IE335 OPERATIONS RESEARCH

INTRODUCTION

Operations Research
In its most basic form, operations research (OR) may be viewed as a scientific approach to decision making, which seeks to determine how best to design and operate a system, usually under conditions requiring the allocation of scarce resources.

Operations Research
Provides rational basis for decision making
Solves the type of complex problems that turn up in the modern business environment Builds mathematical and computer models of organizational systems composed of people, machines, and procedures Uses analytical and numerical techniques to make predictions and decisions based on these models

Definition of OR
OR may simply be viewed as a systematic and analytical approach to decision making or problem solving. OR is not an absolute decision-making process, but it is an aid to making good decisions. OR plays an advisory role by presenting to a manager or a decision maker scientifically derived alternatives. However, the final decision is always left to the human being who has knowledge that cannot be exactly quantified and who can temper the results of the analysis to arrive at a sensible decision.

OR and MS
Sometimes OR is referred to as management science (MS) to better reflect its role as a scientific approach to solving management problems, but it appears that this terminology is more popular with business professionals

OR and Computer Science (CS)

OR emerged out of optimization questions in warfare logistics in the 1940s and quicly established itself as one of the cornerstones of industrial mathematics CS and engineering is a younger discipline, which pervades all activities relating to the processing and manipulation of quantitative information at an ever increasing rate

OR and CS
OR and CS have been, and still are, considered as two subjects different from each other If the difference is quite evident for some areas of both subjects, it becomes much less so if we think of areas such as
complexity theory, theory of algorithms, solving hard combinatorial problems,

graph theory,
artificial intelligence, and discrete mathematics, etc.

OR and CS
All these matters form a very large interface between OR and CS OR effects CS and also CS effects OR OR and CS cannot exist without each other More specifically, the evolution of either area to a discipline in itself has only been possible due to the use of concepts, results, and techniques developed in the other area

OR and CS
So far, the influence of computer science was basically restricted to providing the machinery needed. During the 1960s, the impact deepened and acquired a component that was more algorithmic in nature. Operations researchers became interested in the efficieny of computer algorithms. In order to reduce the time and space requirements of their implementations, they had to use sophisticated data structures. With this, OR started to rely on the art of computer programming

What is Decision Making?

Decision is to select the best alternative among the others Simple decisions are apparent and easy to find the best alternative Hard decisions are related with complex systems and need more comprehensive analysis of the system
DECISION MAKING = PROBLEM SOLVING

What is a system?
System is a collection of elements which interactively operate with each other in a system boundary aiming the same common goal
Environment
Quantitative factors (external or internal) Qualitative factors (external or internal)

System

Inputs

Process

Outputs

Feedback

 Some qualitative factors can be transformed into quantitative counterparts using appropriate measurings Decision maker makes a decision using OR techniques and taking into account qualitative factors

What is system approach?

System approach has been defined as an approach to problem solving, by viewing "problems" as parts of an overall system, rather than reacting to specific part, outcomes or events and potentially contributing to further development of unintended consequences

Basic Characteristics of OR
1. Uses system approach 2. Utilizes and develops scientific methods 3. Performed by an interdisciplinary team

History of OR
OR as a formal discipline is about 70 years old and its origins may be traced to the latter half of World War II. Groups of mathematicians, economists and other scientists were formed in England and in the US These groups tackled a variety of problems such as radar installations, search for enemy submarines, deploy mines in the seas around Japan, determining optimal size of merchant convoy fleets, development of maneuver strategies for ships under attack ...

History of OR
After World War II
Theoretical background of OR was strengthened Industrial firms in England and the US attempting to apply it to their operational and managerial problems

Many important developments took place in this period.

Most notably George Dantzig invented the simplex method for solving linear programs (LPs) in 1947

Also development on computer technology accelerated the evolution of OR Today, operations research is a mature, well-developed field with a sophisticated array of techniques that are used routinely to solve problems in a wide range of application areas.

