OPERATIONS RESEARCH

MB0048
Ques 1 - Discuss the methodology of Operations Research. Explain in
brief the phases of Operations Research.
Ans 1 Meaning of Operations Research Operations research
management focuses on the mathematical scoring of consequences of a
decision aiming to optimize the use of time, effort, and resources to avoid
blunders. The act of obtaining best results under any given circumstances is
known as optimizing. The key purpose of Operations Research (OR) is to do
preparative calculations that aid the decision-making process.
We can also define operations research as The use of scientific methods to
provide criteria for decisions regarding man, machine, and systems involving
repetitive operations.
Operations Research Methodology - The basic dominant characteristic
feature of operations research is that it employs mathematical
representations or models to analyze problems. This distinct approach
represents an adaptation of the scientific methodology used by the physical
sciences. The scientific method translates a given problem into a
mathematical representation which is solved and retransformed into the
original context.
Definition - The first and the most important step in the OR approach of
problem solving is to define the problem. One needs to ensure that the
problem is identified properly because this problem statement will indicate
the following three major aspects:

Description of the goal or the objective of the study

Identification of the decision alternative to the system

Recognition of the limitations, restrictions, and requirements of the

system

Construction - Based on the problem definition, you need to identify and

select the most appropriate model to represent the system. While selecting a
model, you need to ensure that the model specifies 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 in tackling it in a well-organized manner. Therefore, if the resulting
model fits into one of the common mathematical models, you can obtain a
convenient solution 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. Hence, appropriate models can

be constructed.
Solution - After deciding on an appropriate model, you need to develop a
solution for the model and interpret the solution in the context of the given
problem. A to a model implies determination of a specific set of decision
variables that would yield an optimum solution. An optimum solution is one
which maximizes or minimizes the performance of any measure in a model
subject to the conditions and constraints imposed on the model.
Validation - A model is a good representation of a system. However, the
optimal solution must work towards improving the systems performance. We
can test the validity of a model by comparing its performance with some past
data available from the actual system. If under similar conditions of inputs,
our model can reproduce the past performance of the system, then we can
be sure that our model is valid. However, we will still have no assurance that
future performance will continue to duplicate the past behaviour. Secondly,
since the model is based on careful examination of past data, the comparison
should always reveal favourable results. In some instances, this problem may
be overcome by using data from trial runs of the system. One must note that
such validation methods are not appropriate for non-existent systems
because data will not be available for comparison.
Implementation - You need to apply the optimal solution obtained from the
model to the system and note the improvement in the performance of the
system. You need to validate this performance check under changing
conditions. To do so, you need to translate 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 reaches
its peak in this phase.
Phases of Operations Research - The scientific method in OR study
generally involves three phases.
Judgment phase - This phase includes the following activities:

Determination of the operations

Establishment of objectives and values related to the operations

Determination of suitable measures of effectiveness

Formulation of problems relative to the objectives

Research phase - This phase utilizes the following methodologies:

Operation and data collection for a better understanding of the

problems

Formulation of hypothesis and model

Observation and experimentation to test the hypothesis on the basis of

additional data

Analysis of the available information and verification of the hypothesis

using pre-established measure of effectiveness

Prediction of various results and consideration of alternative methods

Action phase - This phase involves making recommendations for the

decision process. The recommendations can be made by those who identify
and present the problem or by anyone who influences the operation in which
the problem has occurred.
Ques-2 - a. Explain the graphical method of solving Linear
Programming Problem.
Ans-2- a. Graphical Methods to Solve LPP - While obtaining the optimal
solution to an LPP by the graphical method, the statement of the following
theorems of linear programming is used:

The collection of all feasible solutions to an LPP constitutes a convex

set whose extreme points correspond to the basic feasible solutions.

There are a finite number of basic feasible regions within the feasible
solution space.

If the convex set of the feasible solutions of the system of

simultaneous equation is a convex polyhedron, then at least one of the
extreme points gives an optimal solution.

