Syllabus
Chapter 1 What is Operation Research
Chapter 2 Modeling With Linear Programming
Chapter 3 The simplex Method and Sensitivity
Chapter 5 Transportation Model and its variants
Chapter 6 Network Models
Chapter 11 Deterministic Inventory Models
Chapter 13 Decision Analysis and Games
Decision Theory and Analysis
• Decision theory is body of knowledge and set
of analytical tools that help managers make
optimal decision.
• Decision Under Certainty
• Decision under uncertainty
• Decision under Risk
Operation Research
• As its name implies, operations research
involves “research on operations.” Thus, operations
research is applied to problems that concern how to
conduct and coordinate the operations (i.e., the
activities) within an organization .
• The nature of the organization is essentially
immaterial, in fact, OR has been applied extensively in
such diverse areas as manufacturing, transportation,
construction, telecommunications, financial planning,
health care, the military, and public services, to name
just a few .
1.1 Operations Research Models
Imagine that you have a 5-week business commitment between
Fayetteville(FYV) and Denver (DEN). You fly out of Fayetteville on Monday
and retun on Wednesday. A Regular round trip ticket costs $400, but a
20% discount is granted if the dates of the ticket span a weekend. A one
way ticket in either direction costs 75% of the regular price. How should
you buy the ticket for the 5 week period?
We can Look at the situation as a decision-making problem whose
solution requires answering three question:
1. What are the decision alternatives?
2. Under What restriction is the descision made?
3. What is an appropriate Objective criterion for evaluating the
alternatives?
Three Alternatives are considered:
1. Buy five regular FYV-DEN-FYV for departure on Monday and return on
Wednesday of the same Week.
2. Buy one FYV-DEN, Four DEN-FYV-DEN that span weekends, and one DEN-
FYV.
3. Buy one FYV-DEN-FYV to cover Monday of the first week and Wednesday of
the last week and four DEN-FYV-DEN to cover the remaining legs.
All tickets in this alternative span at least on weekend.
The restriction on these options is that you should be able to leave FYV on
Monday and return on Wednesday of the same week.
An Obvious objective criterion for evaluating the proposed alternative is the
price of the tickets. The alternative that yields the smallest cost is the best.
Specifically, we have
Alternative 1 Cost = 5 x 400 =$2000
Alternative 2 Cost = 0.75 x 400 + 4 x (0,8 X 400 ) + 0.75 x 400 =$1800
Alternative 3 Cost = 5 x (0.8 X 400 ) =$1600
Thus you should choose alternative 3.
1.2 Solving the OR Model:
In OR, we do not have a single generl technique to solve all mathematical
models that can arise in practice. Instead, the type and complexity of the
mathematical model dictate the nature of the solution method.
The most prominent OR Technique is linear Programming. It is designed
for models with linear objective and constraint functions. Other
techniques include
Interger programming (in which variables assume integer values),
Dynamic programming ( in which the original model can be decomposed
into more manageable subproblems)
Network programming (in which the problem can be modeled as network)
and Non linear programming( in which functions of the model are
nonlinear) etc...
1.3 Queuing and Simulation Models
Queing and Simulation model deal with the study of waiting lines. They
are not optimization techniques, rather they measures of performance
of the waiting lines, such as average waiting time in que, average
waiting time for service and utilization of service facilities.
Queuing model utilize probability and stochastic models to analyze
waiting lines, and simulation estimates the measures of performance
by imitating the behavior of the real system.
The main difference between Queing and simulation model.
Queing models are purely mathematical, and hence are subject to
specific assumption that limit their scope of application.
And Simulation model is flexible and can be used to analyze
practically any queing situation.
The Process of Simulation models is costly in both time and
resources. Moreover, the execution of simulation models, even on the
faster computer is usually slow.
1.4 Art of the Modeling
The assumed real world from the
real situation by concentrating
on the dominant variables that
control the behavior of the real
system.
Definition
• Operations Research (OR)
It is a scientific approach to determine
the optimum (best) solution to a decision
problem under the restriction of limited
resources, using the mathematical
techniques to model, analyze, and solve the
problem
• Phases of OR
1. Definition of the problem
2. Model Construction
3. Solution of the model
4. Model validity
5. Implementation of the solution
Basic components of the model
1. Decision Variables
2. Objective Function
3. Constraints