Some Success Stories

Problem Techniques Used Annual Savings Designing buffers into production Hewlett Packard Queuing models $280 million line Taco Bell Employee scheduling IP, Forecasting, Simulation $13 million Redesign production & distributon Proctor & Gamble Transportation models $200 million system Delta Airlines Assigning planes to routes Integer Programming $100 million Queuing models, AT&T Call center design $750 million Simulation Yellow Freight Systems, Network models, Design trucking network $17.3 million Inc. Forecasting, Simulation San Francisco Police Patrol Scheduling Linear Programming $11 million Dept. Bethlehem Steel Design an Ingot Mold Stripper Integer Programming $8 million North American Van Assigning loads to drivers Network modeling $2.5 million Lines Linear Programming, Citgo Petroleum Refinery operations & distribution $70 million Forecasting United Airlines Scheduling reservation personnel LP, Queuing, Forecasting $6 million Dairyman's Creamery Optimal production levels Linear Programming $48.000 Phillips Petroleum Equipment replacement Network modeling $90.000 Company

Application Steps of the Operations Research Approach

Given that OR represents an integrated framework to help making decisions, the next step is to have a clear understanding of this framework so that it can be applied to a generic problem.
1. 2. 3. 4. 5. 6. 7. PROBLEM DEFINITION, DATA COLLECTION, MODEL FORMULATION, VERIFICATION OF THE MODEL SOLUTION OF THE MODEL MODEL VALIDATION AND OUTPUT ANALYSIS, IMPLEMENTATION AND MONITORING.

Problem Definition

Data Collection

F E E D B A C K

Model Formulation

Verify the model

Solution of the model

Validation and Output Analysis

Implementation and Monitoring

Problem definition
A clear definition of the problem contains three broad components: 1. Statement of objective or objectives of the study (project) 2. Describing of the factors which have impacts on the objective (or objectives) 3. Specification of the constraints (limitations) on the factors

1. Statement of an unambiguous objective

While a complete system level solution is always desirable, this may often be unrealistic when the system is very large or complex, and in many cases one must then focus on a portion of the system that can be effectively isolated and analyzed. Some examples:
(1) maximize profits over the next quarter from the sales of our products, (2) minimize the average downtime at work center X, (4) minimize the average number of late shipments per month to customers. (5) layout of integrated circuits so that total area is minimized (6) design of a communication network to maximize reliability of connection between any pair of computers

2. Describing of factors
The second component of problem definition is a specification of factors that will affect the objective. These factors must further be classified into;
1. Factors that under the control of the decision maker 2. Uncontrollable factors over which he or she has no control.

For example, in a production environment, the planned production rates can be controlled, but the actual market demand may be unpredictable. The idea here is to form a comprehensive list of all the alternative actions that can be taken by the decision maker and that will then have an effect on the stated objective. Eventually, the OR approach will search for the particular course of action that optimizes the objective.

3. Specification of the constraints

The third and final component of problem definition is a specification of the constraints on the system activities (factors having impacts on the objective/s) Setting boundaries for the specific activities that the decision maker may take. As an example, in a production environment the availability of resources may set limits on what levels of production can be achieved. Minimum reliability requirement, bandwith capacity are other examples of constraints in the topological design

Data collection
One of the major driving forces behind the growth of OR has been the rapid growth in computer technology and the concurrent growth in information systems and automated data storage and retrieval. This has been a great boon because OR analysts now have ready access to data that was previously hard to obtain. Simultaneously, this has also made things difficult, because many companies find themselves in the situation of being data-rich but information-poor. In other words, even though the data is all present somewhere and in some form, extracting useful information from these sources is often very difficult.
Data mining

Model formulation
This is the fourth phase of the OR process. It is also a phase that deserves a lot of attention since modeling is a defining characteristic of all operations research projects.

-Studying on a system

Directly studying on the system

Studying on a model of the system

Physical models

Analytical models

Mathematical models

Simulation models

-Physical Models
These are actual, scaled-down versions of the original. Examples include; Maquettes, patterns (a globe, a scaled-model car, or a model of a flow line made with elements from a toy construction set). In general, such models are not very common in operations research, mainly because getting accurate representations of complex systems through physical models is often impossible.

