Chapter One Introduction To Operations Research 1.1 History of Operations Research and Management Science
Chapter One Introduction To Operations Research 1.1 History of Operations Research and Management Science
The work of these OR teams was very successful and their solutions were effective in
military management. This led to the use of such scientific teams in other Allied
nations, in particular the United States, France, and Canada. At the end of the war,
many of the scientists who worked in the military operational research units returned
to civilian life in universities and industries. They started applying the OR
methodology to solve complex management problems in industries. Petroleum
companies were the first to make use of OR models for solving large-scale production
and distribution problems. In the universities advancements in OR techniques were
made that led to the further development and applications of OR. Much of the postwar
development of OR took place in the United States.
An important factor in the rapid growth of operations research was the introduction of
electronic computers in the early 1950s. The computer became an invaluable tool to
the operations researchers, enabling them to solve large problems in the business
world.
The Operations Research Society of America (ORSA) was formed in 1952 to serve
the
Professional needs of these operations research scientists. Due to the application of
OR in
industries, a new term called management science (MS) came into being. In 1953, a
national society called The Institute of Management Sciences (TIMS) was formed in
the United States to promote scientific knowledge in the understanding and practice of
management. The journals of these two societies, Operations Research and
Management Science, as well as the joint conferences of their members, helped to
draw together the many diverse results into some semblance of a coherent body of
knowledge. In 1995, the two societies, ORSA and TIMS, merged to form the Institute
of Operations Research and Management Sciences (INFORMS).
Another factor that accelerated the growth of operations research was the introduction
of OR/MS courses in the curricula of many universities and colleges in the United
States. Graduate programs leading to advanced degrees at the master’s and doctorate
levels were introduced in major American universities. By the mid-1960s many
theoretical advances in OR techniques had been made, which included linear
programming, network analysis, integer programming, nonlinear programming,
dynamic programming, inventory theory, queuing theory, and simulation.
Simultaneously, new applications of OR emerged in service organizations such as
banks, health care, communications, libraries, and transportation. In addition, OR
came to be used in local, state, and federal governments in their planning and
policy-making activities.
How then can we define operations research? The Operational Research Society of
Great
Britain has adopted the following definition:
Operational research is the application of the methods of science to complex
problems arising in the direction and management of large systems of men, machines,
materials and money in industry, business, government, and defense. The distinctive
approach is to develop a scientific model of the system, incorporating measurement of
factors such as chance and risk, with which to predict and compare the outcomes of
alternative decisions, strategies or controls. The purpose is to help management
determine its policy and actions scientifically.
The Operations Research Society of America has offered a shorter, but similar,
description:
Operations research is concerned with scientifically deciding how to best design and
operate man–machine systems, usually under conditions requiring the allocation of
scarce resources.
However, the following definition is proposed here:
“Operations Research is a systematic analysis of a problem through scientific
methods, carried out by appropriate specialists, working together as a team,
constituted at the instance of management for the purpose of finding an optimum and
the most appropriate solution, to meet the given objective under a given set of
constraints.”
From the concept and definition given above, Operations Research is:
1. The application of scientific methods, techniques and tools to the problem to find
an answer
2. A management tool in the hands of a manager to take a decision
3. A scientific approach to decision making process
4. An “applied research” aims at finding a solution for an immediate problem facing
a society, industry or a business enterprise .This is not “fundamental research”
5. A decision-oriented research, using scientific methods, for providing management a
quantitative basis for taking decision regarding operations under its control
6. Applied decision theory. It uses scientific, mathematical and logical means to take
decisions.
Definition
Decision making is the process of selecting or choosing based on some criteria, the
best alternative among alternatives.
-Problem is any variation between what was planned and what is actually
have/produced.
-Problem solving can be defined as the process of identifying a difference between
some actual and some desired states of affairs and then taking action to resolve the
difference.
Example:
The structure of an atom
Model of an airplane
Photograph of a machine
Layout drawing of a factory
Globe
CHAPTER TWO
LINEAR PROGRAMMING
Linear Programming- is an optimization method, which shows how to allocate
scarce resources such as money, materials or time and how to do such allocation in
the best possible way subject to more than one limiting condition expressed in the
form of inequalities and/or equations. It enables users to find optimal solution to
certain problems in which the solution must satisfy a given set of requirements or
constraints.
