Master of Business Administration- MBA Semester 2 MB0048 Operations Research Assignment Set -1

Master of Business Administratot- MBA Semester 2 MB0048 Operations Research Assignment Set- 1

Question 1- Explain the scope of Operations Research. What are the features of Operations Research?
Answer 1- Operations management is often used along with production management in literature on the subject. It is therefore, useful to understand the nature of operations management .Operations management is understood as the process whereby resources or inputs are converted into more useful products .A second reading of the sentence reveals that, there is hardly any difference between the terms produ7ction management and operations management .But, there are a least two points of distinction between production management and operations management .First, the term production management is more used for a system where tangible goods are produced .Whereas ,operations management is more frequently used where various inputs are transformed into tangible services .Viewed from this perspective, operations management will cover such services organization as banks ,airlines ,utilities ,pollution control agencies super bazaars, educational institutions ,libraries ,consultancy firm and police departments, in addition ,of course ,to manufacturing enterprises. The second distinction relates to the evolution of the subject. Operation management is the term that is used now a days .Production management precedes operations management in the historical growth of the subject
The two distinctions not withstanding, the terms production management and operations management are used interchargeably . Scope of Production and Operation Management The scope of production and operations management is indeed vast .Commencing with the selection of location production management covers such activities as acquisition of land, constructing building ,procuring and installing machinery ,purchasing and storing raw material and converting them into saleable products. Added to the above are other related topics such as quality management ,maintenance management ,production planning and control, methods improvement and work simplification and other related areas. Evolution of Production Function In order to trace the evolution of production function, we identify six historical developments :the Industrial Revolution ,scientific management , the human relations movement ,operations research, computers and advanced production technology and the service ways of planning and controlling the output of workers The impact of the Industrial Revolution was first felt in England .From here, it spread to other European countries and to the United states. The Industrial Revolution advanced further with the development of the gasoline engine and electricity in the 1800s.Other industries emerged and along with them new factories came into being.By the middle of 1800s. the old cottage system of production had been laced by the factory system .As days went by, production capacities expanded ,demand for capital grew and labor became highly dependant on jobs and urdanised. At the commencement of the 20 th century ,the one element that was missing was a management the ability to

develop and use the existing facilities to produce on a large scale to meet massive markets of today.

Question 3- a. Explain the Monte Carlo Simulation. b. A Company produces 150 cars. But the production rate varies with the distribution.

At present the track will hold 150 cars. Using the following random numbers determine the average number of cars waiting for shipment in the company and average number of empty space in the truck. Random Numbers 82, 54, 50, 96, 85, 34, 30, 02, 64, 47. Answer3a. Explain the Monte Carlo Simulation. Monte Carlo simulation is a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making. The technique is used by professionals in such widely disparate fields as finance, project management, energy possibilitiesthe outcomes of going for broke and for the most conservative decision along with all possible consequences for middle-of-the-road decisions. The technique was first used by scientists working on the atom bomb; it was named for Monte Carlo, the Monaco resort town renowned for its casinos. Since its introduction in World War II, Monte Carlo simulation has been used to model a variety of physical and conceptual systems. b. A Company produces 150 cars. But the production rate varies with the distribution.

Question 4- Explain the Characteristics and Constituents of a Queuing System.

Answer4- The figure shows the basic components of a queuing system. Potential and actual customers are represented by the small circles and may be persons, parts, machines or almost any other quantity. The servers are represented by the numbered rectangles and may be any resource, such as a person, machinPopulation of Customers can be considered either limited (closed systems) or unlimited (open systems). Unlimited population represents a theoretical model of systems with a large number of possible customers (a bank on a busy street, a motorway petrol station). Example of a limited population may be a number of processes to be run (served) by a computer or a certain number of machines to be repaired by a service man. It is necessary to take the term "customer" very generally. Customers may be people, machines of various nature, computer processes, telephone calls, etc.
Arrival defines the way customers enter the system. Mostly the arrivals are random with random intervals between two adjacent arrivals. Typically the arrival is described by a random distribution of intervals also called Arrival Pattern. Queue represents a certain number of customers waiting for service (of course the queue may be empty). Typically the customer being served is considered not to be in the queue. Sometimes the customers form a queue literally (people waiting in a line for a bank teller). Sometimes the queue is an abstraction (planes waiting for a runway to land). There are two important properties of a queue: Maximum Size and Queuing Discipline. Maximum Queue Size (also called System capacity) is the maximum number of customers that may wait in the queue (plus the one(s) being served). Queue is always limited, but some

