MBA SEMESTER 2

MB0048 –Operations Research- 4 Credits

(Book ID: B1137)
Assignment Set- 1

1 a. “Operation Techniques is a bunch of mathematical

techniques.”Comment.
Answer:-
Churchman, Aackoff and Aruoff defined Operations Research as: “the application of scientific methods,
techniques and tools to operation of a system with optimum solutions to the problems”, where 'optimum'
refers to the best possible alternative.

The objective of Operations Research is to provide a scientific basis to the decision-makers for solving
problems involving interaction of various components of the organisation. You can achieve this by
employing a team of scientists from different disciplines, to work together for finding the best possible
solution in the interest of the organisation as a whole. The solution thus obtained is known as an optimal
decision.
You can also define Operations Research as “The use of scientific methods to provide criteria for
decisions regarding man, machine, and systems involving repetitive operations”.OR “Operation
Techniques is a bunch of mathematical techniques.”

b. “Operation Research is an aid for the executive in making his

decisions based on scientific methods analysis”. Discuss the above
statement in brief.
Answer:-
“Operation Research is an aid for the executive in making his decisions based on scientific
methods analysis”.

Discussion:-

Any problem, simple or complicated, can use OR techniques to find the best possible solution. This
section will explain the scope of OR by seeing its application in various fields of everyday life.

i) In Defense Operations: In modern warfare, the defense operations are carried out by three major
independent components namely Air Force, Army and Navy. The activities in each of these components
can be further divided in four sub-components namely: administration, intelligence, operations and
training and supply. The applications of modern warfare techniques in each of the components of military
organisations require expertise knowledge in respective fields. Furthermore, each component works to
drive maximum gains from its operations and there is always a possibility that the strategy beneficial to
one component may be unfeasible for another component. Thus in
defense operations, there is a requirement to co-ordinate the activities of various components, which gives
maximum benefit to the organisation as a whole, having maximum use of the individual components. A
team of scientists from various disciplines come together to study the strategies of different components.
After appropriate analysis of the various courses of actions, the team selects the best course of action,
known as the ‘optimum strategy’.
ii) In Industry: The system of modern industries is so complex that the optimum point of operation in its
various components cannot be intuitively judged by an individual. The business environment is always
changing and any decision useful at one time may not be so good some time later. There is always a need
to check the validity of decisions continuously against the situations. The industrial revolution with
increased division of labour and introduction of management responsibilities has made each component
an independent unit having their own goals. For example: production department minimises the cost of
production but maximises output. Marketing department maximises the output, but minimises cost of unit
sales. Finance department tries to optimise the capital investment and personnel department appoints
good people at minimum cost. Thus each department plans its own objectives and all these objectives of
various department or components come to conflict with one another and may not agree to the overall
objectives of the organisation. The application of OR techniques helps in overcoming this difficulty by
integrating the diversified activities of various components to serve the interest of the organisation as a
whole efficiently. OR methods in industry can be applied in the fields of production, inventory controls
and marketing, purchasing, transportation and competitive strategies.
iii) Planning: In modern times, it has become necessary for every government to have careful planning,
for economic development of the country. OR techniques can be fruitfully applied to maximise the per
capita income, with minimum sacrifice and time. A government can thus use OR for framing future
economic and social policies.
iv) Agriculture: With increase in population, there is a need to increase agriculture output. But this
cannot be done arbitrarily. There are several restrictions. Hence the need to determine a course of action
serving the
best under the given restrictions. You can solve this problem by applying OR techniques.
v) In Hospitals: OR methods can solve waiting problems in out-patient department of big hospitals and
administrative problems of the hospital organisations.
vi) In Transport: You can apply different OR methods to regulate the arrival of trains and processing
times minimise the passengers waiting time and reduce congestion, formulate suitable transportation
policy, thereby reducing the costs and time of trans-shipment.
vii) Research and Development: You can apply OR methodologies in the field of R&D for several
purposes, such as to control and plan product introductions.
Self Assessment Questions

2. Comment on the following statements:

a. Operation Research advocates a system approach and is concerned with
optimization.

Answer:-
Features of Operation Research
Some key features of OR are as follows:

1. OR is system oriented. OR scrutinizes the problem from an organization’s perspective. The results can
be optimal for one part of the system, while the same can be unfavorable for another part of the system.
2. OR imbibes an inter–disciplinary team approach. Since no single individual can have a thorough
knowledge of all fast developing scientific know-how, personalities from different scientific and
managerial cadre form a team to solve the problem.

3. OR makes use of scientific methods to solve problems.

4. OR increases effectiveness of the management’s decision-making ability.

5. OR makes use of computers to solve large and complex problems.

6. OR offers a quantitative solution.

7. OR also takes into account the human factors

Due to above a feature Operation Research advocates a system approach and is concerned with
optimization.

b. Operation Research replaces management by personality.

3. Explain how the profit maximization transportation problem can
be converted to an equivalent cost minimization transportation
problem.
Answer :
I can apply different OR methods to regulate the arrival of trains and processing times minimise the
passengers waiting time and reduce congestion, formulate suitable transportation policy, thereby reducing
the costs and time of trans-shipment.

