PE203 OPERATIONS RESEARCH

PE203 OPERATIONS RESEARCH

BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

DR. S. K. TIWARI
Department of Production and Industrial Engineering
Birla Institute of Technology, Mesra – Ranchi
Email: [email protected]

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COURSE INFORMATION

Course code: PE 203

Course title: Operations Research
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

Pre-requisite(s): Nil
Credits: L T P C
3 0 0 3
Class schedule per week: 3L

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COURSE OBJECTIVES
THIS COURSE ENABLE THE STUDENTS:
1. Apply the techniques of operations research in industrial engineering
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problems.
2. Formulate a real-world industrial problem as a mathematical
programming model.
3. Understand the simplex method for linear programming and perform
iterations of it by hand.
4. Solve specialized linear programming problems like the
transportation and assignment problems.
5. Solve specialized linear programming problems like the
transportation and assignment problems.

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COURSE OUTCOMES
AFTER COMPLETION OF THE COURSE, THE LEARNERS WILL BE ABLE TO:
1. Understand how to translate a real-world problem, given in words,
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into a mathematical formulation.

2. Formulate and solve engineering and managerial situations as LPP.
3. Formulate and solve engineering and managerial situations as
transportation and assignment problems.
4. Apply Sequencing and Queuing theory for performance evaluation
of engineering and management system.
5. Solve engineering and managerial decision theories problems by
Game Theory.

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SYLLABUS
Module 1: Introduction [8]
Importance of Operation Research, Methodology, Characteristics, Scope,
Application and Limitation of Operations Research.
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

Requirement of LP, Basic Assumptions, Mathematical formulation of the of

LP, Graphical solution; numerical problems based on these methods.
Module 2: Linear Programming [8]
Analytical Methods Simplex method, Big-M method, concept of duality;
numerical problems based on these methods (preferably industrial
engineering-based problems).
Module 3: Transportation and Assignment Model [9]
Basic feasible solution by different methods (North west corner method, least
cost method, Vogel’s approximation method), finding optimal solutions
(MODI method), unbalanced transportation problems; numerical problems
based on these methods (preferably industrial engineering-based problems).
Balanced and unbalanced assignments, travelling sales-man Problem;
numerical problems based on these methods (preferably industrial
engineering-based problems).

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SYLLABUS (continued…)

Module 4: Sequencing and Queuing Model [8]

Processing of n jobs through two machines, processing n jobs through three
machines; Processing of 2 jobs through m machines –graphical method,
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numerical problems based on these methods .

Basis of Queuing theory, elements of queuing theory, Kendall’s Notation,
Operating characteristics of a queuing system, Classification of Queuing
models, Queuing system and their characteristics of M/M/1/FIFO/
Queuing system.
Module 5: Game Theory [7]
Introduction, Characteristics of Game Theory, Two Person, Zero sum
games, Pure strategy. Dominance theory, Mixed strategies (2x2, mx2),
Algebraic and sub games methods.

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SYLLABUS (continued…)

Books:
Text books:
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1) Operations Research, (Revised Edition), D.S. Hira, P.K. Gupta, S. Chand

& Company Ltd, 2014.
2) Quantitative Techniques Vol I and Vol II, L. C. Jhamb, Everest
Publishing House.
3) Operations Research, - Kanti Swarup, P. K. Gupta and Man Mohan,
Sultan Chand & Sons.
Reference books:
1) Operations Research an Introduction –Hamady A. Taha, Prentice Hall.
2) Introduction to Operations Research, 9e, Frederick S. Hillier, Gerald J.
Lieberman, Bodhibrata Nag and Preetam Basu, McGraw Hill.

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BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR PE203 OPERATIONS RESEARCH

Module 1: Introduction
▪ Importance of Operation Research, Methodology, Characteristics,
Scope, Application and Limitation of Operations Research.
▪ Requirement of LP, Basic Assumptions, Mathematical formulation of
the of LP, Graphical solution; numerical problems based on these
methods.

