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# ASSIGNMENT Operations Research

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## 511216400 ABHINAV SRIVASTAVA MBA SECOND SEMISTER MB0048

OPERATIONS RESEARCH

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Master of Business Administration - Semester 2 MB004 ! "Operations Research# \$4 credits% \$Boo& I'! B()0(% ASSIGNMENT SET ( *(+ A to, compan, manufactures t-o t,pes of do..s/ a 0asic 1ersion do..-A and a de.u2e 1ersion do..-B+ Each do.. of t,pe B ta&es t-ice as .on3 to produce as one of t,pe A/ and the compan, -ou.d ha1e time to ma&e ma2imum of (000 per da,+ The supp., of p.astic is sufficient to produce (000 do..s per da, \$0oth A 4 B com0ined%+ The de.u2e 1ersion re5uires a fanc, dress of -hich there are on., 600 per da, a1ai.a0.e+ If the compan, ma&es a profit of Rs )+00 and Rs 6++ per do../ respecti1e., on do.. A and B/ then ho- man, of each do.. shou.d 0e produced per da, in order to ma2imi7e the tota. profit+ 8ormu.ate this pro0.em+ 8ormu.ation! Let X1 and X2 be the number of dolls produced per day of type A and B, respectively. Let the A require t hrs. So that the doll B require 2t hrs. So the total time to manufacture X1 and X2 dolls should not exceed 2 !herefore, tX1 " 2tX2 # 2 t t hrs.

\$ther constraints are simple. !hen the linear pro%rammin% problem becomes& 'aximi(e p ) * X1 " + X2 Sub,ect to restrictions, X1 " 2X2 # 2 X1 " X2 # 1+ X2 # 0 -!ime constraint. -/lastic constraint.

-1ress constraint.

## And non2ne%atively restrictions X1, X2 3

*2+ 9hat are the ad1anta3es of :inear pro3rammin3 techni5ues; ANS9ER! 1. !he linear pro%rammin% technique helps to ma4e the best possible use of available productive resources -such as time, labor, machines etc.. 2. 5t improves the quality of decisions. !he individual 6ho ma4es use of linear pro%rammin% methods becomes more ob,ective than sub,ective. *. 5t also helps in providin% better tools for ad,ustment to meet chan%in% conditions. 7. 5n a production process, bottle nec4s may occur. 8or example, in a factory some machines may be in %reat demand 6hile others may lie idle for some time. A si%nificant advanta%e of linear pro%rammin% is hi%hli%htin% of such bottle nec4s. +. 'ost business problems involve constraints li4e ra6 materials availability, mar4et demand etc. 6hich must be ta4en into consideration. 9ust 6e can produce so many units of product does not mean that they can be sold. Linear pro%rammin% can handle such situation also. *)+ So.1e the fo..o-in3 Assi3nment <ro0.em Operations O( O2 O) M( (0 = (6 M2 (6 (0 (> M) (2 = (> M4 (( (2 (?

ANS9ER! Since the number of ro6s are less than number of columns, addin% a dummy ro6 and applyin% :un%arian method, ;o6 reduction matrix \$perations \$1 \$2 \$* \$7 \$ptimum assi%nment solution \$perations \$1 \$2 \$* \$7 '1 > ? x 1 x '2 + 1 > ? x '* 2 > ? x x '7 1 * x > ? '1 1 < 1+ '2 1+ 1 10 '* 12 < 10 '7 11 12 1=

:un%arian 'ethod leads to multiple solutions. Selectin% - *, '2. arbitrarily. \$1 @ '1 \$2 @ '* \$* @ '2 1 < 10

