Name G M Firoz Khan

Roll No. 520931217

Program MBA
Operations Research
Subject
[Set 2]
Code MB 0032

Learning Systems Domain –Indira Nagar,

Centre Bangalore [2779]

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1. Describe in details the OR approach of problem solving. What
are the limitations of the Operations Research?

The basic dominant characteristic feature of operations research is that it

employs mathematical representations or models to analyze and solve
problems. This distinctive approach represents an adaption of the
scientific methodology used by the physical sciences. The scientific
method translates a real given problem into a mathematical
representation which is solved and transformed into the original context.

The OR approach of problem solving consists of the following steps:

a. Definition of the problem:

The first and the most important requirement is that the root problem
should be identified and understood. The problem should be identified
properly, this indicates three major aspects: [1] a description of the
goal or the objective of the study, [2] an identification of the decision
alternative to the system, and [3] a recognition of the limitations,
restrictions and requirements of the system.

b. Construction of the model:

Depending on the definition of the problem, the operations research
team should decide on the most suitable model for representing the
system. Such a model should specify quantitative expressions for the
objective and the constraints of the problem in terms of its decision
variables. A model gives a perspective picture of the whole system and
helps tackling it in a well organized manner. If the resulting model fits
into one of the common mathematical techniques; and if the
mathematical relationships of the model are too complex to allow
analytic solutions, a simulation model may be more appropriate.

c. Solution of the model:

Once an appropriate model has been formulated, the next step in the
analysis calls for its solution and the interpretation of the solution in
the context of given problem. A solution to a model implies
determination of optimum solution is one which maximizes or
minimizes the performance of any measure in a model subject to the
conditions and constrain imposed on the model.

d. Validation of the model:

A model is a good representative of a system, and then the optimal
solution must improve the system’s performance. A common method
for testing validity of a model is to compare its performance with some

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 past data available for the actual system. The model will be valid if
under similar conditions of inputs, it can reproduce the past
performance of the system. There is no assurance that the future
performance ill replicate past performance. Also, since the models
based on the past performance data, the comparison always reveals
favorable results. In some instances, this problem may be overcome
by using data from the trail runs of the system. It must be noted that
such a validation method is not appropriate for nonexistent systems,
since data will not be available for comparison.

e. Implementation of the final result:

The optimal solution obtained from a model should be applied to
improve the performance of the system and the validity of the solution
should be verified under changing conditions. It involves the
translation of these results into detailed operating instructions issued
in an understandable form to the individuals who will administer and
operate the recommended system. The interaction between the
operations research team and the operating personnel is at its peak in
this phase.

Limitations of Operations Research:

The limitations re more related to the problems of model building, time

and money factors.
• Magnitude of computation: Modern problems involve large number of
variables; and hence to find the interrelationship, among makes it
difficult.
• Non Quantitative factors and human emotional factor cannot be taken
into account.
• There is a wide gap between the managers and the operation
researchers.
• Time and money factors when the basic data is subjected to frequent
changes then incorporation of them into OP models is a costlier affair.
• Implementation of discussions involves human relations and behavior.

1. What are the characteristics of the standard form of L.P.P.?

What is the standard form of L.P.P.? State the fundamental
theorem of L.P.P.

Characteristics of standard form of L.P.P.:

The characteristics of the standard form are:

• All constraints are equations except for the non-negativity condition

which remain inequalities [>0] only.

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• The right hand side element of each constraint equation is non-
negative.
• All variables are nonnegative.
• The objective function is of the maximization or minimization type.
The inequality constraints can be changed to equations by adding or
subtracting the left hand side of each such constraint by a non negative
variable. The non negative variable that has to be added to a constraint
inequality of the form < to change it to an equation is called a slack
variable. The non negative variable that has to be subtracted from a
constraint inequality is called a surplus variable. The right hand side of
a constraint equation can be made positive by multiplying both sides of
the resulting equation with -1 wherever necessary. The remaining
characteristics are achieved by using the elementary transformations
introduced with the canonical form.

