Operations Research

Prerequisite: Basic Engineering Mathematics and Probability Theory

L-T-P: 4-0-0, Credits: 4
Type: Core Essential Subjects (CES)

Dr Deepak Gupta
Assistant Professor, SMIEEE
CSED, MNNIT Allahabad, Prayagraj
Email: [email protected]
 Course Description

This course module on Operations Research aims to introduce students to use

quantitative methods and techniques for effective decisions–making; model
formulation and applications that are used in solving business decision problems.
 Syllabus
UNIT 1: Introduction to OR Models, Graphical Method for LPP, Convex sets, Simplex
Method, Big M Method, Two Phase Method, Multiple solutions of LPP, Unbounded
solution of LPP, Infeasible solution of LPP, Revised Simplex Method, Case studies,
Primal Dual Construction, Duality Principle, Primal-Dual relationship of solutions,
Dual Simplex Method, Sensitivity Analysis.
UNIT II: The Transportation Model, Definitions, Formulation, North-West Corner
Method, Vogel’s Approximation Method, u-v method, Post optimality Analysis, The
Assignment Model: Definition and mathematical representation, The Hungarian method
Network Optimization Models: Sequencing and Scheduling (Critical Path Methods and
PERT)
UNIT III: Dynamic Programming: Formulation, Optimal subdivision problem,
Solution of L.P.P. by dynamic programming, applications, Deterministic and
probabilistic dynamic programming.
UNIT IV: Integer Programming: Non-Linear Programming Constrained and
Unconstrained optimization, Multi-variable unconstrained optimization, Kuhn-Tucker
Conditions, Queuing Theory.
Unit V: Decision Theory, The Theory of Games, Pure and Mixed strategies Games, n-
person zero sum games, Basic Queuing Models, Inventory Models, Simulation
Modeling
 Books

Text Books
1. Taha, Hamdy A. Operations research: an introduction. Pearson Education India,
2013.
2. Hillier, Frederick S., and Gerald J. Lieberman. "Introduction to Operations
Research, Burr Ridge, IL." 10th Edition (2017)
3. Operations Research, P K Gupta and D S Hira, S. Chand and Company LTD.
Publications, New Delhi – 2007
4. Operations Research, Theory and Applications, Sixth Edition K Sharma, Trinity
Press, Laxmi Publications Pvt. Ltd. 2016.

Reference Books
1. Churchman, C. West, Russell L. Ackoff, and E. Leonard Arnoff. "Introduction
to operations research." (1957).
2. 2. Hillier, Frederick S. Introduction to operations research. Tata McGraw-Hill
Education, 2012.
Time Table
 OPERATIONS RESEARCH

The term Operations Research (OR) was coined by J.F. McCloskey and F.N.
Trefethen in 1940 in Bowdsey in the United Kingdom.

This innovative science was discovered during World War II for a specific
military situation, when military management sought decisions based on the
optimal consumption of limited military resources with the help of an
organized and systematized scientific approach.

Hence, Operation Research can be associated with ‘an art of winning the war
without actually fighting it’.
 Definitions

Operation Research is the scientific knowledge through interdisciplinary

team effort for the purpose of determining the best utilization of limited
resources. H.A. Taha
Operation Research is a scientific approach to problem solving for
executive management. H.M. Wagner
Operation Research is a scientific method of providing executive
departments with a quantitative basis for decisions regarding the operations
under their control. Morse and Kimball (1946)
Operation Research is art of wining wars without actually fighting them.
Authar Clark
Operation Research may be described as a scientific approach to decision
making that involves the operations of organization system. F. Hiller and
G.J. Lieberman
 Scope (Applications) of Operations Research
OR is useful in various important fields like:
(i) Agriculture: Resource optimization, production planning of crops, transportation,
manufacturing, purchasing, and selling.
(ii) Finance: Cash flow analysis, long range capital requirements, Investment decision,
Profit plan for the company, dividend policies, investment portfolios
(iii) Industry: production planning and control; quality control; inventory, equipment,
warehouse, and materials management; plant layout
(iv) Organization Behaviors: Selection of personnel, determination of retirement age
and skills, Recruitment policies and assignment of jobs, Recruitment of employees,
Scheduling of training programs
(v) Marketing: Product selection, number of salesmen, advertising media, finding the
best time to launch a product
(vi) Personnel Management: Selection of personnel on minimum salary, Mixes of
ages and skills, recruitment policies, Manpower Scheduling.
(vii) Production Management: Physical distribution, facilities planning,
manufacturing, maintenance and project scheduling
(viii) Research and Development: Determination of areas of concentration of R&D,
project selection, determination of time, cost of development projects
(ix) Transportation: Routing of Vehicles, Scheduling of dispatches
(x) Government: Policy planning, Resource allocation, Costing, Taxation
 Phases of Operations Research

