OPERATIONS RESEARCH

Lecture 2
MORE OR MODELS
by
Dr. KUSUM DEEP
Professor
Department of Mathematics
Indian Institute of Technology Roorkee
Roorkee – 247667, Uttaranchal, INDIA
Emails: [email protected], [email protected]
 OUTLINE OF THIS TALK

• Transportation Problem
• Travelling Salesman Problem
• Capital Budgeting Problem
• Cargo Loading Problem
• Caterer Problem
• Questions and Exercises
 Transportation Problem

x11(c11) D1
O1 x13(c
x12(c12)
x14 ( 13)
c14 )
1)
x21(c2x22(c22) D2
O2 x24(c
x
23(c23)
24 )

) )
x
(
31
c 31
x (c32
32

x33(c33)
D3
O3 x
34(c
3) 4

D4
Oi , i=1,2,…. m are m origins or supply locations
Dj , j=1,2,… n are n destinations or demand locations
If the cost coefficients, demands and
supplies as given, then model the
transportation problem so as to minimize
the cost.
D1 D2 D3 D4 supply

O1 1 2 –2 3 70
O2 2 4 0 1 38
O3 1 2 –2 5 32
demand 40 28 30 42 140
Let xij = no. of units to be transported from
ith origin to jth destination
All xij > 0
Minimize cost =
z = x11 + 2x12 –2x13 + 3x14
+2x21 + 4x22 + x24
+ x31 + 2x32 – 2x33 + 5x34
Such that
Constraints on supply are met:
x11 + x12 + x13 + x14 = 70
x21 + x22 + x23 + x24 = 38
x31 + x32 + x33 + x34 = 32
Constraints on demands are met:
x11 + x21 + x31 = 40
x12 + x22 + x32 = 28
x13 + x23 + x33 = 30
x14 + x24 + x34 = 42
Travelling Salesman Problem
A salesman has to visit five cities,
Ci, i = 1, 2, …, 5. He should start from C1,
his headquarters, visit each city once and
only once, and return to C1. The cost of
travelling from Ci to Cj is given in the table.
(dash indicates that the journey is not
possible). Model how he should travel to
minimize the cost.
 C1 C2 C3 C4 C5
C1 – 20 4 15 –
C2 6 – 5 – 10
C3 7 4 – 6 8
C4 11 5 8 – 12
C5 – 13 9 6 –
xij = 1, if the salesman travels from city i to
city j
= 0, otherwise
Minimize z = 20x12 + 4x13 + 15x14 +
6X11 + 5x13 + 10x15 + 7x11 +4x12 + 6x14 + 8x15 +
11x11 + 5x12 + 8x13 + 12x15 + 13x12 + 9x13 +6x14
∑xij = 1 for all i,j = 1,2,3,4,5 summation over i

∑ xij = 1 for all j,i = 1,2,3,4,5 summation over j

 Capital Budgeting Problem
Remco Industries is in the process of
drawing up a Capital Budget for the next 3
years. It has funds to the tune of Rs.1 Lakh,
which can be allocated to projects A, B, C
and D. The net cash flow associated with an
investment of Rs. 1 in each project is
provided below:
 Cash flow at a time
0 1 2 3
From inv. A – Re. 1 + Re. 0.5 + Re. 1 Re. 0
From inv. B Re. 0 – Re. 1 + Re. 0.5 + Re. 1
From inv. C – Re. 1 + Rs. 1.2 Re. 0 Re. 0
From inv. D – Re. 1 Re. 0 Re. 0 + Rs. 1.9
From inv. E Re. 0 Re. 0 – Re. 1 + Rs. 1.5