The standard form of L.P.P.:

Any standard form of LPP is given by

Maximize or minimize =i=0nCixi

Subject to =j=1naijxj +Si = bi (bi >0) i= 1,2,……..m.

& xj >0, j=1,2,….n.
Si > 0, i1,2,….m

Fundamental theorem of L.P.P.:

Given a set of simultaneous linear equations in n unknowns/variables, n

>m, AX=b, with r(A) =m.
If there is a feasible solution X>0, then there exists a basic feasible
solution.

1. Describe the Two-Phase method of solving a linear

programming problem with an example.

Two phase method:

The drawback of the penalty cost method is the possible computational

errors that could result from assigning a very large value to the constant
M. to overcome this difficulty, a new method is considered, where the use
of M is eliminated by solving the problem in two phases. They are:

Phase I: Formulate the new problem by eliminating the original objective

function by the sum of artificial variables for a minimization problem and
the negative of the sum of the artificial variables for a maximization

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problem. The resulting objective function is optimized by the simplex
method with the constraints of the original problem. If the problem has a
feasible solution, the optimal value of the new objective function is zero.
Then we proceed to Phase II. Otherwise, if the optimal value of the new
objective function is non zero, the problem has no solution and the
method terminates.
Phase II: Use the optimum solution of the phase I as the starting
solution of the variables and is solved by simplex method.
Example:
Use the two phased method to
Maximise Z=3x1-x2
Subject to 2x1 +x2 >2; x1+3x2 <2;
x2<4; x1,x2>0

Rewriting in the standard form,

Maximise Z=3x1-x2+0S1-MA1+0S2+0S3
Subject to
2x1 +x2 –S1+A1=2; x1+3x2+S2=2;
x2+S3 =4;
x1,x2,S1,S2,S3,A1>0

Phase I:
Consider the new objective,
Maximise Z* =-A1
Subject to
2x1 +x2 –S1+A1=2; x1+3x2+S2=2;
x2+S3 =4;
x1,x2,S1,S2,S3,A1>0

Solving by simplex method, the initial simplex table is given by

x1 x 2 S1 A1 S2 S3
0 0 0 -1 0 0 Ratio
A1-1 2* 1 -1 1 0 0 2 2/2 =1
S2 0 1 3 0 0 1 0 2 2/1 = 2
S3 0 0 1 0 0 0 1 4
-2 -1 1 0 0 0 -2
Work column * Pivot element

x1 enters the basic set replacing A1

The first iteration gives the following table:

x1 x2 x1 A1 S2 S3
0 0 0 -1 0 0

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 x1 0 1 ½ -½ ½ 0 0 1
S2 0 0 5/2 ½ -½ 1 0 1
S3 0 0 1 0 0 0 1 4
0 0 0 1 0 0 0

Phase I is complete, since there are no negative elements in the last row.
The optimal solution of the new objective is Z* =0.

Phase II:
Consider the original objective function,
Maximise Z=3x1-x2+0S1-MA1+0S2+0S3
Subject to
x1 +(x2/2) –(S1/2)=1;
(5/2)x2 + S1 /2 + S2=1;
x2+S3 =4;
x1,x2,S1,S2,S3,A1>0
With the initial solution x1 = 1, S2 = 1, S3 = 4, the corresponding simplex
table is

x1 x2 S1 S2 S3
3 -1 0 0 0 Ratio
x1 3 1 ½ -1/2 0 0 1
S2 0 0 5/2 ½* 1 0 1 1/(1/2) = 2
S3 0 0 1 0 0 1 4
0 5/2 -3/2 0 0 3
Work column, * Pivot table

Proceeding to the next iteration

x 1 x 2 S1 S2 S3
3 -1 0 0 0
x1 3 1 3 0 1 0 1 2
S2 0 0 5 1 2 0 1 2
S3 0 0 1 0 0 1 4 4
0 10 0 3 0 3 6
Since all elements of the last row are non negative, the current solution is
optimal.

2. What do you understand by the transportation problem? What

is the basic assumption behind the transportation problem?
Describe the MODI method of solving transportation problem.

