Welcome to the course

Operations Research

Introduction to Operations Research and Linear Programming

Dr. Ramesh Krishnan

IIM Kozhikode.
[email protected]
 Let’s think!

• Have you heard about this

topic before – Operations
Research
• What is Optimization?
 Let's think about a few things
• Railway: Howrah Junction Railway
Station
• # of Platforms: 23
• # of Trains Crossing Every Day: 286
• Airport: Indira Gandhi International
Airport, Delhi
• # of passengers: 39.34 million in 2022
• # of airlines: 59
• # of destinations: 97
• E-Commerce: Amazon
• Amazon ships approximately 1.6 million
packages a day.
• 353 million products are sold on the
Amazon marketplace
Who is the reason for us to study this?
 My Operations Gurus

Prof G Srinivasan Prof C Rajendran Prof Usha Mohan Prof Arshinder Kaur
IIT Madras IIT Madras IIT Madras IIT Madras
NPTEL

Fundamental of Operations Research

https://www.youtube.com/playlist?list=PL0D211A8239B691E7
 Chapter No. / Reading
Session(s) Module Topic(s)
material / Cases
1-4 Linear programming Basic linear programming, graphical method, simplex Chapters 1, 2, 3, 4, 5
method, excel solver for LP models, Sensitivity
Analysis
5-6 Transportation, Transportation, Transshipment & Assignment problems Chapter 6
Transshipment
&Assignment
problems

7-10 Network optimization Minimum spanning trees, Maximal flow problem, Chapters 7, 9
& Decision trees shortest path problem & Decision Trees

11-12 Integer Programming Knapsack problem, Fixed charge problem, Travelling Chapter 8
Problems salesman problem, Set covering and set partitioning
problems

13-14 Project management Work Breakdown Structure, PERT and CPM networks, Chapter 13
Critical path computation, Crashing
15 Multi-criteria Pareto front, Analytic Hierarchy Process, Weighted sum Chapter 14
decision making approach, Lexicographic approach
16 Simulation Discrete vs Continuous, steps involved, Monte Carlo Chapter 11-12
method
END TERM EXAMINATION

Hiller, F., & Hiller, M. (2019). Introduction to management science: a modeling and case studies
approach with spreadsheets (6th edition). New York, NY: McGraw-Hill.
 Evaluation Component /Assessment Tool Percentage

Quizzes (Sum of 2) 30%

End term exam 60%

Class participation & Case Analysis 10%

What is Operations Research/
Management Science
• Operations Research (OR) is the discipline of applying advanced analytics

to help make better decisions.

• Descriptive, Diagnostic, Predictive & Prescriptive Analytics

• Management science is a discipline that attempts to aid managerial

decision-making by applying a scientific approach to managerial problems
that involve quantitative factors

• As the name implies OR involves “research on operations (military)”

• However, now, the nature of the organization is essentially immaterial

• Manager – Dealing with scarce resources
• Scarce resources – Labor, materials, machinery, money…
• Minimizing costs or Maximizing profits
Terminologies used in Linear Programming
• Decision Variables

• Parameters

• Objective Function – Max/Min

• Constraints & Types of Constraints

• Non-negativity Constraints
• Linear Programming (LP) problems
- Linear objective function
- Linear constraints
• Why only LP?
- Majority of real-life problems can be approximated
- Efficient solution procedures
- Easy Sensitivity Analysis
Steps to be followed in solving Linear
Programming Problem

1. Identifying the decision variables

2. Writing the objective function

3. Writing the constraints

4. Writing the non-negativity restrictions.

Example Problem No.1
Consider a small manufacturer making two products
A and B. Two resources R1 and R2 are required to
make these products. Each unit of Product A requires
1 unit of R1 and 3 units of R2. Each unit of Product B
requires 1 unit of R1 and 2 units of R2. The
manufacturer has 5 units of R1 and 12 units of R2
available. The manufacturer also makes a profit of
Rs. 6 per unit of Product A sold and Rs. 5 per unit of
Product B sold.
Solution
Decision Variables:
X1 = Number of units of Product A made
X2 = Number of units of Product B made
Parameters/Resources:
Resources R1 & R2
Objective Function:
Minimization or Maximization?
Profit of Rs.6 per unit of Product A & Rs.5 per unit of Product B

Constraints:
Consumption of resource R1 & R2 should be within the availability
Non Negativity
Assumptions of Linear Programming

• Proportionality - Absence of economies of scale

• Additivity – Absence of interaction b/n variables
• Divisibility – Non-integer values are acceptable
• Certainty – Model parameters are known and constant
Example Problem No.2: Wyndor Glass Co. Product Mix
Problem

• Wyndor has developed the following new products:

• An 8-foot glass door with aluminum framing.
• A 4-foot by 6-foot double-hung, wood-framed window.
• The company has three plants
• Plant 1 produces aluminum frames and hardware.
• Plant 2 produces wood frames.
• Plant 3 produces glass and assembles the windows and doors.
Questions:
1. Should they go ahead with launching these two new products?
2. If so, what should be the product mix?
Solution

• What are the decision variables?

