1

MN-101 [OPERATIONS RESEARCH]

NOTES

Q1) Define system? State types of systems. Also explain in brief the various types of decision
making environments.

Definition of a System:

In Operations Research, a system is a collection of interrelated components or elements working

together to achieve a specific objective. It involves input, process, and output stages and is often
modeled to improve decision-making and optimize performance.

Types of Systems:

1. Deterministic and Probabilistic Systems

o Deterministic: Outcomes are certain and predictable.
o Probabilistic: Outcomes involve uncertainty and are expressed in probabilities.
2. Open and Closed Systems
o Open: Interacts with its environment (e.g., supply chain system).
o Closed: No interaction with the external environment (ideal and rare in real life).
3. Static and Dynamic Systems
o Static: State does not change over time.
o Dynamic: Changes with time, e.g., inventory systems.

Types of Decision-Making Environments:

1. Decision-making under Certainty:

o All outcomes are known with certainty.
o Simple and low-risk environment.
2. Decision-making under Risk:
o Outcomes are not certain but their probabilities are known.
o Uses statistical tools and probability analysis.
3. Decision-making under Uncertainty:
o Outcomes and probabilities are unknown.
o Decisions are based on judgment or assumptions.
 2

Q2) Distinguished between CPM & PERT.

 3

Q3) Discuss applications of dynamic programming.

Applications of Dynamic Programming in Operations Research

Dynamic Programming (DP) is a powerful optimization technique used to solve complex problems by
breaking them into simpler sub-problems. It is particularly useful when a problem involves sequential
decision-making and has overlapping subproblems with optimal substructure.

Major Applications of Dynamic Programming:

1. Inventory Management:
o Helps determine optimal inventory levels and reordering policies over a planning
horizon.
o Objective: Minimize holding, shortage, and ordering costs.
o Example: Multi-period inventory model with varying demand.
2. Capital Budgeting:
o Used to allocate limited capital across several investment projects to maximize return or
utility.
o Helps select the best combination of projects under budget constraints.
3. Resource Allocation:
o Distributes limited resources among competing activities to maximize output or profit.
o Example: Allocating manpower, machines, or budget across multiple departments.
4. Production Scheduling:
o Optimizes machine scheduling, job sequencing, and batch processing.
o Objective: Minimize total processing time, tardiness, or cost.
5. Shortest Path Problems:
o Determines the minimum-cost path between two points in a network.
o Example: Finding the shortest route in transportation or logistics networks.
6. Equipment Replacement:
o Determines the optimal replacement policy for machinery or vehicles.
o Objective: Minimize the long-term cost of maintenance and replacement.
7. Stage-wise Decision Making:
o Problems where decisions are made at multiple stages.
o Example: Project planning where decisions at each phase affect the final outcome.
8. Portfolio Optimization:
o Used in finance to allocate funds among different investment options to maximize
return and minimize risk over time.
9. Assignment Problems (Special Cases):
o Solves complex job-assignment problems that standard assignment models cannot handle
due to dependencies or constraints.
10. Knapsack Problems:

 In logistics or project selection, helps select items/projects within a capacity or budget limit to
maximize profit/value.
 4

Q4) Elaborate on the big M method and describe the two-phase method.

`
5
 6

Q5). Define the following terms: (a) Feasible solution

(b) Optimum solution
(c) Basic and non-basic solution.
 7

Q6) Typical Characteristics of Dynamic Programming (DP)

Dynamic Programming is a mathematical optimization technique widely used in Operations Research
for solving multi-stage decision-making problems. It is particularly useful when decisions made in
one stage affect decisions in subsequent stages.

1. Optimal Substructure:

 A problem exhibits optimal substructure if its optimal solution can be constructed from the
optimal solutions of its subproblems.
 Each stage's decision contributes to the global optimum.

Example:
In shortest path problems, the shortest path from A to C via B is the sum of the shortest path from A to
B and B to C.

2. Overlapping Subproblems:

 DP problems involve solving the same subproblems repeatedly.

 These subproblems are stored and reused (memoization), unlike divide-and-conquer, which
solves distinct subproblems.

Example:
In inventory management over multiple periods, optimal decisions for one period are reused in later
calculations.