The procedure to be followed in the study of OR generally involves the

following major phases:

i. Definition of the problem

ii. Construction of a mathematical model
iii. Deriving the solution of the model
iv. Validation or Testing the model and its solution
v. Implementation of the solution
 Tools of Operation Research

In any area of human endeavor, whether it is a production system,

business system or service system where an objective is to be optimized,
the problem falls into the domain of operation research. Some of the
commonly used techniques of operation research are as follows:
• Linear programming • Integer Programming
• Waiting line theory or queuing • Transportation Problems
theory • Simulation
• Inventory control models • Goal Programming
• Replacement problems • Markov Analysis
• Network Analysis • Game Theory
• Dynamic programming • Heuristic Models
• Assignment problems • Routing Models
• Decision theory
 Classification of Models of Operation Research
The various models of operation research have been classified under five
major categories:
• Solution method
• Time or Behavior
• Certainty or Environment
• Function
• Structure
Classification based on solution: In this category, the models of operations
research are classified according to the methodology of solution procedure, which
are described as follows:
Analytical models: When the model has clearly specified mathematical
structure and the clear mathematical technique could be applied. For
example, a general linear programming model, as well as the specially
structured transportation and assignment models are analytical models.

Simulation models: When the solution of models cannot be achieved

by simple mathematical technique, it requires computer-assisted
algorithms procedure under the environment of some assumed factors.

Heuristic models: When the method of solving the model is completely

unknown, one has to put some rules, which correlate the given situation
with the present and generate the solutions that are not necessarily
optimal, yet applicable.
Classification based on time (behavior): In this category, the models of
operations research are classified as per their representation of time constraints,
which are described as follows:

Static models: Only one decision is needed for the duration of a given
time period. They are used only for a single time. It represents the system
at a specified time and do not consider changes in the system over a
change in the time period. Example: Economic Order Quantity Model

Dynamic models: It can be for multiple times on similar problems. It

used in a situation where time plays important role and used for
optimization of multistage decision problems. Example: Dynamic
Programming model
Classification based on Certainty (Environment): In this category, the
models of operations research are classified as per their certainty factor, which are
described as follows:

Deterministic models: Models which have all known values and

the outcomes are certain. Example: Linear Programming model,
Transportation Problem etc.
Probabilistic models: It has at least one parameter or decision variable
is a random variable and surety of solution is uncertain. These models are
also known as stochastic models. Example: It used in the conditions of
uncertain demand to decide the economic ordering quantity (EOQ).
Classification based on Function: In this category, the models of operations
research are classified as per their utilities, which are described as follows:

Descriptive models: It explains various operations in non-

mathematical language. Example: Observation, Survey, Questionnaires
etc.
Predictive models: It explain or predict the behavior of a system.
Example: Forecast model predicts future, sale or future demand.

Prescriptive models (Normative): It used to prescribe certain optimal

solutions for problems. These models are also known as optimization
models because they provide the best solutions called optimal or optimum
solutions under the restrictions of pre-determined constraints. Example:
Linear Programming models
Classification based on Structure: In this category, the models of operations
research are classified based on their structure, which are described as follows:

Physical models (Iconic): Physical representation of a real

situation with a different scale. Example: Map, Images, Paintings,
model of a car etc.

