Name : Mohan N

Roll No : 511015404

ASSIGNMENTS
MB 0048 (4 credits) Set 1
OPERATIONS RESEARCH

Name Mohan N
Roll No 511015404

Program MBA
Subject OPERATIONS RESEARCH
[ Set 1]
Code MB0048

1. Describe in details the different scopes of application of

Operations Research.

Answer : The scope of Operations Research its application in various fields of

everyday life are as follows:
i) In Defense Operations: 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
defense 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 business environment is always changing and any
decision useful at one time may not be so good some time later. There is

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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. 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 out-

patient 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 trans-shipment.

vii) Research and Development: Control of R and D projects, product

introduction planning etc. and many more applications.

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2. What do you understand by Linear Programming Problem? What

are the requirements of L.P.P.? What are the basic assumptions of
L.P.P.?

Answer : The Linear Programming Problem (LPP) is a class of mathematical

programming in which the functions representing the objectives and the
constraints are linear. Here, by optimization, we mean either to maximize or
minimize the objective functions. The general linear programming model is
usually defined as follows:

Maximize or Minimize
Z = c1 x1 + c2 x 2 + - - - - + cn x n

subject to the constraints,

a11x1 + a12x2+----- a1nxn~b1
a21x1 + a22x2+----- a2nxn~b2
----------------------------------
-----------------------------------
am1x1 + am2x2+----- amnxn~bm
And x1 >x2 > 0, ----- xn > 0.

Where cj, bi and aij (i = 1, 2, 3, ….. m, j = 1, 2, 3 ——- n) are constants

determined from the technology of the problem and xj (j = 1, 2, 3 —- n) are
the decision variables. Here ~ is either (less than), (greater than) or =
(equal). Note that, in terms of the above formulation the coefficient cj, aej, bj
are interpreted physically as follows. If bi is the available amount of resources
i, where aij
is the amount of resource i, that must be allocated to each unit of activity j, the
“worth” per unit of activity is equal to cj.

Requirements of L.P.P.
i. Decisions variables and their relationship
ii. Well defined objective function
iii. Existence of alternative courses of action
iv. Non-negative conditions on decision variables.

Basic assumptions of L.P.P

1. Linearity: Both objective function and constraints must be expressed as
linear inequalities.

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2. Deterministic: All coefficient of decision variables in the objective and

constraints expressions should be known and finite.
3. Additively: The value of objective function for the given values of decision
variables and the total sum of resources used, must be equal to sum of the
contributions earned from each decision variable and the sum of resources
used by decision variables respectively.
4. Divisibility: The solution of decision variables and resources can be any non-
negative values including fractions.

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3. Describe the different steps needed to solve a problem by

simplex method.

Answer : Simplex method

The simplex method is a method for solving problems in linear programming.
This method, invented by George Dantzig in 1947, tests adjacent vertices of
the feasible set (which is a polytypic) in sequence so that at each new vertex
the objective function improves or is unchanged. The simplex method is very
efficient in practice, generally taking 2m to 3m iterations at most (where m is
the number of equality constraints), and converging in expected polynomial
time for certain distributions of random inputs (Nocedal and Wright 1999,
Forsgren 2002). However, its worst-case complexity is exponential, as can be
demonstrated with carefully constructed examples (Klee and Minty 1972).

A different type of methods for linear programming problem by simplex method

is a below

To Solve problem by Simplex Method

1. Introduce stack variables (Si’s) for ” ” type of constraint.
2. Introduce surplus variables (Si’s) and Artificial Variables (Ai) for ” ≥ ”
type of constraint.
3. Introduce only Artificial variable for “=” type of constraint.
4. Cost (Cj) of slack and surplus variables will be zero and that of Artificial
variable will be “M”
5. Find Zj - Cj for each variable.
6. Slack and Artificial variables will form Basic variable for the first simplex
table. Surplus variable will never become Basic Variable for the first
simplex table.
7. Zj = sum of [cost of variable x its coefficients in the constraints – Profit
or cost coefficient of the variable.
8. Select the most negative value of Zj - Cj. That column is called key
column. The variable corresponding to the column will become Basic
variable for the next table.
9. Divide the quantities by the corresponding values of the key column to
get ratios select the minimum ratio. This becomes the key row. The
Basic variable corresponding to this row will be replaced by the variable
found in step 6.
10. The element that lies both on key column and key row is called
Pivotal element.

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11. Ratios with negative and “a” value are not considered for
determining key row.
12. Once an artificial variable is removed as basic variable, its column will
be deleted from next iteration.
13. For maximisation problems decision variables coefficient will be same as
in the objective function. For minimization problems decision variables
coefficients will have opposite signs as compared to objective function.
14. Values of artificial variables will always is – M for both maximization and
minimization problems.
15. The process is continued till all Zj - Cj ≥ 0.

