Q.1. Discuss the methodology of Operations Research.

Explain in brief the phases of

Operations Research.

Ans. Definitions of operations research- Churchman, Aackoff, and Aruoff defined operations
research as the application of scientific methods, techniques and tools to the operation of a
system with optimum solutions to the problems where 'optimum' refers to the best possible
alternative. The objective of OR is to provide a scientific basis to the decision-makers for solving
problems involving interaction with various components of the organisation. This can be
achieved by employing a team of scientists from different disciplines to work together for
finding the best possible solution in the interest of the organisation as a whole. The solution thus
obtained is known as an optimal decision. You can also define operations research as The use
of scientific methods to provide criteria for decisions regarding man, machine, and systems
involving repetitive operations.
Phases of Operations Research-

Judgment phase
This phase includes the following activities:

of objectives and values related to the operations


Research phase
This phase utilises the following methodologies:
r a better understanding of the problems

additional data
using pre-established
measure of effectiveness

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.

Operations Research Methodology-
Definition
Student Name- Shiv Prakash Singh


Course-MBA II Semester
Reg. N0-1205027160 LC Code-03377
Subject Code-MB0048 Subject Name-Operation Research
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:


ion 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-organised 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 solution to a model implies
determination of a specific set of decision variables that would yield an optimum solution. An
optimum solution is one which maximises or minimises 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. You 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, your model can reproduce the past performance of the system, then you can be sure that
your model is valid. However, you 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.


Q.2. a. Explain the graphical method of solving Linear Programming Problem.
b. A paper mill produces two grades of paper viz., X and Y. Because of raw material
restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade
Y paper in a week. There are 160 production hours in a week. It requires 0.20 and 0.40
hours to produce a ton of grade X and Y papers. The mill earns a profit of Rs. 200 and Rs.
500 per ton of grade X and Y paper respectively. Formulate this as a Linear Programming
Problem.

Ans. (A). Programming (LP) is a mathematical technique designed to help managers in their
planning and decision-making. It is usually used in an organisation that is trying to make the
most effective use of its resources. Resources typically include machinery, manpower, money,
time, warehouse space, and raw materials. A few examples of problems in which LP has been
successfully applied are:
for a firms product
and at the same time minimise total production and inventory costs.
f stocks or bonds that will
maximise a companys return on investment.
newspaper spots in order to
maximise advertising effectiveness.
minimise total shipping cost from several
warehouses to various market locations.
and man hours
available while maximising the firms profit.
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.

(B) Let x1 for paper X and x2 for paper Y
Objective Function (Z): Profit of both X and Y Paper is given.
Max (Z) = 200x1+500x2
Constrains: two, one for production hours and second for raw material;
Subject to:
X1<=400
X2<=300
0.20x1+0.40x2<=160
x1, x2 >=0


Q.3. a. Explain how to solve the degeneracy in transportation problems.
b. Explain the procedure of MODI method of finding solution through optimality test.

Ans. (A). Degeneracy in transportation problem
A basic solution to an m-origin, n destination transportation problem can have at the most m+n-1
positive basic variables (non-zero), otherwise the basic solution degenerates. It follows that
whenever the number of basic cells is less than m + n 1, the transportation problem is a
degenerate one. The degeneracy can develop in two ways:
Case 1 - The degeneracy develops while determining an initial assignment via any one of the
initial assignment methods discussed earlier. To resolve degeneracy, you must augment the
positive variables by as many zero-valued variables as is necessary to complete the required
m + n 1 basic variable. These zero-valued variables are selected in such a manner that the
resulting m + n 1 variable constitutes a basic solution. The selected zero valued variables are
designated by allocating an extremely small positive value to each one of them. The cells
containing these extremely small allocations are then treated like any other basic cells.
The s are kept in the transportation table until temporary degeneracy is removed or until the
optimum solution is attained, whichever occurs first. At that point, we set each = 0.
Case 2 - The degeneracy develops at the iteration stage. This happens when the selection of the
entering variable results in the simultaneous drive to zero of two or more current (pre-iteration)
basic variables. To resolve degeneracy, the positive variables are augmented by as many zero-
valued variables as it is necessary to complete m+n-1 basic variables. These zero-valued
variables are selected from among those current basic variables, which are simultaneously driven
to zero. The rest of the procedure is exactly the same as discussed in case 1.
Note - The extremely small value is infinitely small and it never affects the value it is added to
or su cost cell to avoid forming a loop.

