Operations Research

ILO 7015

Lecture1
Introduction to Operations Research

Lecture by
Pro Jay Goy
Department of Mechanical Engineering

A. P. Shah Institute of Technology

 What is Operations Research
• The first formal activities of operations research (OR)
were initiated in England during world war II.

• A team of British scientists set out to make decision

regarding the best utilization of scarce military resources
and efforts.

• The name ‘Operations Research’ was apparently invented

because the team was dealing with research on (Military)
operations.

• Following the end of war, the ideas advanced in military

operations were adapted to improve efficiency and
productivity in the civilian sector (Specifically Industrial
Sector).

• A cornerstone of OR is mathematical modelling and the

 Modelling in Operations Research
• A model in the sense used in OR is defined as a
representation of an actual object or situation.
• It shows the relationships and inter-relationships of action
and reaction in terms of cause and effect.
• The main objective of a model is to provide means for
analyzing the behavior of the system for the purpose of
improving its performance.
• The reliability of the solution obtained from a model
depends on the validity of the model in representing the
real system.
• A model permits to examine the behavior of a system
without interfering with ongoing operations.
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 Classification of Models
Models can be classified according to following
characteristics:
1. Classification by Nature of Environment
a) Deterministic Models: Such models assume conditions of complete
certainty and knowledge. Ex. Linear Programming (LPP), transportation
and assignment models.
b) Probabilistic (or Stochastic) Models: Usually handles the situations in
which the consequences of managerial actions can not be predicted with
certainty. However it is possible to forecast a pattern of events, based on
which decisions are made. Ex. Insurance companies are willing
to insure against risk of fire, accidents or sickness.

2. Classification by Behavior
a) Static Models: These models do not consider the impact of changes that
takes place during the planning horizon (independent of time).
b) Dynamic Models: I these models time is considered as one of the
important variables and admit the impact of changes generated by time.
A series of interdependent decisions are required during planning
 Classification of Models
3. Classification by Method of Solution
a) Analytical Models: These models have a specific mathematical structure
and thus can be solved by known analytical or mathematical
techniques. Ex. LPP, assignment or transportation model.
b) Simulation Models: They also have a mathematical structure but they
can not be solved by purely using the tools and techniques of
mathematics. A simulation model is essentially computer assisted
experimentation on a mathematical structure of a real time structure in
order to study the system under a variety of assumptions.
-Simulation modelling has the advantage of being more flexible than
mathematical modeling and hence can be used to represent complex
systems.
 Structure of Mathematical Model
We can look at any situation as a decision making problem
whose solution requires identifying three components:
1) What are decision alternatives?
2) Under what restrictions is the decision made?
3) What is an appropriate objective criterion for evaluating the
alternatives?

Example:
Imagine that you have to plan 5 weeks business trips between Mumbai
and Delhi. You are required to fly on Monday and return on Thursday
every week. A round trip ticket cost 7000 INR, but a 20% discount is
granted if the dates of the return ticket span at least a weekend. A one
way ticket in either direction cost 75% of the regular price. How
should you buy the tickets for the 5 week period?
 Structure of Mathematical Model
• Three alternatives are considered as follows:
1. Buy 5 regular return tickets MUM-DEL-MUM.
2. Buy 1 MUM-DEL, Four DEL-MUM-DEL that span weekends, and 1 DEL-MUM
3. Buy 1 MUM-DEL-MUM to cover first Monday and return on last Thursday and
Four DEL-MUM-DEL that span weekends. (Each ticket in this way will span a
weekend)

• The restriction on these options is that you should be able to

leave Mumbai on Monday and return on Thursday.
• An obvious objective criterion for evaluation is the price of tickets.
The alternative that yields the smallest cost is the best.
– Alternative 1 cost = 5*7000 = 35000 INR
– Alternative 2 cost = .75*7000 + 4*(0.8*7000) + .75*7000 = 32900 INR
– Alternative 3 cost = 5*(0.8*7000) = 28000 INR

• Thus you should choose alternative 3.

• This example illustrates three main components of an OR model
(alternatives, objective, and constraints). However situation may
differ in the details of constructing each component. Next example
 Structure of Mathematical Model
Example 2: Consider forming a maximum area rectangle out of a
piece of wire of length L meters. What should be the height and
width of the rectangle ?
– In contrast with the previous example, the number of alternatives in this
example are not finite. The height and width can assume infinite possibilities.
• Let w and h are width and height of the rectangle in meters.
Thus the situation can be expressed verbally as:
❑ Width of rectangle + height of rectangle = half the length of wire
❑ Width and height can not be negative

• These restrictions are translated algebraically as:

❑ 2 * (w + h) = L
❑ w ≥ 0, h ≥ 0

• The objective of the problem; namely, maximization of the area

(z) of the rectangle can be expressed as 2 * (w + h) = L
❑ Maximize z = w * h Subject tow ≥ 0, h ≥ 0
 Structure of Mathematical Model
• Using mathematical tool (differential calculus in the previous
case) optimal solution can be obtained as w = h = L/4.
• Based on above two examples, the general structure of a
mathematical OR model can be organized in the following
general format:
Maximize or minimize Objective Function
Subject to
Constraints

• A solution of the model is feasible if it satisfies all the constraints.