Symbolic models (Mathematical): It represent the original system

by using mathematical symbols or relations such as numbers, letters
etc. Example: Resource allocation model, Newspaper boy problem,
transportation model etc.
 Advantages of Operation Research

Along with larger applicability of operations research, following are the

added advantages of operations research theory:

Better Coordination: Maintaining proper balance and

coordinating all the activities for desired results, which provides
greater control.
Flexibility: Accurate measures and controlled environment provide
the flexibility to the models.
Better Planning: A realistic approach of operations research
models towards the constraints and other factors provides a better
and strong plan to apply which involves optimum short-term and
long-term plans.
Scientific approach: Pre-defined deterministic methods or
algorithm ensures the accurate results generation.
 Limitations of Operation Research

Along with several advantages, it has some limitations too, which are
discussed below:

Required trained people: Nearly all the models and solution

methods of OR are highly complex and difficult to understand.
Hence, they require a skilled and trained person to deal.
Lengthy procedure: The methodology of operations research has
to take too many factors into consideration. Therefore, this
procedure takes long time and enormous calculations.
Complex: Due to high range of value into consideration and
lengthy calculations, the solution generation turned out to be very
complex and highly sensitive even with a single small calculation
mistakes.
 Format of OR Model

OR model can be organized in the following general format:

Maximize or Minimize Objective Function

subject to
Constraints

A solution of the model is feasible if it satisfies all the constraints. It is

optimal if, in addition to being feasible, it yields the best (max./min) value
of the objective function.
Problem 1
Imagine that you have a 5-week business commitment between India (IND) and
United States of America (USA). You fly out of India on Mondays and return on
Wednesdays. 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 tickets for the 5-week period?

Solution
It is a decision-making problem whose solution requires answering three
questions:
1. What are the decision alternatives?

2. Under what restrictions is the decision made?

3. What is an appropriate objective criterion for evaluating the alternatives?

Problem 1
Imagine that you have a 5-week business commitment between India (IND) and
United States of America (USA). You fly out of India on Mondays and return on
Wednesdays. 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 tickets for the 5-week period?

1. What are the decision alternatives?

Three alternatives are considered:

1. Buy five regular IND-USA-IND for departure on Monday and return on

Wednesday.
2. Buy one IND-USA, four USA-IND-USA that span weekends, and one USA-
IND.
3. Buy one IND-USA-IND to cover Monday of the first week and Wednesday
of the last week and four USA-IND-USA to cover the remaining legs. All
tickets in this alternative span at least one weekend.
Problem 1
Imagine that you have a 5-week business commitment between India (IND) and
United States of America (USA). You fly out of India on Mondays and return on
Wednesdays. 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 tickets for the 5-week period?

2. Under what restrictions is the decision made?

The restriction on these options is that you should be able to leave IND on
Monday and return on Wednesday.

3. What is an appropriate objective criterion for evaluating the alternatives?

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.
Three alternatives are considered:

1. Buy five regular IND-USA-IND for departure on Monday and return on

Wednesday of the same week.
2. Buy one IND-USA, four USA-IND-USA that span weekends, and one USA-
IND.
3. Buy one IND-USA-IND to cover Monday of the first week and Wednesday of
the last week and four USA-IND-USA to cover the remaining legs. All tickets
in this alternative span at least one weekend.

Specifically, we have

Alternative 1 cost = 5 X 400 = $2000

Alternative 2 cost = .75 X 400 + 4 X (.8 X 400) + .75 X 400 = $1880

Alternative 3 cost = 5 X (.8 X 400) = $1600

Thus, you should choose alternative 3.

Problem 2
Consider forming a maximum-area rectangle out of a piece of wire of
length L inches. What should be the width and height of the rectangle?
Solution:
Here, the number of alternatives is not finite; namely, the width and height of the
rectangle can assume an infinite number of values.

