ME 5749/ Operations Research

Prepared
By
Mrs.T.S.A.Suryakumari
 OBJECTIVES

• Creates awareness on model formulation and computations in linear

programming (LP), which involves the allocation of limited resources in an
optimal manner, on the basis of a given criterion of optimality.
• Determine the shipping schedule that minimizes the total shipping cost
while satisfying supply and demand limits.
• Provides PERT/CPM methods of network analysis for planning, developing
and implementing projects of all types, sizes and complexity.
• Creates awareness for deciding the best policy in determining the time at
which the replacement is the most economical instead of continuing at an
increased cost.
• Gives an overall view of Queuing theory, which describes the basic
queuing system configurations and understands the three parts of a queuing
system: the calling population, the queue itself, and the service facility.
 Syllabus

UNIT I – LINEAR MODEL (9)

The phases of OR study – Formation of an L.P
Model– Graphical Solution – Simplex
Algorithm – Artificial Variables Technique– Big
M Method, Two Phase Method.
UNIT II – TRANSPORTATION PROBLEM
• Optimal Solution by North West Corner
Method– Least Cost Method – Vogel‘s
Approximation Method – Optimality Test –
MOBI Method – ASSIGNMENT Problem –
Formulation – Hungarian Method –
Unbalanced Assignment Problem.
 UNIT III – NETWORK MODELS
• Shortest Route – Minimal Spanning Tree –
Maximum Flow Models – Project Network–
CPM and PERT network – Critical Path
Scheduling.
UNIT IV – REPLACEMENT MODELS
• Replacement of Items that Deteriorate with
Time – Value of Money Changing with Time –
Not Charging with Time – Optimum
Replacement Policy – Individual and Group
Replacement – Sequencing problem: Models
with n jobs with 2 machines – Problem with n
jobs with 3 Machines.
 UNIT V – QUEUING THEORY
• Queuing models – Queuing Systems and
Structures – Notation –Parameter – Single
Server and Multi Server Models – Poisson
input – Exponential service – Constant rate
service – Infinite population.
 References
• Taha H.A, ―Operation Research‖, Pearson
Education sixth edition, 2003
• 2. Hira and Gupta ―Introduction to
Operations Research‖, S.Chand and Co, 2002
• 3. Hira and Gupta ―Problems in Operations
Research‖, S.Chand and Co, 2000
 Introduction
to
Operations Research

The development and application

of mathematical techniques and
models, for the purpose of solving
problems in a wide array of fields,
and producing better quality decisions
 Identifies better methods to
coordinate financial, material,
equipment, and human resources
toward achievement of an
organization’s goals, drawing
from mathematics, science,
and engineering
Operations research/management
science

– Winston: “a scientific approach to decision making, which

seeks to determine how best to design and operate a
system, usually under conditions requiring the allocation
of scarce resources.”

– Kimball & Morse: “a scientific method of providing

executive departments with a quantitative basis for
decisions regarding the operations under their control.”
Methodology of Operations Research
The Seven Steps to a Good OR
Analysis
TECHNIQUES AVAILABLE
Econometric Models Simulation
Linear Programming
Queuing Models
Dynamic Programming
Nonlinear Programming
Integer Programming
Neural Networks
Expert Systems
Decision Analysis
Game Theory
Forecasting
Inventory Control
Assignment Algorithms
Goal Programming
Quality Control Models
Network Models
 EXAMPLES
Burger King uses linear programming to determine how
different cuts of meat should be blended together to
pro- duce hamburger patties at minimum cost while still
meet- ing certain specifications such as fat content,
texture, freshness, and shrinkage.
As the cost of different cuts of meat changes, the firm
reevaluates its model to determine whether its recipe
should be modified.
 EXAMPLE
The marriage of the microprocessor with the
Global Positioning Satellite System has enabled
Sony Cor-poration to develop an onboard
navigation system capable of giving directions
to a car’s driver.This information is especially
valuable during traffic conditions such as rush
hour congestion. The software is based on an
operations research model known as a
shortest path network.
 EXAMPLE
Following the California earthquake in January 1994,
Interstate 10, a main freeway serving the Los Angeles
area, needed to be rebuilt quickly. The project prime
contractor was given a fairly short 5 month deadline to
reopen the roadway. To encourage the work to be done as
quickly as possible, the contractor was offered a bonus of
$500,000.00 for each day by which it was able to beat the
deadline. Using a project scheduling technique known as the
critical path method , the contractor was able to schedule
work crews so as to be able to complete the repair work a
month earlier than the project deadline. As a result, the
contractor collected a $15 million dollar bonus.
 APPLICATIONS
 E - commerce
 Health care services
 Supply chain management
 Global warming
 Telecommunications
 Banking
 Flexible manufacturing
 Neural networks
 International economics
 Transportation systems
 Environmental impact
 Robotics
 Successful OR Applications
Company Year Problem Techniques Used Annual Savings
Designing buffers into production
Hewlett Packard 1998 Queuing models $280 million
line
Taco Bell 1998 Employee scheduling IP, Forecasting, Simulation $13 million
Redesign production & distributon
Proctor & Gamble 1997 Transportation models $200 million
system
Delta Airlines 1994 Assigning planes to routes Integer Programming $100 million
Queuing models,
AT&T 1993 Call center design $750 million
Simulation
Yellow Freight Systems, Network models,
1992 Design trucking network $17.3 million
Inc. Forecasting, Simulation
San Francisco Police
1989 Patrol Scheduling Linear Programming $11 million
Dept.
Bethlehem Steel 1989 Design an Ingot Mold Stripper Integer Programming $8 million
North American Van
1988 Assigning loads to drivers Network modeling $2.5 million
Lines
Linear Programming,
Citgo Petroleum 1987 Refinery operations & distribution $70 million
Forecasting
United Airlines 1986 Scheduling reservation personnel LP, Queuing, Forecasting $6 million
Dairyman's Creamery 1985 Optimal production levels Linear Programming $48,000
Phillips Petroleum 1983 Equipment replacement Network modeling $90,000
 Conclusion
In the 21st century, there is overwhelming
evidence that major organizations are looking
for individuals in all disciplines who have strong
quantitative, computer, and communications
skills. Operations research, with its emphasis
on all these areas, as well as its direct
application to problems of optimization and
efficiency, is recognized as an important
element in a well-rounded business education.