• It is optimal if, in additional to being feasible, it yields the best (maximum or
minimum) value of the objective function.
• Though OR models are designed to optimize a specific objective criterion
subject to a set of constraints, the quality of the resulting solution depends
on the completeness of the model in representing the real system.
 Phases of An OR Study
• The principal phases for implementing OR in practice
include:
1. Definition of the problem
2. Construction of the model
3. Solution of the model
4. Validation of the model
5. Implementation of the solution

• Of all five phases, only phase 3 dealing with model

solution is the best defined and easiest to implement in
an OR study.
 Phases of An OR Study
1. Problem Definition
Defining the scope of the problem by identification of three
principal elements of the decision problem, namely: (1) description
of the decision alternatives, (2) determination of the objective of the
study, (3) Specification of the constraints.

2. Model Construction
Translating the problem definition into mathematical relationships.

3. Model Solution
Computation of the value of decision variables that maximize (or
minimize) the objective function.
4. Model Validation
Checks whether or not the proposed model does what it is supposed
to do? The model is considered valid if, under similar input
conditions, it reproduces past performances.
5. Implementation
Translation of the results into operating instructions.
 Solving the OR Model
• In OR, we do not have a single general technique that solves all
mathematical models that arise in practice.
• Instead, the type and complexity of the mathematical model dictate
the nature of the solution method.
• The most prominent OR technique is linear programming (designed
for strict linear objective and constraint function). Other techniques
include integer programming (in which variable assume integer
values); dynamic programming (original model can be decomposed
in smaller sub problems); network programming (problem can be
modelled as a network); and non-linear programming ( functions
of the model are nonlinear).
• The solutions obtained using OR techniques are not generally
obtained in (formula like) closed forms. Instead, they are determined
by ‘Algorithms’. An algorithm provides fixed computational rules
that are applied repetitively to the problem, with each repetition
(called iteration) moving the solution closer to the optimum.
• Iterations are typically tedious, it is imperative that these algorithms
 Scope of Operations Research
• In Agriculture
– Optimum allocation of land to various crops
– Optimum distribution of water from various resources

• In Finance
– To find out the profit plan for the company
– To determine best replacement policies

• In Marketing
– To minimize the cost of transportation
– To determine size of stock to meet future demand

• In Production Management
– To determine the quantity to be produced
– Allocation of machines
– To determine optimum product mix

• In Personnel Management
– Selection of suitable personnel on minimum salary
– Mixes of ages and skills
 Limitations of Operations Research
• Dependence on a Computer
OR techniques try to find out an optimal solution taking into account all the factors.
In the modern society these factors are enormous and expressing them in quantity
and establishing relationships among these require voluminous calculations that
can only be handled by computers.

• Non-Quantifiable Factors
All relevant variables do not lend themselves to quantification (qualitative or
emotional factors). Factors that cannot be quantified find no place in OR models.

• Distance between Manager and Operation Researcher

OR being specialist’s job requires a mathematician or a statistician, who might not be
aware of business problems. Similarly, owner may be failed to understand the
complex working of OR.

• Implementation
Implementation of OR model is a delicate task. It must take into account the
complexities of human relations and behavior. (due to conventional thinking,
changes face lot of resistance from workers)
Introduction to Linear Programming Problem
Introduction to Linear Programming Problem
 Requirements of Linear Programming
1. Decision variables and their relationship
The decision variables refer to candidates that are competing with one another for
sharing the given limited resources. These variables are usually interrelated in terms
of utilization of resources and need simultaneous solutions. Decision variables should
have linear relationship

2. Well defined objective function

It should be expressed as a linear function of decision variables and can be
represented in the following form. Optimize (maximize or minimize) z = C 1 x1  +
C2 x2 +……………… + C nxn..

3. Presence of Constraints or Restrictions

There must be limitations or constraints on the use of limited resources which are to
be allocated among various competitive activities. These constraints must be capable
of being expressed as linear equalities or inequalities in terms of decision variables.
The solution of LP model should satisfy these constraints.

4. Alternative course of action

There must be alternative courses of action. For example, it must be possible to make
a selection between various combinations of the productive factors such as men,
machines, materials, market-etc.

5. Non-Negative Restriction
Any Questions