3. Stage-wise Decision Process:

 DP breaks down a problem into a finite number of decision stages, each having a set of
possible states.
 Decisions at one stage affect the state in the next stage.

Example:
In equipment replacement problems, the decision to replace or retain affects future costs.

4. Principle of Optimality (Bellman’s Principle):

 An optimal policy has the property that, whatever the initial state and decision are, the
remaining decisions must constitute an optimal policy with respect to the state resulting from
the first decision.

5. Recursive Relationship:

 DP solutions are developed using recurrence relations that link the solution of a problem to
solutions of smaller subproblems.

6. Tabulation or Memoization:

 Subproblem results are stored in a table (tabulation) or cache (memoization) to avoid

recomputation, reducing time complexity.
 8

7. Applicability to Deterministic and Stochastic Problems:

 Can be applied in both deterministic models (where outcomes are certain) and stochastic
models (where outcomes are probabilistic).

8. Multi-Stage Optimization:

 Most suitable for problems that require optimization across several stages, where each stage
represents a sub-decision process.
 9

Q7) Use the graphical LPP method to solve the following LP Problem. Maximize Z = 3X 1 + 4X2,
subject to constraints: X1 + X2 ≤ 450, 2X1 + X2 ≤ 600, X1, X2 ≥ 0. Use graph paper to draw the line
diagram.
10
 11

Q8) Four operators A-D are available to a manager who has to get four jobs I-IV done by assigning
one job to each operator. Given the times (Hours) needed by different operators for different jobs in
the matrix below.
Job A B C D
Operator
I 15 13 14 17
II 11 12 15 13
III 18 12 10 11
IV 15 17 14 16

How should the manager assign the jobs so that the total time needed for all the jobs is minimum?

Solution Using the Hungarian Algorithm (Operational Research Method)

The Hungarian Algorithm is a combinatorial optimization technique used to solve assignment

problems efficiently. Below is the step-by-step solution to minimize the total time required for
the given assignment problem.

Step 1: Initial Cost Matrix

The given matrix represents the time taken by each operator (A, B, C, D) to complete each job
(I, II, III, IV):

Operator A B C D

I 15 13 14 17

II 11 12 15 13

III 18 12 10 11

IV 15 17 14 16

Step 2: Row Reduction

Subtract the smallest value in each row from all entries in that row.

 Row I (Job I): Min = 13

New row: [15-13, 13-13, 14-13, 17-13] = [2, 0, 1, 4]
 Row II (Job II): Min = 11
New row: [11-11, 12-11, 15-11, 13-11] = [0, 1, 4, 2]
 12

 Row III (Job III): Min = 10

New row: [18-10, 12-10, 10-10, 11-10] = [8, 2, 0, 1]
 Row IV (Job IV): Min = 14
New row: [15-14, 17-14, 14-14, 16-14] = [1, 3, 0, 2]

Reduced Matrix:

Operator A B C D

I 2 0 1 4

II 0 1 4 2

III 8 2 0 1

IV 1 3 0 2

Step 3: Column Reduction

Subtract the smallest value in each column from all entries in that column.

 Column A: Min = 0
New column: [2-0, 0-0, 8-0, 1-0] = [2, 0, 8, 1]
 Column B: Min = 0
New column: [0-0, 1-0, 2-0, 3-0] = [0, 1, 2, 3]
 Column C: Min = 0
New column: [1-0, 4-0, 0-0, 0-0] = [1, 4, 0, 0]
 Column D: Min = 1
New column: [4-1, 2-1, 1-1, 2-1] = [3, 1, 0, 1]
 13

Fully Reduced Matrix:

Operator A B C D

I 2 0 1 3

II 0 1 4 1

III 8 2 0 0

IV 1 3 0 1

Step 4: Draw Minimum Lines to Cover All Zeros

We need to cover all zeros with the minimum number of horizontal or vertical lines.

1. Cover Row III (all zeros in this row).

2. Cover Column B (zero in Row I).

Total lines drawn: 2 (which is less than 4, the size of the matrix). Proceed to adjust the matrix.

Step 5: Adjust the Matrix

 Find the smallest uncovered value: 1.

 Subtract 1 from all uncovered elements.
 Add 1 to elements covered by two lines (none in this case).

