVENDRA SINGH 1208005653

(Spring/Feb 2013)

Master of Business Administration - MBA Semester 2 MB0048 Operations Research ASSIGNMENT- Set 1 Q1. Explain the scope of Operations Research. What are the features of Operations Research? The scopes of Operation Research are as follows: 1. In defense operations: In modern warfare, the three major military components namely, Air Force, Army, and Navy carry out the defense operations. The activities in each of these components can be further divided in four sub-components administration, intelligence, operations, training and supply. The applications of modern warfare techniques in each of the components of military organizations require expert knowledge in respective fields. Furthermore, each component works to drive maximum gains from its operations and there is always a possibility that the strategy beneficial to one component may be unfeasible for another component. Thus in defense operations, there is a requirement to co-ordinate the activities of various components. This gives maximum benefit to the organization as a whole, having maximum use of the individual components. A team of scientists from various disciplines gets together to study the strategies of different components. After appropriate analysis of the various courses of actions, the team selects the best course of action, known as the optimum strategy. In industry: The system of modern industries is so complex that an individual cannot intuitively judge the optimum point of operation in its various components. The business environment is always changing and any decision useful at one time may not be suitable some time later. There is always a need to check the validity of decisions continuously against the situations. The industrial revolution with increased division of labour and introduction of management responsibilities has made each component an independent unit having its own goals. Planning: In modern times, it has become necessary for every government to carefully plan, for the economic development of the country. OR techniques can be fruitfully applied to maximize the per capita income, with minimum sacrifice and time. A government can thus use or for framing future economic and social policies. Agriculture: With increase in population, there is a need to increase agriculture output. However, this cannot be done arbitrarily. There are several restrictions. Hence, the need to determine a course of action that serves the best under the given restrictions. You can solve this problem by applying OR techniques. In hospitals: These methods can solve waiting problems in outpatient department of big hospitals and administrative problems of the hospital organizations. In transport: These methods can be applied to regulate the arrival of trains and processing times, to minimize the passengers waiting time and reduce congestion, and to formulate suitable transportation policy, thereby reducing the costs and time of transshipment. Research and development: In this methodologies can be applied in the field of R&D for several purposes, such as to control and plan product introductions.

2.

3. 4. 5. 6. 7.

Some key features of OR are as follows: Q2. OR is system-oriented OR scrutinizes the problem from an organizations perspective. OR imbibes an interdisciplinary team approach. OR uses scientific methods to solve problems. OR increases effectiveness of the managements decision -making ability. OR uses computers to solve large and complex problems. OR offers a quantitative solution. Six Operators are to be assigned to five jobs with the cost of assignment in Rs. given in the matrix below. Determine the optimal assignment. Which operator will have no assignment?

Operators 1 1 2 3 4 5 6 7 SOLUTION: Operators 1 1 2 3 4 5 6 6 2 7 6 9 4 2 2 5 8 2 3 7 2

Jobs 3 4 5

6 2 7 6 9 4

2 5 8 2 3 7
jobs 3 5 8 6 3 8 4

5 8 6 3 8 4

2 7 9 4 9 6

6 7 8 5 7 8

5 2 7 9 4 9 6

6 6 7 8 5 7 8 0 0 0 0 0 0

Row reduced matrix:-

Operators 1 1 2 3 4 5 6 6 2 7 6 9 4 2 2 5 8 2 3 7

jobs 3 5 8 6 3 8 4 4 5 2 7 9 4 9 6 6 6 7 8 5 7 8 0 0 0 0 0 0

Column reduced matrix:Operators 1 1 2 3 4 5 6 4 0 5 4 7 2 2 0 3 6 0 1 5 jobs 3 2 5 3 0 5 1 4 5 0 5 7 2 7 4 6 1 2 3 0 2 3 0 0 0 0 0 0

Operators 1 1 2 3 4 5 6 4 0 5 4 7 2 2 0 3 6 0 1 5

jobs 3 2 5 3 0 5 1 4 5 0 5 7 2 7 4 6 1 2 3 0 2 3 0 0 0 0 0 0

Operators 1 1 2 3 4 5 6 4 0 4 4 6 1 2 0 3 5 0 0 4

jobs 3 2 5 2 0 4 0 4 5 0 5 6 2 6 3 6 1 2 2 0 1 2 1 1 0 1 0 0

Operator -1 to job-4 Operator -2 to job-1 Operator -3 to job-6 Operator -4 to job-5 Operator -5 to job-2 Operator -6 to job-3