4. Describe the economic importance of the Duality concept.

Answer : The Importance Of Duality Concept Is Due To Two Main Reasons
i) If the primal contains a large number of constraints and a smaller number of
variables, the labour of computation can be considerably reduced by converting
it into the dual problem and then solving it

ii) The interpretation of the dual variable from the lost or economic point of
view proves extremely useful in making future decisions in the activities being
programmed.

The linear programming problem can be thought of as a resource allocation

model in which the objective is to maximize revenue or profit subject to limited
resources. Looking at the problem from this point of view, the associated dual
problem offers interesting economic interpretations of the L.P resource
allocation model.

5. How can you use the Matrix Minimum method to find the initial
basic feasible solution in the transportation problem.

Answer :

Step 1: Determine the smallest cost in the cost matrix of the transportation
table. Let it be cij , Allocate
xij = min ( ai, bj) in the cell ( i, j )

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Step 2: If xij = ai cross off the ith row of the transportation table and decrease
bj by ai go to step 3.
if xij = bj cross off the ith column of the transportation table and decrease ai by
bj go to step 3.
if xij = ai= bj cross off either the ith row or the ith column but not both.

Step 3: Repeat steps 1 and 2 for the resulting reduced transportation table
until all the rim requirements are satisfied whenever the minimum cost is not
unique make an arbitrary choice among the minima.

Example : obtain an initial basic feasible solution to the following

Transportation problem using matrix minima method.

Where Oi and Di denote ith orgin and jth destination respectively.

Solutions : The Transportation table of the given TP has 12 Cells. Following is
matrix minima method.

The first allocation is made in cells (3,1) the magnitude being X21 = 4. This
satisfies the requirement at destination D1 and thus we cross off the first
column from the table. The second allocation is made in the cell ( 2 , 4)
magnitude X24 = Min ( 6, 8) = 6. Cross off the fourth column of the table. This
yields the table (i)

There is again a tie for the theirs allocation. We choose arbitrarily the cell (1,2)
and allocate X12 = Min (6,6)= 6 there. Cross off either the second column of
the first row. We choose to cross off the first row of the table. The next

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allocation of magnitude X22 = 0 is made in the cell ( 3 ,2 ) across odd the

second column getting table (ii)

WE choose arbitrarily again to make the next allocation in cell (2,3) of

magnitude X23 = Min (2,8) = 2 cross off the second row this gives table (iii)
the last allocation of magazine X23 = min (6,6) = 6 is made in the cell (3,3)

Now all the rim requirement have been satisfied and hence an initial feasible
solutions has been determined. This solution is shown in table (iv) since the
cells do not form a loop, the solution is basic one. Moreover the solution is
degenerate also. The transportation cost according the above route is given by
Z=6x2+2x2+6x0+4x0+0x2+6x2=28

6. Describe the Integer Programming Problem. Describe the

Gomory’s All-I.P.P. method for solving the I.P.P. problem.

Answer : The Integer Programming Problem I P P is a special case of L P P

where all or some variables are constrained to assume non-negative integer
values. This type of problem has lot of applications in business and industry
where quite often discrete nature of the variables is involved in many decision
making situations.

All And Mixed I P P

An integer programming problem can be described as follows:
Determine the value of unknowns x1, x2, … , xn
so as to optimize z = c1x1 +c2x2 + . . .+ cnxn

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subject to the constraints

ai1 x1 + ai2 x2 + . . . + ain xn =bi , i = 1,2,…,m
and xj ≥ 0 j = 1, 2, … ,n

where xj being an integral value for j = 1, 2, … , k ≤ n.

If all the variables are constrained to take only integral value i.e. k = n, it is
called an all(or pure) integer programming problem. In case only some of the
variables are restricted to take integral value and rest (n – k) variables are free
to take any non negative values, then the problem is known as mixed integer
programming problem.

Gomory’s All – IPP Method

An optimum solution to an I. P. P. is first obtained by using simplex method
ignoring the restriction of integral values. In the optimum solution if all the
variables have integer values, the current solution will be the desired optimum
integer solution. Otherwise the given IPP is modified by inserting a new
constraint called Gomory’s or secondary constraint which represents necessary
condition for inerrability and eliminates some non integer solution without
losing any integral solution. After adding the secondary constraint, the problem
is then solved by dual simplex method to get an optimum integral solution. If
all the values of the variables in this solution are integers, an optimum inter-
solution is obtained, otherwise another new constrained is added to the
modified L P P and the procedure is repeated. An optimum integer solution will
be reached eventually after introducing enough new constraints to eliminate all
the superior non integer solutions. The construction of additional constraints,
called secondary or Gomory’s constraints, is so very important that it needs
special attention.