Components Assumptions
1. Objective function 1. Linearity
2. Decision variables Model 2. Divisibility Model
3. Constraints Structure 3. Certainty Validity
4. Parameters & RHSV 4. Non-negativity
Components of LP model
1. The Objective Function- is the mathematical or quantitative expression of the
objective of the company/model. The objective in problem solving is the criterion by
which all decisions are evaluated. In LPMs a single quantifiable objective must be
specified by the decision maker. For example, the objective might relate to profits, or
costs, or market share, but to only one of these. Moreover, because we are dealing
with optimization, the objective will be either maximization or minimization, but not
both at a time.
2.The Decision Variables - represent unknown quantities to be resolved for. These
decision variables may represent such things as the number of units of different
products to be sold, the amount of Birr to be invested in various projects, the number
of advertisements to be placed with different media. Since the decision maker has
freedom of choice among actions, these decision variables are controllable variables.
3. The constraints - are restrictions which define or limit the feasibility of a proposed
course of action. They limit the degree to which the objective can be pursued.
Atypical restriction embodies scarce resources (such as labor supply, raw materials,
production capacity, machine time, storage space), legal or contractual requirements
(e.g. product standards, work standards), or they may reflect other limits based on
forecasts, customer orders, company policies etc.
4. Parameters- are fixed values that specify the impact that one unit of each decision
variable will have on the objective and on any constraint it pertains to as well as to the
numerical value of each constraint.
The components are the building blocks of an LP model. We can better
understand their meaning by examining a simple LP model as follows.
Example:
Maximize: 4X1 + 7X2 + 5X3 (Profit) ________________ objective function
Subject to:
2X1 + 3X2 + 6X3 300 labor hrs
5X1 + X2 + 2X3 200 lb raw material A System constraints
3X1 + 5X2 + 2X3 360
X1 = 30 Individual
X2 40 constraints
X1, X2, X3 0 Non-negativity constraints.
System constraints – involve more than one decision variables.
Individual constraints – involve only one decision variable.
None-negativity constraints specify that no variable will be allowed to take on a
negative value. The non-negativity constraints typically apply in an LP model,
whether they are explicitly stated or not.
Assumptions of LP Models
1. Linearity. The linearity requirement is that each decision variable has a linear
impact on the objective function and in each constraint in which it appears. Following
the above example, producing one more unit of product 1 adds Br. 4to the total profit.
This is true over the entire range of possible values of X1. The same applies to each of
the constraints. It is required that the same coefficient (from example, 2 lb. per unit)
apply over the entire range of possible value so the decision variable.
2. Divisibility. The divisibility requirement pertains to potential values of decision
variables. It is assumed that non-integer values are acceptable. For example: 3.5 TV
sets/hr would be acceptable 7 TV sets/2hrs.
3. Certainty. The certainty requirement involves two aspects of LP models.
i) With respect to model parameters (i.e., the numerical values) – It in assumed
that these values are known and constant e.g. in the above example each unit of
product 1 requires 2lab his is known and remain constant, and also9 the 300
lab/hr available is deemed to be known and constant.
ii) All the relevant constraints identified and represented in the model are as they
are.
4. Non-negativity. The non-negativity constraint is that negative values of variables are
unrealistic and, therefore, will not be considered in any potential solution; only
positive values and zero will be allowed.
Formulating LP Models
Once a problem has been defined, the attention of the analyst shifts to formulating a
model. Just as it is important to carefully define a problem, it is important to carefully
formulate the model that will be used to solve the problem. If the LP model is ill
formulated, ill-structured, it can easily lead to poor decisions.
Formulating linear programming models involves the following steps:
1. Define the problem/problem definition
* To determine the # of type 1 and type 2 products to be produced per month
so as to maximize the monthly profit given the restrictions.
2. Identify the decision variables or represent unknown quantities
* Let X1 and X2 be the monthly qualities of Type 1 and type 2 products
3. Determine the objective function
* Once the variables have been identified, the objective function can be
specified. It is necessary to decide if the problem is a maximization or a
minimization problem and the coefficients of each decision variable.
Note: a. The units of all the coefficients in the objective function must be the
same.
E.g. If the contribution of type 1 is in terms of Br so does for type 2.
b. All terms in the objective function must include a variable each term have to
have 1 variable.
c. All decision variables must be represented in the objective
function.
