MSc in Operational Research Operational Techniques 1

Lecture 1
OPERATIONAL RESEARCH Introduction The term, operations research was first coined in 1940 by McClosky and Trefthen in a small town Bowdsey, of the United Kingdom. This new science came into existence in a military context. During World War II, military management called on scientists from various disciplines and organized them into teams to assist in solving strategic and tactical problems, relating to air and land defence of the country. Their mission was to formulate specific proposals and plans for aiding the Military commands to arrive at decisions on optimal utilization of scarce military resources and efforts and also to implement the decisions effectively. This new approach to the systematic and scientific study of the operations of the system was called Operations Research or operational research. Hence OR can be associated with "an art of winning the war without actually fighting it." Scope of Operations Research There is a great scope for economists, statisticians, administrators and the technicians working as a team to solve problems of defence by using the OR approach. Besides this, OR is useful in the various other important fields like: 1. Agriculture. 2. Finance. 3. Industry. 4. Marketing. 5. Personnel Management. 6. Production Management. 7. Research and Development. Phases of Operational Research The procedure to be followed in the study of OR, generally involves the following major phases. 1. Formulating the problem. 2. Constructing a mathematical model. 3. Deriving the solution from the model. 4. Testing the model and its solution (updating the model). 5. Controlling the solution. 6. Implementation.

Lecture Notes

Models In Operations Research A model in OR is a simplified representation of an operation, or is a process in which only the basic aspects or the most important features of a typical problem under investigation are considered. The objective of a model is to identify significant factors and interrelationships. The reliability of the solution obtained from a model, depends on the validity of the model representing the real system. A good model must possess the following characteristics: (i) It should be capable of taking into account, new formulation with out having any changes in its frame. (ii) Assumptions made in the model should be as small as possible. (iii) Variables used in the model must be less in number ensuring that it is simple and coherent. (iv) It should be open to parametric type of treatment. (v) It should not take much time in its construction for any problem. Advantages of A Model There are certain significant advantages gained when using a model these are: (i) Problems under consideration become controllable through a model. (ii) It provides a logical and systematic approach to the problem. (iii)It provides the limitations and scope of an activity. (iv) It helps in finding useful tools that eliminate duplication of methods applied to solve problems. (v) It helps in finding solutions for research and improvements in a system. (vi) It provides an economic description and explanation of either the operation, or the systems they represent. Models by Structure Mathematical models Are most abstract in nature. They employ a set of mathematical symbols to represent the components of the real system. These variables are related together by means of math-ematical equations to describe the behavior of the system. The solution of the problem is then obtained by applying well-developed mathematical techniques to the model.

Introduction of Linear Programming Linear programming deals with the optimisation (maximisation or minimisation) of a function of variables known as objective functions. It is subject to a set of linear equalities and /or inequalities known as constraints. Linear programming is a mathematical technique, which involves the allocation of limited resources in an optimal manner, on the basis of a given criterion of optimality.
In this section properties of Linear Programming Problems (LPP) are discussed. The graphical method of solving a LPP is applicable where two variables are involved. The most widely used method

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for solving LP problems consisting of any number of variables is called simplex method. Formulation of LP Problems The procedure for mathematical formulation of a LPP consists of the following steps: Step 1 To write down the decision variables of the problem. Step 2 To formulate the objective function to be optimised (Maximised or Minimised) as a linear function of the decision variables. Step 3 To formulate the other conditions of the problem such as resource limitation, market constraints, interrelations between variables etc, as linear in equations or equations in terms of the decision variables. Step 4 To add the non-negativity constraint from the considerations so that the negative values of the decision variables do not have any valid physical interpretation. The objective function, the set of constraint and the non-negative constraint together form a Linear programming problem. General Formulation of LPP
The general formulation of the LPP can be stated as follows:
,

x1 , x 2 , x 3 ,....., x n

In order to find the values of n decision variables objective function.

to maximize or minimize the

Z = c1x1 + c2 x 2 + c3 x 3 +..... + cn x n
and also satisfy m-constraints

(1)

a11x1 + a12 x 2 + a13 x 3 +..... + a1n x n =b1 a 21x1 + a 22 x 2 + a 23 x 3 + + a 2n x n =b 2

(2)
... ... ... .
.... ..

.. .. .. .. ..

... ... ... .

.. .. .. .. ..

