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ACH : AN OVERVIEW 13. DUCTION or and mere comp One na others sath job he should cho seats et dn to cake a correct ecision at a proper time. An effective decision di 15 a Pe n {0 fomic, social and political. T° ‘example, starting of a new factor Pee on ae epend sie emi eto nic, Soci? onstruction costs, labour costs, availabilty of Con a rnaoerinton nets. ene. Pomtution control costs. ote. On the other hand, starting of a angen title og depend on the number Sf students available for further studie 2 tae ae ate and local oF etude extremely diffeul since aneeas many people: has any ie. thas Sang oT eee Wee iclsion maker Is not only fa nea sng variables: sito account the actions of the oe of rah people nas te decisions with the help of their past experience and Ra eee hey conta pake decisions ns on intuitions alone in the face of complex Ssermeting store B have steading and SO formal system is needed fo i efermnine an effective course of action. In Oe wordt understanding ‘of the possible use ‘of scientific approach to decision-making is of great aponaaee Se undspss students ce to the nes ves at al Tevels 10 DUS and industry come across the problems of making deciso sage mn their day 0-03, isin fuies, Operations Research (also known as bles ot nated: management Science, decision science and few other thames) provides them with various quantitative techniques { selene snaking and enhances fe oO ity tm wake land range plane atid oO everyday problems of Tanning S pusiness hance greater efficlency, competence pit confidence’ In other words Sperations a Dusen provides a scientific rach to problem-solving Jor executive management error operations Research 8 smo rr operational Research (the nomenciatores in WS erations oe former, te more common one throughout. respectively). Wes 1-2. EVALUATION OF OPERATIONS RESEARCH (HISTORICAL PERSPECTIVE) During World War Il, Britain wae having very Iimited military resources, urgent need was felt to allocate the scarce resources—In 27 as pave manner—to the various milhary operations and tu the activities aleateach operation. Therefore thé British and the American military, itary gement invited large number O° Suentists including physicists, biologists, statisticians, can rumaticians and psychologis'> apply @ scienffie approach to the many strategic sts. frotical problems. Their efforts Warr ingteumental in winning the ‘ru the Pacific™. The success of fart with such teams. THe rant was used and developed. 1. ntcwgns Research developed ary names like ate. "Management Science’ ‘Decision Science’ and U.K. name Operations Research ( “Research on Military ‘Operations’. ‘Operational Analysis’, ‘Systems Anal etc., were assigned to it. Post World War Development. atention of the industry which was see ipeeteatin, in organizations. This creat om of Specialization Wa tunctionalization. This resulted complex a eeierere thus prompted to use the formal tools ‘of Operations Research. industria iustrial boom after World War II resulted in continuous mechanization, av} ted in complex “as the discipline of Ope ysis’, ‘Cost Benefit Analy ‘after the War, the apparent success king solutions to problems caused by # ted possible goal incom Pi an Further, the economic and ‘decentralisation of roblems. and operatic the applica and — ‘of management functions, which rest! - Of OR. to managerial decision making became popular. cond 0, at the end of We different sectors: fi trans) of orld War I, the scientists of this growl moved to de {insperation, health, education, ete, Bae of them carried with ereuP cgnviction that fe operation une operations cai management can be analysed scientifically and the optimum hod for CAM tween Spee an Re tnrestignted. In “joing so It soon becomes apparent ptm ge is a COMM giferent Sau cee ee ‘This resulted in categorization of operational R arc oper recognition as an important subject for decision ‘making: « gnaia. initially AOR eee Resoaieh in India. O.R. originated during the last Phar of World War Ht Inde by this frou, formed at the Air Headquarters to tackle problems relating to radar id fail ith the ne a started in planning P of sclenti oper Selenilsts was extremely limited in scope. 1 Leieeved that O-R. b SE eey Laboratory, Hyderabad for using ‘Operations ‘Scanned with CamScannerOPERATIONS RESEARCH : QUANTITATIVE TECHNIQUES FOR MANAGEMEN, OPERATIONS RESEARCH : QUANTITATIVE ZECTNVOUES FOR MANAGEMEN) and organizing research. Ahmedabad Textile Industry Research Association organized an O.R. group for thei industrial problems. At the same time, another O.R. group was set up at the then Defence Science Laboraton (DSL) under the guidance of Prof. D.S. Kothari, which devoted itself to the problems of stores, purchase an, weapons evaluation..In 1953, an O.R. tnit was formed at the Indian Statistical Institute, Kolkata with a viey to apply O.R. techniques to national planning under the guidance of Prof. Mahalanobis. OR. got its formal recognition in the country with the formation of O.R. Society of India (ORSI) in 1957, ‘The first President of the Sectety was P.C, Mahalanobis. The society had the honour of receiving the