2 2 0 5 3 4

Operator 6 will have no assignment. Q3 a. Explain the Monte Carlo Simulation. Monte-Carlo Simulation: The Monte-Carlo method is a simulation technique in which statistical distribution functions are created by using a series of random numbers. This approach has the ability to develop many months or years of data in a matter of few minutes on a digital computer. The method is generally used to solve the problems that cannot be adequately represented by mathematical models or where solution of the model is not possible by analytical method. The Monte-Carlo simulation procedure can be summarized in the steps depicted in figure:

b. A Company produces 150 cars. But the production rate varies with the distribution.

Production Rate Probability

147 0.05

148 0.10

149 0.15

150 0.20

151 0.30

152 0.15

153 0.05

At present the track will hold 150 cars. Using the following random numbers determine the Average number of cars waiting for shipment in the company and average number of empty space in the truck. Random Numbers- 8 2 , 54, 50, 96, 85, 34, 30, 02, 64, 47. SOLUTION:Production Rate and Probability Production rate 147 148 149 150 151 152 153 Probability 0.05 0.10 0.15 0.20 0.30 0.15 0.05 cumulative Probability 0.05 0.15 0.30 0.50 0.80 0.95 1.00 Simulation worksheet Trial no. 1 2 3 4 5 6 7 8 9 10 Random no. 82 54 50 96 85 34 30 02 64 47 Total Simulated production rate 152 150 150 153 152 150 150 147 151 150 Cars waiting in company 2 2 2 5 7 7 7 4 5 7 Number of example spaces in the track 3 3 Random no. assigned 00-04 05-14 15-29 30-49 50-79 80-94 95-99

Average number of cars waiting =7/10=0.7/day Average number of empty space= 3/10=0.3/day Q4. Explain the Characteristics and Constituents of a Queuing System.

A queuing model has the following operating characteristics which enables us to understand and efficiently manage a queue: Queue length: The number of customers in the waiting line reflects one of the two conditions. Short queues could mean either good customer service or too much capacity. Similarly, long queues could indicate either low server efficiency or the need to increase capacity. Number of customers in system: The number of customers in queue and also those being served in the queue relates to the service efficiency and capacity. Large values imply congestion, potential customer dissatisfaction and a need for more capacity. Waiting time in queue: Long lines do not reflect long waiting times if the service rate is fast. However, when waiting time seems long to customers, they perceive that the quality of service is poor. Long waiting times may indicate a need to adjust the service rate of the system or change the arrival rate of customers. Waiting time in system: The total elapsed time from entry into the system until exit from the system may indicate problems with customers, server efficiency or capacity. If some customers are spending too much time in the service system, there may be a need to change the priority discipline, increase productivity or adjust capacity in some way. Service facility utilization: The collective utilization of the service facilities reflects the percentage of time the facilities are busy. Management is interested in maintaining high utilization but this objective may adversely impact the other operating characteristic. A queuing system is said to be in transient state when its operating characteristics are dependent upon time. If the operating characteristics become independent upon time, the queuing system is said to be in a steady state. Constituents of a Queuing System: Arrival pattern: It is the average rate at which the customers arrive. Service facility: Examining the number of customers served at a time and the statistical pattern of time taken for service at the service facility. Queue discipline: The common method of choosing a customer for service amongst those waiting for service is First Come First Serve. Components of a Queuing system