-Analytical models

Summarize the relationships between elements of the system into a mathematical or logical framework to
Control or monitor the system Forecast the future of the system Expect the behaviour of the system against the chaning system dynamics Solve a problem of the system

-Simulation Models

Simulation is the process of designing a computer model of a real system and conducting experiments with this model for the purpose of either understanding the behavior of the system and/or evaluating various strategies for the operation of the system

-Simulation Models
With the growth in computational power, these models have become extremely popular. A simulation model is one where the system is abstracted into a computer program. A number of languages and software systems have been developed solely for the purpose of building computer simulation models

-Mathematical Models

This is the one that traditionally has been most commonly identified with OR. In this type of model one captures the characteristics of a system or process through a set of mathematical relationships. Mathematical models allow us to find optimum solution and to show the relationships between elements of system analytically

Model formulation
A model may be defined formally as a selective abstraction of reality. This definition implies that modeling is the process of capturing selected characteristics of a system or a process and then combining these into an abstract representation of the original. The main idea here is that it is usually far easier to analyze a simplified model than it is to analyze the original system, and as long as the model is a reasonably accurate representation, conclusions drawn from such an analysis may be validly extrapolated back to the original system.

Model formulation
The key point to remember is that most often there is a natural trade-off between the accuracy of a model and its tractability. At the one extreme, it may be possible to build a very comprehensive, detailed, and exact model of the current system. However, the model may be useless from an analytical perspective since its construction may be extremely time-consuming and its complexity precludes any meaningful analysis. At the other extreme, one could build a less comprehensive model with a lot of simplifying assumptions so that it can be analyzed easily. However, the danger here is that the model may be so lacking in accuracy that extrapolating results from the analysis back to the original system could cause serious errors.

Model formulation
There may be no single correct way to build a model. OR is art because the success of all the phases that precede and succeed the solution of the mathematical model depends largely on the creativity and experience of the operations research team.

Verification of the model

The developed model must be verified to proof its correctness Determine whether the model is an accurate representation of the intended model of the real system. Verification is the building of model right

Solution of the model

Model solution is the simplest of all OR phases because it entails the use of well-defined optimization algorithms
An important aspect of the model solution phase is sensitivity analysis

Sensitivity analysis deals with obtaining additional information about the behaviour of the optimum solution when the model undergoes some parameter changes Sensitivity analysis is particularly needed when the parameters of the model cannot be estimated accurately. In this case, it is important to study the behaviour of the optimum solution in the neighborhood of the estimated parameters

Validation and output analysis

The model must predict adequately the behaviour of the system under study

Validation means building the right model

A common method for checking the validity of a model is to compare its output with historical output data

The model is valid if, under similar input conditions, it produces past performance
If the proposed model is representing a new (nonexisting) system, no historical data would be available to make the comparison. In such cases, the use of simulation as an independent tool for verifying the output of the mathematical model generally is resorted

Implementation and monitoring

Implementation of the solution of a validated model involves the translation of the results into operating instructions issued in understandable form to the individuals who will administer the recommended system

Basic elements of mathematical models

Objective function/functions Decision variables Constraint functions

Objective function
Objective function represents considered performance of system in terms of decision variables We need to maximize or minimize the objective function according to the purpose Objective function must be maximized or minimized according to the considered performance type
Profit or cost level respect to amount of manufactured products Travel time according to assigned buses on a route Produced amount of a chemical material Utilized time of an airport according to the scheduled departures,

Decision variables
Decision variables can be controlled by the system (or decision maker) and their values effects the performance of the system
Batch sizes of the products Number of buses on a route Amount of a chemical material in a chemical process Scheduling of airplanes departures,.

