Академический Документы
Профессиональный Документы
Культура Документы
Unit 1 Introduction To OR
Structure
1.1. Introduction
1.2 Historical Background
1.3. Scope of operation Research
1.4. Important Features of OR
1.5. Phases of OR
1.6. Types of OR Models
1.5.1 A broad classification of OR models
1.7. Methodology of OR
1.7.1 Definition of the problem
1.7.2 Construction of the model
1.7.3 Solution of the model
1.7.4 Validation the model
1.7.5 Implementation of the final result
1.8. Techniques or Tools of OR
1.9. The structure of Mathematical Model
1.9.1 Decision variables and parameters
1.9.2 Objective functions
1.9.3 Constraints
1.9.4 Diet Problem
1.10. Limitations of OR
1.11. Summary
Terminal Questions
Answers of SAQs & TQs
1.1 Introduction
Optimization is the act of obtaining the best result under any given circumstance. In various
practical problems we may have to take many technical or managerial decisions at several
Sikkim Manipal University 1
Operations Research Unit 1
stages. The ultimate goal of all such decisions is to either maximize the desired benefit or
minimize the effort required. We make decisions in our every day life without even noticing them.
Decisionmaking is one of the main activity of a manager or executive. In simple situations
decisions are taken simply by common sense, sound judgment and expertise without using any
mathematics. But here the decisions we are concerned with are rather complex and heavily
loaded with responsibility. Examples of such decision are finding the appropriate product mix
when there are large numbers of products with different profit contributions and productional
requirement or planning public transportation network in a town having its own layout of factories,
apartments, blocks etc. Certainly in such situations also decision may be arrived at intuitively from
experience and common sense, yet they are more judicious if backed up by mathematical
reasoning. The search of a decision may also be done by trial and error but such a search may
be cumbersome and costly. Preparative calculations may avoid long and costly research. Doing
preparative calculations is the purpose of Operations research. Operations research does
mathematical scoring of consequences of a decision with the aim of optimizing the use of time,
efforts and resources and avoiding blunders.
Learning Objectives:
After studying this unit, you should be able to understand the following.
1. Know the significant features in O.R.
2. Understand the Methodology of O.R.
3. Define the structure of a mathematical model in O.R.
4. Know the significance of the Objective function
1.2Historical Background
During Second World War in United Kingdom a team of scientists from different disciplines
studied the strategic and tactical problems associated with air and land defence of the country.
Their objective was to determine the most effective utilization of limited military resources to win
the battle and the technique they developed was named as Operations research. After the war,
Operations research techniques rapidly developed in the fields of industrial, academic and
government organizations.
The application of Operations research methods helps in making decisions in such complicated
situations. Evidently the main objective of Operations research is to provide a scientific
basis to the decisionmakers for solving the problems involving the interaction of various
components of organization, by employing a team of scientists from different disciplines,
Sikkim Manipal University 2
Operations Research Unit 1
all working together for finding a solution which is the best in the interest of the
organization as a whole. The solution thus obtained is known as optimal decision.
Definition of Operations Research: Churchman, Ackoff and Aruoff have defined “Operations
research as the application of scientific methods, techniques and tools to operation of a
system with optimum solutions to the problems”. Here Optimum implies the one, which is
best of all possible alternatives. Another definition is that, “Operations research is the use of
scientific methods to provide criteria for decisions regarding man, machine, systems
involving repetitive operations”. This definition is more general and comprehensive and seems
to be more exhaustive than the previous definition.
Self Assessment Questions 1
1. The main objective of O.R is to provide a _______ ________ to the decisionmakers.
2. O.R employs a team _________ from _________ __________
1.3Scope of Operations Research (OR)
In general, whenever there is any problem simple or complicated, the OR techniques may be
applied to find the best solution. In this section we shall try to find the scope of OR by seeing its
application in various fields of everyday life.
i) In Defence Operations: In modern warfare the defence operations are carried out by a
number of independent components namely Air Force, Army and Navy. The activities in each
of these components can be further divided in four subcomponents viz.: administration,
intelligence, operations and training, and supply. The application of modern warfare
techniques in each of the components of military organizations requires expertise knowledge
in respective fields. Further more, each component works to drive maximum gains from its
operations and there is always a possibility that strategy beneficial to one component may
have an adverse effect on the other. Thus in defence operations there is a necessity to co
ordinate the activities of various components which gives maximum benefit to the
organization as a whole, having maximum use of the individual components. The final
strategy is formulated by a team of scientists drawn from various disciplines who study the
strategies of different components and after appropriate analysis of the various courses of
actions, the best course of action, known as optimum strategy, is chosen.
ii) In Industry: The system of modern industries are so complex that the optimum point of
operation in its various components cannot be intuitively judged by an individual. The
Sikkim Manipal University 3
Operations Research Unit 1
business environment is always changing and any decision useful at one time may not be so
good some time later. There is always a need to check the validity of decisions continually,
against the situations. The industrial revolution with increased division of labour and
introduction of management responsibilities has made each component an independent unit
having their own goals. For example: Production department minimize cost of production but
maximizes output. Marketing department maximizes output but minimizes cost of unit sales.