4. Identifying the constraints
- System constraints - more than one variable
- Individual constraints - one variable
- Non-negative constraints
Example 1: A firm that assembles computer and computer equipment is about to start
production of two new microcomputers. Each type of micro-computer will require
assembly time, inspection time and storage space. The amount of each of these
resources that can be devoted to the production of microcomputers is limited. The
manger of the firm would like to determine the quantity of each microcomputer to
produce in order to maximize the profit generated by sales of these microcomputers.
Additional information
In order to develop a suitable model of the problem, the manager has meet with
design and manufacturing personnel. As a result of these meetings, the manger has
obtained the following information:
Type 1 Type 2
Profit per unit Birr 60 Birr 50
Assembly time per unit 4hrs 10hrs
Inspection time per unit 2hrs 1hr
Storage space per unit 3cubic ft 3cubic ft
The manager also has acquired information on the availability of company resources.
These weekly amounts are:
Resource Resource available
Assembly time 100hrs
Inspection time 22hrs
Storage space 39 cubic feet
The manger also meet with the firm’s marketing manager and learned that demand for
the microcomputers was such that whatever combination of these two types of
microcomputer is produced, all of the output can be sold.
Required: Formulate the Linear programming model:
Solution:
Step 1: Problem Definition
- To determine the number of two types of microcomputers to be
produced (and sold) per week so as to maximize the weekly profit
given the restriction.
Step 2: Variable Representation
- Let X1 and X2 be the weekly quantities of type 1 and type 2
microcomputers, respectively.
Step 3: Develop the Objective Function
Maximize or Z max = 60X1 + 50X2
Step 4: Constraint Identification
System constraints: 4X1 + 10X2 100hrs Assembly time
2X1 + X2 22hrs inspector time
3X1 + 3X2 39 cubic feet Storage space
Individual constraint: No
Non-negativity constraint: X1, X2 0
In summary, the mathematical model for the microcomputer problem is:
Z max = 60X1 + 50X2
Subject to: 4X1 + 10X2 100
2X1 + X2 22
3X1 + 3X2 39
X1, X2 0
2. An electronics firm produces three types of switching devices. Each type involves a
two-step assembly operation. The assembly times are shown in the following table:
Assembly time per Unit (in minutes). Section #1
Section #2
Model A 2.5 3.0
Model B 1.8 1.6
Model C 2.0 2.2
Each workstation has a daily working time of 7.5 hrs. The manager wants to obtain
the greatest possible profit during the next five working days. Model A yields a profit
of Birr 8.25 per unit, Model B a profit of Birr 7.50 per unit and Model C a profit of
Birr 7.80 per unit. Assume that the firm can sell all it produces during this time, but it
must fill outstanding orders for 20 units of each model type.
In summary:
Z max: 8.25X1 + 7.50X2 + 7.80X3
: 2.5X1 + 1.8X2 + 2.0X3 2250 minutes
3.0X1 + 1.6X2 + 2.2X3 2250 minutes
X1 20 model A
X2 20 model B
X3 20 model C
X1, X2, X3 0 non-negativity
3. A diet is to include at least 140 mgs of vitamin A and at least 145 Mgs of vitamin B.
These requirements are to be obtained from two types of foods: Type 1 and Type 2.
Type 1 food contains 10Mgs of vitamin A and 20mgs of vitamin B per pound. Type 2
food contains 30mgs of vitamin A and 15 mgs of vitamin B per pound. If type 1 and 2
foods cost Birr 5 and Birr 8 per pound respectively, how many pounds of each type
should be purchased to satisfy the requirements at a minimum cost?
Vitamins
Foods A B
Type 1 10 20
Type 2 30 15
Solution:
Step 1. Problem definition
To determine the pounds of the two types of foods to be purchased to make the diet at
a minimum possible cost within the requirements.
Step 2. Variable representation
Let X1 and X2 be the number of pounds of type 1 and type 2 foods to be
purchased, respectively.
Step 3. Objective function
Z min: 5X1 + 8X2
4. Constraints
10X1 + 30X2 140 System constraints
20X1 + 15X2 145
X1, X2 0 non-negativity constraints.
4. A farm consists of 600 hectares of land of which 500 hectares will be planted with corn,
barley and wheat, according to these conditions.
(1) At least half of the planted hectare should be in corn.
(2) No more than 200 hectares should be barley.
(3) The ratio of corn to wheat planted should be 2:1
It costs Birr 20 per hectare to plant corn, Birr 15 per hectare to plant barley and Birr
12 per hectare to plant wheat.
a. Formulate this problem as an LP model that will minimize planting cost
while achieving the specified conditions.