patronag. and support of such eminent personalities like Jagjit Singh, Vikram Sarabhai. etc. The society became the qnember of the International Federation of O.R. Societies in 1959 and organized its first conference at all-Indig evel during the same year. The publication of the journal OPSEARCH by ORSI in 1964 further added to the growth of O.R. activities in India. f conferences/symposta/seminars were organized in the early years to promote the development oe one aT has regularly organized its Annual Convention singe 1968. An international Seminar ‘Second Operations Research Around-the-World Meeting’ sponsored by ORSI and IFORS was held at New Delhi during August 7-10, 1967. These efforts did result in encouraging the formation of a number of O.R. groups in organizations such as Planning Commission, Railways, Public Sector Undertakings, eg, BHEL, SAIL, EIL, ONGC, ete. Operations Research Education in India. O.R. education was formally initiated in India with the formation of Indian Institute of Management at Ahmedabad and Kolkata during the year 1961-62. Later the subject was taken up for teaching as one of the papers in different universities. Institutes of Technology. and Indian Statistical Institute, Kolkata and New Delhi. The University of Delhi started a full-time Master's Degree programme in Operations Research in 1963. A graduate programme in Operations Research was introduced by the Operational Research Society of India in 1973. Short-term training programmes are being run by a number of professional institutions such as IIPA, NITIE, NPC, etc. Today almost all the universities and institutions in India are offering the inputs of Operations Research in their carricula in some form or the other. Industries, government and other agencies are gradually becoming conscious of the role of Operations Research in decision making. 1-3. OPERATIONS RESEARCH DEFINED Quite a large number of definitions of Operations Research have been given from time to time but it is not possible to give a uniformly acceptable definition of O.R. However, the September 1962 issue of the Operational Research Quarterly (London). the Journal of O.R. Socieiy of U.K., carried out the following finition : ie ‘ ] _ “Operational Research is the application of the methods of science to complex problems arising in the (ansehen of ane 2 ia tis a government and defence. The distinctive approach is to develop a scientific model of the system. ee eae such as chance and risk, with which to predict and compare the nutcomes af alternat ‘strategies and controls. The pus el ment, determine its ae ae Purpose is to help manager fe Apart from its length, this definition has been criticised becaus 2 e {t emphasizes on complex problems an large systems, leaving the reader with the impression that itis a highly ‘echnical and sophisticated approach appropriate only for large organizations, A few other definitions which are commonly used and widely James Lundy writes, “O.R. is the sophisticated name folk roach given to a multi-disciplinary problem-oriented app fo the top management problems. It involves the application of the selentific metods tn situations where = ‘cription, prediction and compartson for the purpose of making decisions.” Morse & Kimble defines O.R. as, “a scientific met! ic executit ite basta for decison regarding he operon ni eof roving execute departments with a quan Jagjit Singh states, “Operations Research is i aE One half by the free anid Dold eeopaie Seareh ts @ management activity pursued in two complementary wall application of a repertoire of well-establ tne eee ntrammelted by any routine, and the other half by iethods and techniques.” According to Miller and Starr, “O.R. is an appl ‘5 tical O° logieal means 1 atlebt Be coe Tithe 8a aPPlied decision theory. It uses any scientific, mathematica problems that to achieve thorough going rationality tn docling tlt ee ese Con the executive when he/she tres to ‘Scanned with CamScannervERVIEW ESEARCH : AN g oreRATIONS Bt lowing definition of Operations Research ty of Am oR, Soe © mace devoted to observing, understanc 9 and predicting the tat and applied Research workers are actively engaged in’ pum ts an experimental Ove Tint systems: and Operations rkers eto engan item en thins in business goverment dst Fons Research is a scientific approach to problem-solving for executive eri in the wor yagement- operations Research utilizes the planned approach (updated scientific re rteral & Hlamn, “Operatons Resear pos functana relalonships co mathemati and an intents ag a juantitative basis for decision-making and uncovering new problems for rp mts forte PUPS aquanttatee ane gaa, “Tis new decision-making fleld has been characterised by the use of scientific in the words of HA. Tale. team effort for the purpose of determining the best utilization of limite mn interdisciplinary nouteige throug resources. “ tions Research may be described as a scientific approach to ' d Lieberman, “Operations Rese yb According to Hiller ane ne operations of organizational system. decision ma sn of O.R. as given in the book by Kaufman ts as follows : The best deo eS ine body of methods which makes posstble a