Time 0: present
Time 1: 1 year from now
Time 2: 2 years from now
Time 3: 3 years from now
Re.1 invested in investment B requires a
Re.1 cash flow at time 1 and returns Re.0.5
at time 2 and Re.1 at time 3. To ensure that
the firm remains reasonably diversified, the
firm will not commit an investment exceeding
Rs.75,000/- in any project. The firm cannot
borrow funds; therefore the cash available
for investment at any time is limited to cash
on hand.
The firm will earn interest at 8% p.a. by
parking the uninvested funds in money
market investments. Assume that the returns
from investments can be immediately
reinvested. e.g. the positive cash flow
received from project C at time 1 can
immediately be reinvested in project B.
Formulate an LPP that will maximize cash
flow on hand at time 3.
• Company wants to decide the optimum
allocation of funds to projects A, B, C, D, E
and money market investments.
• Let xA, xB, xC, xD, xE be the amount in Rs.
invested in A, B, C, D, E.
• Let S0, S1, S2 be surplus amount at year
0,1,2 which is amount invested in money
market.
Objective: Maximize cash on hand at time 3.
At time 0
Funds available = Rs.1,00,000/-
Amount invested = Rs. (xA + xC + xD)
So, S0 = Rs.(100000 – (xA + xC + xD))
At time 1
Funds available = Rs.(0.5xA+1.2xC+1.08S0)
Amount invested = Rs. xB
So, xB < 0.5xA+1.2xC+1.08S0
And surplus S1 = (0.5xA+1.2xC+1.08S0) - xB
At time 2
• Funds available = Rs. xA+0.5xB+1.08S1
Amount invested = Rs. xE
So, xE < xA+0.5xB+1.08S1
And surplus S2 = (xA+0.5xB+1.08S1) – xE
At time 3
Funds available = Rs. xB+1.9xD+1.5xE+ 1.08S2
Final model
Maximize Z = xB+1.9xD+1.5xE+ 1.08S2
s.t. S0 = Rs.(100000 – (xA + xC + xD))
S1 = (0.5xA+1.2xC+1.08S0) – xB
S2 = (xA+0.5xB+1.08S1) – xE
xA, xB, xC, xD, xE < 75000 (given)
xA, xB, xC, xD, xE , S0, S1, S2 > 0
 Cargo Loading Problem
A 4-ton vessel is to be loaded with one or
more of three items. The following table
gives the unit weight, wi, in tons and the
unit revenue, ri, in thousands of rupees for
item i. How should the vessel be loaded to
maximize the total return?
Item i wi ri
1 2 31
2 3 47
3 1 14
Let u1 , u2 , u3 be no. of items of type i=1, 2, 3
which should be loaded on the vessel to
maximize the total return.
Max z = 31u1 + 47u2 +14u3
subject to 2u1 + 3u2 +u3  4
u1 , u2 , u3 non-negative integers
 Caterer Problem
A caterer is to organize a garden party for a
week. He needs a total of 160, 120, 60, 90,
110, 100 and 120 fresh napkins during the 7
days of the week. Each new napkins costs
Rs. 3/-. He can use soiled napkins after
getting them washed from a laundry.
Ordinarily washing charges are Rs.0.60 per
napkin and they are returned after 4 days.
However, the laundry also provides
express service at a cost of Re.1 per
napkin, in which case they are returned
after 2 days. Formulate LP model to
determine the planning schedule the
caterer should adopt to buy or send
napkins to the laundry so as to minimize
the cost.
xj = no. of napkins bought on the jth day
yj = no. of napkins sent for express laundry
service on the jth day
zj = no. of napkins sent for ordinary laundry
service on the jth day
vj = no. of napkins soiled on the jth day but
not sent to laundry on the jth day
All xj , yj , zj , vj > 0 and integers
For first 3 days he has to buy new napkins
x1 = 160 ; x2 = 120 ; x3 = 60
Supply of napkins for 7 days is:
Day
Type 1 2 3 4 5 6 7
New
napkin x1 x2 x3 x4 x5 x6 x7
Express
service - - - y1 y2 y3 y4
Ordinary
service - - - - - z1 z2
Total
required 160 120 60 90 110 100 120
Requirements constraints are:
x1 = 160
x2 = 120
x3 = 60
x4 + y1 = 90
x5 + y2 = 110
x6 + y3 + z1 = 100
x7 + y4 + z2 = 120
No. of soiled napkins on jth day
= no. used on jth day + no. left on (j – 1) th day
y1 + z1 + v1 = 160
y2 + z2 + v2 = 120 + v1
y3 + z3 + v3 = 60 + v2
y4 + z4 + v4 = 90 + v3
y5 + z5 + v5 = 110 + v4
y6 + z6 + v6 = 100 + v5
y7 + z7 + v7 = 120 + v6
 But y5 = y6 = y7 = 0
And z3 = z4 = z5 = z6 = z7 = 0
So we get:
y1 + z1 + v1 = 160
y2 + z2 + v2 = 120 + v1
y3 + v3 = 60 + v2
y4 + v4 = 90 + v3
v5 = 110 + v4
v6 = 100 + v5
v7 = 120 + v6
 Objective is minimize cost
Minimize z = 3(x1 + x2 + x3 + x4 + x5 + x6 + x7)
+ (y1 + y2 + y3 + y4 )
+ 0.6(z1 + z2 + z3 )
 Exercises
A lady of taste and fashion has the following
requirement of saris for six months. Each
sari costs Rs 500, and once worn can be
repeated but not in the same or the next
month. It can be worn again in the third,
fourth, fifty or sixth month but at an
estimated cost of Rs 100,80,60,50 resp.
which includes the dry-cleaning charges
and also the cost of loss of face to the lady.
All the saris have to be rejected after
August as they would be out of fashion
next year. Find the schedule of purchasing
and wearing the saris so that the cost is
minimum.

Month March April May June July August

No.of 10 15 20 18 14 10
saris
 THANK YOU
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