\$7 @ '7 2222222222222222222222222 !\$!AL *+ !herefore, the optimum assi%nment schedule is \$1 @ '1, \$2 @ '*, \$* @ '2 AA1 \$7 @ '7. *4+ 9hat is inte3er pro3rammin3; ANS9ER! 5f the un4no6n variables are all required to be inte%ers, then the problem is called an inte%er pro%rammin% -5/. or inte%er linear pro%rammin% -5L/. problem. 5n contrast to linear pro%rammin%, 6hich can be solved efficiently in the 6orst case, inte%er pro%rammin% problems are in many practical situations -those 6ith bounded variables. A/2hard -non2deterministic polynomial2time hard., in computational complexity theory, is a class of problems that are, informally, Bat least as hard as the hardest problems in A/B.. 21 inte%er pro%rammin% or binary inte%er pro%rammin% -B5/. is the special case of inte%er pro%rammin% 6here variables are required to be or 1 -rather than arbitrary inte%ers.. !his problem is also classified as A/2hard, and in fact the decision version 6as one of CarpDs 21 A/2complete problems. 5f only some of the un4no6n variables are required to be inte%ers, then the problem is called a mixed inte%er pro%rammin% -'5/. problem. !hese are %enerally also A/2hard. !here are ho6ever some important subclasses of 5/ and '5/ problems that are efficiently solvable, most notably problems 6here the constraint matrix is totally uni2modular and the ri%ht2 hand sides of the constraints are inte%ers. Advanced al%orithms for solvin% inte%er linear pro%rams include&

cuttin%2plane method branch and bound branch and cut branch and price if the problem has some extra structure, it may be possible to apply delayed column %eneration.

## Such inte%er2pro%rammin% al%orithms are discussed by /adber% and in Beasley.

*6+ E2p.ain the different steps in1o.1ed in simu.ation methodo.o3ies; ANS9ER! !he methodolo%y developed for simulation process consists of the follo6in% seven steps& Step 1& 5dentify and clearly define the problem. Step 2& List the statement of ob,ectives of the problem. Step *& 8ormulate the variables that influence the situation and an extract or probabilistic description of their possible values or states. Step 7& \$btain a consistent set of values -or states. for the variables, i.e., a sample of probabilistic variables, random samplin% technique maybe used. Step +& Ese the sample obtained in step 2 to calculate the values of the decision criterion, by actually follo6in% the relationships amon% the variables for each of the alternative decisions. Step 0& ;epeat steps 2 and * until a sufficient number of samples are available. Step =& !abulate the various values of the decision criterion and choose the best policy. *>+ 9rite do-n the 0asic difference 0et-een <ERT 4@<M+ ANS9ER! !hou%h there are no essential differences bet6een /F;! and G/' as both of them share in common the determination of a critical path. Both are based on the net6or4 representation of activities and their schedulin% that determines the most critical activities to be controlled so as to meet the completion date of the pro,ect. <ERT Some 4ey points about /F;! are as follo6s& 1. /F;! 6as developed in connection 6ith an ;H1 6or4. !herefore, it had to cope 6ith the uncertainties that are associated 6ith ;H1 activities. 5n /F;!, the total pro,ect duration is re%arded as a random variable. !herefore, associated probabilities are calculated so as to characteri(e it. 2. 5t is an event2oriented net6or4 because in the analysis of a net6or4, emphasis is %iven on the important sta%es of completion of a tas4 rather than the activities required to be performed to reach a particular event or tas4. *. /F;! is normally used for pro,ects involvin% activities of non2repetitive nature in 6hich time estimates are uncertain. 7. 5t helps in pinpointin% critical areas in a pro,ect so that necessary ad,ustment can be made to meet the scheduled completion date of the pro,ect.

@<M +

1. G/' 6as developed in connection 6ith a construction pro,ect, 6hich consisted of routine tas4s 6hose resource requirements and duration 6ere 4no6n 6ith certainty. !herefore, it is basically deterministic. 2. G/' is suitable for establishin% a trade2off for optimum balancin% bet6een schedule time and cost of the pro,ect. *. G/' is used for pro,ects involvin% activities of repetitive nature.