rational determination of the most “operations Resecre ton in policy — decision problems concerning the management of an economle or efficient or econe f Statistical - mathematical procedures which sometimes require the use of jomenon, drawing upon Pr huspan phenomendr, (reve methods are based upon a prior analysis of relationships among the technical and ih gical factors in the Phenomenon’ structures, which is ‘achieved by resource to the various appropriate psychological tors es. sae saat ofthe deintions of Operations Research are not saifatory due tothe following reasons: ia oe gona af Operation Research have been ofered. at diferent times ofthe development of Most ot Rescarch and hen are bound to emphasise its only one or the other aspect, (u) Teinterdiscplinary team, approach, which i an important characteristic of Operations Research ts not included inmost of the definitions of O.R. (at) is vey eifficult to define Operations Research precisely as it is not a science representing any well-defined ‘hysea. biological or social phenomenon. However, with further development of Operations Research, perhaps more precise definitions than the caxisting ones would be forthcoming. 1.4. SALIENT FEATURES (OR CHARACTERISTICS) OF OPERATIONS RESEARCH) ‘The broad features of O.R. approach to any decision problem are summarised as follows : 1. Systems Approach. The term ‘systems approach’ implies that each problem should be examined in its eae to the extent possible and economically feasible from the point of view of the overall system of which the problem under consideration is one part. Under this approach a manager makes conscious attempt to ™ ane te relationships among various parts of the organization and their role in supporting the overall crane of the organization. Operations objective of Operations Research is to provide managers of the organization 2g Seeing basis for solving problems involving the interaction of components of the decision, Opera noe, The decision which is best for the organization as a whole is called an optimal organtation “Tauons Research tries to find the best decision relative to a large portion of the total systems approach for Operations Research every problem is considered in its totality, Le. O.R. adopts SUstens aon Solving the problem. In other words, “Operations Research is the scientYic study of large will enhance treeenttly problem areas and provide the managers with a quantitative basis for decisions 2. Inter-dise effectiveness in achieving the specified objectives.” ding to the elinary Team Approach. It is an important characteristic of Operations Research Sra, Ma erst, no single individual can be an expert on all aspects of a. problem oe nee comprising erations Research utilizes the inter-disciplinary team approach. Under this approach, atagement, Compu ets, fom different disciplines such as Mathematics, Statistics. Peover fonted with ‘a pene Science, Engineering and. Psychology, etc. 1s constituted. Such a team fire aanitates, Bvery depen letermines its”solution by utilizing the diverse background and Sem then determines ane the team. while solving the problem, tries to abstract the essence of {he pron ‘whether a similar type of problem Has been dealt By ister team or net: te ans ‘Scanned with CamScannerOPERATIONS RESEARCH : QUANTITATIVE TECHNIQUES FOR MANAGE yes, then it is easy for an expert to apply the earlier used techniques/methods to determine the solution of the current problem. In this way, each member of the team, by utilizing his/her experience and expertise, may be in a position to suggest an approach to overcome a problem that otherwise may not be possible for an individual to tackle. 3. Methodological Approach. Operations research utilizes the applications of scientific methods, techniques and tools to problems involving the operations of systems $0 as to provide those in control of operations with optimum solutions to the problems. Specifically, the process begins with the careful observation and formulation of the problem. The next step 1s to construct a scientific (typically mathematical ‘or simulation) model that attempts to abstract the essence of the real problem. From this model, conclusions or soltitions are obtained which are also valid for the real problem. In an iterative fashion, the model is then Verified through appropriate experimentation to determine the best or optimal solution to the problem under consideration. 4, Decisional Approach. The primary focus of an O.R. study is addressed to managerial decision making Le. the main results of the analysis must directly and unambiguously have implications for managerial irrespective of the situation involved can be action. A major premise of O.R. is that decision making, that consists of the following : defining the problem and considered as a general systematic process establishing the criterion, then selecting the alternative courses of action, determining the model to be used and evaluating the alternatives so as to choose the optimal alternative. 