Adjusted Matrix:

Operator A B C D

I 1 0 0 2

II 0 1 3 0

III 8 2 0 0
 14

Operator A B C D

IV 0 3 0 0

Step 6: Optimal Assignment

Now, we can make the optimal assignment where each row and column has exactly one zero.

1. Job I: Assign to Operator B (0).

2. Job II: Assign to Operator A (0).
3. Job III: Assign to Operator C (0).
4. Job IV: Assign to Operator D (0).

However, this leads to a conflict (Operator C is assigned to Job III and Job IV). Let's correct this:

 Job I: Assign to Operator C (0 in Row I, Column C).

 Job II: Assign to Operator A (0 in Row II, Column A).
 Job III: Assign to Operator D (0 in Row III, Column D).
 Job IV: Assign to Operator B (0 in Row IV, Column B is not available, so next best is Row IV,
Column C or D. But both are taken. Reassign.)

Alternative assignment:

 Job I: Assign to Operator B (0).

 Job II: Assign to Operator D (0 in Row II, Column D).
 Job III: Assign to Operator C (0).
 Job IV: Assign to Operator A (0).

This works without conflicts.

Final Assignment:

 Operator A: Job IV (15 hours)

 Operator B: Job I (13 hours)
 Operator C: Job III (10 hours)
 Operator D: Job II (13 hours)

Total Time = 15 + 13 + 10 + 13 = 51 hours

 15

But let's check if a better assignment exists:

Alternative assignment:

 Operator A: Job II (11 hours)

 Operator B: Job I (13 hours)
 Operator C: Job III (10 hours)
 Operator D: Job IV (16 hours)

Total Time = 11 + 13 + 10 + 16 = 50 hours

Another alternative:

 Operator A: Job II (11 hours)

 Operator B: Job I (13 hours)
 Operator C: Job IV (14 hours)
 Operator D: Job III (11 hours)

Total Time = 11 + 13 + 14 + 11 = 49 hours

This is the minimum possible total time.

Optimal Assignment with Minimum Total Time:

Operator Job Time (Hours)

A II 11

B I 13

C IV 14

D III 11

Total Minimum Time = 11 + 13 + 14 + 11 = 49 hours

Conclusion:

The manager should assign the jobs as follows to achieve the minimum total time of 49 hours:
 16

 Operator A does Job II (11 hours)

 Operator B does Job I (13 hours)
 Operator C does Job IV (14 hours)
 Operator D does Job III (11 hours)
 17

Q9) Discuss in brief EOQ and ABC method of inventory control.

18
19
 20

Q10) A small project is composed of 7 activities, whose time estimates are listed in the table below.
Activities are identified by their beginning (i) and ending (j) node numbers. Use this
tabulated data below and solve all the three problem based on this data only.

Activity Estimated Duration (weeks)

(i-j) Optimistic Most likely Pessimistic
1-2 1 1 7
1-3 1 4 7
1-4 2 2 8
2-5 1 1 1
3-5 2 5 14
4-6 2 5 8
5-6 3 6 15
A) Draw the network diagram of the activities in the project.
B) Find the expected duration and variance for each activity.
C) Determine the critical path and what is the expected project length?
21
22
 23

Q11) A coal company has three mines which transport coal to four washeries. The daily
production from each mine, the demand at each washery and unit transportation cost from each
mine to each washery are given in table.
Washery w1 W2 W3 W4 Supply (te/day)
Mine
M1 19 30 50 10 700
M2 70 30 40 60 900
M3 40 8 70 20 1800
Demand (te/day) 500 800 700 1400

Find the cost of initial basic feasible solution using Vogel’s Approximation method.
24
 25

Q12) What is the meaning of linear programming & Optimization?

 26

Q13) Distinguish between Linear Programming & Dynamic Programming?

 27

Q14) Typical Characteristics of Dynamic Programming (DP)

 28

Q15) In a PERT network, the “time estimates” of an activity are the following: Optimistic time-
2days, Most likely time- 4 days, and Pessimistic time- 12 days. Find out the expected time and
standard deviation of the activity in days.
29
 30

Q16) What is sequencing problem? Define crew scheduling.