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BÀI 1 - Introduction To MS

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6 views19 pages

BÀI 1 - Introduction To MS

Slide Vận trù học chương1

Uploaded by

Thùy Duyên Trần Nguyễn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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OPERATIONS RESEARCH

PART 1: INTRODUCTION

TRUNG-HIEP BUI
scv.udn.vn/buitrunghiep | [email protected] | 0935-743-555
INTRODUCTION

CONTENT

 Definition of Operation Research


 The Applications of Operation Research
 Problem Solving & Decision Making & Quantitative analysis
 Management Science Techniques

LEARNING OUTCOMES
INTRODUCTION

DEFINITION

Operations Research (OR) is the methodology to allocate the available resources to the various
activities in a way that is most effective for the organization as a whole.
It is “applied to problems that concern how to conduct and coordinate the operations within an
organization.” By doing OR studies, we generate some suggestions for decision-makers.

Names of similar subjects/ideas:


Management science | Decision science | Optimization method/algorithm | Mathematical programming
INTRODUCTION

DEVELOPMENT HISTORY

From the early 1900s: The use of quantitative methods in management (The scientific
management revolution - Frederic Winslow Taylor).
 The World War II (01/09/1939–02/09/1945): deal with strategic and tactical problems faced by
the military.
The Post-World War II period: use of management science in nonmilitary application
+ Simplex method for solving linear programming problems - 1947 - George Dantzig
More recently: Data Science, Big Data, Machine Learning
INTRODUCTION

BUSINESS ANALYTICS
Today, everybody talks about Business Analytics.
Master of Business Administration (MBA) becomes Master of Business Analytics
INTRODUCTION

EXAMPLE: JOB ALLOCATION


Two people are going to hold an event, and they need to complete some tasks.
One task must be assigned to exactly one person; one person can work on one task at a time.
How to assign the tasks so that they can complete all tasks the fastest?
What are the resources? What is the objective?
INTRODUCTION

EXAMPLE: PROJECT MANAGEMENT


n workers are going to complete m jobs in a project.
 Some jobs must be processed with precedence rules.
 Some jobs cannot be done by certain workers.
 Some jobs can be split and allocated to several workers.
 Some jobs require different processing time if allocated to different workers.
How many days does it take to complete this project?
INTRODUCTION

EXAMPLE: PRODUCT INVENTORY

How to set the inventory level of product to maximize the total expected profit?
Suppose that there is ONLY ONE PRODUCT.
 Prevent Understocking or Overstocking.
 Data analysis: Estimate the random amount of demand during one order cycle time.
 Operations research: According to the random amount of demand,
Find the inventory level to maximize the expected profit.
INTRODUCTION

EXAMPLE: MULTI-PRODUCT INVENTORY

How to set the inventory levels of multiple products to maximize the total expected profit?
When we have MULTIPLE PRODUCTS.
 Demand substitution: “There is no more Coke. How about Pepsi?”
 Data analysis is difficult. Estimate the probability of demand substitution between A and B, which is the
probability for one to purchase B when A is sold out (or purchase A when B is sold out).
 Operations research is also difficult. Given the substitution probabilities, find the best inventory levels
of all products.
INTRODUCTION

EXAMPLE: KNAPSACK PROBLEM

You preparing for hiking. There are some useful items, but your backpack can only carry 5 kilograms.
An item cannot be split: Each item should be either chosen or discarded.
Which items should you bring to maximize the total value?
INTRODUCTION

EXAMPLE: INDUSTRYAPPLICATION

Key decisions:
 How to deliver 6.5 millions items to more than 220 countries each day?
 In each region, where to build distribution hubs?
 In each distribution hub, how to classify and sort items?
 In each city, how to choose routes?
What do you need?
 Well-designed information systems.
 Operations Research!
INTRODUCTION

EXAMPLE: INDUSTRYAPPLICATION
Key decisions:
 How to determine the cities to connect?
 How to schedule more than 2000 flights per day?
 How to assign crews to flights?
 How to reassign crews immediately when there is an emergency?
What do you need?
 Well-designed information systems.
 Operations Research!
INTRODUCTION

PROBLEM SOLVING AND DECISION MAKING


Problem-solving: The process of identifying a difference between the actual and the desired state of
affairs and then taking action to resolve the difference.
Problem-solving process involves the following 7 steps:
1. Identify and define the problem.
2. Determine the set of alternative solutions.
3. Determine the criterion or criteria that will be used to evaluate the alternatives.
4. Evaluate the alternatives.
5. Choose an alternative (MAKE THE DECISION)
6. Implement the selected alternative.
7. Evaluate the results to determine whether a satisfactory solution has been obtained.