If the optimal solution occurs at more than one extreme point, the
value of the objective function will be the same for all convex
combination of these extreme points.

Working rule - The method of solving an LPP on the basis of the above
analysis is known as the graphical method. The working rule for the method
is as follows.
Step 1: Formulate the problem in terms of a series of mathematical
equations representing objective function and constraints of LPP.

Step 2: Plot each of the constraints equation graphically. Replace the

inequality constraint equation to form a linear equation. Plot the equations on
the planar graph with each axis representing respective variables.
Step 3: Identify the convex polygon region relevant to the problem. The
area which satisfies all the constraints simultaneously will be the feasible
region. This is determined by the inequality constraints.
Step 4: Determine the vertices of the polygon and find the values of the
given objective function Z at each of these vertices. Identify the greatest and
the least of these values. These are respectively the maximum and minimum
value of Z.
Step 5: Identify the values of (x1, x2) which correspond to the desired
extreme value of Z. This is an optimal solution of the problem.
Ques-2 (b). A firm produces three types of products viz., A, B and C,
which are processed on three different machines viz., M1, M2 and
M3. The time required to process on unit of each of the products and
the daily capacities of machines available per day are given in the
following table. The profit earned by selling one unit of type A, B and
C is Rs.10, Rs.15 and Rs.20 respectively. It is assumed that what all
is produced is consumed in the market. Formulate this as Linear
Programming Problem to maximize the profit.
Machines

Time per unit (minutes)

Machine
capacity
available
(min.)

Product A

Product B

Product C

5
4
5

3
2

2
3
1

M1
M2
M3

Ans-2(b) formulating LPP

Find X1, X2, and X3 so as to maximise

z= 10X1+15X2+20X3
Subject to constraints

400
500
300

5X1+3X2+2X3< 400
4X1+3X3 < 500
5X1+2X2+1X3 < 300

X1, X2, X3 > 0

Ques-3 - Explain the steps involved in finding Initial Basic Feasible

solution by the following methods:
a. North West Corner Rule method
method

b. Vogels approximation

Ans-3(A) - North-west corner rule Step 1 - The first assignment is made in the cell occupying the upper left
hand (north-west) corner of the transportation table. The maximum feasible
amount is allocated here is: x11 = min (a1, b1) Either the capacity of origin O1
is used up or the requirement at destination D1 is satisfied or both. This value
of x11 is entered in the upper left hand corner (small square) of cell (1, 1) in
the transportation table.
Step 2 - If b1> a1, the capacity of origin O is exhausted and the requirement
at destination D1 is still not satisfied, then, at least one variable in the first
column will have to take on a positive value. Move down vertically to the
second row and make the second allocation of magnitude:
x21 = min (a2, b1 x21) in the cell (2, 1)
This either exhausts the capacity of origin O 2 or satisfies the remaining
demand at destination D1. If a1> b1, the requirement at destination D1 is
satisfied, but the capacity of origin O1 is not completely exhausted. Move to
the right in a horizontal position to the second column to make the second
allocation of magnitude:
x12 = min (a1 x11, b2) in the cell (1, 2)
This either exhausts the remaining capacity of origin O 1 or satisfies the
demand at destination D2.