Master of Business Administration - Semester 2 'B 7I& J\$perations ;esearchK -7 credits. \$Boo& I'! B()0(% 0

ASSIGNMENT- Set 2 *(+ 9hat is a mode. in OR;+ 'iscuss different mode.s a1ai.a0.e in OR+ ANS9ER! A model is an ideali(ed representation or abstraction of a real2life system. !he ob,ective of a model is to identify si%nificant factors that affect the real2life system and their interrelationships. A model aids the decision2ma4in% process as it provides a simplified description of complexities and uncertainties of a problem in a lo%ical structure. !he most si%nificant advanta%e of a model is that it does not interfere 6ith the real2life system. A broad classification of \$; models Lou can broadly classify \$; models into the follo6in% types. a. <h,sica. Mode.s include all form of dia%rams, %raphs and charts. !hey are desi%ned to tac4le specific problems. !hey brin% out si%nificant factors and interrelationships in pictorial form to facilitate analysis. !here are t6o types of physical models& a. 5conic models b. Analo% models 5conic models are primarily ima%es of ob,ects or systems, represented on a smaller scale. !hese models can simulate the actual performance of a product. Analo% models are small physical systems havin% characteristics similar to the ob,ects they represent, such as toys. b. Mathematica. or S,m0o.ic Mode.s employ a set of mathematical symbols to represent the decision variable of the system. !he variables are related by mathematical systems. Some examples of mathematical models are allocation, sequencin%, and replacement models. c+ B, nature of En1ironment& 'odels can be further classified as follo6s& a. 1eterministic model in 6hich everythin% is defined and the results are certain, such as an F\$M model. b. /robabilistic 'odels in 6hich the input and output variables follo6 a defined probability distribution, such as the Names !heory. d. B, the e2tent of Genera.it, 'odels can be further classified as follo6s& a. Neneral 'odels are the models 6hich you can apply in %eneral to any problem. 8or example& Linear pro%rammin%. b. Specific 'odels on the other hand are models that you can apply only under specific conditions. 8or example& Lou can use the sales response curve or equation as a function of only in the mar4etin% function. *2+ 9rite dua. of Ma2 A B 4C( D 6C2

Su0Eect to! )C( D C2 F (6 C( D 2C2 F (0 6C( D 2C2 F 20 C(/ C2 G 0 So.n! 'in O ) 1+L1 " 1 L2 " 2 L* Sub,ect to *L1 " L2 " +L* 3 7 L1 " 2L2 " 2L* 3 + L1, L2, L* 3

*)+ 9rite a note on Monte-@ar.o simu.ation+ ANS9ER! !he 'onte2Garlo method is a simulation technique in 6hich statistical distribution functions are created by usin% a series of random numbers. !his approach has the ability to develop many months or years of data in a matter of fe6 minutes on a di%ital computer. !he method is %enerally used to solve the problems 6hich cannot be adequately represented by mathematical models, or, 6here solution of the mode, is not possible by analytical method. !he 'onte2Garlo simulation procedure can be summari(ed in the follo6in% steps& Step 1& 1efine the problem& a. 5dentify the ob,ectives of the problem, and b. 5dentify the main factors 6hich have the %reatest effects on the ob,ectives of the problem Step 2& Gonstruct an appropriate model& a. Specify the variables and parameters of the model. b. 8ormulate the appropriate decision rules, i.e., state the conditions under 6hich the experiment is to be performed. c. 5dentify the type of distribution that 6ill be used @ 'odels use either theoretical distributions or empirical distributions to state the patterns the occurrence associated 6ith the variables. I