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HISTORY OF OPERATIONS RESEARCH

▪ Main origin of Operations Research was during the Second World War (1939-
1945).
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▪ At the time of Second World War, the military management in England invited a
team of scientists to study the strategic and tactical problems related to air and
land defense of the country.
▪ The problem attained importance because at that time the resources available with
England was very limited and the objective was to win the war with available
inadequate resources.
▪ The resources such as food, medicines, ammunition, manpower etc., were required
to manage war and for the use of the population of the country. It was necessary
to decide upon the most effective utilization of the available resources to achieve
the objective.
▪ Hence, the Generals of military, invited a team of experts in various walks of life
such as scientists, doctors, mathematicians, businesspeople, professors, engineers
etc., and the problem of resource utilization is given to them to discuss and come
out with a feasible solution. These specialists had a brain storming session and
came out with a method of solving the problem.

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OPERATIONS RESEARCH
As the name indicates, the word Operations is used to refer to the problems
of military and the word Research is use for inventing new method. As this
method of solving the problem was invented during the war period, the
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subject is given the name ‘OPERATIONS RESEARCH’ and abbreviated as

‘O.R.’

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PE203 OPERATIONS RESEARCH

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Each and every definition may explain one or another characteristic of Operations
Research but none of them explain or give a complete picture of Operations research.
But in the academic interest some of the important definitions are discussed below:
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1. Operations Research is the art of winning wars

without actually fighting. – Aurther Clarke.
2. Operations Research is the art of giving bad
answers to problems where otherwise worse
answers are given. - T.L. Satty.
3. Operations Research is defined as Scientific
method for providing executive departments a
quantitative basis for decisions regarding the
operations under their control. - P.M. Morse and
G.E. Kimball.

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From these definitions, we can state that Operational research

can be considered as being the application of scientific method
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by interdisciplinary teams to problems involving the control of

organized (man-machine) systems so as to provide solutions
which best serves the purposes of the organization as a whole.

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METHODOLOGY FOR SOLVING OPERATIONS RESEARCH PROBLEMS

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Phases of Solving Operations Research Problems

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➢ Formulation of the Problem

▪ The fist step of problem solving in Operations Research is to formulate problem.
▪ For this OR analyst or team of experts must examine the situation and clearly
define what exactly happening there and identify the variables and constraints.
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▪ Next, identify what is the objective and put them all in the form of statement.
The statement must include:
a) a precise description goals or objectives of the study,
b) identification of controllable and uncontrollable variables, and
c) restrictions of the problem.
▪ Let us consider the following statement:
A company manufactures two products X and Y, by using the three machines A,
B, and C. Each unit of X takes 1 hour on machine A, 3 hours on machine B and 10
hours on machine C. Similarly, product Y takes one hour, 8 hours and 7 hours on
Machine A, B, and C respectively. In the coming planning period, 40 hours of
machine A, 240 hours of machine B and 350 hours of machine C is available for
production. Each unit of X brings a profit of Rs 5/- and Y brings Rs. 7 per unit.
How much of X and Y are to be manufactured by the company for maximizing
the profit?

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➢ Identify the Variables, Resources, Constraints, and Objective function

▪ Variables: The Company is manufacturing two products X and Y. These are the
two variables in the problem. In linear programming language, these are known
as competing candidates. Because they compete to use or consume available
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resources.
▪ Resources: There are three machines A, B, and C on which the products are
manufactured. These are known as resources. The capacity of machines in terms
of machine hours available is the available resources. The competing candidates
must use these available resources, which are limited in nature.
▪ Constraints: In the above statement, machine A has got available 40 hours and
machine B has available a capacity of 240 hours and that of machine C is 350
hours. The products must use these machine hours in required proportion. That
is one unit of product X consumes one hour of machine A, 3 hours of machine B
and 10 hours of machine C. Similarly, one unit of Y consumes one hour of
machine B, 8 hours of machine B and 7 hours of machine C. These machine hours
given are the available resources and they are limited in nature and hence they
are constraints given in the statement.

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➢ Identify the Variables, Resources, Constraints, and Objective function

(Continued…)

▪ Objective function: To maximize the profit how much of X and Y are to be

manufactured? That is maximization of the profit or maximization of the returns
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is the objective of the problem. For this in the statement it is given that the profit
contribution of X is Rs 5/- per unit and that of product Y is Rs. 7/- per unit.