5. Objective Approach. The O.R. approach seeks to obtain an optimal solution to the problem under analysis, Le.. it attempts to find the best or optimal solutions to the problem under consideration. For this, a measure of desirability/effectiveness is defined based on the objectives (or goals). of the organization. This measure so defined is then used to compare alternative courses of action. 6. Wholistic Approach. While arriving at a decision, an operations research team examines the relative importance of all conflicting and multiple objectives and validity of the claims of various departments of the organization from the perspective of the whole organization. 7. Operations Economy. The task of Operations Researcher may be said to consist of studying an operation: selecting variables to describe the operation; investigating the mathematical relationships of the variables; selecting objectives, measures and criteria of system performance and finding means to improve or optimize the system's functioning according to the selected measures and criteria. 8. Digital Computer. Use of digital computer has become an integral part of the operations research approach to decision making. The computer may be required due to the complexity of the model, volume of data required or the computations to be made. Many quantitative techniques are available in the form of canned programmes. 1-5. PHASES OF OPERATIONS RESEARCH ‘The scientific method in O.Rs study generally involves the following three phases : 1. Judgement Phase. This phase consists of : ({) Determination of the opera the ot : »peration, (it) Identification of reallfe problem. (ii) Establishment of the objectives and values related to the operation, (iu) Determination of the suitable mcasures of elleciveness; (x) Formulation ofthe problems relative to the objectives, (+) Building lel of the problem abstracting 2 a e of an appropriate model of the problew abstracting the essential information. so that a solution to 2. Research Phase. This phase utilizes»; (9 0; f ear aa }perations and data collection for a better understanding 0! the problems, (i) Formulation of hypothesis and model, (u Observation and experimentation to test the hypothesis on the basis of additional data, (1x) Analysis of the available information and verification of the hypothesis using pre-established measures of efiectiveness, and (v) Predictions of various results from the hypothesis, (v generalisation of the various results ynd consideration of alternative methods. 3. Action Phase. It consists of making recommendations for the decision process by those whe first posed the problem for consideration or by anyone in a position to make a decision, influencing the operation I" which the problem occurred. \ \ 1-6, MODELS AND MODELLING IN OPERATIONS RESEARCH ‘A model is defined as an idealized representation or an abstraction of some real-life system, whether such system refers to a problem, process. operation, object or event. The objective of the model is to provide # ‘Scanned with CamScanner\s RESEARCH : AN OVERVIEW = .g the behaviour of the system for the purpose of improving its he performance. Or, to define the ideal structure of this future system Rateeaie es Saeed OPERATION: js for analyzing ae it yet in the existence, 2 is no syste po among is elements receting isthe essence af an Operations Research approach. By bullding a model, the complexities and Dee decision-making problem can be changed to a logleal structure annie that may occur, indicates the relevant data for analyzing the alternatives, and leads to ‘meaningl and event aive managerial conclustons. In short modelling {s a means of providing a clear structural framework infomatpem for purposes af understanding and dealing with realty ere is nothing mysterious about models. Photographs, roadmaps, organization ch: a ants uke, profits and Toss account and balance sheet are all models, since they partisly represent state mplify complexity and portray essential features In their own way. 4-6-1. Classification of Operations Research Models. The various classification schemes of operations Research models are discussed below : + classification by degree of abstraction. With the aforesaid liberty inthe definition of a model (Let sna lok ay ot be physical construct) whatever we sneak or vite or read is after alla model. Surely when we a rate ve deserbe some event or whatever which, though, we cannot do perfectly well because of our speak o rane language and the limitations of the language itself. There could, in fact, be other limitations mastey Sample. in the case of a cricket match commentary, the commentator who is modelling the play for his audience is usually under time limitations. All such models are language models. Business case studies are such models in our context. Language models are far more abstract than the concrete model like a globe of the earth or the model planes mounted in wind tunnels since they (the concrete models) are at once suggestive of the shape or Froperties or characteristics sought afler of the modelled entity. However, even more abstract than the Fanguage models are the mathematical models (viz., the breakeven equation or linear programming formulation of the product mix problem). 