d. Specify the manner in 6hich time 6ill chan%e. e. 1efine the relationship bet6een the variables and parameters. Step *& /repare the model for experimentation& a. 1efine the startin% conditions for the simulation, and b. Specify the number of runs of simulation to be made. Step 7& Esin% step 1 to *, experiment 6ith the model& a. 1efine a codin% system that 6ill correlate the factors defined in step 1 6ith the random numbers to be %enerated for the simulation. b. Select a random number %enerator and create the random numbers to be used in the simulation. c. Associate the %enerated random numbers 6ith the factors identified in step 1 and coded in step 7 -a.. Step +& Summari(e and examine the results obtained in step 7. Step 0& Fvaluate the results of the simulation. Step =& 8ormulate proposals for advice to mana%ement on the course of action to be adopted and modify the model, if necessary. *4+ E2p.ain <ERT ANS9ER! /ro%ram -/ro,ect. Fvaluation and ;evie6 !echnique -/F;!. is a pro,ect mana%ement tool used to schedule, or%ani(e, and coordinate tas4s 6ithin a pro,ect. 5t is basically a method to analy(e the tas4s involved in completin% a %iven pro,ect, especially the time needed to complete each tas4, and to identify the minimum time needed to complete the total pro,ect. Some 4ey points about /F;! are as follo6s& 1. /F;! 6as developed in connection 6ith an ;H1 6or4. !herefore, it had to cope 6ith the uncertainties that are associated 6ith ;H1 activities. 5n /F;!, the total pro,ect duration is re%arded as a random variable. !herefore, associated probabilities are calculated so as to characteri(e it. 2. 5t is an event2oriented net6or4 because in the analysis of a net6or4, emphasis is %iven on the important sta%es of completion of a tas4 rather than the activities required to be performed to reach a particular event or tas4. *. /F;! is normally used for pro,ects involvin% activities of non2repetitive nature in 6hich time estimates are uncertain.

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7. 5t helps in pinpointin% critical areas in a pro,ect so that necessary ad,ustment can be made to meet the scheduled completion date of the pro,ect. /F;! plannin% involves the follo6in% steps& 5dentify the specific activities and milestones. 1etermine the proper sequence of the activities. Gonstruct a net6or4 dia%ram. Fstimate the time required for each activity. 1etermine the critical path. Epdate the /F;! chart as the pro,ect pro%resses.

6+ E2p.ain Ma2imini - minima2 princip.e ANS9ER! Solvin% a t6o2person (ero2sum %ame /layer A and player B are to play a %ame 6ithout 4no6in% the other playerPs strate%y. :o6ever, player A 6ould li4e to maximi(e his profit and player B 6ould li4e to minimi(e his loss. Also each player 6ould expect his opponent to be calculative. Suppose player A plays A1. !hen, his %ain 6ould be a11, a12, ... , a1n, accordin%ly BPs choice 6ould be B1,B2, Q , Bn. Let R1 ) min S a11, a12, Q , a1n. !hen, R1 is the minimum %ain of A 6hen he plays A1 -R1 is the minimum pay2off in the first ro6.. Similarly, if A plays A2, then his minimum %ain is R2, the least pay2off in the second ro6. Lou 6ill find correspondin% to APs play A1, A2, Q , Am, the minimum %ains are the ro6 minimums R1, R2, Q , Rm. Suppose A chooses the course of action 6here Ri is maximum. !hen the maximum of the ro6 minimum in the pay2off matrix is called maximin. !he maximin is R ) max 5 S min , -ai,. T Similarly, 6hen B plays, he 6ould minimise his maximum loss. 1

!he maximum loss to B is 6hen B, is U, ) max i - ai, .. !his is the maximum pay2off in the , th column. !he minimum of the column maximums in the pay2off matrix is called minimax. !he minimax is U ) min , S max 5 -ai,. T 5f R ) U ) v -say., the maximin and the minimax are equal and the %ame is said to have saddle point. 5f R V U, then the %ame does not have a saddle point. Sadd.e point 5n a t6o2person (ero2sum %ame, if the maximin and the minimax are equal, the %ame has saddle point. Saddle point is the position 6here the maximin -maximum of the ro6 minimums. and minimax -minimum of the column maximums. coincide. 5f the maximin occurs in the rth ro6 and if the minimax occurs in the sth column, the position -r, s. is the saddle point. :ere, v ) ars is the common value of the maximin and the minimax. 5t is called the value of the %ame. !he value of a %ame is the expected %ain of player A, 6hen both the players adopt optimal strate%y. Note! 5f a %ame has saddle point, -r, s., the playerPs strate%y is pure strate%y. So.ution to a 3ame -ith sadd.e point Gonsider a t6o2person (ero2sum %ame 6ith players A and B. Let A1, A2, Q ,Am be the courses of action for player A. Let B1, B2, Q ,Bn be the courses of action for player B. !he saddle point of the %ame is as follo6s& 1. !he minimum pay2off in each ro6 of the pay2off matrix is encircled. 2. !he maximum pay2off in each column is 6ritten 6ithin a box. *. 5f any pay2off is circled as 6ell as boxed, that pay2off is the value of the %ame. !he correspondin% position is the saddle point. Let -r, s. be the saddle point. !hen, the su%%ested pure strate%y for player A is Ar. !he su%%ested pure strate%y for player B is Bs. !he value of the %ame is ars. Aote& :o6ever, if none of the pay2offs is circled or boxed, the %ame does not have a saddle point. :ence, the su%%ested solution for the players is mixed strate%y.