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Transportation problem is an important model of linear programming.
This model studies the minimization of the cost of transporting a
commodity from a number of sources to several destinations. The supply
at each source and the demand at each destination are known. The
transportation problem involves m sources, each of which has available ai
(i =1,2….m) units of homogeneous product and n destinations, each of
which requires bj (j=1,2,…..n) units of products. Here ai and bj are
positive integers. The cost cij of transporting one unit of the product from
the ith source to jth destination is given for each I and j.
The objective is to develop integral transportation schedule that meets all
demands from the inventory at a minimum total transportation cost.

Assumption:
It is assumed that the total supply and the total demand are equal.
i.e.,i=1nai = j=1nbj ------------- (1)
The condition (1) is guaranteed by creating either a fictitious destination
with a demand equal to the surplus if total demand is less than the total
supply or a (dummy) source with a supply equal to the shortage if the
total demand exceeds total supply. The cost of transportation from the
fictitious destination to all sources and from the destinations to the
fictitious sources are assumed to be zero so that the total cost of
transportation will remain the same.

Formulation of Transportation Problem:

The standard mathematical model for the transportation problem is as

follows:
Let xij be the number f units of the homogenous product to be transported
from source I to destination j.
The objective is to

Minimize
i=1mj=1nCij Xij

Subject to
j=1nXij=ai, i = 1,2,3…..m (2)
j=1mXij=bj, j = 1,2,3….n

With all xij > 0 and integrals

MODI method of solving transportation problem

The first approximation to (2) is always integral and therefore always a

feasible solution. Rather than determining a first approximation by a

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direct application of the simplex method it is more efficient to work with
the table given below called the transportation table. The transportation
algorithm is the simplex method specialized to the format of table it
involves:
• Finding the integral basic feasible solution
• Testing the solution for optimality.
• Improving the solution, when it is not optimal.
• Repeating steps above until the optimal solution is obtained.
The solution to transportation problem is obtained in two stages. In the
first stage we find the basic feasible solution by any one of the following
methods.
a. North-west corner method
b. Matrix minima method
c. Vogel’s approximation method.
In the second stage we test the B.Fs for its optimality either by MODI
method or by stepping stone method.

D1 D2 Dn Supply ui
S1 C11 C12 C1n a1 u1
X11 X12 X2n
S2 C21 C22 C3n a1 u2
X21 X22 X3n
S3 C31 C32 C4n a1 u3
X31 X32 X4n

Sm Cm1 Cm2 Cmn am um

Xm1 Xm2 Xmn
Demand b1 b2 bn ai = bi
Vj v1 v2 vm

1. Describe the North-West Corner rule for finding the initial basic
feasible solution in the transportation problem.

Let us consider a T.P. involving m-origins and n-destinations. Since the

sum of origin capacities equals to the sum of requirements, a feasible
solution always exists. Any feasible solution satisfying m+n-1 of the m+n
constraints is a redundant one an hence can be deleted. This also means
that a feasible solution to a transportation problem can have at the most
only m+n-1 strictly positive compliments, otherwise the solution will
degenerate.

It is always possible to assign an initial feasible solution to a

transportation problem in such a manner that the rim requirements are

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satisfied. This can be achieved either by inspection or by following some
simple rules.

North-West corner rule is one of the simplest procedures for initial

allocation of feasible solution.

North-West Corner Rule:

Step 1:
The first assignment is made in the cell occupying the upper left hand
(north west) corner of the transportation table. The maximum feasible
amount is allocated there, that is x11 = min (a1,b1)
So that, either the capacity of origin O1 is used up; or the requirement at
the destination D1 is satisfied or both. This value of x11 is entered in the
upper left hand corner (small square) of cell (1,1) in the transportation
table.

Step 2:
If b1>a1 the capacity of origin O, is exhausted but the requirement at
destination D1 is still not satisfied, so that one more other variable in the
first column will have to take on a positive value. Move down vertically to
the second row and make the second allocation of magnitude
x21 = min (a2, b1-x21) in the cell (2,). This either exhausts the capacity of
origin O2 or satisfies the remaining demand at destination D1.