Finance department tries to optimize capital investment and personnel department appoints
good people at minimum cost. Thus each department plan their own objectives and all these
objectives of various department or components come to conflict with each other and may not
conform to the overall objectives of the organization. The application of OR techniques helps
in overcoming this difficulty by integrating the diversified activities of various components so
as to serve the interest of the organization as a whole efficiently.
OR methods in industry can be applied in the fields of production, inventory controls and
marketing, purchasing, transportation and competitive strategies etc.
iii) Planning: In modern times it has become necessary for every government to have careful
planning, for 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.
iv) Agriculture: With increase in population there is a need to increase agriculture output. But
this cannot be done arbitrarily. There are a number of restrictions under which agricultural
production is to be studied. Therefore there is a need to determine a course of action, which
serves the best under the given restrictions. The problem can be solved by the application of
OR techniques.
v) In Hospitals: The OR methods can be used to solve waiting problems in outpatient
department of big hospitals. The administrative problems of hospital organization can also be
solved by OR techniques.
vi) In Transport: Different OR methods can be applied to regulate the arrival of trains and
processing times, minimize the passengers waiting time and reduce congestion, formulate
suitable transportation policy, reducing the costs and time of transshipment.
vii) Research and Development: Control of R and D projects, product introduction planning etc.
and many more applications.
Sikkim Manipal University 4
Operations Research Unit 1
Self Assessment Questions 2
1. Mention two uses of O.R
2. How is it used in hospital.
1.4 Important features of OR are:
i. It is System oriented: OR studies the problem from over all point of view of organizations or
situations since optimum result of one part of the system may not be optimum for some other
part.
ii. It imbibes Inter – disciplinary team approach. Since no single individual can have a
thorough knowledge of all fast developing scientific knowhow, personalities from different
scientific and managerial cadre form a team to solve the problem.
iii. It makes use of Scientific methods to solve problems.
iv. OR increases the effectiveness of a management Decision making ability.
v. It makes use of computer to solve large and complex problems.
vi. It gives Quantitative solution.
vii. It considers the human factors also.
Self Assessment Questions 3
1. O.R ________ interdisciplinary approach.
2. OR increases the effectiveness of ________ ability.
1.5 Phases of Operations Research
The scientific method in OR study generally involves the following three phases:
i) Judgment Phase: This phase consists of
a) Determination of the operation.
b) Establishment of the objectives and values related to the operation.
c) Determination of the suitable measures of effectiveness and
d) Formulation of the problems relative to the objectives.
ii) Research Phase: This phase utilizes
a) Operations and data collection for a better understanding of the problems.
b) Formulation of hypothesis and model.
c) Observation and experimentation to test the hypothesis on the basis of additional data.
Sikkim Manipal University 5
Operations Research Unit 1
d) Analysis of the available information and verification of the hypothesis using preestablished
measure of effectiveness.
e) Prediction of various results and consideration of alternative methods.
iii) Action Phase: It consists of making recommendations for the decision process by those
who first posed the problem for consideration or by anyone in a position to make a decision,
influencing the operation in which the problem is occurred.
Self Assessment Questions 4
State True / False
1. O.R gives qualitative solution.
2. One of O.R phases is Action phase
1.6 Types of operation Research Models
A model is a representation of the reality. It is an idealized representation or abstraction of a real
life system. The objective of the model is to identify significant factors and their interrelationship.
A model is helpful in decision making as it provides a simplified description of complexities and
uncertainties of a problem in logical structure. Major advantage of models is it does not interfere
with real system.
1.6.1. A broad classification of OR models
a. Physical Modes include all form of diagrams, graphs and charts. They are designed to deal
with specific problems. They bring out significant factors and interrelationship in pictorial firm
so as to facilitate analysis. There are two types i) Iconic models and ii) Analog models.
Iconic model is an image of an object or system, represented on a small scale. These models
can simulate the actual performance of a product.
Analog models are small physical systems that has similar characteristics and work l
ike an objects it represents Eg: Toy
b. Mathematical Model or symbolic models employ a set of mathematical symbols to represent
the decision variable of the system. The variables are related by mathematical system Eg:
Allocation, sequencing, replacement models etc.
