411623945500

Feb 15, 2012
Introduction to Operations Research

Feng Chen
Department of Industrial Engineering and Logistics
Management
Shanghai J iao Tong University
Feb 15, 2012
FC/fchen@sjtu.edu.cn 1
Copyright Feng Chen 2004-2012. All rights reserved.
My recent project
I received a question from an IT manager of Logistics
Company ten months ago:
How to load cars onto trucks, such that we can deliver
cars as many as possible, and meanwhile, using
trucks as less as possible?
How to do??????????????????????????????
Feb 15, 2012 FC/fchen@sjtu.edu.cn 2
What I have done
We have investigated the company, and get answers for
the following questions:
What are the objectives?
What are the constraints/restrictions?
What are the variables we need to decide on?
What the models we adopt to describe our problem?
Feb 15, 2012
Step 1: problem analysis
What I have done
Feb 15, 2012
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Step 2:
modeling
What I have done
Feb 15, 2012
Step 3: solving with tools of Cplex
What?
What is Operations Research?
Operations? Research?
Operations
Operations in Distribution Center / Logistics
Generally, you can understand operations consist of
some steps to do something.
One story
Continental Airlines Survives 9/11
Continental Airlines Survives 9/11
Why?
Long before September 11, 2001, Continental
Airline asked a question: how it could plan
recovery from potential disasters such as massive
weather delays.
Continental Airlines (cont)
They faced a complicated/complex problem.
Requirements/Constraints
1,400 daily flights
5,000 pilots
9,000 flight attendants
FAA regulations
Union contracts
They Operations Research, What?
Consulting:
To identify or answer what is the real problem?.
Model building
Optimization model, to find
Optimal assignments of pilots and crews / from a major
disruption of service
Integrated into system, DSS/decision support
system, to recover from the disrupted flight
schedule
The value
Cost reduction
Millions of dollars and thousands of hours saved for the
airline and its passengers with each major disruption
Improve repute and competition in market
After 9/11, Continental was the first airline to resume
normal operations
China also needs OR.
Complex-snow disaster
More complex/Wenchuan Earthquake
What are efficient ways to rescue?
What are efficient means to recover?
More complex problem
Why do we need OR?
These problems are very hard to solve.
We need to study it carefully.
OR tools New OR tools
OR questions
Research how towork efficiently.
Research how to produce efficiently, e.g.,
automobile manufacturing.
Research how to move items (logisticsefficiently.
Research how to reduce patients waiting time in
hospital (manage hospital efficiently).
Research how to do management projects
efficiently.
OR provides these tools.