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>+ 9rite short notes on the fo..o-in3! a. Linear /ro%rammin% b. transportation :inear <ro3rammin3 Linear pro%rammin% focuses on obtainin% the best possible output -or a set of outputs. from a %iven set of limited resources. !he L// is a class of mathematical pro%rammin% 6here the functions representin% the ob,ectives and the constraints are linear. \$ptimi(ation refers to the maximi(ation or minimi(ation of the ob,ective functions. Lou can define the %eneral linear pro%rammin% model as follo6s& 'aximi(e or 'inimi(e& W ) c1X1 " c2X2 " 222 "cnXn Sub,ect to the constraints, a11X1 " a12X2 " 222 " a1nXn X b1 a21X1 " a22X2 " 222 " a2nXn X b2 am1X1 " am2xX2 " 222 " amnXn X bm and X1, X2, QQQQQQ.., Xn 3 Ohere, c,, bi and ai, -i ) 1, 2, *, Q.. m, , ) 1, 2, * 2222222 n. are constants determined from the technolo%y of the problem and X, -, ) 1, 2, * 2222 n. are the decision variables. :ere X is either # -less than., 3 -%reater than. or ) -equal.. Aote that, in terms of the above formulation the coefficients c,, bi and ai, are interpreted physically as follo6s. 5f bi is the available amount of resources i, 6here ai, is the amount of resource i that must be allocated to each unit of activity ,, the J6orthK per unit of activity is equal to c,. Transportation !ransportation model is an important class of linear pro%rams. 8or a %iven supply at each source and a %iven demand at each destination, the model studies the minimi(ation of the cost of transportin% a commodity from a number of sources to several destinations. !he transportation problem involves m sources, each of 6hich has available ai -i ) 1, 2Q m. units of homo%eneous product and n destinations, each of 6hich requires b, -, ) 1, 2Q., n. units of products. :ere ai and b, are positive inte%ers. !he cost ci, of transportin% one unit of the product from the ith source to the ,th destination is %iven for each i and ,. !he ob,ective is to develop an inte%ral transportation schedule that meets all demands from the inventory at a minimum total transportation cost.

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5t is assumed that the total supply and the total demand are equal. mYi)1 ai ) nY,)1 b, -1.

!he condition -1. is %uaranteed by creatin% either a fictitious destination 6ith a demand equal to the surplus if total demand is less than the total supply or a -dummy. source 6ith a supply equal to the shorta%e if total demand exceeds total supply. !he cost of transportation from the fictitious destination to all sources and from all destinations to the fictitious sources are assumed to be (ero so that total cost of transportation 6ill remain the same. !he standard mathematical model for the transportation problem is as follo6s. Let Xi, be number of units of the homo%enous product to be transported from source i to the destination ,. !hen ob,ective is to 'inimi(e W ) mYi)1 nY,)1 G59 Xi, Sub,ect to mYi)1 ai, i ) 1, 2, *, 2222222222222, m and nY,)1 b,, , ) 1, 2, *, 2222222222222, n -2. Oith all X59 3 A necessary and sufficient condition for the existence of a feasible solution to the transportation problem -2. is& mYi)1 ai ) nY,)1 b,

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