To formalize this observation, the alternatives of the problem are identified by

defining the width and height as continuous (algebraic) variables.
Let

w = width of the rectangle in inches

h = height of the rectangle in inches

The restrictions of the situation can be expressed verbally as:

Width of rectangle + Height of rectangle = Half the length of the wire

Width and height cannot be negative

These restrictions are translated algebraically as

2(w + h) = L
w >= 0, h >= 0
The objective of the problem; namely, maximization of the area of the rectangle.
Let z be the area of the rectangle, then the complete model becomes

Maximize z = w h
subject to:
2(w + h) = L
w, h >= 0

The optimal solution of this model is w = h = L/4, which calls for constructing a
square shape.
 Linear Programming (LP)
Linear programming (LP) is designed by George B. Dantzig in 1947 to optimize
operations with some constraints. The main objective of linear programming is to
maximize or minimize the numerical value. It consists of linear functions which are
subjected to the constraints in the form of linear equations or in the form of
inequalities
General Form: The general form of linear programming is given as
(Max or Min) Z = c1x1 + c2x2 +.............+cnxn
subject to:
a11x1 + a12x2 + .............+a1nxn (≤ / ≥) b1
a21x1 + a22x2 + .............+a2nxn (≤ / ≥) b2
.
.
.
am1x1 + am2x2 + ...........+amnxn (≤ / ≥) bm
and x1 ≥ 0, x2 ≥ 0,..., xn ≥ 0
where
Z = value of on the whole measure of performance
xj = level of activity (for j = 1, 2, ..., n)
cj = increase in Z that would result from each unit enhance in level of activity j
bi = amount of resource i that is available for allocation to activities (for i = 1,2, ..., m)
aij = amount of resource i used by each unit of activity j
Example 1
Reddy Mikks produces both interior and exterior paints from two raw material
M1, M2. The following table provides the basic data of problem:

A market survey indicates that the daily demand for interior paint cannot
exceed that for exterior paint more than 1 ton. Also, the maximum daily
demand for interior paint is 2 tons. Reddy Mikks wants to determine the
optimum (best) product mix of interior and exterior paints that maximizes the
total daily profit?
Solution:
Variables of model are defined as:

x1=tons produced daily of exterior paint

x2=tons produced daily of interior paint
Objective function:

To construct objective function, note that the company wants to maximize (i.e.
increase much as possible) the total daily profit of both paints.

Given that the profit per ton of exterior and interior paints are 5 and 4 (thousand)
dollars, respectively, it follows that

Total profit from exterior paint=5x1

Total profit from exterior paint=4x2

Letting z represent the total daily profit, the objective of the company is

Maximize z=5x1+4x2
constrains:

To construct the constrains that restrict raw material usage and product demand.

(usage of a raw material by both paint) ≤ (max. raw material availability)

The daily usage of raw material M1 is 6 ton of exterior paint and 4 ton of
interior paint. Thus
Usage of raw material M1 by exterior paint=6x1 tons/day
Usage of raw material M1 by interior paint=4x2 tons/day

Usage of raw material M1 by both paints=6x1+4x2 tons/day

The daily usage of raw material M2 is 1 ton of exterior paint and 2 ton of
interior paint. Thus

Usage of raw material M2 by exterior paint=1x1 tons/day

Usage of raw material M2 by interior paint=2x2 tons/day

Usage of raw material M2 by both paints=x1+2x2 tons/day

Because the daily availabilities of raw materials M1 and M2 are limited to 24 and 6
ton, respectively, the associated restriction are given as

6x1 + 4x2 ≤ 24 (Raw material M1)

x1 + 2x2 ≤ 6 (Raw material M2)

The first demand restriction stipulate that excess of daily production of interior over
exterior paint, x2-x1, should not exceed 1 ton, which translates to

x2 − x1 ≤ 1 (market limit)

The second demand restriction stipulate that the max. daily demand of interior paint is
limited to 2 tons, which translates to

x2 ≤ 2 (demand limit)

An implicit (or "understood to be") restriction is that variable x1 and x2 cannot assume
negative values.