2. Classification according to structure. (a) Iconic (Physical) Model. Iconic model is a physical representation of some item either in an idealized form or ona different scale, ‘e., a representation is an iconic model to the extent that its properties are the same as possessed by what it represents. A photograph, cyclograph, a blueprint, and a_ painting are ‘conte ‘models of persons or objects. The toy aeroplane is an {conic model of a real aeroplane. A globe is an icone model of the earth. An iconic model is said to be scaled down when the dimensions of the model are smaller than those of the real object, e.g., a globe representing the earth, or a blueprint representing @ floor of a building. The model is said to be scaled up when it is bigger than the real item; in biology. the structure ofa cell may be depicted by an enlarged model for teaching purposes, and similarly an atom In physics. angoitmonly. an iconic model represents a static event. Characteristics that are not considered in the Gia for which the model is constructed are not included in the model. For example, in the use of model in {he udy ofthe structure of an atom, the colour of the model is irrelevant because this particular fact does not have uph aan study of the atom, Models of automobiles used in the study of a parking problem nit dimen: zione a Istery or motors in them. Another limitation of an iconic model ts its dimensions. fe, tw supaeats (photos, blueprints, maps) or three dimensions. (small airplane, globe, atom). When a? 's the third dimenston, it is no longer possible to construct it physically. (b) won bd nalague (Schematic) Model. It represents a system or an object of the erpreted in terms of th what the original system processes. After the model is solved. of the variables’in of the original system. For example, an analogue computer is the physical re Peed, age, time, ete nem Also graphs are very simple analogues ‘They represent Proper iy acy te Cte Hn terms of distance. A graph ts well suited for represent, quantitat Aner ny Properties and predits how a change in one property effects the other- ve Various eanizational chart ts a common analogue model. It represents the relationsti 2 existing Bene ne tmbers of the organization. A man machine chart is also schemauc model [TEP ga set of inquiry by utilising 2 set of the solution jcal representation es like force. ship ‘Scanned with CamScannerOPERATIONS RESEARCH ; QUANTITATIVE TECHNIQUES FOR MANAGEMENT c cycle. A flow process chart is an other a macnn oe compete war ee 0 tec. Conor ie varying interaction of men an¢ ‘Similarly demand curves and frequency ‘chematic model which represents the order of o ‘ on a map are analogue of the ‘low’ of electricity through wires. of analogue models. SE Sag manga me Satan roads, highways towns and their inter-relationship, . fs an analogue model ny ext of properties. Analogue models can He ae aloge model represents one set of properties PY another se tof properties. Analogue a cm represent dynamic situation and they are customarily used more th capaclty ‘to depict the characteristics of the event ae considera een eres ematical Models). Thesé el __(@) Symbolic Models (Syn. Matieretions to represent the decision variables and theit relationships to (Ge. letters, numbers. ec) ec aystem, The symbols used are generally mathematical o cal acter en oF R cine most widely employed in an O.R. study because of the great deal of comp! 7 ty associated They are, by far, He mA eymbolte or mathematical mode! consists of a set of equations which define and with an organization ips and interactions among various elements of decisfon problem under study. The solution of the problem is then obtained by applying ‘well-developed mathematical techniques to the model. ‘The ‘advantages’ of mathematical models over other types of models may be summarized as follows : 1. They are precise, abstract and general, rather than restricted. 2. Transformation of a model from a verbal to a mathematical form makes far greater clarification of existing and future relationships and interactions among variables. 3. Promote greater ease of communication because mathematical terminology is standardized unlike that of social sciences. 4, Being logical, are more objective while verbal constructs lean heavily on intuition. 5. Analysis that is not feasible through verbal models may be advanced by mathematical models, since they lend themselves to analysis and manipulation by utilizing the laws of mathematics. ‘The nature and structure of mathematical models. ‘A mathematical model includes principally three basic set of elements. These are : (@ Decision variables and parameters. The decision variables are the unknowns (for decisions) which are oe by solving the: ae The parameters are the known values that relate the decision variables to the constraints and objective function. ‘The “ r deterministic or probabilistic (stochastic. aah ao (@ Constraints. To account for the technolo; must include constraints values. (a9 Obective function, The objective function defines the measure of effectiveness of the system as a Valuce of the desionon of the decision variables. An optimal solution to the model is obtained when the apeonen ner ene yleld a best