Decision making is the term generally associated with the first 5 steps of the problem-solving
process.
INTRODUCTION

DECISION MAKING

Single-criterion decision problem


v/s
Multicriteria decision problem
INTRODUCTION

QUANTITATIVE ANALYSIS AND DECISION MAKING

QUANTITATIVE ANALYSIS might be used when the problem is:


COMPLEX | IMPORTANT | NEW | REPETITIVE
INTRODUCTION

QUANTITATIVE ANALYSIS: MODEL DEVELOPMENT

QUANTITATIVE ANALYSIS: Concentrate on the quantitative facts or data associated


with the problem and develop MATHEMATICAL EXPRESSIONS that describe the
objectives, constraints, and other relationships that exist in the problem.

Let x indicate the number of units produced each week: VARIABLE


The profit equation P = 10x: OBJECTIVE FUNCTION for a firm attempting to maximize profit.
A production capacity CONSTRAINT: 5 hours are required to produce each unit and only 40 hours
of production time are available per week.
INTRODUCTION

QUANTITATIVE ANALYSIS: MODEL DEVELOPMENT

DETERMINISTIC MODEL
v/s
STOCHASTIC | PROBABILISTIC MODEL
INTRODUCTION

QUANTITATIVE ANALYSIS: MODEL DEVELOPMENT - EXAMPLE


INTRODUCTION

MANAGEMENT SCIENCE TECHNIQUES


 LINEAR PROGRAMMING is a problem-solving approach developed for situations involving maximizing or minimizing a linear
function subject to linear constraints that limit the degree to which the objective can be pursued.
 INTEGER LINEAR PROGRAMMING is an approach used for problems that can be set up as linear programs, with the additional
requirement that some or all of the decision variables be integer values.
 DISTRIBUTION AND NETWORK MODELS A network is a graphical description of a problem consisting of circles called nodes
that are interconnected by lines called arcs (supply chain design, information system design, and project scheduling…).
 NONLINEAR PROGRAMMING is a technique for maximizing or minimizing a nonlinear function subject to nonlinear
constraints.
 PROJECT SCHEDULING: In many situations, managers are responsible for planning, scheduling, and controlling projects that
consist of numerous separate jobs or tasks performed by a variety of departments, individuals, and so forth. The PERT (Program
Evaluation and Review Technique) and CPM (Critical Path Method) techniques help managers carry out their project scheduling
responsibilities.
 INVENTORY MODELS are used by managers faced with the dual problems of maintaining sufficient inventories to meet demand
for goods and, at the same time, incurring the lowest possible inventory holding costs.
 WAITING-LINE | QUEUEING MODELS have been developed to help managers understand and make better decisions
concerning the operation of systems involving waiting lines.
 SIMULATION is a technique used to model the operation of a system. This technique employs a computer program to model the
operation and perform simulation computations.
 DECISION ANALYSIS can be used to determine optimal strategies in situations involving several decision alternatives and an
uncertain or risk-filled pattern of events.
 GOAL PROGRAMMING is a technique for solving multicriteria decision problems, usually within the framework of linear
programming.
 ANALYTIC HIERARCHY PROCESS This multicriteria decision-making technique permits the inclusion of subjective factors in
arriving at a recommended decision.
 FORECASTING are techniques that can be used to predict future aspects of a business operation.
 MARKOV PROCESS MODELS are useful in studying the evolution of certain systems over repeated trials. Markov processes
have been used to describe the probability that a machine, functioning in one period, will function or break down in another period.

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