Sikkim Manipal University 6
Operations Research Unit 1
c. By nature of Environment
We have i) Deterministic model in which every thing is defined and the results are certain.
Eg: EOQ model ii) Probabilistic Models in which the input and output variables follow a
probability distribution Eg: Games Theory.
d. By the extent of Generality: The two models belonging to this class are i) General models
can be applied in general and does not pertain to one problem only. Eg: Linear programming
ii) Specific Model is applicable under specific condition only. Eg: Sales response curve or
equation as a function of advertising is applicable in the marketing function alone.
Self Assessment Questions 5
State True / False
1. Diagram belongs to physical model
2. Allocation problems are represented by iconic model.
1.7 Methodology of Operations Research
The basic dominant characteristic feature of operations research is that it employs mathematical
representations or model to analyze problems. This distinctive approach represents an adaptation
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 retransformed into the
original context. The OR approach to problem solving consists of the following steps:
1. Definition of the problem.
2. Construction of the model.
3. Solution of the model.
4. Validation of the model.
5. Implementation of the final result.
1.7.1 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.
Sikkim Manipal University 7
Operations Research Unit 1
1.7.2 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 problem and helps tackling it in a well
organized manner. If the resulting model fits into one of the common mathematical models, a
convenient solution may be obtained by using mathematical techniques. If the mathematical
relationships of the model are too complex to allow analytic solutions, a simulation model may be
more appropriate. There are various types of models which can be constructed under different
conditions.
1.7.3 Solution of the model
Once an appropriate model has been formulated, the next stage in the analysis calls for its
solution and the interpretation of the solution in the context of the given problem. A solution to a
model implies determination of a specific set of decision variables that would yield an Optimum
solution. An Optimum solution is one which maximize or minimize the performance of any
measure in a model subject to the conditions and constraints imposed on the model.
1.7.4 Validation the model
A model is a good representative of a system, then the Optimal solution must improve the
system’s performance. A common method for testing the validity of a model is to compare its
performance with some 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. The problem
here is that there is no assurance that future performance will continue to duplicate past
behaviour. Also, since the model is based on careful examination of past data, the comparison
should always reveal favorable results. In some instances this problem may be overcome by
using data from trial 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.
1.7.5 Implementation of the final result
The optimal solution obtained from a model should be applied practice 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 will
reach its peak in this phase.
Sikkim Manipal University 8
Operations Research Unit 1
1.8. Techniques or Tools of OR
1. Linear Programming:
It is used to find a solution for optimizing a given objective. Objectives may be to maximize
profit or minimize cost. Both objective function and constraints must be capable of being
expressed as linear expression of decision variables. Its various use will be seen in Chapter
2.
2. Inventory control Methods:
The production, purchasing and material managers are always confronted with question of
when to buy, how much to buy and how much to keep in stock. Inventory models aims at
optimizing inventory levels.
3. Goal Programming
Single objective function is taken in the linear programming and all other factors are
considered as constraints, but in actual practice there may be number of important objective
functions. Goal programming has several objective functions, each having a target value and
programme models are developed to minimize deviation from these targets.
4. The tools, namely, queuing model, sequence model, transportation and assignment model,
network analysis are discussed in detail in later chapters.
Self Assessment Questions 6
State True / False
1. O.R methodology consists of definition, solution and validation only.
2. The interaction between O.R team and Management reaches peak level in implementation
phase.
Sikkim Manipal University 9
Operations Research Unit 1
1.9 The Structure of Mathematical Model
Many industrial and business situations are concerned with planning activities. In each case of
planning, there are limited sources, such as men, machines, material and capital at the disposal
of the planner. One has to make decision regarding these resources in order to either maximize
production, or minimize the cost of production or maximize the profit etc. These problems are
referred to as the problems of constrained optimization. Linear programming is a technique for
determining an optimal schedule of interdependent activities, for the given resources.
Programming thus means planning and refers to the process of decisionmaking regarding
particular plan of action amongst several available alternatives.
Any business activity of production activity to be formulated as a mathematical model can best be
discussed through its constituents; they are:
- Decision Variables,
- Objective function,
- Constraints.
1.9.1 Decision variables and parameters
The decision variables are the unknowns to be determined from the solution of the model. The
parameters represent the controlled variables of the system.
1.9.2 Objective functions
This defines the measure of effectiveness of the system as a mathematical function of its decision
variables. The optimal solution to the model is obtained when the corresponding values of the
decision variable yield the best value of the objective function while satisfying all constraints.
Thus the objective function acts as an indicator for the achievement of the optimal solution.