value of the objective function, subject to the constraints. problem. A common exaeiaicy eee of the objective function can only lead to a poor solution to the example, in determinigg ible of this occurs when some aspects of the system are neglected. For reflect only goals of the lon level of a certain product, the objective function may such cases, the model entire organization 8. Classification by desi pri age Purpose, Models canbe classed by purpose gical, economic, and other limitations of the s} c stem, the model (implicit or explicit) that restrict the decision variables to a range of feasible ‘The purpose of a model may be to ‘Scanned with CamScannerAESEARCH : AN OVERVIEW openaTIONS if their solution does not have noticeable reactions on the other componi G3) wna rea par Normative models af apleable wo repative components or problems of the system of whic programmed with Mitte ‘managerial involvement. Linear programming is normative oe oat cou BE Regge it preseribes what the managers ought todo, mative or perseriptive cove 4, Classification by nature of the environment. inistie Models. In deterministic models, parameters are comple (o,Petermealar courses of action are certain, Certalny 1s the state of nature ansaid eco cote Patter words, deterministic models represent completly closed systems and the sults ot the moda ey programing nd break-even models are examples of dterininiste motes abies abraye veaptistic Models, These models handle those situations in which the a Pym Hen at pe na ingoagei rtinty. Te inpat and oF dhe output variables take the frm of & probabil distributons and sk ad unceasing values, Te svantage of probabilistic modells tha fofiers an evaluation ofthe assume more event of result in ther words, probablste models reflect to some extent, the complet of meno og and the uncertainty sorrounding it They are probably semt-closed models 5. classification according to behaviour characteristics. ig Static Models. These models do not consider the impact of changes that takes place duri saGhag horizon, Le. they are independent of time. Also, in static model only one ectsion'is needed or the Banning re gven time period. In a static model, cause and effect are almost immediate and no time lag is guration Srarnatively, the effects of time are considered linear and as such do not affect the model output aagally. Static models are easier to handle and understand. (i) Dynamic Models. These models consider time as one of the important variables and admit the impact of charges generated by time. Also, in dynamic models, not one, but a series of interdependent decisions. are tailed during the planning horizon. The time dimenstons has a definite impact on the model solutions, and ‘on the interpretation of the results. 6. Classification according to procedure of solution. (q) Analytical Models. These models have specified mathematical structure and they can be solved by mown analytical or mathematical techniques. For example, the general linear programming model. as well as the special structured transportation and assignment models are analytical models. (8 Simulation and Heuristic Models. The development of the digital computer has led to the introduction of two other forms of modelling in O.R. These are: (9 simulation, and (i Heuristic models. Simulation modelling has the advantage of being more flexible than mathematical modelling, and hence may be used to represent complex systems which, othewise, cannot be formulated mathematically. On the other hand, simulation, has the disadvantage of not yielding general solutions like those obtained from successful mathematical models. Heuristic models are essentially models that employ some intuitive rules or guidelines in the hope of generating new strategies which will yield improved solutions, This is in contrast to mathematical and simulation models, where the strategies are generally well defined. Heuristic models do not claim ‘9 find the optimal solution to the problem and give a solution to a problem depending on the assumption based on. past experience. ‘The advantage of such models is that they operate faster as compared to other models and are TRY Useful for solving large-size problems. These models, however. require an ample amount of creativity as as experience on the part of decision maker. 16-2. Characteristics of a Good Model. A model does not always have the characters of being 8 yardstick—it can be expli al re th teristics that lanatory rath mel r re the chief characte 2 00d OR, model shoei stony rather than merely descriptive. Following ar 1. The i number of assumptions made should be as few as possible. 2.4n nits frame. O-R- model should take into account new formulations without having any significant change 3.1t shoul etric type of atnent ww Make ininimum possible assumptions. The model should accommodate a parametric (YP 4h mall in rumibgl® MOWel should be simple and coherent. The number of variables utlized PY if should be s ‘Scanned with CamScannerSEARCH : QUANTITATIVE TECHNIQUES FOR MANAGENE,, OPERATIONS Rt 4.6-3. Advantages and Drawbacks of 0.R. Models Advantages Drawbacks
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