Constraint functions
Constraints show the limitations of system Constraints restrict the levels of decision variables directly or indirectly Constraint functions are need to represented in terms of decision variables
Production capacity of a manufacturing line Maximum allowed time to waiting in a bus stop Process time of a chemical reaction Land requirements to depart or arrive of airplanes for an airport,

A simple example:
Consider a highly simplified instance of a production planning problem where there are two main product lines (X and Y, say) and three major limiting resources (A, B, and C) for which each of the products compete. Each product requires varying amounts of each of the resources and the company incurs different costs (labor, raw materials etc.) in making the products and realizes different revenues when they are sold. The objective of the OR project is to allocate the resources to the two products in an optimal fashion.

Related data of the example

To relate data collection to our hypothetical production example, based on variable costs of production and the selling price of each of the products, it might be determined that the profit from selling one X is $10 and one Y is $9. It might be determined based on time and work measurements that each X and each Y respectively requires; 7 10 unit and 1 unit of resource A, 1 unit and 2 3 unit of resource B,and 1 10 unit and 1 4 unit of resource C Finally, based on prior commitments and historical data on resource availability, it might be determined that in the next month there will be following capacities of the resources available for use in producing the two products; 630 units of resource A, 708 units of resource B, and 135 units of resource C

 Decision variables:
Number of product X Number of product Y

Constraints:
Resources A, B, and C

Objective function:
Total profit from selling X and Y

Mathematical model of the example

Total profit =10X + 9Y (objective function) (Constraint functions) (7/10)X + Y 630 ( for resource A) X + (2/3)Y 708 (for resource B) (1/10)X + (1/4)Y 135 (for resource C)

Classification of mathematical models

Unconstrained Constrained

Static

Dynamic

Deterministic

Stochastic

Single objective

Multi objective

Continuous decision variables

Integer decision variables

Operations research techniques to solve different mathematical models

Linear Programming Goal Programming Network Programming Integer Programming Dynamic Programming Nonlinear programming

What is optimization?
Optimization is to find the best levels of decision variables to maximize (or minimize) considered objective function satisfying all the system constraints Optimized level of objective function is unique but there can be alternative combinations of levels of the decision variables which yield the same optimum objective value

Linear Programming (LP)

LP applies to optimization models in which the objective and constraint functions are strictly linear. LP technique is used in wide range of applications, including agriculture, industry, transportation, economics, health systems, and the military. There are also efficient computational algorithms to solve LP problems with thousands of constraints and variables. LP also forms the backbone of the solution algorithms for other OR models, including integer, stochastic, and nonlinear programming.

Assumptions of LP
Proportionality Additivity Determinism Nonnegativity Linearity

Proportionality
Proportionality requires the contribution of each decision variable in the objective function and its requirements in the constraint functions to be directly proportional to the value of the variable

Additivity
Additivity stipulates that the total contribution of all the variables in the objective function and their requirements in the constraint functions are the direct sum of the individual contribution or requirements of each variable

 Determinism
All the values of mathematical model parameters (data) are known in advance and constant during the plannig period

Nonnegativity
All the decision variables can take only nonnegative values

Developing LP models
Developing of LP models after analysis of considered system is the most important task First we need to understand relations between subsystems Then decision variables must be defined. What will be the computed results from solving of LP model? Finally, objective function and constraint functions are represented mathematically in terms of decision variables

We can formulate mathematical model for this general problem of allocating resources to activities. This model is to select the values for x1, x2, .., xn so as to

x1 , x2 , , xn 0

[c1, c2, .., cn] : vector of objective function coefficients [b1, b2, .., bm] : vector of right-hand side coefficients (or capacities) : matrix of constraints' coefficients

Developing LP models
We will experienced on development of LP models before learning of solution techniques of them One of the simple forms of LP models includes problems with 2 decision variables Increasing the number of decision variables increases also both dimension of problem and complexity of the problem However, LP problems with thousands of decision variables and constraints can be solved efficiently (in polinomial time with the problem dimension)

Example 1
SilComputers makes quarterly decisions about their product mix. While their full product line includes hundreds of products, we will consider a simpler problem with just two products: notebook computers and desktop computers. SilComputers would like to know how many of each product to produce in order to maximize profit for the quarter.