D = the number of doors to produce
W = the number of windows to produce
• What is the objective function
Maximize P = $300D + $500W
subject to Constraints
D≤4
2W ≤ 12
3D + 2W ≤ 18
and
D ≥ 0, W ≥ 0.

2.16
 Example Problem
• The Mighty Silver Ball Company manufactures three kinds of pinball
machines, each requiring a different manufacturing technique.

• The Super Deluxe Machine requires 17 hours of labor, 8 hours of

testing, and yields a profit of $300.

• The Silver Ball Special requires 14 hours of labor, 12 hours of testing,

and yields a profit of $250.

• The Bumper King requires 10 hours of labor, 15 hours of testing, and

yields a profit of $200.
 Example Problem
• There are 1000 hours of labor and 600 hours of testing available.

• In addition, a marketing forecast has shown that the demand for the
Super Deluxe is no more than 25 machines, demand for the Silver Ball
Special no more than 50, and demand for Bumper King no more than
100.

• The manufacturer wants to determine the optimal production quantities

that will maximize his total profit

• Formulate this as a linear programming problem

 Machine Labor Testing Profit / Unit

Super Deluxe
17 8 $300
Machine

Silver Ball
14 12 $250
Special

Bumper King 10 15 $200

Availability 1000 hrs 600 hrs

Solution to Example Problem
1. Decision Variables???

2. Let x1, x2, and x3 be the production quantities of

machines 1, 2, and 3 respectively.

3. Constraints???

4. Hours of Labor and Testing, Upper limit on production

quantities

5. Last, the objective function is to maximize the profit

• Maximize
Z = 300x1 +250x2 + 200x3 Objective Function

• Subject to

• 17x1 + 14x2 + 10x3 < 1000

• 8x1 + 12x2 + 15x3 < 600 Constraints
• x1 ≤ 25, x2 ≤ 50, x3 ≤ 100

• x1 > 0, x2 > 0, x3 > 0 Non-Negativity

Constraints

• x1, x2 , x3

Decision Variables
Example Problem No. 3
An advertising company wishes to plan an advertising campaign in three
different media – television, radio, and magazines. The purpose of the
advertising program is to reach as many potential customers as possible.
Results of a market study are as follows.

Television Radio Magazines

Daytime Prime Time
Cost of an advertising unit $40,000 $75,000 $30,000 $15,000

No. of potential customers 400,000 900,000 500,000 200,000

reached per unit

No. of women customers 300,000 400,000 200,000 100,000

reached per unit
 Example Problem No. 3
The company does not want to spend more than $800,000 on advertising. It
further requires that

(1) At least 2 million exposures take place among women

(2) Advertising on television be limited to $500,000

(3) At least 3 advertising units be bought on daytime television, and two

units during prime time and

(4) Number of advertising units on radio and magazine should each be

between 5 and 10
 Solution to Example Problem No.3
• Decision Variables?
• x1, x2, x3 and x4 (all ≥ 0) be the number of advertising units bought
in daytime television, prime-time television, radio, and magazines,
respectively.
• Constraints?
▪ Budget Constraint:
40000x1 + 75000x2 + 30000x3 + 15000x4 < 800000
▪ Constraint on No. of women customers:
300000x1 + 400000x2 + 200000x3 + 100000x4 ≥ 2000000
Solution to Example Problem No.3
▪ Constraints on television advertising:
40000x1 + 75000x2 < 500000
x1 > 3, x2 > 2
▪ Constraints on radio and magazine:
5≤ x3 ≤ 10
5≤ x4 ≤ 10
▪ Objective Function
Maximize Z = 400000x1 + 900000x2 + 500000x3 +
200000x4
Problem No. 5 – Nurse Recruitment
• A hospital administrator has the following minimal daily requirements for nursing
personnel:

Period Clock Time Minimal No. of nurses

1 6 AM to 10 AM 60
2 10 AM to 2 PM 70
3 2 PM to 6 PM 60
4 6 PM to 10 PM 50
5 10 PM to 2 AM 20
6 2 AM to 6 AM 30

• Nurses report to the hospital wards at the beginning of each period and work for 8
consecutive hours. The hospital wants to determine the minimal number of nurses to
employ so that there will be a sufficient number of personnel available for each period.
Problem No. 5 - Solution

• Decision variables: Let xi represent the number of nurses reporting in period ‘i’
where i varies from 1 to 6 (xi >=0)

• Constraints: x1+x6>=60 (Period 1)

x2+x1>=70 (Period 2)

x2+x3>=60 (Period 3)

x3+x4>=50 (Period 4)

x4+x5>=20 (Period 5)

x5+x6>=30 (Period 6)