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➢ Establish relationship between variables and constraints and build

up a model
▪ Let us say that company manufactures x units of X and y units of Y.
Then as one unit of x consumes one hour on machine A and one unit
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of y consumes one hour on machine A, the total consumption by

manufacturing x units of X and y units of Y is, 1x + 1y and this should
not exceed available capacity of 40 hours. Hence the mathematical
relationship in the form of mathematical model is 1x + 1y ≤ 40. This is
for resource machine A.
▪ Similarly for machine B and machine C we can formulate the
mathematical models. They appear as shown below:
3x + 8y ≤ 240 for machine B and 10x + 7y ≤ 350 for machine C.
▪ Therefore, the mathematical model for these resources are:
1𝑥 + 1𝑦 ≤ 40
3𝑥 + 8𝑦 ≤ 240 and
10𝑥 + 7𝑦 ≤ 350

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➢ Establish relationship between variables and constraints and build

up a model (Continued…)
▪ Similarly, for objective function as the company manufacturing x units of X
and y units of Y and the profit contribution of X and Y are Rs.5/- and Rs 7/-
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

per unit of X and Y respectively, the total profit earned by the company by
manufacturing x and y units is 5x + 7y. This we have to maximize. Therefore
objective function is: Maximize 5x + 7y
▪ At the same time, it may be noted that the company cannot manufacture
negative units of x and y. Hence one more constraint is to be introduced in the
model i.e. a non - negativity constraint.
▪ Hence the mathematical representation of the contents of the statement is as
given below:

OBJECTIVE FUNCTION

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➢ Identify the possible alternative solutions (or known as Basic

Feasible Solutions or simply BFS)
There are various methods of getting solutions. For example, we go on
giving various values (positive numbers only) and find different values of
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objective function. All these are different Basic Feasible Solutions. For
example x = 0,1,2,3, etc. and y = 0,1,2,3 etc., are all feasible values as far as
the given condition is concerned. Once we have feasible solutions on
hand go on asking is it maximum? Once we get maximum value, those
values of x and y are optimal values. And the value of objective function
is optimal value of the objective function.

➢ Install and Maintain the Solution

Once we get the optimal values of x and y and objective function
instructions are given to the concerned personal to manufacture the
products as per the optimal solution and maintain the same until further
instructions.

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CHARACTERISTICS OF OR:
1) Interdisciplinary team approach.
2) Systems approach.
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3) Helpful in improving the quality of solution.

4) Scientific method.
5) Goal-oriented optimum solution.
6) Use of models.
7) Requires willing executives.
8) Reduces complexity.
9) Increases the creative ability of the decision maker.

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SCOPE OF OPERATIONS RESEARCH

1) In Defense Operations.
2) In Industry.
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3) In Planning for Economic Growth.

4) In Agriculture.
5) In Traffic control.
6) In Hospitals.

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O.R. TOOLS AND TECHNIQUES

i) Linear Programming.
ii) Game Theory.
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iii) Decision Theory.

iv) Waiting Line or Queuing Theory.
v) Inventory Control/Planning.
vi) Simulation.
vii)Markov Process.
viii)Network Analysis.
ix) Integrated Production Models.

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O.R. TOOLS AND TECHNIQUES (Continued…)

In addition to these, there are several other techniques such as non-linear
programming, dynamic programming, search theory, and the theory of
replacement. A brief mention of some of these is are as follows:
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a) Non-linear programming.
b) Dynamic programming.
c) Heuristic programming.
d) Integer programming.
e) Algorithmic programming.
f) Quadratic programming.
g) Parametric programming.
h) Probabilistic programming.

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APPLICATIONS OF OPERATIONS RESEARCH

Accounting: Finance:
Assigning audit teams effectively Building cash management models
Credit policy analysis Allocating capital among various
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Cash flow planning alternatives

Developing standard costs Building financial planning models
Establishing costs for byproducts Investment analysis
Planning of delinquent account strategy Portfolio analysis
Dividend policy making

Facilities Planning: Organizational Behavior / Human

Factory location and size decision Resources:
Estimation of number of facilities required Personnel planning
Hospital planning Recruitment of employees
International logistic system design Skill balancing
Transportation loading and unloading Training program scheduling
Warehouse location decision Designing organizational structure more
effectively

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APPLICATIONS OF OPERATIONS RESEARCH (Continued…)

Manufacturing: Marketing:
Inventory control Advertising budget allocation
Marketing balance projection Product introduction timing
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Production scheduling Selection of Product mix

Production smoothing Deciding most effective packaging
alternative

Purchasing: Research and Development:

Optimal buying R & D Projects control
Optimal reordering R & D Budget allocation
Materials transfer Planning of Product introduction

Construction:
Project scheduling, monitoring and
control
Determination of proper work force
Deployment of work force
Allocation of resources to projects

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LIMITATIONS OF OPERATIONS RESEARCH

1) The inherent limitations concerning mathematical expressions.

