AIMA Operation Research Introduction_2003

8/3/2019 AIMA Operation Research Introduction_2003

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Introduction to Operations Research

Session SpeakerProf. Meghna Verma

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OPERATIONS RESEARCH

Sl. NO Topics / Sub Topics

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Introduction to Operations Research : Definition & Characteristics of OR,

Techniques in OR, Problem Formulation & Modeling,Linear Programming – General formulation, Application Corner point theorem,

graphical and Simplex method, Big-M method, Sensitivity analysis ,Duality

Transportation Model – Finding an initial basic feasible solution: NW corner

method, VAM method, LCC method (balanced & unbalanced transportation

problems), optimality test: U-V (MODI) method only

Assignment problems, Travelling salesman problems, Case Study.

Game Theory: Optimal solution of Two-Person Zero-sum Games. MixedStrategies, Graphical Solutions of (2xn) and (mx2) games,

Queueing Models:Queuing Models: Basic elements of Queuing Models.Single Channel Models- M/M/1:FCFS/∞/∞ type only

Simulation: Basic Concepts. Use of Random Numbers. Monte Carlo Method,

Application of Simulation, Markov Chain

Decision Theory: Decision Process, decision making under certainty, decision

making under uncertainty decision making under risk. (Expected value

criterion,EOL),Decision trees

TEXT BOOK: AIMA Book –Quantitative Techniques for ManagersOPERATIONS RESEARCH - P.K.Gupta & D.S.Hira. S.Chand & Co. Limited



1. Introduction to Operation Research2. Meaning and definition of Operation

Research

3.

Phases and application of an operationsresearch

4. Methodology of Operation Research

5. Operation Research Models In Practices

6. Summary



Operations Research involves “Research on

military operations”. This indicates the approach as

well as the area of applications of the field. Thus itis an approach to problems of how to coordinateand control the operations or activities within anorganization.

INTRODUCTION



World War II –Prof. P.M.S.Blackett of Manchester Unive formed“Blackett Circus”

1950, OR was introduced as a subject in American Univ.

ORSA was formed in 1950.

In India OR unit was establised in Regional ResearchLaboratory in Hyderabad.

In India OR society of India (ORSI) was founded in 1957.

The journal OPSEARCH was published for the first time in1963, Now OR techniques are used in almost all walks of ourlife and industry life.

Prof. Mahalonobis made the first MADE or APPLICATION INIndia in preparing the Draft of Second five year plan.



“ Operation Research is the application of scientific methods, techniques and tools toproblem involving the operation of thesystems so as to provide those in control of

the system with optimum solutions to theproblems”.-Churchman, Ackoff andArnoff,1957

Meaning of Operation Research



“Operation Research is the art of giving badanswers to problems, to which ,otherwise,worse answers are given.”-Thomas L.Saaty

“OR is a scientific method of providing

executive departments with a quantitativebasis for decisions regarding the operationsunder their control.”- Morse & Kimball



System (or Executive) Orientation of OR Interdisciplinary Approach Scientific Approach Uncovering of new problems Holistic Approach Improvement in the quality of Decision Use of computer

Quantitative solutions Human Factors



Judgement Phase*Determination of the operation

*Determination of the objectives and values associated with theoperation

*Determination of effectiveness measure*Formulation of problem relative to the objective

The Research Phase:*Observation and data collection for a better understanding ofthe problem

*Formulation of hypothesis and model*Analysis of available information & verification of hypothesis*Prediction of various results from the hypothesis

*Prediction & Generalization of the result and consideration ofalternative methods.

The Action Phase*It consist of making recommendations for implementing the

decision by an individual who is in the position to implement theresult



1. Formulate the problem2. Develop math model to represent the system

3. Solve and derive solution from model

4. Test/validate model and solution

5. Establish controls over the solution6. Put the solution to work



Real life

problem oropportunity

System

•Choosing aparticular aspect ofreality which needsattention

•Define the problem

Develop The Mathematical Model

•Collect the relevant data

•Establish relationships amongvariables & parameters of the system

•Define objective(s) to be achieved &limitations on resources

Solve the model

Apply suitable ORtechnique to ge solution interms of decision variables

Testing the model & its solution

•Put values of decision variables in themodel under consideration

•See whether solution is valid or not

Modify themodel

Implementation & Control

*Interpret solution values

*Put the result gained from thesolution to work throughorganisational policies

*Monitor changes and exercise

control



Finance*Capital requirement, cash flow analysis

* Credit policy*Profit plan for the company*Determination of optimum replacement policy Dividend

policies, auditing, investment & portfolio mgmt

Production Mgmt*Facility Planning

*Manufacturing*Maintenance & project scheduling

Mktg

Purchasing ,Procurement & Exploration Personnel Mgmt Techniques & General Mgmt Government R & D



Allocation Models: are used to solve problems inwhich

a)there are a number of jobs to be performed and there arealternative ways of doing them and

b)Resources & facilities are limited.

Assignment model , Transportation model comes under suchcategory.

Inventory Models:deals with idle resource such asmen, machines, money and materials.These models areconcerned with two decision:

a)how much to order(produce/purchase) to replenish theinventory of an item and

b) When to order so as to minimise the total cost.



Waiting line (or Queuing) models:have been developedto establish a trade-off between cost of providing service andwaiting time of customer in th queuing system.

Competitive (game theory) models: These models are used

when two or more Individualsor organisations with conflictingobjectives try to make decisions.

Network Model: These models are applied to the mgmt(planning, controlling and scheduling) of large-scale projects.PERT/CPM techniques help in identifying potential trouble spots

in a project thru the identification of critical path. Sequencing Models: These are applicable in situations in

which there is a problem in determining the sequence (order) inwhich a no. of tasks can be performed by a no.of service facilitiesin such a way that some measure of performance eg time,cost ordistance is optimized.

Decision Analysis Model: These models deal with theselection of an optimal course of action given the possiblepayoffs and their associated probabilities of occurrence. Thesemodels are broadly applied to the problems involving decision-making under risk and uncertainty.



Simulation Model :Simulation is a data generation technique and is

used when actual experimentation is not feasible and analytical methodsof building models and solving them are not helpful.

Replacement model: These models are used when one must decidethe optimal time to replace an equipment for one reason or the other.

Markov-chain Model: these models are used for analysing a systemwhich changes over a period of time among various possible outcomes orstates. To test brand loyalty and brand switching tendencies of customers,where each system state is considered to a particular brand purchase,these models have been used.

Advanced OR models : Non-linear programming

Dynamic programming

Integer Programming

Goal Programming

Heuristic Programming Quadratic Programming

Parametric Programming

Stochastic Programming

Sensitivity analysis



Models

Bydegree

ofabstraction

ByFunction

ByTime

HorizonBy

structure

ByNatureOf the

Envionment

By theExtent ofGenerality

DescriptiveModel

PredictiveModel

NormativeOr

PrescriptiveModel

IconicOr

PhysicalModel

AnalogOr

SchematicModel

GeneralModel

SpecificModel

DeterministicModel

ProbabilisticModel

Mathe-MaticalModel

LanguageModel

SymbolicOr

MathsModel

StaticModels

DynamicModels



• Explained the meaning and definition of operationresearch along with its application in mgmt.

• Phases of an operations research project has beenexplained .

•

Classification scheme of OR models has beenexplained.

• OR models in practices were discussed.

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AIMA Operation Research Introduction_2003

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