Solution:
Step 1. Problem definition
To determine the number of hectares of land to be planted with corn, barley
and wheat at a minimum possible cost meeting the requirements.
Step 2. Decision variable representation
Let X1 be the number of hectares of land to be planted with corn, X2 be
the number of hectares of land to be planted with barley, and X3 be the
number of hectares of land to be planted with wheat.
Step 3. Objective function
Z min = 20X1 + 15X2 + 12X3
Step 4. Constraints
X1 + X2 + X3 = 500
X1 250
X2 200
X1 – 2X3 =0
X1, X2, X3 0
In summary
Z min: 20X1 + 15X2 + 12X3
S.t. X1 + X2 + X2 = 500
X1 – 2X3 =0
X1 250
X2 200
X1, X2, X3 0
Solution Approaches to Linear Programming Problems
There are two approaches to solve linear programming problems:
1. The Graphic solution method
2. The Algebraic solution/ simplex algorithm method
20
16
3X1 + 3X2 = 39
12
(0, 13) E
8
(5, 8)D 4X1 + 10X2 = 100
4 (9, 4) C
(0, 0) A 4 8 B 12 16 20 24 28
To identify the maximum (minimum) value we use the corner point approach or the
extreme point approach. The corner point/extreme point approach has one theorem: It
states that;
For problems that have optimal solutions, a solution will occur at an extreme, or
corner point. Thus, if a problem has a single optimal solution, it will occur at a corner
point. If it has multiple optimal solutions, at least one will occur at a corner point.
Consequently, in searching for an optimal solution to a problem, we need only
consider the extreme points because one of those must be optimal. Further, by
determining the value of the objective function at each corner point, we could identify
the optimal solution by selecting the corner point that has the best value (i.e.,
maximum or minimum, depending on the optimization case) at the objective function.
Determine the values of the decision variables at each corner point. Sometimes, this
can be done by inspection (observation) and sometimes by simultaneous equation.
Substitute the value of the decision variables at each corner point.
After all corner points have been so evaluated, select the one with the highest or lowest
value depending on the optimization case.
Basic solution:
X1 = 9, X2 = 4, Z = Birr 740
After we have got the optimal solution, we have to substitute the value of the decision
variables into the constraints and check whether all the resources available were used
or not. If there is an unused resource we can use it for any other purpose. The amount
of unused resources is known as SLACK-the amount of the scarce resource that is
unused by a given solution.
The slack can range from zero, for a case in which all of a particular resource is used,
to the original amount of the resource that was available (i.e., none of it is used).
Constraints that have no slack are some time referred to as binding constraints since
they limit or bind the solution. In the above case, inspection time and storage space
are binding constraints; while assembly time has slack.
Knowledge of unused capacity can be useful for planning. A manager may be able to
use the assembly time for other products, or, perhaps to schedule equipment
maintenance, safety seminars, training sessions or other activities.
12
(0, 9.67) A
B (5, 3) 10X1 + 30X2 = 140
8
4
Interpretation: To make the diet at the minimum cost of Birr 49 we have to purchase
5
pounds of Type1 food and 3 pounds Type 2 food.
If there is a difference between the minimum required amount and the optimal
solution, we call the difference surplus: That is, Surplus is the amount by which the
Points Coordinates How Determined Value of the objective function
X1 Z = 5X1 + 8X2
X2
A 0 9.67 Observation Birr 77.30
B 5 3 Simultaneous Birr 49
equations
C 14 0 Observation Birr 70
optimal solution causes a constraint to exceed the required minimum amount. It can
be determined in the same way that slack can: substitute the optimal values of the
decision variables into the left side of the constraint and solve. The difference
between the resulting value and the original right-hand side amount is the amount of
surplus. Surplus can potentially occur in a constraint.
The optimal solution to a linear programming model will occur at an extreme point of
the feasible solution space. This is true even if a model involves more than two
variables; optimal solutions will occur at these points. Extreme points represent
intersections of constraints. Of course, not every solution will result is an extreme
point of the feasible solution space; some will be outside of the feasible solution space.
Hence, not every solution will be a feasible solution. Solutions which represent
intersections of constraints are called basic solutions; those which also satisfy all of
the constraints, including the non-negativity constraints, are called basic feasible
solutions. The simplex method is an algebraic procedure for systematically
examining basic feasible solutions. If an optimal solution exists, the simplex method
will identify it.
