OPERATION RESEARCH

Origin:-
• The ambiguous (unclear) term operations research (O.R.) was coined during
World War II, when the British military management called upon a group of
scientists together to apply a scientific approach in the study of military
operations to win the battle. The main objective was to allocate limited resources
in an effective manner to various military operations and to the activities within
each operation. The effectiveness of operations research in military increase
interest in it to other government departments and industry.

• Due to the availability of faster and flexible computing facilities and the number
of qualified O.R. professionals, it is now widely used in military, business,
industry, transportation, public health, crime investigation, etc.

Introduction to Operation Research:-

• Operation research as one of the quantitative aid to decision making offers the
decision maker a method of evaluating every possible alternative action by using
various techniques to know the potential outcomes. To effectively address the
problems and provide the leadership in the advancing global age, Decision makers
cannot afford to make decisions by simply applying their personal experience,
guesswork, or intuition because the consequences (penalty) of wrong decisions
are serious and costly.

• Decision making in today’s social and business environment has become a

complex task. High cost of technology, material, labour, competitive pressure and
so many different economic and social as well as political factors and viewpoints
greatly increase the difficulty of managerial decision-making.

DEFINITIONS OF OPERATION RESEARCH:-

• Operation research is concerned with scientifically deciding how to best design
and operate man – machine system usually requiring the allocation of scare
resources.

• O.R. is a scientific approach to problems solving for executive management

OR Model:-
An OR model is image of an actual project or solution. It shows the relationships and the
interrelationship of action and reaction in terms of cause and effect.
Application of Operation Research:-
1. Finance and Accounting
2. Marketing
3. Purchasing Procurement and Exploration
4. Production Management
5. Personal Management
6. Techniques and General Management
7. Government

Linear Programming:-

• { linear and programming } The word linear refers to linear relationship among
variables in model. Thus a given change in one variable will always cause a
resulting proportional change in resulting variable.

Example:
(If we double the investment on a project than we will surely get double the rate of
return.)

The word programming refers to modeling and solving a problem mathematically that
involves the economic allocation of limited resources by choosing a particular course of
action or strategy among various alternative strategies to achieve the desired objective.

General structure of LP model:-

General structure of LP model consist three elements

1. Decision activities
2. Objective function
3. constraints

Advantages of linear programming:-

• The linear programming technique helps to make the best possible use of
available productive resources (such as time, labour, machines etc.)
• In a production process, bottle necks may occur. For example, in a factory some
machines may be in great demand while others may lie idle for some time. A
significant advantage of linear programming is highlighting of such bottle necks.
Limitations of Linear Programming:-
 • Linear programming is applicable only to problems where the constraints and
objective function are linear. when constraints or objective functions are not
linear, this technique cannot be used
• Factors such as uncertainty, weather conditions etc. are not taken into
consideration.
• Linear programming requires that all the mathematical functions in the model
be linear functions.
• Mathematical programming is used to find the optimal (best) solution to a
problem that requires a decision or set of decisions about how best to use a set of
limited resources to achieve a state goal of objectives.

Steps Involved in Mathematical Programming:-

• Conversion of stated problem into a mathematical model that abstracts all the
essential elements of the problem.
• Exploration of different solutions of the problem.
• Finding out the optimum (most suitable) solution.

Application of Linear Programming Problem:-

Linear Programming Problem (L.P.P) is widely used in
1. Portfolio selection
2. Financial mix strategy
3. Profit planning
4. Manpower planning
5. Media selection problem
6. Job Allocation
7. Traveling salesman problem
8. Make or buy problem

Graphical Method of Solution of a Linear Programming

Problem:-

• The graphical method is applicable to solve the LPP involving two decision
variables x1, and x2.
• A) The determination (purpose) of the solution space that defines the feasible
(possible) solution (the set of values of the variable x1, x2, x3,....xn which
satisfy all the constraints and also the non-negative conditions is called the
feasible (possible) solution of the LPP).
• B) The determination (purpose) of the optimal solution from the feasible
(possible) region.

Example:-

Use graphical method to solve the following LP problem.

Maximize Z = 15x1 +10x2

Subject to the constraints

4x1 +6x2 ≤ 360
3x1 +0x2 ≤ 180
0x1 +5x2 ≤ 200
and x1 + x2 ≥ 0
Solution:-
• The given LP problem in already in graphical form.
• We shall treat x1 as the horizontal and x2 as vertical axis. Each constraint will be
plotted on the graph by treating it as a linear equation and than appropriate
inequality condition will be plotted on to mark the area of possible solution.
• Consider the first constraint 4x1 + 6x2 ≤ 360. Treat it as the equation, 4x1 + 6x2
≤ 360. The easiest way to plot this line is to find any two points that satisfy the
equation, than drawing a straight line through them. The points at which the line
intersects the x1 and x2 axis
• These two points are than connected to by a straight line. Where are the points
satisfying 4x1 + 6x2 ≤ 360. Any point above the constraint line violates the
inequality condition. But any point below the lines does not violate (break) the
constraint (control). Thus the inequality and non – negativity condition can only
be satisfied by the shaded area.
• Similarly the constraint 3x1 ≤ 180 and 5x2 ≤ 200 are also plotted on the graph and
indicated by the shaded area since all constraint have been graphed the area
which is bounded by all the constraints lines including all the boundary points is
called the feasible (possible) (realistic / practical) reason
• Since the optimal value of the objective function occurs at one of the extreme
points of the practical region. It is necessary to determine their coordinates the
coordinates of extreme points of the feasible (possible) reason (practical) are: O
= (0,0), A = (60,0), B = (60,20), C = (30,40), D = (0,40)
• Evaluate objective function value at each extreme point of the feasible (possible)
(possible) reason as shown below.