If a1>b1 the requirement at destination D1 is satisfied but the capacity of

origin O1 is no completely exhausted. Move to the right horizontally to
the second column and make the second allocation of magnitude x12=min
(a1-x11,b2) in the cell(1,2). This either exhausts the remaining capacity of
origin O1, or satisfies the demand at destination D2.

If b1 =a1, the origin capacity of O1 is completely exhausted as well as the

requirement at destination is completely satisfied. There is a tie for
second allocation. An arbitrary the breaking choice is made. Make the
second allocation of magnitude x12 =min (a1-a2,b2) =0 in the cell (1,2) or
x21 = min(a2, b1-b2) =0 in the cell (2,1).

Step 3:
Start from the new north-west corner of the transportation table
satisfying destination requirements and exhausting the origin capacities
one at a time, move down towards the lower right corner of the
transportation table until al the rim requirements are satisfied.

2. Describe the Branch and Bound Technique to solve an I.P.P.

problem.

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Sometimes a few or all variables of an IPP are constrained by their upper
or lower bounds or by both. The most general technique for the solution
of such constrained optimisation problems is the branch and bound
technique. The technique is applicable to both all IPP as well as mixed
IPP. The technique for a maximisation problem is discussed below:

Let the IPP be

Maximise Z= j=1nCj Xj ---------------------- (1)

Subject to constraints
j=1naijxj < bi,i=1,2,.....m ---------------------(2)
Xj is integer valued j = 1,2,3....r (<n) --------(3)
Xj >0 j=r+1,......n--------------------------(4)
Further let us suppose that for each integer valued xj, we can assign
lower and upper bounds for the optimum values of the variable by
Lj<xj<Uj j = 1,2,....r ------------------------(5)
The following idea is behind “the branch and the bound technique”
Consider any variable xj, and let l be the some integer value satisfying
Lj<l<Uj -1. Then clearly an optimum solution to (1) through (5) shall also
satisfy either the linear constraint.

Xj>l+1 -------------------------(6)
Or the linear constrain xj<l------(7)

To explain how this partition helps, let us assume that there were no
integer restrictions (3), and suppose that this then yields an optimal
solution to LPP (1), (2), (4) and (5). Indicating, x1 =1.66 (for example).
Then we formulate and solve two LPP’s each containing (1), (2) and (4).
But (5) for j =1 is modified to be 2<x1<U1 in one problem and L1<x1<1 in
the other. Further each of these problems process an optimal solution
satisfying integer constants (3).

Then the solution having the larger value for z is clearly the optimum
solution for the given IPP. However, it usually happens that one of these
problems has no optima solution satisfying (3), and thus some more
computations are necessary. We now discuss step wise the algorithm that
specifies how to apply the partitioning (6) and (7) in a systematic manner
to finally arrive at an optimum solution.

We start with an initial lower bound for z, say z(0), we also have a list of
LPP’s differing only in the bounds (5). Th start with the master list
contains a single LPP, consisting of (1), (2), (4) and (5). We now discuss
below ,the step by step procedure that specifies how the partitioning (6)

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and (7) can be applied systematically to eventually get an optimum
integer – valued solution.

Branch & Bound Algorithm:

At the tth iteration (t=0,1, 2...)

Step 0:
If the master list is not empty, choose an LPP out of it. Otherwise stop
the process, Go the step 1.

Step 2:
Obtain the optimum solution to the objective function z is less than or
equal to z(t) , then let z(t+1) = z(t) and return to step 0 otherwise go to step
3.

Step 3:
Select any variable xj, j = 1,2,...p. that does not have an integer value in
the obtained optimum solution to the LPP chosen in step 0. Let xj* denote
his optimal value of xj. Add two LPP’s to the master list; these LPP’s are
identical with the LPP chosen in step 0, except that in one, the lower
bound on xj is replaced by [xj*] +1. Let z(t+1) = z(t) , return to step 0.

At the termination of algorithm, if feasible integer valued solution yielding

z(t) has been recorded it is optimum, otherwise no integer valued feasible
solution exists.

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