 There are a number of limits on what SilComputers can produce. The major constraints are as follows:
Each computer (either notebook or desktop) requires a Processing Chip. Due to tightness in the market, our supplier has allocated 10,000 such chips to us. Each computer requires memory. Memory comes in 16MB chip sets. A notebook computer has 16MB memory installed (so needs 1 chip set) while a desktop computer has 32MB (so requires 2 chip sets). We received a great deal on chip sets, so have a stock of 15,000 chip sets to use over the next quarter. Each computer requires assembly time. Due to tight tolerances, a notebook computer takes more time to assemble: 4 minutes versus 3 minutes for a desktop. There are 25,000 minutes of assembly time available in the next quarter.

 Given current market conditions, material cost, and our production system, each notebook computer produced generates $750 profit, and each desktop produces $1000 profit. There are many questions SilComputer might ask. The most obvious are such things as
``How many of each type computer should SilComputer produce in the next quarter?''
``What is the maximum profit SilComputer can make?

Example 2
The WYNDOR GLASS CO. produces high-quality glass products, including windows and glass doors. It has three plants. Aluminum frames and hardware are made in Plant 1, wood frames are made in Plant 2, and Plant 3 produces the glass and assembles the products. Because of declining earnings, top management has decided to revamp the companys product line. Unprofitable products are being discontinued, releasing production capacity to launch two new products having large sales potential: Product 1: An 8-foot glass door with aluminum framing Product 2: A 4x6 foot double-hung wood-framed window Product 1 requires some of the production capacity in Plants 1 and 3, but none in Plant 2. Product 2 needs only Plants 2 and 3. The marketing division has concluded that the company could sell as much of either product as could be produced by these plants. However, because both products would be competing for the same production capacity in Plant 3, it is not clear which mix of the two products would be most profitable. Therefore, an OR team has been formed to study this question.

Problem definition: Determine what the production rates should be for the two products in order to maximize their total profit, subject to the restrictions imposed by the limited production capacities. (Each product will be produced in batches of 20, so the production rate is defined as the number of batches produced per week.)

What data is needed to model this problem?

1) Number of hours of production time available per week in each plant for these new products. 2) Number of hours of production time used in each plant for each batch produced of each new product. 3) Profit per batch produced of each new product.

LP model of the problem

This problem is an LP problem of the classic product mix type To formulate the linear programming model for this problem, let x1 : number of batches of product 1 produced per week x2 : number of batches of product 2 produced per week

Example 3
Reddy Mikks produces both interior and exterior paints from two raw materials, M1 and M2. The following table provides the basic data of the problem:
Tons of raw material per ton of Exterior paint Raw material M1 Raw material M2 Profit per ton ($1000) 6 1 5 Interior paint 4 2 4 Maximum daily available (ton) 24 6

A market survey indicates that the daily demand for interior paint cannot exceed that of exterior paint by more than 1 ton. Also, the maximum daily demand of interior paint is 2 tons. The company wants to determine the optimum (best) product mix of interior and exterior paints that maximizes the total daily profit.
Develop the LP model of the problem.

x1: tons produced daily of exterior paint x2: tons produced daily of interior paint Letting z represent the total daily profit (in thousands of dollars), the objective of the company is expressed as

4 x2 tons Usage of M2 per day = 1x1 2 x2 tons

Usage of M1 per day = 6 x1

Maximize

z 5 x1 4 x2

Because the availabilities of M1 and M2 are limited to 24 and 6 tons, respectively, the associated restrictions are given as

6 x1 4 x2 24 x1 2 x2 6

The first demand restriction says that the difference between the daily production of interior and exterior paints, x2-x1, does not exceed 1 ton, which translates to x2-x1 1 The second demand restriction stipulates that the maximum daily demand of x2 is limited to 2 tons, which translated to x2 2

An implicit restriction is that variable x1 and x2 cannot assume negative values. The nonnegativity restrictions x10, x2 0, account for this requirement. The complete Reddy Mikks model is

Maximize Subject to

z 5 x1 4 x2 6 x1 4 x2 24 x1 2 x2 6 x1 x2 1 x2 2 x1 , x2 0

Any combination of x1 and x2 values that satisfies all the constraints of the model constitutes a feasible solution. For example, the solution x1 =3 tons and x2 =1 ton per day, is feasible because it does not violate any of the constraints, including the nonnegativity constraint. From the standpoint of the entire model, we are interested in finding the optimum feasible solution that yields the maximum total profit while satisfying all the constraints.