Length

Queue discipline

Queuing system

Number of lines &Line structures

service time distribution

Q5. a. What do you mean by dominance? State the dominance rules for rows and columns. The pay-off matrix of player A is pay-off in one specific row ( r row ) th exceeding the corresponding pay-off in another specific row( s row ) th . This means that whatever course of action is adopted by player B, for A, the course of action Ar yields greater gains than the course of action As. Therefore, Ar is a better strategy than As irrespective of Bs strategy. Hence, you can say that Ar dominates As. Alternatively, if each pay-off in a specific column ( p column ) th is less than the corresponding pay-off in another specific column( q column ) th , it means strategy Bp offers minor loss than strategy Bq irrespective of As strategy. Hence, you can say that Bp dominates Bq . Therefore, you can say that: a) In the pay-off matrix, if each pay-off in r row th is greater than (or equal to) the corresponding pay-off in thes row th , Ar dominates As . b) In the pay-off matrix, if each pay-off in p column th is less than (or equal to) the corresponding pay-off in theq column th , Bp dominates Bq . At times, a convex combination of two or more courses of action may dominate another course of action. Whenever a course of action (say As or Bq) is dominated by others, then that course of action (As or Bq) can be deleted from the pay-off matrix. Such a deletion will not affect the choice of the solution, but it reduces the order of the pay-off matrix. Successive reduction of the order using dominance property helps in solving games. Consider a two-person zero-sum game with players A and B. Let A1, A2 ...Am be the courses of action for player A. Let B1, B2 Bn be the courses of action for player B. Suppose the game has a saddle point. Use the dominance property in sequence to delete the courses of action of A as well as B till the pair comprising the saddle point remains alone. The procedure to arrive at the saddle point is as follows: a) In the pay-off matrix, if each pay-off in r row th is greater than (or equal to) the corresponding pay-off in the s row th , Ar dominates As , hence As is deleted. b) In the pay-off matrix, if each pay-off in p column th is less than (or equal to) the corresponding pay-off in the q column th, Bp dominates Bq , hence Bq is deleted. c) Repeat the above steps in succession to achieve the saddle point. b. Find the saddle point of the following game and state the optimum strategies for players A and B. B 1 1 2 3 4 SOLUTION: A Strategy 1 2 3 4 9 6 2 5 9 1 2 3 5 4 6 6 4 3 1 4* 4 2 8 8 4 8 6 3 2 5 0 7 8 1 Row minimum 0 4 2 1 2 9 6 2 5 A 3 3 5 4 6 4 5 1 4 4 2 8 6 3 2 0 7 8 1

Column maxim. Saddle point (2, 3) Value of the game v= 4

Q6. (a) What are the differences between PERT and CPM?

There are no essential differences between PERT and CPM as both of them share in common the determination of a critical path. Both are based on the network representation of activities and their scheduling, which determines the most critical activities to be controlled in order to meet the completion date of the project. PERT: Some key points of PERT are as follows: PERT was developed in connection with an Research and Development (R&D) work. Therefore, it had to cope with the uncertainties that are associated with R&D activities. In PERT, the total project duration is regarded as a random variable. Therefore, associated probabilities are calculated in order to characterize it. It is an event-oriented network as in the analysis of a network, emphasis is given on the important stages of completion of a task rather than the activities required to be performed to reach a particular event or task. PERT is normally used for projects involving activities of non-repetitive nature in which time estimates are uncertain. It helps in pinpointing critical areas in a project, so that necessary adjustment can be made to meet the scheduled completion date of the project. CPM: CPM was developed in connection with a construction project, which consisted of routine tasks whose resource requirements and duration were known with certainty. Therefore, it is basically deterministic. CPM is suitable for establishing a trade-off for optimum balancing between schedule time and cost of the project. CPM is used for projects involving activities of repetitive nature.

(b) A project has eleven activities whose duration is given in the following table : Activity Duration (Days) 0-1 2 1-2 8 1-3 10 2-4 6 2-5 3 3-4 3 3-6 7 4-7 5 5-7 2 6-7 8 7-8 3

1. Draw the network 2. Identify the critical activities and path. SOLUTION Critical activity * 19 1. DRAW THE NETWORK. 16 Critical path: 0-1-3-6-7-8

5
2 12 10 3 6 22 16 5 3 7 19 19 27 27 30 30 3

2
0 0 2 2 2 8 10 12 12

4
8

1.Activity (i j) 0-1 1-2 1-3 2-4 2-5 3-4 3-6 4-7 5-7 6-7 7-8

2.Duration Dij 2 8 10 6 3 3 7 5 2 8 3

ACTIVITY TABLE Earliest Latest 3.Start ESi 4.Finish 5.Start LSij 6.Finish ECij LCj 0 2 0 2 2 10 4 12 2 12 2 12 10 16 13 19 10 13 16 19 12 15 16 19 12 19 12 19 16 21 22 27 16 18 25 27 19 27 19 27 27 30 27 30

7.Total Float TFij 0 2 0 3 6 4 0 6 9 0 0

8.Free Float FFij 0 2 0* 3 6 4 0* 6 9 0* 0*


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