2) High costs are incurred in the use of OR techniques.

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3) OR does not take into consideration the intangible factors, i.e., non-
measurable human factors.

4) OR is only a tool of analysis and not the complete decision-making

process.

5) Bias.

6) Inadequate objective functions.

7) Internal resistance.

8) Competence.

9) Reliability of the prepared solution.

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LINEAR PROGRAMMING MODELLING PROCESS

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Recognition and Formulation and

Real-World Definition of the Construction of the
Problem Problem Mathematical
Model

Interpretation
Validation and Solution
Implementation Sensitivity Analysis of the Model
of the Model

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Introduction
➢ A model, which is used for optimum allocation of
scarce or limited resources to competing products or
activities under such assumptions as certainty,
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linearity, fixed technology, and constant profit per

unit, is linear programming.
➢ Linear Programming is one of the most versatile,
powerful and useful techniques for making
managerial decisions.
➢ Linear programming technique may be used for
solving broad range of problems arising in business,
government, industry, hospitals, libraries, etc.

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Requirements For Linear Programming Problems

A linear programming problem (LPP) can be used for optimization
problems if the following conditions are satisfied:
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1) The relationship between variables and constraints must be

linear.
2) The variables should obey the properties of proportionality
and additivity.
3) The model must have an objective function.
4) The model must have structural constraints.
5) The model must have non-negativity constraint.
6) There must be an alternate course of action.

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Assumptions in Linear Programming Models

A linear programming model is based on the following
assumptions:
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1) Proportionality.
2) Additivity.
3) Continuity.
4) Certainty.
5) Finite choices.

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General Linear Programming Problem

A general mathematical way of representing a Linear Programming
Problem (L.P.P.) is as given below:
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Steps for Formulating Linear Programming Problem

1) Define the decision variables (x1, x2, x3,…, xn) to be determined.
2) Construct the objective function which must be optimized as a linear
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equation involving the decision variables.

3) Identify all the restrictions or constraints in the problem and express
them as linear equations or inequalities of decision variables.
4) State the non-negativity condition and express the given problem as
mathematical model

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Linear Programming Problem

Illustration 1. A company manufactures two products X and Y, which
require, the following resources. The resources are the capacities machine
M1, M2, and M3. The available capacities are 50, 25, and 15 hours
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respectively, in the planning period. Product X requires 1 hour of machine

M2 and 1 hour of machine M3. Product Y requires 2 hours of machine M1, 2
hours of machine M2 and 1 hour of machine M3. The profit contribution of
products X and Y are Rs.5/- and Rs.4/- respectively. Formulate a
mathematical model of the problem.

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Linear Programming Problem (Continued…)

Solution.
The contents of the statement of the problem can be summarized as follows:
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Let the company manufactures x units of X and y units of Y. As the profit

contributions of X and Y are Rs.5/- and Rs. 4/- respectively. The objective of
the problem is to maximize the profit Z, hence objective function is:

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Linear Programming Problem (Continued…)

This should be done so that the utilization of machine hours by products x
and y should not exceed the available capacity. This can be shown as follows:
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But the company can stop production of x and y or can manufacture any
amount of x and y. It cannot manufacture negative quantities of x and y.
Hence, we have write,

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Linear Programming Problem (Continued…)

Illustration 2. A retail store stocks two types of shirts A and B. These are
packed in attractive cardboard boxes. During a week, the store can sell a
maximum of 400 shirts of type A and a maximum of 300 shirts of type B. The
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storage capacity, however, is limited to a maximum of 600 of both types

combined. Type A shirt fetches a profit of Rs. 2/- per unit and type B a profit
of Rs. 5/- per unit. How many of each type the store should stock per week to
maximize the total profit? Formulate a mathematical model of the problem.
Solution.

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Linear Programming Problem (Continued…)

Solution.
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Linear Programming Problem (Continued…)

Illustration 3. A ship has three cargo holds forward, center, and aft & center. The
capacity limits are:
Forward: 2000 tons, 100,000 cubic meters
Center: 3000 tons, 135,000 cubic meters
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Aft and Center: 1500 tons, 30,000 cubic meters.

The following cargoes are offered, the ship owners may accept all or any part of each
commodity:

In order to preserve the trim of the ship the weight in each hold must be proportional
to the capacity in tons. How should the cargo be distributed to maximize profit?
Formulate this as linear programming problem.