The simplex procedure for a maximization problem with all constraints consists of
the following steps.
1. Write the LPM in a standard form: when all of the constraints are written as equalities,
the linear program is said to be in standard form. We convert the LPM in to a standard
form by applying the slack variables, S, which carries a subscript that denotes which
constraint it applies to. For example, S1 refers to the amount of slack in the first
constraint, S2 to the amount of slack in the second constraint, and so on. When slack
variables are introduced to the constraints, they are no longer inequalities because the
slack variable accounts for any difference between the left and right-hand sides of an
expression. Hence, once slack variables are added to the constraints, they become
equalities. Furthermore, every variable in a model must be represented in the
objective function. However, since slack does not provide any real contribution to the
objective, each slack variable is assigned a coefficient of zero in the objective
function.
Slack = Requirement – Production, surplus = Production – Requirement
Entering Variable
Sol/n Cj 60 50 0 0 0
basis X1 X2 S1 S2 S3 RHSV Øj = bj/xj (aij)
S1 0 0 0 1 6 -16/3 24
X1 60 1 0 0 1 -1/3 9
X2 50 0 1 0 -1 2/3 4
Zj 60 50 0 10 40/3 740
Cj-Zj 0 0 0 -10 -40/3
Note: The variables in solution all have unit vectors in their respective columns for
the constraint equations. Further, note that a zero appears is raw c - z in every
column whose variable is in solution, indicating that its maximum contribution to the
objective function has been realized.
Example 2
A manufacturer of lawn and garden equipment makes two basic types of lawn
mowers: a push-type and a self-propelled model. The push-type requires 9 minutes to
assemble and 2 minutes to package; the self-propelled mower requires 12 minutes to
assemble and 6 minutes to package. Each type has an engine. The company has 12 hrs
of assembly time available, 75 engines, and 5hrs of packing time. Profits are Birr 70
for the self-propelled models and Birr 45 for the push-type mower per unit.
Required:
1. Formulate the linear programming models for this problem.
2. Determine how many mower of each type to make in order to maximize the total
profit (use the simplex procedure).
Solution:
1. a)To determine how many units of each types of mowers to produce so as to
maximize profit.
b)Let X1 - be push type mower.
X2 - be self-propelled mower.
c) Determine the objective function
Z max = 45X1 + 70X2
d) Identify constraints
9X1 + 12X2 720 minutes Assembly time
2X1 + 6X2 300 minutes packing time
X1 + X2 75 engines Engines
X1, X2 0
In summary:
Z max = 45X1 + 70X2
: 9X1 + 12X2 720
2X1 + 6X2 300
X1 + X2 75
X1, X2 0
2. a. Write the LPM in a standard form
Z max = 45X1 + 70X2 + 0S1 + 0S1 + 0S3
: 9X1 + 12X2 + S1 = 720
2X1 + 6X2 + S2 = 300
X1 + X2 + S3 = 75
X1, X2, S1, S2, S3 o
a. Develop the initial tableau – in LP matrices are commonly called tableaus
Sol/n Cj 45 70 0 0 0
basis X1 X2 S1 S2 S3 RHSV Øj = bj/xj (aij)
S1 0 9 12 1 0 0 720 720/12 =60 Leavi
S2 0 2 6 0 1 0 300 300/6 =50 ng
S3 0 1 1 0 0 1 75 75/1 = 75 variab
Zj 0 0 0 0 0 0 le
Cj-Zj 45 70 0 0 0
Entering variable
b. Develop the subsequent tableaus
-Identify the entering variable
-Identify the leaving variable
Sol/n Cj 45 70 0 0 0
basis X1 X2 S1 S2 S3 RHSV Øj = bj/xj (aij)
S1 0 5 0 1 -2 0 120 120/5 = 24
X2 70 1/3 1 0 1/6 0 50 50/. 333 =150
S3 0 2/3 1 0 -1/6 1 25 25/.666 = 75
Zj 70/3 70 0 70/6 0 3500
Cj-Zj 65/3 0 0 -70/6 0
Leaving variable
Entering variable
Sol/n Cj 45 70 0 0 0
basis X1 X2 S1 S2 S3 RHSV Øj = bj/xj (aij)
X1 45 1 0 1/5 -2/5 0 24
X2 70 0 1 -1/15 3/10 0 42
S3 0 0 0 -2/15 1/10 1 9
Zj 45 70 13/3 3 0 4020
Cj-Zj 0 0 -13/3 -3 0