While formulating a problem the desire of the decisionmaker is expressed as a function of ‘n’
decision variables. This function is essentially a linear programming problem (i.e., each of its item
will have only one variable raise to power one). Some of the Objective functions in practice are:
- Maximization of contribution or profit
- Minimization of cost
- Maximization of production rate or minimization of production time
- Minimization of labour turnover
- Minimization of overtime
- Maximization of resource utilization
- Minimization of risk to environment or factory etc.
Sikkim Manipal University 10
Operations Research Unit 1
1.9.3 Constraints
To account for the physical limitations of the system, the model must include constraints, which
limit the decision variables to their feasible range or permissible values. These are expressed in
the form of constraining mathematical functions.
For example, in chemical industries, restrictions come from the government about throwing gases
in the environment. Restrictions from sales department about the marketability of some products
are also treated as constraints. A linear programming problem then has a set of constraints in
practice.
The mathematical models in OR may be viewed generally as determining the values of the
decision variables x J, J = 1, 2, 3, n, which will optimize Z = f (x 1, x 2, x n).
Subject to the constraints:
1.9.4 Diet Problem
Formulate the mathematical model for the following:
Mathematical Model of the Diet Problem: Suppose x1 = the number of units of food–1 in the mixture,
x2 = the number of units of food–2 in the mixture.
Now we formulate the constraint related to vitaminA. Since each unit of food –1 contains 5 units
of vitamin – A, we have that x1 units of food – 1 contains 5x1 units of vitamin – A. Since each unit
of food – 2 contains 6 units of vitamin – A, we have that x2 units of food – 2 contains 6x2 units of
vitamin – A. Therefore the mixture contains 5x1 + 6x2 units of vitamin A. Since the minimum
Sikkim Manipal University 11
Operations Research Unit 1
Now we formulate the constraint related to vitamin – B. Since each unit of food – 1 contains 2
units of vitamin – B we have that x1 units of food – 1 contains 2x1 units of vitamin B. Since each
unit of food – 2 contains 3 units of vitamin – B, we have that x2 units of food – 2 contains 3x2 units
of vitamin – B. Therefore the mixture contains 2x1 + 3x2 units of vitamin – B. Since the
minimum requirement of vitamin – B is 80 units, we have that
2x2 + 3x2 ³ 80.
Next we formulate the cost function. Given that the cost of one unit of food –1 is R's. 5/ and one
unit of food – 2 is R's. 6/. Therefore x1 units of food–1 costs Rs. 5x1, and x2 units of food – 2
costs Rs. 6x2. Therefore the cost of the mixture is given by Cost = 5x1 + 6x2. If we write z for the
cost function, then we have z = 5x1 + 6x2. Since cost is to be minimized, we write min z = 5x1 +
6x2.
Since the number of units (x1 or x2) are always nonnegative we have that
x1 ³ 0, x2 ³ 0. Therefore the mathematical model is
Self Assessment Questions 7
Fill in the blanks
i. OR imbibes _________ team approach
ii. Linear programming is tool of _______
Sikkim Manipal University 12
Operations Research Unit 1
iii. The three phases of OR are ________
iv. To solve any problem through OR approach the first step is _______
v. _________ represents a real life system
vi. _________ represents the controlled variables of the system.
1.11. Summary
The OR approach needs to be equally developed in various agricultural problems on a regional or
international basis. With the explosion of population and consequent shortage of food, every
country faces the problem of optimum allocation of land in various crops in accordance with
climate conditions and available facilities. The problem of optimal distribution of water from a
resource like a reservoir for irrigation purposes is faced by each developing country, and a good
amount of scientific work can be done in this direction.
Terminal Questions
1. Define OR
2. What are the characteristic features of OR?
3. What is a model in OR? Discuss different models available in OR
4. Write short notes are different phases or OR
5. What are the limitations of OR
Answers to Self Assessment Questions
Self Assessment Questions 1
1. Scientific basis
2. Scientists, different, disciplines
Self Assessment Questions 2
1. Industry, Planning
2. To solve waiting problems
Self Assessment Questions 3
1. Imbibes
2. Decisionmaking
Sikkim Manipal University 13
Operations Research Unit 1
Self Assessment Questions 4
1. True 2. True
Self Assessment Questions 5
1. True 2. False
Self Assessment Questions 6
1. False 2. False
Self Assessment Questions 7
1. Interdisciplinary
2. OR
3. Judgment phase, Research phase and Action phase
4. Define the problem
5. Model
6. Parameters.
Answer for Terminal Questions
1. Ref: See 1.1.1
2. Ref: See 1.3
3. Ref: See 1.5
4. Ref See: 1.4
5. Ref: See 1.9
Sikkim Manipal University 14