theoretical models assume an unlimited queue length. If the queue length is limited, some customers are forced to renounce without being served. Queuing Discipline represents the way the queue is organised (rules of inserting and removing customers to/from the queue). There are these ways: 1) FIFO (First In First Out) also called FCFS (First Come First Serve) - orderly queue. 2) LIFO (Last In First Out) also called LCFS (Last Come First Serve) - stack. 3) SIRO (Serve In Random Order). 4) Priority Queue, that may be viewed as a number of queues for various priorities. 5) Many other more complex queuing methods that typically change the customers position in the queue according to the time spent already in the queue, expected service duration, and/or priority. These methods are typical for computer multi-access systems. Most quantitative parameters (like average queue length, average time spent in the system) do not depend on the queuing discipline. Thats why most models either do not take the queuing discipline into account at all or assume the normal FIFO queue. In fact the only parameter that depends on the queuing discipline is the variance (or standard deviation) of

the waiting time. There is this important rule (that may be used for example to verify results of a simulation experiment): The two extreme values of the waiting time variance are for the FIFO queue (minimum) and the LIFO queue (maximum). Theoretical models (without priorities) assume only one queue. This is not considered as a limiting factor because practical systems with more queues (bank with several tellers with separate queues) may be viewed as a system with one queue, because the customers always select the shortest queue. Of course, it is assumed that the customers leave after being served. Systems with more queues (and more servers) where the customers may be served more times are called Queuing Networks. Service represents some activity that takes time and that the customers are waiting for. Again take it very generally. It may be a real service carried on persons or machines, but it may be a CPU time slice, connection created for a telephone call, being shot down for an enemy plane, etc. Typically a service takes random time. Theoretical models are based on random distribution of service duration also calledService Pattern. Another important parameter is the number of servers. Systems with one server only are called Single Channel Systems, systems with more servers are called Multi Channel Systems. Output represents the way customers leave the system. Output is mostly ignored by theoretical models, but sometimes the customers leaving the server enter the queue again ("round robin" time-sharing systems). Queuing Theory is a collection of mathematical models of various queuing systems that take as inputs parameters of the above elements and that provide quantitative parameters describing the system performance. Because of random nature of the processes involved the queuing theory is rather demanding and all models are based on very strong assumptions (not always satisfied in practice). Many systems (especially queuing networks) are not soluble at all, so the only technique that may be applied is simulation. Nevertheless queuing systems are practically very important because of the typical trade-off between the various costs of providing service and the costs associated with waiting for the service (or leaving the system without being served). High quality fast service is expensive, but costs caused by customers waiting in the queue are minimum. On the other hand long queues may cost a lot because customers (machines e.g.) do not work while waiting in the queue or customers leave because of long queues. So a typical problem is to find an optimum system configuration (e.g. the optimum number of servers). The solution may be found by applying queuing theory or by simulation.

Question 5- a. What do you mean by dominance? State the dominance rules for rows and columns. b. Find the saddle point of the following game and state the optimum strategies for players A and B

Answer5 (A) In a rectangular game, the pay-off matrix of player A is pay-off in one specific row ( r row ) th exceeding the corresponding pay-off in another specific row( s row ) th . This means that whatever course of action is adopted by player B, for A, the course of action Ar yields reater 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 ( p column ) th is less than the orresponding pay-off in another specific column( q column ) th , it means strategy Bp offers minor loss than strategy Bq irrespective of As strategy. Hence, you can say that Bp dominatesBq .

Therefore, you can say that: a) In the pay-off matrix, if each pay-off in r row th is greater than (or equal to) the corresponding pay-off in thes row th , Ar dominates As . b) In the pay-off matrix, if each pay-off in p column th is less than (or equal to) the corresponding pay-off in theq column th , Bp dominatesBq . At times, a convex combination of two or more courses of action may dominate another course of action. Whenever a course of action (say As orBq ) is dominated by others, then that course of action ( As orBq ) 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 pay-off matrix. Successive reduction of the order using dominance property helps in solving games.

Question 6- a What are the differences between PERT and CPM? b. A project has eleven activities whose duration is given in the following table:

Answer6(a) PERT Some key points of PERT are as follows: PERT was developed in connection with an 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 characterise 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. 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.