Enumeration of the feasible solutions is not acceptable because the model has an infinite number of feasible solutions. Instead, we need a systematic procedure that will locate the optimum solution efficiently.

Example 4
Ozark Farms uses at least 800 lb of special feed daily. The special feed is mixture of corn and soybean meal with the following compositions:
lb per lb of feedstuff Feedstuff Corn Soybean meal Protein 0.09 0.60 Fiber 0.02 0.06 Cost ($/lb) 0.30 0.90

The dietary requirements of the special feed stipulate at least 30% protein and at most 5% fiber. Ozark Farms wishes to determine the daily minimum-cost feed.

The decision variables in the problem x1 = lb of corn in the daily mix

x2 = lb of soybean meal in the daily mix

Total daily cost (in dollars) of the feed mix , z

z 0.3x1 0.9 x2
The objective of the company is

Minimize

z 0.3x1 0.9 x2

Amount of the daily mix = x1+x2 The farms uses at least 800 lb of the mix: x1+x2 800 Protein amount in the mix = 0.09x1+0.60x2 The protein amount must be at least 30% of the mix: 0.09x1+0.60x2 0.30(x1+x2 )

Fiber amont in the mix = 0.02x1+0.06x2 The fiber amount must be at most 5% of the mix: 0.02x1+0.06x2 0.05(x1+x2 )

The complete LP model of the problem is written as

Minimize
subject to

z 0.3x1 0.9 x2

Subject to x1 x2 800 0.21 x1 0.30 x2 0 0.03 x1 0.10 x2 0

x1 , x2 0

Example 5: Invesment problem

An investor wants to invest his totally 80,000 TL in four alternative investment funds. The alternatives and their rates of return are given in the following table.
Alternative investment type Rate of return (%)

Share
Stock in bank Gold fund Bond fund

80
50 30 60

The investor also considers the following conditions:

Investment in share must be at least 20% of the total capital Investment in gold fund must not be greater than 10% of the money in bond fund

Develop an LP model to maximize the total expected return.

x1: Money in share x2: Money to stock in bank

x3: Money in gold fund

x4: Money in bond fund
Max z 0.80 x1 0.50 x2 0.30 x3 0.60 x4 Subject to x1 x2 x3 x4 80000 x1 16000 x3 0.10 x4 0 xi 0, i 1,2,3,4

Example 6
Three types of petrol (minimum Octane rating: 85, 90, 95) Four types of oils (Octane rating: 68, 86, 91, 99) Blending oils petrol, with proportional Octane rating Oils which are not used in any blend are sold directly as raw oils Objective: best product mix [how much of each petrol, oil to sell] to maximize total profit

The data
Raw oil 1 2 3 4 OcR 68 86 91 99 Petrol Type 1 (Premium) 2 (Super) 3 (Regular) Available amount (barrels/day) 4000 5050 7100 4300 Min OcR 95 90 85 Selling price 45.15 42.95 40.99 Cost/barrel 31.02 33.15 36.35 38.75 Selling price 36.85 36.85 38.95 38.95 Demand (barrels/day) 10,000 No limit 15,000

xij = barrels/day of oil i ( i = 1, 2, 3, 4) to make petrol j (j = 1, 2, 3) yi = barrels/day of oil i sold directly (i=1,2,3,4) Objective is to maximize the profit = total revenue total cost The constraints: Supply limits (we can not blend more oils than we have) Demand limits (we need to satisfy the demand on petrol types premium and regular) Octane rating constraints Total premium petrol per day = x11 + x21 + x31 + x41 Its Octane Rating: 68x11 + 86x21 + 91x31 + 99x41 x11 + x21 + x31 + x41 68x11 + 86x21 + 91x31 + 99x41 - 95(x11 + x21 + x31 + x41) 0. We can develop the similar octane rating constraints for super and regular petrol types 95,