(B). Modified distribution method/MODI method/UV method-

n the same row or same column

Step 4 - You repeat steps 1 to 3 to till all allocations are over.
Step 5 - For allocating all forms of equations ui+ vj = cj, set one of the dual variable ui / vj to
zero and solve for others.
Step 6 - - ui - solution.
Step 7 - point of the loop is
positive and alternative corners of the loop are negative and positive. Examine the quantities
allocated at negative places. Select the minimum, add it to the positive places and subtract from
the negative places.
Step 8 - Form a new table and repeat steps 5 to 7 ti


Q.4.

Ans. (A). Hungarian Method Algorithm
Hungarian method algorithm is based on the concept of opportunity cost and is more efficient in
solving assignment problems. The following steps are adopted to solve an AP using the
Hungarian method algorithm.
Step 1: Prepare row ruled matrix by selecting the minimum values for each row and subtract it
from the other elements of the row.
Step 2: Prepare column-reduced matrix by subtracting minimum value of the column from the
other values of that column.
Step 3: Assign zero row-wise if there is only one zero in the row and cross (X) or cancel other
zeros in that column.
Step 4: Assign column wise if there is only one zero in that column and cross other zeros in that
row.
Step 5: Repeat steps 3 and 4 till all zeros are either assigned or crossed. If the number of
assignments is equal to number of rows present, you have arrived at an optimal solution, if not,
proceed to step 6.
Step 6: Mark the column
containing the crossed zero. Look for assigned zero in that column. Mark the row containing
assigned zero. Repeat this process till all the makings are done.
Step 7: Draw a straight line through unmarked rows and marked column. The number of straight
line drawn will be equal to the number of assignments made.
Step 8: Examine the uncovered elements. Select the minimum.



new table.
Step 9: Repeat steps 3 to 7 till optimum assignment is obtained.
Step 10: Repeat steps 5 to 7 till number of allocations = number of rows.


(B).

Q.5.

Ans. (A). 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.

(B). Production Rate and Probability

Production rate Probability Cumulative
Probability
Random No.
Assigned
147 0.05 0.05 00 04
148 0.10 0.15 05 - 14
149 0.15 0.30 15 - 29
150 0.20 0.50 30 - 49
151 0.30 0.80 50 - 79
152 0.15 0.95 80 - 94
153 0.05 1.00 95 - 99
Simulation Worksheet
Trial No. Random No. Simulated
Production
Rate
Cars Waiting in
the factory
Number of
example spaces
in the truck
1 82 152 2 -
2 54 150 2 -
3 50 150 2 -
4 96 153 5 -
5 85 152 7 -
6 34 150 7 -
7 30 150 7 -
8 02 147 4 3
9 64 151 5 -
10 47 150 7 -
Total 3

Therefore, average number of scooters waiting = 7/10 =0.7/day
Average number of empty space = 3/10 = 0.3/day


Q.6. a. Explain the dominance principle in game theory.
b. Describe the Constituents of a Queuing System.
c. Differentiate between PERT and CPM

Ans. (A). Consider a two-person zero-sum game with players A and B. Let A1 ,A2 ,......Am be the
courses of action for player A. Let B1 ,B2 , ...Bn be the courses of action for player B. Suppose
the game has a saddle point. Use the dominance property in sequence to delete the courses of
action of A as well as B till the pair comprising the saddle point remains alone. The procedure to
arrive at the saddle point is as follows:
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 , hence s A is deleted.
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 , henceBq is deleted.
c) Repeat the above steps in succession to achieve the saddle point.

(B). 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.

(C). Basic Difference between PERT and CPM
There are no essential differences between PERT and CPM as both of them share in common the
determination of a critical path. Both are based on the network representation of activities and
their scheduling, which determines the most critical activities to be controlled in order to meet
the completion date of the project.
PERT
Some key points of PERT are as follows:
(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.
-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.
-repetitive nature in which
time estimates are uncertain.
adjustment can be made to
meet the scheduled completion date of the project.
CPM
consisted of routine
tasks whose resource requirements and duration were known with certainty. Therefore, it is
basically deterministic.
-off for optimum balancing between schedule time
and cost of the project.