OR Unit 1
OR Unit 1
Operations research quantifies the relevant factors of an issue and uses mathematical techniques to arrive
at an optimal decision. Operations research is important because it is a helpful tool used to solve complex
problems under uncertainty. In business, very few things are certain, and managers must often make
decisions based on their instincts instead of being able to use reliable data. Operations research
techniques fill this void with methods that quantify issues and give business managers a better basis for
making decisions.
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6. Describe the use of various operation research models in the field of business.
Linear programming is a mathematical technique of assigning a fixed amount of resources to satisfy a
number of demands in such a way that some objectives are optimized and other defined conditions are also
satisfied.
The transportation problem is special type of linear programming problem where the objective is to
minimize the cost of distributing a product from a number of sources to a number of destinations.
Succinctly, when the problem involves the allocation of n different facilities to n different tasks, it is often
termed as assignment problem.
The queuing problem is identified by a group of customers who arrived randomly to receive some service.
Game theory is used for decision making under conflicting situations where there are one or more opponent.
In this theory we consider two or more person s with different objectives each of whose actions influence the
outcome of the game.
8. Define Model. Explain briefly different types of OR models based on different classification.
The model is a collection of logical and mathematical relationships that represents aspects of the situation
under study.
Models can be classified on the basis of following factors:
1. By degree of Abstraction:
i. Mathematical models.
ii. Language models.
2. By Function:
i. Descriptive models.
ii. Predictive models.
iii. Normative models for repetitive problems.
3. By Structure:
i. Physical models.
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ii. Analogue (graphical) models.
iii. Symbolic or mathematical models.
4. By Nature of Environment:
i. Deterministic models.
ii. Probabilistic models.
5. By the Time Horizon:
i. Static models.
ii. Dynamic models.
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10. Write a short note on Methodologies in OR.
Operation Research, is a scientific approach for decision-making, and therefore must follow following
steps:
1. Formulating the Problem:
The problem must be first clearly defined. It is common to start the O.R. study with tentative formulation of
the problem, which is reformulated over and again during the study. The study must also consider
economical aspects.
While formulating the O.R. study, analyists must analyse following major components:
(i) The environment:
Environment involves physical, social and economical factors which are likely to affect the problem under
consideration. O.R. team or analysts must study the organisation contents including men, materials,
machines, suppliers, consumers, competitors, the government and the public.
(ii) Decision-makers:
Operation analyst must study the decision-maker and his relationship to the problem at hand.
(iii) Objectives:
Considering the problem as whole, objectives should be defined.
(iv) Alternatives:
The O.R. study determines as to which alternative course of action is most effective to achieve the desired
objectives. Expected reactions of the competitors to the alternative must also be considered.
2. Deriving Solution:
Models are used to determine the solution either by simulation or by mathematical analysis. Mathematical
analysis for deriving optimum solution includes analytical or numerical procedure, and uses various
branches of mathematics.
3. Testing the Model and Solution:
A properly formulated and correctly manipulated model is useful in predicting the effect of changes in
control variables on the overall system effectiveness. The validity of the solution is checked by comparing
the results with those obtained without using the model.
4. Establishing Controls over the Solution:
The solution derived from a model remains effective so long as the uncontrolled variables retain their values
and the relationship. The solution goes out of control, if the values of one or more variables vary or
relationship between them undergoes a change. In such circumstances the models need to be modified to
take the changes into account.
5. Implementing the Solution:
Solution so obtained should be translated into operating procedure to make it easily understandable and
applied by the concerned persons. After applying the solution to the system, O.R. group must study the
response of the system to the changes made.
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