Blending Problem: complete model

Maximize: z = 45.15(x11 + x21 + x31 + x41) + 42.95(x12 + x22 + x32 + x42) + 40.99(x13 + x23 + x33 + x43) + 36.85y1 + 36.85y2 + 38.95y3 + 38.95y4 31.02(x11 + x12 + x13 +y1) 33.15(x21 + x22 + x23 +y2) 36.35(x31 + x32 + x33 + y3) 38.75(x41 + x42 + x43 +y4)

Subject to:
68x11 + 86x21 + 91x31 + 99x41 - 95(x11 + x21 + x31 + x41) 0 68x12 + 86x22 + 91x32 + 99x42 - 90(x12 + x22 + x32 + x42) 0 68x13 + 86x23 + 91x33 + 99x43 - 85(x13 + x23 + x33 + x43) 0
Octane

rating

x11 + x12 + x13 + y1 = 4000

x21 + x22 + x23 + y2 = 5050 x31 + x32 + x33 + y3 = 7100 x41 + x42 + x43 + y4 = 4300 x11 + x21 + x31 + x41 10,000 x13 + x23 + x33 + x43 15,000 xij 0, yi 0 for i = 1, 2, 3, 4, and j = 1, 2, 3.
Demand Supply

Example 7
Two mines supply three plants of a company. The company knows the transportation cost between mines and plants, demands of plants and also capacities of mines. Accordingly, the company wants to minimize total transportation cost considering the demand and capacity requirements.

The data
transportation cost per ton mine capacity/day Mine 1 Mine 2 800 300 plant 1 11 7 400 plant 2 8 5 500 plant 3 2 4 200

daily ore requirement at each plant:

The decision variables the model Transportation problem:

xij = amount of ore shipped from mine i to plant j per day.

Minimize z = 11x11 + 8x12 + 2x13 + 7x21 + 5x22 + 4x23 Subject to x11 + x12 + x13 = 800 x21 + x22 + x23 = 300 x11 + x21 = 400 x12 + x22 = 500 x13 + x23 = 200 xij 0, for all i= 1, 2,

[capacity of mine 1] [capacity of mine 2] [demand at plant 1] [demand at plant 2] [demand at plant 3]

j = 1, 2, 3.

Example 7
Consider the problem of assigning aircrafts to four routes according to the following data:
Number of Daily Trips on Route Number Aircraft Capacity of Type (passengers) Aircraft 1 50 5 2 30 8 3 20 10 Min. Daily number of customers 1 3 4 5 1000 2 2 3 5 2000 3 2 3 4 900 4 1 2 2 1200

The associated costs, including the penalties for losing customers because of space unavailability, are
Operating cost per trip on given route ($) Aircraft Type 1 2 3 Penalty cost per lost customer 1 2 3 4

1000 800 600

40

1100 900 800

50

1200 1000 800

45

1500 1000 900

70

Formulate the problem as a linear programming problem.

xij = the number of aircraft i assigned to route j, i=1,2,3, j=1,2,3,4

yj = the number of losing customers on route j, j=1,2,3,4
Minimize z 3(1000) x11 2(1100) x12 2(1200) x13 1500x14 4(800) x21 3(900) x22 3(1000) x23 2(1000) x24 5(600) x31 5(800) x32 4(800) x33 2(900) x34 40 y1 50 y2 45 y3 70 y4 Subject to 50(3) x11 30(4) x21 20(5) x31 y1 1000 50(2) x12 30(3) x22 20(5) x32 y2 2000 50(2) x13 30(3) x23 20(4) x33 y3 900 50(1) x14 30(2) x24 20(2) x34 y4 1200 x11 x12 x13 x14 5 x21 x22 x23 x24 8 x31 x32 x33 x34 10 xij 0, y j 0, i 1,2,3 j 1,2,3,4