Transportation model: The transportation model is an important class of linear programs. The model
studies the minimisation of the cost of transporting a commodity from a number of sources to several
destinations. The supply at each source and the demand at each destination are known. The objective of
the model is to develop an integral transportation schedule that meets all demands from the inventory at a
minimum total transportation cost.
The transportation problem involves m sources, each of which has available a i (i = 1, 2, …..,m) units of
homogeneous product and n destinations, each of which requires b j (j = 1, 2…., n) units of products. Here
ai and bj are positive integers. The cost cij of transporting one unit of the product from the i th source to the
jth destination is given for each i and j. It is assumed that the total supply and the total demand are equal.

The condition (1) is guaranteed by creating either a fictitious destination with a demand equal to the
surplus if total demand is less than the total supply or a (dummy) source with a supply equal to the
shortage if total demand exceeds total supply. The cost of transportation from the fictitious destination to
all sources and from all destinations to the fictitious sources are assumed to be zero so that total cost of
transportation will remain the same.
So the profit maximization transportation problem can be converted to an equivalent cost
minimization transportation problem.
4. Write the difference in the simplex solution procedure for a
maximization problem and a minimization problem of linear
programming.
Every linear programming problem (LPP) is associated with another linear programming problem
involving the same data and optimal solutions. Such two problems are said to be duals of each other. One
problem is called the primal, while the other problem is called the dual.
The dual formulation is derived from the same data and solved in a manner similar to the original 'primal'
formulation. In other words, you can say that dual is the 'inverse' of the primal formulation because of the
following reasons.

 If the primal objective function is 'maximisation' function, then the dual objective function is
'minimisation' function and vice-versa.

 The column co-efficient in the primal constraint is the row co-efficient in the dual constraint.

 The co-efficients in the primal objective function are the RHS constraint in the dual constraint.

The RHS column of constants of the primal constraints becomes the row of co-efficient of the dual
objective function.

The concept of duality is useful to obtain additional information about the variation in the optimal
solution. These changes could be effected in the constraint co-efficient, in resource availabilities and/or
objective function co-efficient. This effect is termed as post optimality or sensitivity analysis.

5. What do you mean by the two-phase method for solving a given

LPP? Why is it used?
Every linear programming problem (LPP) is associated with another linear programming problem
involving the same data and optimal solutions. Such two problems are said to be duals of each other. One
problem is called the primal, while the other problem is called the dual.
The dual formulation is derived from the same data and solved in a manner similar to the original 'primal'
formulation. In other words, you can say that dual is the 'inverse' of the primal formulation because of the
following reasons.

 If the primal objective function is 'maximisation' function, then the dual objective function is
'minimisation' function and vice-versa.

 The column co-efficient in the primal constraint is the row co-efficient in the dual constraint.

 The co-efficients in the primal objective function are the RHS constraint in the dual constraint.

The RHS column of constants of the primal constraints becomes the row of co-efficient of the dual
objective function.
The concept of duality is useful to obtain additional information about the variation in the optimal
solution. These changes could be effected in the constraint co-efficient, in resource availabilities and/or
objective function co-efficient. This effect is termed as post optimality or sensitivity analysis.

Characteristics of dual solutions

If the primal problem possesses a unique non-degenerate, optimal solution, then the optimal solution to
the dual is unique. However, dual solutions arise under a number of other conditions. Several of the cases
which can arise are:

 When the primal problem has a degenerate optimal solution, the dual has multiple optimal solutions.

 When the primal problem has multiple optimal solutions, the optimal dual solution is degenerate.

 When the primal problem is unbounded, the dual is infeasible.

 When the primal problem is infeasible, the dual is unbounded or infeasible.

Formulation of Dual Concepts
Consider the following LPP
Maximise Z = c1x1 +c2x2 + . . .+ cnxn
Subject to the constraints
a11 x1 + a12 x2 + . . . + a1n xn ≤ b1
a21 x1 + a22 x2 + . . . + a2n xn ≤ b2
am1 x1 + am2 x2 + . . . + amn xn ≤ bm
x1, x2, . . ., xn ≥ 0
To construct a dual problem, you must adopt the following guidelines:

i. The maximisation problem in the primal becomes a minimisation problem in the dual and vice versa

ii. (≤) type of constraints in the primal become (≥) type of constraints in the dual and vice versa.

iii. The coefficients c1, c2, . . .,cn in the objective function of the primal become b 1, b2,…,bm in the objective
function of the dual.

iv. The constants b1, b2,…,bm in the constraints of the primal become c1, c2, . . .,cn in the constraints of the
dual

v. If the primal has n variables and m constraints the dual will have m variables and n constraints

vi. The variables in both the primal and dual are non-negative

Thus the dual problem will be

Minimise W = b1 y1 + b2 y2 + . . . +bm ym
Subject to the constraints
a11 y1 + a21 y2 + . . . + am1 ym ≥ c1
a12 y1 + a22 y2 + . . . + am2 ym ≥ c2
a1n y1 + a2n y2 + . . . + amn ym ≥ cn
y1, y2, . . ., ym ≥ 0

Formation of dual LPP is easier when the standard form of LPP for maximisation problem must contain
“≤” type of constraints, while for minimisation problem, it must contain “≥” type of constraints.