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MB0032 Assingment Set1 Set2
MB0032 Assingment Set1 Set2
MB0032
SET 1
OPERATIONS RESEARCH
Ans:- Operations Research (OR) in the USA, South Africa and Australia, and
Operational Research in Europe and Canada, is an interdisciplinary branch of applied
mathematics and formal science that uses methods such as mathematical modeling,
statistics, and algorithms to arrive at optimal or near optimal solutions to complex
problems. It is typically concerned with optimizing the maxima (profit, assembly line
performance, crop yield, bandwidth, etc) or minima (loss, risk, etc.) of some objective
function. Operations research helps management achieve its goals using scientific
methods.
The terms operations research and management science are often used
synonymously. When a distinction is drawn, management science generally implies a
closer relationship to the problems of business management. The field of operations
research is closely related to Industrial engineering. Industrial engineers typically
consider Operations Research (OR) techniques to be a major part of their toolset.
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• Road traffic management and 'one way' street allocations i.e. allocation problems.
• Determining the routes of school buses (or city buses) so that as few buses are
needed as possible
• designing the layout of a computer chip to reduce manufacturing time (therefore
reducing cost)
• Managing the flow of raw materials and products in a supply chain based on
uncertain demand for the finished products
• Efficient messaging and customer response tactics
• Robotizing or automating human-driven operations processes
• Globalizing operations processes in order to take advantage of cheaper materials,
labor, land or other productivity inputs
• Managing freight transportation and delivery systems (Examples:
LTLhttp://en.wikipedia.org/wiki/Less-Than-Truckload_%28LTL%29_Shipping
Shipping, intermodal freight transport)
• Scheduling:
o Personnel staffing
o Manufacturing steps
o Project tasks
o Network data traffic: these are known as queuing models or queueing
systems.
o sports events and their television coverage
• Blending of raw materials in oil refineries
• Determining optimal prices, in many retail and B2B settings, within the disciplines
of pricing science
Operations research is also used extensively in government where evidence-
based policy is used.
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Q.2:- What do you understand by Linear Programming Problem? What are the
requirements of L.P.P.? What are the basic assumptions of L.P.P.?
Ans:-
Linear programming problem (LPP): The standard form of the linear programming
problem is used to develop the procedure for solving a general programming problem.
A general LPP is of the form
Max (or min) Z = c1x1 + c2x2 + … +cnxn
x1, x2, ....xn are called decision variable.
subject to the constraints
c1, c2,…. Cn, a11, a12,…. amn are all known constants
Z is called the "objective function" of the LPP of n variables which is to be maximized or
minimized.
Requirements of L.P.P : There are mainly four steps in the mathematical formulation
of linear programming problem as a mathematical model. We will discuss formulation of
those problems which involve only two variables.
• Identify the decision variables and assign symbols x and y to them. These
decision variables are those quantities whose values we wish to determine.
• Identify the set of constraints and express them as linear equations/inequations
in terms of the decision variables. These constraints are the given conditions.
• Identify the objective function and express it as a linear function of decision
variables. It might take the form of maximizing profit or production or minimizing
cost.
• Add the non-negativity restrictions on the decision variables, as in the physical
problems, negative values of decision variables have no valid interpretation.
There are many real life situations where an LPP may be formulated. The
following examples will help to explain the mathematical formulation of an LPP.
Example-1. A diet is to contain at least 4000 units of carbohydrates, 500 units of fat
and 300 units of protein. Two foods A and B are available. Food A costs 2 dollars per unit
and food B costs 4 dollars per unit. A unit of food A contains 10 units of carbohydrates,
20 units of fat and 15 units of protein. A unit of food B contains 25 units of
carbohydrates, 10 units of fat and 20 units of protein. Formulate the problem as an LPP
so as to find the minimum cost for a diet that consists of a mixture of these two foods
and also meets the minimum requirements.
Suggested answer:
The above information can be represented as
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Let the diet contain x units of A and y units of B.
Total cost = 2x + 4y
The LPP formulated for the given diet problem is
Minimize Z = 2x + 4y
subject to the constraints
• Factors such as uncertainty, weather conditions etc. are not taken into
consideration. There may not be an integer as the solution, e.g., the number of
men required may be a fraction and the nearest integer may not be the optimal
solution. i.e., Linear programming technique may give practical valued answer
which is not desirable.
• Only one single objective is dealt with while in real life situations, problems come
with multi-objectives.
• Parameters are assumed to be constants but in reality they may not be so.
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Q.3:- Describe the different steps needed to solve a problem by simplex
method?
Ans:- Simplex method The simplex method is a method for solving problems in
linear programming. This method, invented by George Dantzig in 1947, tests adjacent
vertices of the feasible set (which is a polytope) in sequence so that at each new vertex
the objective function improves or is unchanged. The simplex method is very efficient in
practice, generally taking 2m to 3m iterations at most (where m is the number of
equality constraints), and converging in expected polynomial time for certain
distributions of random inputs (Nocedal and Wright 1999, Forsgren 2002). However, its
worst-case complexity is exponential, as can be demonstrated with carefully constructed
examples (Klee and Minty 1972).
Dantzig's simplex method should not be confused with the downhill simplex
method (Spendley 1962, Nelder and Mead 1965, Press et al. 1992). The latter method
solves an unconstrained minimization problem in n dimensions by maintaining at each
iteration n+1 points that define a simplex. At each operation, this simplex is updated by
applying certain transformations to it so that it "rolls downhill" until it finds a minimum.