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Linear Programming Problem (Continued…)

Solution.
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Linear Programming Problem (Continued…)

Illustration 4. A patient consults a doctor to check up on his ill health. The doctor
examines him and advises him that he is having a deficiency of two vitamins, vitamin A
and vitamin D. Doctor advises him to consume vitamin A and D regularly for a period
so that he can regain his health. The doctor prescribes tonic X and tonic Y, which are
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having vitamin A, and D in a certain proportion. Also advises the patient to consume at
least 40 units of vitamin A and 50 units of vitamin D daily. The cost of tonics X and Y
and the proportion of vitamin A and D that are present in X and Y are given in the table
below. Formulate LPP to minimize the cost of tonics.

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Linear Programming Problem (Continued…)

Solution.
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Linear Programming Problem (Continued…)

Illustration 5. A farmer has 100 acre farm. He can sell all tomatoes, lettuce and radishes
he can raise. The price he can obtain is Rs 1.00 per kg for tomatoes, Rs.0.75 a head for
lettuce and Rs. 2.00 per kg for radishes. The average yield per –acre is 2000 kg of
tomatoes,3000 head of lettuce and 1000kg radishes. Fertilizer is available at Rs. 0.50 per
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kg and the required per acre is 100 kgs each for tomatoes, lettuce and 50 kgs for
radishes. Labor required for sowing, cultivating and harvesting per acre is 5 man–days
for tomatoes, and radishes, and 6 man –days for lettuce. A total of 400 man-days of
labor are available at Rs 20.00 per man –day. Formulate this problem as a LP model to
maximize the farmers' total profit.

Solution.

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Linear Programming Problem (Continued…)

Solution.
Maximize Z = 1850 x1+ 2080 x2 + 1875 x3
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S.t x1+ x2+ x3 ≤ 100

5x1+ 6x2+ 5x3 ≤ 400
x1, x2, x3 ≥ 0

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 ADVANTAGES OF LINEAR PROGRAMMING MODEL

1) It helps in attaining the optimum use of productive factors.

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2) It improves the quality of decisions.

3) It also helps in providing better tools for adjustments to meet changing
conditions.
4) Most business problems involve constraints like raw materials availability,
market demand, etc. which must be taken into consideration.
5) It highlights the bottlenecks in the production processes.

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 LIMITATIONS OF LINEAR PROGRAMMING MODEL

1) For large problems having many limitations and constraints, the

computational difficulties are enormous, even when the assistance of large
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digital computers is available.

2) The results of the linear programming model may yield fractional valued
answers for the decision variables, whereas it may happen that only integer
values of the variables are logical.
3) It is applicable to only static situations since it does not consider the effect
of time.
4) It assumes that the values of the coefficients of decision variables in the
objective function as well as in all the constraints are known with certainty.
5) In some situations, it is not possible to express both the objective function
and constraints in linear form.
6) Linear programming deals with problems that have a single objective.

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Graphical Solution of LP Problems

Represent the given problem in mathematical form.
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

Draw the x and y-axes.

x2

Plot each of the constraint on the graph.

Identify the feasible region (or solution space).

Find the co-ordinates of each extreme point (or

corner point or vertex) of the feasible region to x1
determine the optimal solution.

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Feasible area - convex set

BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

A set of points S is a convex set if the line segment joining

any pair of points in S is wholly contained in S.

Convex polyhedrons

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Feasible area – corner point

BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

A point in convex polyhedron S is a corner point if it does not

lie on any line joining any pair of other (than P) points in S.

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Graphical Solution of LP Problems

Special Cases of LP Models:
➢ Definite or Unique Optimal Solution
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

➢ Multiple Optimal Solutions

➢ No Optimal Solution or Unbounded Solution

➢ Infeasible Solution

➢ Single Solution

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Graphical Solution of LP Problems

Special Cases of LP Models:
➢ Definite or Unique Optimal Solution
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

x2

A
z

x1

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➢ Multiple Optimal Solutions

x2
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

B
z
C

x1

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➢ No Optimal Solution or Unbounded Solution

x2
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

x1

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➢ Infeasible Solution

x2
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

x1

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➢ Single Solution

x2
BIRLA INSTITUTE OF TECHNOLOGY, MESRA – OFF CAMPUS DEOGHAR

Single Solution

x1

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