Today
Syllabus and course structure
Brief introduction to operations research
Me
CHEN Feng ()
Office: Rm 618, Mechanism Building A, Minhang Campus
Cell: 13918071898
E: fchen@sjtu.edu.cn
Wayne L. Winston, Operations Research: Applications and
Algorithms, third edition, 1994.
Text book
Course Objectives
In Class
To learn some basic modeling techniques and solving
methodologies of Operations Research (OR) (in class).
To learn the most known optimization tools / softwares
(lab).
Project Oriented Homework
To learn how to solve real problems occurred in practice
(application oriented project), including analysis, modeling,
optimization.
For Example: Do we need J iangchuan No. 3 bus?
Class Structure
Grading and Assignments
Attendance - 10%
Quiz - 10%
Oriented Project - 20%
Middle Exam - 20%
Final Exam - 40%
Attendance in class is required, 5 times lost will be D.
Score distribution for year 2009,2011
2
4
11 11
12
5 5
3 3
6
0
2
4
6
8
10
12
14
1
A+ A A- B+ B B- C+ C C- D
2
6
7
6
7
9
2
4
8
13
0
2
4
6
8
10
12
14
1 A+ A A- B+ B B- C+ C C- D
2009
2011
Home Work
Each week, submit your homework electronically
before Wed Class.
Quiz every two weeks.
Feb 15, 2012
Operations Research
Definitions, History, OR@China
When OR starts?
Operations Research started as a
named field in WWII(1930s),
thanks to physicists such as Philip M.
Morse
http://hcohl.shell42.com/morse.jpg
Feb 15, 2012 FC/fchen@sjtu.edu.cn Page 27
History(1)
1947: George Dantzig Project Scoop
Developed the simplex method
for linear programming
1950's: Lots of excitement, mathematical developments
queuing theory, mathematical programming
1960's: More excitement, more development and grand plans
1970's: Disappointment, and a settling down
NP-completeness
More realistic expectations
History (2)
1980's: Widespread availability of personal computers
Increasingly easy access to data
Widespread willingness of managers to use models
1990's: Improved use of O.R. systems and technology
optimization and simulation add-ins to spreadsheets
modeling languages
large scale optimization
more intermixing of A.I. and O.R.
Adapted from: James Orlin, MIT, 2003
History (3)
21
st
century: Lots of opportunities
widespread availability of data (network)
need for increased coordination and resource
efficiency
automated decision making
Culture
Culture
Most Major Advances in Operations Research
Have Come from Work on Real Problems
Culture
A. K. Erlang, Danish
telephone engineer --
invented queueing theory
in work aimed to determine
optimal capacity of newly
invented central telephone
switching centers (1915)
http://www.polytechphotos.dk/pics/A.K_Erlang.jpg
In China
Chinese postman problem
Mei-Ko Kwan() ,Graphic Programming Using Odd
or Even Points , Chinese Mathematics, 1:273-277, 1962.
When the author was
plotting a diagram for a
mailmans route, he
discovered the following
problem: A mailman has
to cover his assigned
segment before returning
to the post office. The
problem is to find the
shortest walking distance
for the mailman.
Chinese Postman Problem
Why the problem?
I think he had nothing to do at
that times.
I believe he was relax, when
he could not change anything.
I believe he did not know how
to do farmer works
Educated urban youth
A facility location problem
Hua Lo-Keng and others, Application of Mathematical Methods
to Wheat Harvesting, Chinese Mathematics 2:77-91, 1962.
the work of wheat
harvesting in the Peking
suburbs was participated in by
teachers and studentsThe
objective was experimental
use of mathematical methods
in the selection of the
threshing site most economical
of transportation.
Quotes
Quotes(1)
From Methods of Operations Research, Morse and
Kimball
Operations Research is a scientific method of
providing executive departments with a
quantitative basis for decisions regarding
operations under their control.
Quotes (2)
Operations Research is an applied science
utilizing all known scientific techniques as tools
in solving a specific problem.
Quotes (3)
Operations Research uses mathematics, but
it is not a branch of mathematics.
Use mathematics Mathematics
Quotes (4)
Operations Research is often an
experimental science as well as an observational
one.
Chemistry=IELM
Quotes (5)
It often occurs that the major contribution
of the operations research worker is to
decide what is the real problem.
More Successful OR Stories
O.R. success stories
2001: NBC Optimizes Advertise Sales
2000: Ford Motor Prototype Vehicle Testing
1996: Procter & Gamble Supply Chain
1991: American Airlines Revolutionizes Pricing
Case 1: NBC Optimizes Ad Sales
The problem
NBC sales staff had to manually develop sales
plans for advertisers, a long and laborious process
to balance the needs of NBC and its clients
The company also sought to improve the pricing of
its ad slots as a way of boosting revenue
NBC (cont)
Objectives and requirements
Complete intricate sales plans
Reduce labor cost
Maximize income
NBC (cont)
The O.R. solution
Used optimization models to reduce labor time and
Used revenue management to improve pricing of
its ad spots, which were viewed as a perishable
commodity
NBC (cont)
The value
In their first four years, the systems
Increased revenues by over $200 million.
Improved sales-force productivity.
Improved customer satisfaction.
Case 2: Ford motor prototype vehicle testing
The problem
Developing prototypes for new cars and modified
products is enormously expensive
Sought to reduce costs on these unique, first-of-
their-kind creations
Ford (cont)
Needed to verify the designs of its vehicles and
perform all necessary tests
Prototypes often sit idle awaiting various tests, so
increasing their usage would offer clear benefits
Ford (cont)
The solution
Ford and an O.R. consulting firm developed a
Prototype Optimization Model (POM) to reduce
the number of prototype vehicles
The model determined an optimal set of vehicles
that can be shared and used to satisfy all testing
needs
Ford (cont)
The value
Ford reduced annual prototype costs by $250
million
Case 3: Procter & Gamble Supply Chain
The problem
To ensure smart growth, P&G needed to
Improve its supply chain
Streamline work processes
Drive out non-value-added costs
Eliminate duplication
Procter & Gamble (cont)
P&G recognized that there were potentially
millions of feasible options for its 30 product
strategy teams to consider
Executives needed sound analytical support to
realize P&Gs goal within the tight, one-year
deadline
The solution
The P&G O.R. department and an O.R. consulting
team created decision-making models and
software.
Followed a modeling strategy of solving two
easier-to-handle sub-problems:
Distribution/location
Product sourcing
The value
The overall effort saved $200 million a year before
tax
Allowed P&G to write off $1 billion in assets and
transition costs
Definition
Operations research is a scientific approach to decision
making that seeks to best design and operate a system.
Usually requires the allocation of scarce resources.
Term originates from WW II era, when military scientists
and engineers were asked to do research on military
operations.
Logistics, convoy scheduling, anti-submarine
operations, radar deployment, mining operations
The End

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Feb 15, 2012

Introduction to Operations Research

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