Spring 2015

MB0048 OPERATION RESEARCH

Ques1. Discuss the methodology of Operations Research. Explain in brief

the phases of Operations Research?
Answer 1.
Definition

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 organization. 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 organization 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.

Operation 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.
Problem 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 wellorganized 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 maximizes
or minimizes the performance of any measure in a mode 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.
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 Operation Research
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.

Ques2. 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?

Answer 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.

Ques3. a. Explain how to solve the degeneracy in transportation problems.

b. Explain the procedure of MODI method of finding solution through
optimality test.?

Answer 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 (a1, b1 x21) in the cell (2, 1)
This either exhausts the capacity of origin O2 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 O1 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.
Application

It is used for transportation to satisfy such obligations where cost is not

the criteria. For example, in the case of Food Corporation of India Ltd.

Matrix minimum method

Step 1 - Determine the smallest cost in the cost matrix of the transportation table.
Let it be cij. Allocate xij= min (ai, bj) in the cell ( i, j )
Step 2 - If xij= ai cross the ith row of the transportation table, decrease bj by ai and
proceed to step 3. If xij= bj cross the ith column of the transportation table,
decrease ai by bj and proceed to step 3. If xij= ai= bj cross either the ith row or the
ith column, but not both.
Step 3 - Repeat steps 1 and 2 to reduce transportation table until all the rim
requirements are satisfied. Whenever the minimum cost is not unique, make an
arbitrary choice among the minima.
Vogels approximation method
The Vogels approximation method (VAM) takes into account not only the least cost
cij, but also the cost that just exceeds cij. The steps of the method are given as
follows:
Steps 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 ith 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.

MODI METHOD
A feasible solution has to be found always. Rather than determining a first
approximation by a direct application of the simplex method, it is more efficient to
work with the transportation table. The transportation algorithm is the simplex
method specialized to the format of table involving the following steps:
i) Finding an initial basic feasible solution
ii) Testing the solution for optimality
iii) Improving the solution, when it is not optimal
iv) Repeating steps (ii) and (iii) until the optimal solution is obtained
The solution to transportation problem is obtained in two stages In the first stage,
we find the basic feasible solution using any of the following methods:

North-west corner rule

Matrix minima method or least cost method
Vogels approximation method.

In the second stage, we test the basic feasible solution for its optimality by MODI
method.