x1, x2 ≥ 0
The complete Reddy Mikks model is

Maximize z=5 x1 +4x2

subject to:
6 x1 + 4x2 ≤ 24
x1 + 2x2 ≤ 6
x2 − x1 ≤ 1
x2 ≤ 2
x1, x2 ≥ 0
 Properties of Linear Programming (LP) Solution
Feasible Solution: If all the constraints of the given linear programming model are
satisfied by the solution of the model, then that solution is known as feasible solution.
Optimal Solution: If there is no other superior solution to the solution obtained for a
given linear programming model, then the solution obtained is treated as the optimal
solution.
Alternate Optimal Solution: For some LPP, there may be more than one combination
of values of the decision variables yielding the best objective function value. Such
combinations of the values of the decision variables are known as alternate optimum
solutions.
Unbounded Solution: For some LP model, the objective function value can be
increased/decreased infinitely without any limitation. Such solution is known as
unbounded solution.
Infeasible Solution: If there is no combination of the values of the decision variables
satisfying all the constrained of the LP model, then that model is said to have
infeasible.
Degenerate Solution: In LPP, intersection of two constraints will define a corner
point of the feasible region. But if more than two constraints pass through any one of
the corner points of the feasible region, excess constraints will not serve any purpose,
and therefore they act as redundant constraints. Under such situation degeneracy will
occur.
 Graphical Method
If the number of variables in any LPP is only two, one can use graphical method to
solve it. These are the practical steps involved in solving LPP by Graphical method:
Step 1 → Consider each inequality constraint as equation.
Step 2 → Take one variable (say x) in a given equation equal to zero and find the
value of other variable (say y) by solving that equation to get one co-ordinate [say
(0, y)] for that equation.
Step 3 → Take the second variable (say y) as zero in the said equation and find the
value of first variable (say x) to get another co-ordinate [say (x, 0)] for that equation.
Step 4 → Plot both the co-ordinates so obtained [i.e., (0, y) and (x, 0)] on the graph
and join them by a straight line. This straight line shows that any point on that line
satisfies the equality and any point below or above that line shows inequality. Shade
the feasible region which may be either convex to the origin in the case of less than
type of inequality (<) or opposite to the origin in case of more than type of
inequality (>).
Step 5 → Repeat Steps 2 to 4 for other constraints.
Step 6 → Find the common shaded feasible region and mark the co-ordinates of its
corner points.
Step 7 → Put the co-ordinates of each of such vertex in the objective function.
Choose that vertex which achieves the most optimal solution.
Example 1

Maximize Z = 10x1 + 9x2

Subject to
3x1 + 3x2 ≤ 21
4x1 + 3x2 ≤ 24 (0,8)
x1, x2 ≥ 0
(0,7)
There are total 4 corner points:
(3,4)
At (0,0): Z=0
Feasible
At (0,7): Z=63 region 3x1 + 3x2 ≤ 21

At (6,0): Z= 60
(0,0) (6,0) (7,0)
At (3,4): Z= 66 Best Solution or
Optimal Solution 4x1 + 3x2 ≤ 24
Example 2

Maximize z=5 x1 +4x2

subject to:
6 x1 + 4x2 ≤ 24
x1 + 2x2 ≤ 6
x2 − x1 ≤ 1
x2 ≤ 2
x1, x2 ≥ 0
Example 3
Ozark farms uses at least 800 lb of special feed daily. The special feed is mixture of
corn and soybean meal with the following composition:

The dietary requirements of the special feed are at least 30% protein and at most
5% fiber. Ozark farms wishes to determine the daily minimum-cost feed mix
Solution
Variables:
The feed mix consists of corn and soybean meal, the decision variables of the model
are define as:
X1=lb of corn in the daily mix
X2=lb of soybean meal in the daily mix
Constraints:
The constraints of the model reflect the daily amount needed and the dietary
requirements because Ozark farms needs at least 800 lb of feed a day, the
associated constrain can be expressed as
𝑥1 + 𝑥2 ≥ 800
 As for the protein dietary requirement constraint, the amount of protein included
in x1 lb of corn and x2 lb of soybean meal is (0.09𝑥1 + 0.6𝑥2)lb. This quantity
should equal at least 30% of the total feed mix (x1+x2) lb :

0.09𝑥1 + 0.6𝑥2 ≥ 0.3(x1+x2)

or
0.21x1-0.3x2 ≤ 0
As for the fiber dietary requirement constraint, the amount of fiber included in x1
lb of corn and x2 lb of soybean meal is (0.02𝑥1+ 0.06𝑥2)lb. This quantity should
equal at most 5% of the total feed mix (x1+x2) lb :
0.02𝑥1 + 0.06𝑥2 ≤ 0.05(x1+x2)
or
0.03x1-0.01x2 ≥ 0
Objective function:
The objective function seeks to minimize the total daily cost (in dollars) of the
feed mix and is thus expressed as