Coordinates Objective Function Value

Extreme Point
x1,x2
O (0,0)
A (60,0)
B (60,20)
C (30,40)
D (0,40)
Simplex Method:-
• When decision variables are more than 2, it is always advisable to use Simplex
Method to avoid lengthy graphical procedure.
Z=15x1+10x2
15(0)+10(0) = 0
15(60)+10(10) = 900
15(60)+10(20) = 1100
15(30)+10(40) = 850
15(0)+10(40) = 400

• The simplex method is not used to examine all the feasible (possible) solutions.
 • It deals only with a small and unique set of feasible (possible) solutions, the set of
vertex points (i.e., extreme points) of the convex feasible (possible) space that
contains the optimal solution.
• Avoid lengthy graphical procedure.
• The simplex method is not used to examine all the feasible (possible) solutions.
• It deals only with a small and unique set of feasible (possible) solutions, the set of
vertex points (i.e., extreme points) of the convex (curved) feasible (possible)
space that contains the optimal solution.

Steps Involved:-
• Locate an extreme point of the feasible (possible) region.
• Examine each boundary edge intersecting at this point to see whether movement
along any edge increases the value of the objective function.
• If the value of the objective function increases along any edge, move along this
edge to the adjacent extreme point. If several edges indicate improvement, the
edge providing the greatest rate of increase is selected.
• Repeat steps 2 and 3 until movement along any edge no longer increases the value
of the objective function

INFEASIBILITY:-
• Infeasibility is a condition that arises when constraints are in consistent, no value
of the variable satisfy all the constraint simultaneously. (There is no single
feasible reason). Such a problem arises due to wrong model formulation with
conflicting (at variance) constraints.
• Infeasibility depends solely (only) on the constraints and has nothing to do with
the objective function. This type of problem requires the ability of decision maker
to resolve conflicting-requirement of resources so that decision acceptable to all
section of the organization can be made.

DEGENERACY:-
• Degeneracy is a condition that arises when there is a tie between two or more
basic variables for leaving the basis, the minimum ratio to identify the basic
variable to leave the basis is not unique or value of one or more basic variables in
the solution values become equal to zero.
• In most of the cases when there is a tie in the minimum ratios, the selection is
made arbitrarily (randomly).

Unbounded Ness and Multiple Optimal Solutions:-

A linear programming problem may have
i) A unique, finite solution
ii) An unbounded solution

iii) Multiple (or infinite) number of optimal solutions

iv) Infeasible solution

v) A unique feasible point.

In the context of graphical method it is easy to visually demonstrate the different situations
which may result in different types of solutions.

Unique, Finite Solution

The example demonstrated above is an example of LPP having a unique, finite solution. In
such cases, optimum value occurs at an extreme point or vertex of the feasible region.

Unbounded Solution
If the feasible region is not bounded, it is possible that the value of the objective function
goes on increasing without leaving the feasible region. This is known as unbounded
solution

Multiple (Infinite) Solutions

If the line is parallel to any side of the feasible region all the points lying on that side
constitute optimal solutions with the same optimum values of objective function.
Decision maker may consider suitable solution in special cases.

Infeasible Solution
Sometimes, the set of constraints does not form a feasible region at all due to
inconsistency in the constraints. In such situation the LPP is said to have infeasible
solution

Unique Feasible Point

This situation arises when feasible region consist of a single point. This situation may
occur only when number of constraints is at least equal to the number of decision
variables

Duality:-
In linear programming problem duality implies that each L.P.P. can be solved in two
different ways (methods) but having same solution. Maximization and Minimization
stated in the original form has associated with L.P.P. called Dual.

Integer Programming Branch & Bound Algorithm:-

Integer Programming:-Integer LP problem are those in which some or all of the
variables are restricted (limited) to integer values. Capital Budgeting, construction
scheduling, plant location and size, routing and shaping schedule, batch size, capacity
expansion, field charge etc. are few areas of application of integer programming.

Types of Integer Programming:-

1. Pure integer programming
2. Mixed integer programming

3. Zero one integer programming

Branch and Bound Method:-

Branch and bound method is method to solve integer programming problem. The idea
behind this method is to divide the entire feasible solution space of LP problem into
smaller parts (sub-problems) and than calculate extreme point of each sub-problem for an
optimal solution.