Operations Reserch (OR)
LSCM4112
PowerPoint Presentation
Addis Ababa University – School of
Commerce
Addis Ababa, Ethiopia
September, 2023
CHAPTER I
An Overview of Operations
Research
2
Course Introduction
WHAT IS OPERATIONS RESEARCH/ MANAGEMENT SCIENCE?
OPERATIONS RESEARCH/ MANAGEMENT SCIENCE, in essence is a branch
of especially applied mathematics, used to provide a scientific base for
management to take timely and effective decisions to their problems.
It tries to avoid the dangers from taking decisions merely by guessing or
by using thumb rules.
Management is the multidimensional and dynamic concept. It is
multidimensional, because management problems and their solutions
have consequences in several dimensions, such as human, economic,
social and political fields.
Hence, any manager, while making decisions, considers all aspects in
Course objective
The fundamental objective of the course module is:
To familiarize the students with the meaning, characteristics & importance
of Operations Research.
To provide the basic knowledge on how to formulate, analyze and interpret
problems using linear programming models.
To provide the basic knowledge on how to formulate, analyze and interpret
problems using transportation and assignment models.
To familiarize the approaches of decision making techniques under
different decision making environments.
To acquaint the basics of project management concept and the techniques
of project planning and scheduling.
Unit One
1.INTRODUCTION TO OPERATIONS RESEARCH
1.1 Learning Objectives:
1.2 General Introduction
1.3 History of Operations Research
1.4 Model
1.5 Operation Research in Practice
Unit Two
2. LEANER PROGRAMMING PROBLEM MODELS (LPPM
2.1 Learning Objectives
2.2 General Introduction
2.3 Linear Programming Problem Models
2.4 Formulation of LPPM
2.5 Approaches to Solve LPPM
2.6 Maximization Problem
2.7 Minimization Problem
2.8 Sensitivity Analysis (Post Optimality Analysis)
Unit Three
3. TRANSPORTATION AND ASSIGNMENT MODELS
3.1 Learning Objectives
3.2. Introduction
3.3 Transportation Problems
3.3. Special Cases
3.4 Assignment Problems
3.5 Special Cases
Unit Four
4. DECISION THEORY
4.1 Learning Objectives
4.2 Introduction
4.2 Decision Theory
4.3 Decision Criteria
Unit Five
5. PROJECT MANAGEMENT
5.1 Learning Objectives
5.2 Introduction
5.3 Planning and Scheduling of Projects
5.4 Project Diagrams (Net- Work Diagrams)
5.5 Computing Algorithms
Evaluation
Evaluation approach and criteria
Activity Approach Proportion
Assignment Group 20
Test Individual 30
Final exam Individual 50
Unit one
HISTORY OF OPERATIONS RESEARCH
Operations Research is a ‘war baby’. It is because, the first
problem attempted to solve in a systematic way was concerned
with how to set the time fuse bomb to be dropped from an aircraft
onto a submarine.
In fact the main origin of Operations Research was during the
Second World War.
At the time of Second World War, the military management in
England invited a team of scientists to study the strategic and
tactical problems related to air and land defense of the country.
Unit one
The problem attained importance because at that time
the resources available with England was very limited
and the objective was to win the war with available
meager resources.
The resources such as food, medicines, ammunition,
manpower etc., were required to manage war and for
the use of the population of the country.
It was necessary to decide upon the most effective
Unit one
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.
Key points
From the concept and definition given above, Operations Research is:
The application of scientific methods, techniques and tools to find an
optimal solution to a problem.
A management tool in the hands of a manager to take a decision
A scientific approach to decision making process
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”
A decision-oriented research, using scientific methods, for providing
management a quantitative basis for taking decision regarding operations
under its control
Unit one
The Five Characterstics of Operations
Research
objective: helps managers to make objective decision
scientific approach: helps decision makers to follow
scientific approach to solve managerial problems
inter disciplinary team work: it allows for team work
digital computers: over reliance on scientific calculators
and other computing machines
decision making : helps decision makers to solve
managerial problems
Unit one
Decision Making
Making appropriate decision is the most vital aspect in management.
Every one of us takes a number of decisions every day.
Some are important; some are trivial.
Some decisions initiate a set of activities;
some put an end to a certain activities.
In business environment right decisions at the right times ensure
success. This shows the importance of decision making.
Decision making is necessary when there is a problem.
Unit one
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.
Decision making defined as the process of selecting or
choosing based on some criteria, the best alternative
among alternatives. It requires for all human being
because each of us make decision every day in our
life. Thus, decision making is universal. Decision
Unit one
The Decision Making Process:
Steps in the process of rational decision making:
1. Identify and define the problem: Problem is a necessary condition
for a decision. i.e.: There would be no need for decisions if problems
did not exist.
2. Determine the set of alternative solutions.
3. Determine the criteria to evaluate alternatives: (Identifying those
characteristics that are important for making the decision)
4. Analyze the alternatives: (The advantages and disadvantages of
each alternative)
5. Select the best alternative: (Select the best alternative that suits
to solve our decision problem. In selecting the best alternative,
factors such as risk, timing and limiting factors should be considered
adequately)
6. Implement the solution: (Putting the decision into action)
Unit one
Model
Model is an abstraction of a reality. It is a simplified and
often an idealized representation of real
objects/situations.
By its very nature a model is incomplete.
A good model will capture the important details of
reality without including innumerable minor details that
would obscure rather than illuminate
Models can be classified in the following ways:
Unit one
a. Physical (iconic) Model
Iconic models are the least abstract; they are physical models
that look like the reality.
It is also called Static Model. It is given in two or three
dimensions. It is a representation of the real object as it is.
Example:
Model of an airplane
Photograph of a machine
Layout drawing of a factory
Glob
Unit one
b. Analogue Models:
They are also physical models but they are more abstract than iconic
models.
Instead of replicating physical appearance as iconic models do, these
models substitute some physical analogy for important aspects of the
reality.
It may show the relationship between an independent variable (input)
with that of a dependent variable (output). It is two dimensional
Example:
Histogram
Frequency table
Cause-effect diagram
Unit one
c. Mathematical Models (Symbolic Models)
These are the most abstract models.
They incorporate numbers, letters and algebraic symbols to
represent important aspects of a problem often in equation form.
Here a set of relations is represented in the form of mathematical
equations, using symbols to represent various parameters.
Example:
Max Z=3000x1 +2500x2
Subject to:
2x1+x2 < 40
x1+3x2 < 45
x1 < 12
x1 , x2 > 0
Unit one
The approach in OR is quite similar to
the scientific approach commonly
used in the physical sciences.
Both involve a logical sequence that
includes careful definition of the
problem use of models and analysis
leading to solution of the problem.
Diagrammatically
End of Chapter One
23
Reflections and Experience Sharing
24
Questions and Discussion
25