Minimize z=0.3x1+0.9x2
The complete model thus become

Minimize z=0.3x1+0.9x2
Subject to
𝑥1 + 𝑥2 ≥ 800
0.21x1-0.3x2 ≤ 0
0.03x1-0.01x2 ≥ 0
x1, x2 ≥ 0
Example 4
A company buying scrap metal has two types of scrap available to them. The first
type of scrap metal has 20% of metal A, 10% of impurity and 20% of metal B by
weight. The second type of scrap has 30% of metal A,10% of impurity and 15% of
metal B by weight. The company requires at least 120 kg. of metal A, at most 40 kg.
of impurity and at least 90 kg. of metal B. The price for the two scraps are Rs. 200
and Rs. 300 per kg. respectively. Determine the optimum quantities of the two
scraps to be purchased so that the requirements of the two metals and the restriction
on impurity are satisfied at minimum cost.
Solution:

Introduce the decision variable x1 and x2 indicating the amount of scrap metal (in
kg.) to be purchased. The problem can be formulated as

Minimize z = 200x1 + 300x2

Subject to
0.2𝑥1 + 0.3𝑥2 ≥ 120
0.1x1 + 0.1x2 ≤ 40
0.2x1 + 0.15x2 ≥ 90
x1, x2 ≥ 0
Minimize z = 200x1 + 300x2
Subject to
0.2𝑥1 + 0.3𝑥2 ≥ 120
0.1x1 + 0.1x2 ≤ 40
0.2x1 + 0.15x2 ≥ 90
x1, x2 ≥ 0

The region right of the boundary ACF includes all solutions which satisfy the first
and the third constraints. The region located on the left of BD includes all
solutions which satisfy the second constraint. Hence, there is no solution
satisfying all the three constraints. Thus, the problem is infeasible.
Example 5 (Packaging)
A manufacturer of packing material, manufactures two types of packing tins, round
and flat. Major production facilities involved are cutting and joining. The cutting
'department can process 300 round tins or 500 flat tins per hour. The joining
department can process 500 round tins or 300 flat tins per hour. If the contribution
towards profit for a round tin is the same as that of a flat tin what is the optimum
production level?
Solution
Let us introduce decision variables x1 No. of round tins per hour, x2 = No. of flat tins
per hour. Since the contribution towards profit is identical for both the products the
objective function can be expressed as x1 + x2. Hence the problem can be formulated
as
Maximum z = x1 + x2
Subject to
(1/300)𝑥1 + (1/500)𝑥2 ≤ 1
(1/500)x1 + (1/300) x2 ≤ 1
x1, x2 ≥ 0
or
5𝑥1 + 3𝑥2 ≤ 1500
3x1 + 5x2 ≤ 1500
x1, x2 ≥ 0
 Maximum z = x1 + x2
Subject to
5𝑥1 + 3𝑥2 ≤ 1500
3x1 + 5x2 ≤ 1500
x1, x2 ≥ 0

Point B is (1500/8, 1500/8).

The optimum value of x1+x2 :

x1+x2 = 1500/8 + 1500/8

= 375.
Problem
A nutrition scheme for babies is proposed by a committee of doctors. Babies can
be given two types of food (I and II) which are available in standard sized
packets weighing 50 grams. The cost per packet of these foods is Rs.2 and Rs.3,
respectively. The vitamin availability in each type of food per packet and the
minimum vitamin requirement for each type of food are summarized below.
Develop a LP model to determine the optimal combination of food types with
the minimum cost such that the minimum requirement of vitamin in each type is
satisfied.
Vitamin availability per packet Minimum daily
Vitamin
Food Type I Food Type II required vitamin
1 1 1 6
2 7 1 14
Cost/Packet(Rs) 2 3
Table: Details of Food Types

Solution
Minimize z = 2x1 + 3x2
Subject to
𝑥1 + 𝑥2 ≥ 6
7x1 + x2 ≥ 14
x1, x2 ≥ 0