• Objective Function: Minimize Z = x1+x2+x3+x4+x5+x6

 Problem No.6
• A post office requires different numbers of full-time employees on different days of
the week.
• The number of full-time employees required on each day is given in Table 4.
• Union rules state that each full-time employee must work five consecutive days and
then receive two days off.
• For example, an employee who works Monday to Friday must be off on Saturday and
Sunday. The post office wants to meet its daily requirements using only full- time
employees.
• Formulate an LP that the post office can use to minimize the number of full-time
employees who must be hired.
Solution
• Decision Variable
• xi - number of employees beginning work on day i
• Objective Function
• Min z = x1 + x2 + x3 + x4 + x5 + x6 + x7
• Constraints
 Problem No. 8 – Mfg Assembly
• A final product is assembled with 4 units of component A and 3
units of component B.
• The manufacturing shop runs three different processes, each of
which requires varying amounts of raw materials and produce
different amounts of A and B.
• Two types of raw materials are used. 100 units of raw material I
(RM I) and 200 units of raw material II (RM II) are available to
the shop each day
 Input per run Output per run
Shop (units) (units)
RM I RM II A B

I 7 5 6 4

II 4 8 5 8

III 2 7 7 3

100 200

Formulate a linear programme to maximize the number of

completed assemblies produced each day.
Solution to Problem No.8

• Let x1, x2, x3 be the number of runs of each process

operated per day

• Total quantity of A produced =

• Total quantity of B produced =

• No. of units of finished product??

We have to maximize the above expression. This is accomplished

by formulating the problem as follows:
Practice Problem 1: PBL India – Refrigerator Example
• PBL India makes two types of refrigerators: small (185 litres) and large (300 litres).
The monthly demands for these two types are 2000 and 1000, respectively.
• Both these items require two important parts, compressor and body. The shop
producing compressors can make 1200 large compressors per month if it makes only
large compressors or 3000 small compressors if it makes only small compressors. It
can make a suitable linear combination if it decides to produce both.
• Similarly, the shop making the body can make 1500 large if it makes only large or
2500 small if it makes only small or a suitable linear combination.
• The company makes a profit of Rs. 1500 per large fridge sold and a profit of Rs. 1000
per small fridge sold.
• The fixed overheads are Rs. 15 lakhs per month.
• The company wants to draw the production plan for the coming month.
• Formulate an LP model for the above situation.
• The production manager believes in increasing the production and argues that they
should produce the maximum possible quantity of 2000 small refrigerators and use
the rest of the capacity, if available, to produce the large refrigerators.
• The marketing manager believes in producing the maximum possible quantity of
1000 of large refrigerators because the profit is higher per fridge and use the rest of
the capacity, if available, to produce small refrigerators.

• How do you react to the above two views based on your solution to the problem?
Practice Problem 2: Thick and Drink

• Thick and Drink, a coffee shop, provides three types of coffee (strong,
medium and light) to its customers in various outlets. They use three
varieties of coffee beans to make the three types of coffee blends from
which the types of coffee are provided. Although the recipes for the three
types are not fully precise, certain restrictions must be satisfied when
combining the three varieties of beans: Component 1 should constitute
not more than 20% of final Blend 1 by weight Component 2 should
constitute at least 30% of Blend 3 by weight. Components 2 and 3
combined should constitute at least 70% of Blend 2 by weight. In
addition to these restrictions, there is limited availability of the three
varieties. The maximum weekly availability is 8000, 10,000 and 9000
kg, respectively. Weekly capacity of the plant is 25,000 kg. To satisfy the
needs of a nearby office customer, weekly production of Blend 1 should
be at least 5000 kg. Given that the three varieties cost the manufacturer
Rs. 120, Rs. 130 and Rs. 110 per kg and the coffee sold using the blends
yield Rs. 300, Rs. 320 and Rs. 280 per kg, find the number of kg of each
variety to be used in each type so that it maximizes the final profit.
Practice Problem
• A company manufactures an assembly consisting of a
frame, a shaft, and a ball bearing. The company
manufactures the shafts and frames but purchases the
ball bearings from a ball bearing manufacturer. Each
shaft must be processed on a forging machine, a lathe,
and a grinder. These operations require 0.6 hour, 0.3
hour, and 0.4 hour per shaft, respectively. Each frame
requires 0.8 hour on a forging machine, 0.2 hour on a
drilling machine, 0.3 hour on a milling machine, and
0.6 hour on a grinder. The company has 5 lathes, 10
grinders, 20 forging machines, 3 drillers, and 6
millers. Assume that each machine operates a
maximum of 4500 hours per year. Formulate the
problem of finding the maximum number of assembled
components that can be produced as a linear program.
 Also practice Case Studies
available in the textbook at the
end of every chapter.
Thank you ☺