. ... ... . ... ... ..

a i1x1 + a i2 x 2 + a i3 x 3 + + a in x n =bi .............................................................. +

+

x
3

x
mn n
+ + a

= b

a
m1

x
1

m2

x
m3

.....

where constraints may be in the form of inequality < or > or even in the form an equation (=) and finally satisfy the non negative restrictions

x1 , x 2 , x 3 ,.....x n 0,

(3)

Example 1 A manufacturer produces two types of models M1 and M2.,. Each model of the type M1 requires 4 hrs of grinding and 2 hours of polishing; where as each model of the type M2 requires 2 hours of grinding and 5 hours of polishing. The manufacturers have 2 grinders and 3 polishers. Each grinder works 40 hours a week and each polisher works for 60 hours a week. Profit on M1 model is Rs.3.00 and

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on model M2 , is Rs.4.00. Whatever is produced in a week is sold in the market. How should the manufacturer allocate his production capacity to the two types of models, so that he may make the maximum profit in a week? Solution Decision Variables Let x1 and x
2

be the number of units of M1 and M

model.

Objective function Since the profit on both the models are given, we have to maximize the profit

Max(Z) =3x1 + 4 x 2
Constraints There are two constraints one for grinding and the other for polishing. No. of hrs. available on each grinder for one week is 40 hrs. There are 2 grinders. Hence the manufacturer does not have more than 2 x 40 = 80 hrs of grinding. M1 requires 4 firs of grinding and M2, requires 2 hours of grinding. The grinding constraint is given by

4x1 + 2x 2 80 .
Since there are 3 polishers, the available time for polishing in a week is given by 3 x 60= 180. M 1 requires 2 hrs of polishing and M2, requires 5 hrs of polishing. Hence we have 2x1 + 5x Finally we have
2

180

Max(Z) =3x1 + 4 x 2
Subject to

4x1 + 2x 2 80 2x1 + 5x 2 180

Graphical Solution

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Example 2 A company manufactures two products A and B. These products are processed in the same machine. It takes 10 minutes to process one unit of product A and 2 minutes for each unit of product B and the machine operates for a maximum of 35 hrs in a week. Product A requires 1 kg. and B 0.5 kg. of raw material per unit the supply of which is 600 kg. per week. Market constraint on product B is known to be 800 unit every week. Product A costs Rs.5 per unit and sold at Rs.10. Product B costs Rs.6 per unit and can be sold in the market at a unit price of Rs.8. Determine the number of units of A and B per week to maximize the profit. Solution Decision Variables Let x1 and x
2

be the number of products A and B.

Objective function Costs of product A per unit is Rs.5 and sold at Rs. 10 per unit. Profit on one unit of product A. = 10-5=5 units of product A contributes a profit of Rs.5 x1 profit contribution from one unit of product B=86=2

x1

x 2 units of product B contribute a profit of Rs.2 x 2 . The objective function is given by Max(Z) =5x1 + 2x 2 ,
Constraints Time requirement constraint is given by

10x1 + 2x 2 (35 60) 10x1 + 2x 2 2100

Raw material constraint is given by

x1 + 0.5x 2 600
Market demand on product B is 800 units every week x 2 800 The complete LPP is

Max(Z) =5x1 + 2x 2 ,
Subject to 10x1 + 2x
2

2100

x1 + 0.5x 2 600

x2 800 x1 0, x 2 0,

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Graphical Solution

Example 3 A person requires 10,12, and 12 units chemicals A, B respectively for his garden. One unit of liquid product contains 5, 2 and 1 units of A, B and C respectively. One unit of dry product contains 1,2 and 4 units of A, B, C. If the liquid product sells for Rs.3 and the dry product sells for Rs.2 , how many of each should be purchased, in order to minimize the cost and meet the requirements?

Solution Decision variable Let x1 and x 2 be the number of units of liquid and dry products. Objective function Since the cost for the products are given we have to minimize the cost

Min(Z) =3x1 + 2x 2 ,
Constraints As there are 3 chemicals and its requirement are given. We have three constraints for these three chemicals.

5x1 + x 2 10

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2x1 + 2x 2 12 x1 + 4x 2 12
x1 0, x 2 0,
Finally the complete L.P.P is

Min(Z) =3x1 + 2x 2 ,
Subject to 5x1 + x
2

10

2x1 + 2x

12

x1 + 4x 2 12 x1 0, x 2 0,
Graphical Solution

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Example 4 A paper mill produces two grades of paper namely X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X and 300 tons of grade Y in a week. There are 160 production hours in a week. It requires 0.2 and 0.4 hours to produce a ton of products X and Y respectively with corresponding profits of Rs.200 and Rs.500 per ton. Formulate the above as a LPP to maximize profit and find the optimum product mix. Solution Decision variables Let x1 and x 2 be the number of units of two grades of paper of X and Y Objective function Since the profit for the two grades of paper X and Yare given, the objective function is to maximize the profit Max(Z) = 200x1 + 500x
2

Constraints There are 2 constraints one w.r t. to raw material, and the other w.r t .to production hours. The complete LPP is

Max(Z) = 200x1 + 500x 2 ,

Subject to

x1 400 x 2 300

0.2x1 + 0.4x 2 160 x1 0, x 2 0,

Graphical Solution

Lecture Notes