Operational Research (OR) encompasses a wide range of

problem-solving techniques and methods applied in the pursuit of

improved decision-making and efficiency, such as simulation,
mathematical optimization, Queuing theory and other
stochastic-process models, Markov decision processes,
Econometric methods, Data envelopment analysis, neural
networks, expert systems, decision analysis, and the
analytic hierarchy process. Nearly all of these techniques
involve the construction of mathematical models that attempt to
describe the system. Because of the computational and statistical
nature of most of these fields, OR also has strong ties to computer
science and analytics. Operational researchers faced with a new
problem must determine which of these techniques are most
appropriate given the nature of the system, the goals for
improvement, and constraints on time and computing power.
The major sub disciplines in modern operational research, as
identified by the journal Operations Research are:
Computing and information technologies
Financial engineering
Manufacturing,
management

service

sciences,

Policy modeling and public sector work

Revenue management
Simulation
Stochastic models
Transportation

and

supply

chain

Origin: Operational research originated in the efforts of military

planners during World War I (convoy theory and Lanchester's
laws). In the decades after the two world wars, the techniques
were more widely applied to problems in business, industry and
society. Since that time, operational research has expanded into a
field widely used in industries ranging from petrochemicals to
airlines, finance, logistics, and government; moving to a
focus on the development of mathematical models that can be
used to analyze and optimize complex systems, and has become
an area of active academic and industrial research.
Transportation Problem:
In mathematics and economics, transportation theory is a name
given to the study of optimal transportation and allocation
of resources. The problem was formalized by the French
mathematician Gaspard Monge in 1781.
The transportation problem is a special type of LPP where the
objective is to minimize the cost of distributing a product from a
number of sources or origins to a number of destinations.
Because of its special structure the usual simplex method is not
suitable for solving transportation problems. These problems
require special method of solution.
Properties:
The problem of finding the minimum-cost distribution of a
given
commodity
from a group of supply centers (sources) i=1,,m
to a group of receiving centers (destinations) j=1,,n
Each source has a certain supply (si)
Each destination has a certain demand (d j)
The cost of shipping from a source to a destination is directly
proportional to the number of units shipped

Figure: Simple
Problem

Networking

Representation

of

Transportation

Two Types:
Balanced Transportation Problem; where the total supply
equals total demand.
Unbalanced Transportation Problem; where the total
supply is not equal to the total demand.
Steps:
Step I- obtains the initial basic feasible solution.
Step II- obtains the optimal basic solution.
Solving Methods:
North West Corner Rule (NWCR)
Vogels Approximation Method (VAM)

 Russells Approximation Method (RAM)

Application of Transportation Problem:
Minimize shipping cost
Determine low cost location
Find minimum cost production schedule
Military distribution system