If b1 = a1, the origin capacity of O1 is completely exhausted as well as the

requirement at destination is completely satisfied, then there is a tie at the
second allocation. An arbitrary tie breaking choice is made. Make the second
allocation of magnitude:
x12 = min (a1 a1, b2) = 0 in the cell (1, 2) or
x21 = min (a2, b1 b2) = 0 in the cell (2, 1)
Step 3 - Start from the new north-west corner of the transportation table;
satisfying the destination requirements and exhausting the origin capacities
one at a time, moving down towards the lower right corner of the
transportation table, until all the rim requirements are satisfied.
(b)- Vogels approximation method - The Vogels approximation method
(VAM) takes into account not only the least cost c ij, but also the cost that just
exceeds cij. The steps of the method are given as follows:
Step 1 - For each row of the transportation table, identify the smallest and the
next to smallest costs. Determine the difference between them for each row.
Display them alongside the transportation table by enclosing them in
parenthesis against the respective rows. Similarly, compute the differences
for each column.
Step 2 - Identify the row or column with the largest difference among all the
rows and columns. If a tie occurs, use any arbitrary tie breaking choice. Let
the greatest difference correspond to the i th row and let Cij be the smallest
cost in the ith row. Allocate the maximum feasible amount xij = min (ai, bj) in
the (i, j)th cell and cross off the ith row or the jth column in the usual manner.
Step 3 - Recompute the column and row differences for the reduced
transportation table and go to step 2. Repeat the procedure until all the rim
requirements are satisfied.
Ques 4 )-Explain Monte Carlo Simulation method. What are the
advantages and limitations of Simulation?
Ans-4) Monte-Carlo Simulation - The Monte-Carlo method is a simulation
technique in which statistical distribution functions are created by using a
series of random numbers. This approach has the ability to develop many
months or years of data in a matter of few minutes on a digital computer. The
method is generally used to solve the problems that cannot be adequately
represented by mathematical models or where solution of the model is not
possible by analytical method.
Step 1: Define the problem:

a) Identify the objectives of the problem.

b) Identify the main factors that have the greatest effect on the objectives of
the problem.
Step 2: Construct an appropriate model:
a) Specify the variables and parameters of the model.
b) Formulate the appropriate decision rules, i.e., state the conditions under
which the experiment is to be performed.
c) Identity the type of distribution that will be used. Models use either
theoretical distributions or empirical distributions to state the patterns of
occurrence associated with the variables.
d) Specify the manner in which time will change.
e) Define the relationship between the variables and parameters.
Step 3: Prepare the model for experimentation:
a) Define the starting conditions for the simulation.
b) Specify the number of runs of simulation to be made.
Step 4: Using steps 1 to 3, experiment with the model:
a) Define a coding system that will correlate the factors defined in step 1 with
the random numbers to be generated for the simulation.
b) Select a random number generator and create the random numbers to be
used in the simulation.
c) Associate the generated random numbers with the factors identified in
step1 and coded in step 4(a).
Step 5: Summarise and examine the results obtained in step 4.
Step 6: Evaluate the results of the simulation.
Step 7: Formulate proposals for advice to management on the course of
action to be adopted and modify the model, if necessary.
Advantages of Simulation

Simulation is the process of experimenting on the model rather than on

the operation which the model represents. Following are some of the
advantages of simulation:

The study of very complicated systems or sub-systems can be done

with the help of simulation. Simulation has been described as What to
do when all else fails.

We can investigate the consequences for a system of possible changes

in parameters in terms of the model.

The knowledge of a system obtained in designing and conducting the

simulation is very valuable.

Simulation enables us to assess the possible risks involved in a new

policy before actually implementing it.

Simulation of complicated systems helps us to locate which variables

have the important influences on system performance.

Simulation methods are easier to apply than pure analytical methods.

Limitations of Simulation
Notwithstanding with the above advantages, following are some of the
limitations of simulation:

Simulation generates a way of evaluating solutions but it does not

generate the solution techniques.

Sometimes, simulation models are expensive and take a long time to

develop. For example, a corporate planning model may take a long
time to develop and prove expensive also.

The simulation model does not produce answers by itself. The user has
to provide all the constraints for the solutions which he/she wants to
examine.

Not all situations can be evaluated using simulation. Only situations

involving uncertainty are considered.

It is the trial-and-error approach that produces different solutions in

repeated runs. This means it does not generate optimal solutions to
problems.

Simulation is a time-consuming exercise.

Ques-5) Explain the Characteristics and Constituents of a Queuing

System.

Ans-5 ) Operating Characteristics of a Queuing System - A queuing

model has the following operating characteristics which enables us to
understand and efficiently manage a queue:

Queue length: The number of customers in the waiting line reflects

one of the two conditions. Short queues could mean either good
customer service or too much capacity. Similarly, long queues could
indicate either low server efficiency or the need to increase capacity

Number of customers in system: The number of customers in

queue and also those being served in the queue relates to the service
efficiency and capacity. Large values imply congestion, potential
customer dissatisfaction and a need for more capacity.

Waiting time in queue: Long lines do not reflect long waiting times if
the service rate is fast. However, when waiting time seems long to
customers, they perceive that the quality of service is poor. Long
waiting times may indicate a need to adjust the service rate of the
system or change the arrival rate of customers.

Waiting time in system: The total elapsed time from entry into the
system until exit from the system may indicate problems with
customers, server efficiency or capacity. If some customers are
spending too much time in the service system, there may be a need to
change the priority discipline, increase productivity or adjust capacity
in some way.

Service facility utilisation: The collective utilisation of the service

facilities reflects the percentage of time the facilities are busy.
Management is interested in maintaining high utilisation but this
objective may adversely impact the other operating characteristic.

Constituents of a Queuing System The constituents of a queuing

system include arrival pattern, service facility and queue discipline.

Arrival pattern: It is the average rate at which the customers arrive.

Service facility: Examining the number of customers served at a time

and the statistical pattern of time taken for service at the service
facility.

Queue discipline: The common method of choosing a customer for

service amongst those waiting for service is First Come First Serve.

Ques-6 (A). What do you mean by dominance? State the dominance

rules for rows and columns.

b. What are the differences between PERT and CPM?

Ans-6(A)- dominance- in a rectangular game, the pay- off matrix of player
A is pay- off in one specific ro w exceeding the corresponding pay-off in another

specific row. This means that whatever course of action is adopted by player B, for A, the
course of action Ar yields greater gains than the course of action As. Therefore, Ar is a
better strategy than As irrespective of Bs strategy. Hence, you can say that Ar dominates
As.
Alternatively, if each pay-off in a specific column (Pth column) is less than the
corresponding pay-off in another specific column (qth column), it means strategy Bp
offers minor loss than strategy Bq irrespective of As strategy. hence you can say that Bp
dominates Bq. Therefore, you can say that:
a) in the pay-off matrix, if each pay-off in rth row is greater than the corresponding
pay-off in the Sth row, Ar dominates As.
b) In the pay-off matrix, if each pay-off in Pth column is less than the corresponding
pay-off in the qth column. Bp dominates Bq.
At times a convex combination of two or more courses of action is dominated by

others, hen that course of action can be deleted from the pay-off matrix. Such a
deletion will not affect the choice of the solution, but it reduces the order of the payoff matrix. Successive reduction of the order using dominance property helps in
solving games.
Ans-6(B) - Difference between PERT and CPM
PERT - Some key points of PERT are as follows:

PERT was developed in connection with a Research and Development

(R&D) work. Therefore, it had to cope with the uncertainties that are
associated with R&D activities. In PERT, the total project duration is
regarded as a random variable. Therefore, associated probabilities are
calculated in order to characterize it.

It is an event-oriented network as in the analysis of a network,

emphasis is given on the important stages of completion of a task
rather than the activities required to be performed to reach a particular
event or task.

PERT is normally used for projects involving activities of non-repetitive

nature in which time estimates are uncertain.

It helps in pinpointing critical areas in a project, so that necessary

adjustment can be made to meet the scheduled completion date of the
project.

CPM

CPM was developed in connection with a construction project, which

consisted of routine tasks whose resource requirements and duration
were known with certainty. Therefore, it is basically deterministic.

CPM is suitable for establishing a trade-off for optimum balancing

between schedule time and cost of the project.

CPM is used for projects involving activities of repetitive nature.