The Simplex Method is "a systematic procedure for generating and testing
candidate vertex solutions to a linear program." (Gill, Murray, and Wright, p. 337) It
begins at an arbitrary corner of the solution set. At each iteration, the Simplex Method
selects the variable that will produce the largest change towards the minimum (or
maximum) solution. That variable replaces one of its compatriots that is most severely
restricting it, thus moving the Simplex Method to a different corner of the solution set
and closer to the final solution. In addition, the Simplex Method can determine if no
solution actually exists. Note that the algorithm is greedy since it selects the best choice
at each iteration without needing information from previous or future iterations.
The Simplex Method solves a linear program of the form described in Figure 3.
Here, the coefficients represent the respective weights, or costs, of the variables .
The minimized statement is similarly called the cost of the solution. The coefficients of
the system of equations are represented by , and any constant values in the system
of equations are combined on the right-hand side of the inequality in the variables .
Combined, these statements represent a linear program, to which we seek a solution of
minimum cost.
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Figure 3
A Linear Program
Solving this linear program involves solutions of the set of equations. If no
Once a solution to the linear program has been found, successive improvements
are made to the solution. In particular, one of the nonbasic variables (with a value of
zero) is chosen to be increased so that the value of the cost function, , decreases.
That variable is then increased, maintaining the equality of all the equations while
keeping the other nonbasic variables at zero, until one of the basic (nonzero) variables is
reduced to zero and thus removed from the basis. At this point, a new solution has been
determined at a different corner of the solution set.
The process is then repeated with a new variable becoming basic as another
becomes nonbasic. Eventually, one of three things will happen. First, a solution may
occur where no nonbasic variable will decrease the cost, in which case the current
solution is the optimal solution. Second, a non-basic variable might increase to infinity
without causing a basic-variable to become zero, resulting in an unbounded solution.
Finally, no solution may actually exist and the Simplex Method must abort. As is
common for research in linear programming, the possibility that the Simplex Method
might return to a previously visited corner will not be considered here.
The primary data structure used by the Simplex Method is "sometimes called a
dictionary, since the values of the basic variables may be computed (‘looked up’) by
choosing values for the nonbasic variables." (Gill, Murray, and Wright, p. 337)
Dictionaries contain a representation of the set of equations appropriately adjusted to
the current basis. The use of dictionaries provide an intuitive understanding of why each
variable enters and leaves the basis. The drawback to dictionaries, however, is the
necessary step of updating them which can be time-consuming. Computer
implementation is possible, but a version of the Simplex Method has evolved with a more
efficient matrix-oriented approach to the same problem. This new implementation
became known as the Revised Simplex Method.
The steps of the Simplex Method also need to be expressed in the matrix format of
the Revised Simplex Method. The basis matrix, B, consists of the column entries of A
corresponding to the coefficients of the variables currently in the basis. That is if is the
fourth entry of the basis, then is the fourth column of B. (Note that
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B is therefore an matrix.) The non-basic columns of A constitute a similar though
likely not square, matrix referred to here as V.
Update dictionary.
Update .
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Examples:
x1 x2 S1 A1 S2 S3
2 0 0 –1 0
0 Ratio
A1 – 1 2* 1 –1 1 0 0 2 2/2=1
S2 0 1 3 0 0 1 0 2 2/1=2
S3 0 0 1 0 0 0 1 4
–2 –1 1 0 0 0 –2
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The first iteration gives the following table:
x1 x2 x1 A1 S2 S3
0 0 0 –1 0 0
X1 0 1 1/2 – 1/2 ½ 0 0 1
S2 0 0 5/2 1/2 –½ 1 0 1
S3 0 0 1 0 0 0 1 4
0 0 0 1 0 0 0
Phase I is complete, since there are no negative elements in the last row. The Optimal
solution of the new objective is Z* = 0.
Phase II: Consider the original objective function,
Maximize z = 3x1 – x2 + 0S1 + 0S2 + 0S3
Subject to x1 + x2/2 – S1/2=1
5/2 x2 + S1/2 + S2=1
x2 + S3 = 4
x1, x2, S1, S2, S3 ≥ 0
with the initial solution x1 = 1, S2 = 1, S3 = 4, the corresponding simplex table is
x1 x2 S1 S2 S3
3 –1 0 0 0 Ratio
X1 3 1 1/2 – 1/2 0 0 1
S2 0 0 5/2 1/2* 1 0 1 1/1/2=2
S3 0 0 1 0 0 1 4
0 5/2 – 3/2 0 0 3
x1 x2 S1 S2 S3
3 –1 0 0
0
X1 0 1 3 0 1 0 2
S1 0 0 5 1 2 0 2
S3 0 0 1 0 0 1 4
0 10 0 3 6
0
Since all elements of the last row are non negative, the current solution is
optimal.
The maximum value of the objective function Z = 6 which is attained for x1 = 2, x2 = 0.
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Q.4:- Describe the economic importance of the Duality concept?
Primal
Maximize
n
z= ∑C j =1
j .x j
n
Subject to ∑a
j =1
ij x j ≤b j , i = 1,2,…., m
xj ≥ 0, j = 1,2,…., n
Dual
Minimize
m
w= ∑b . y
i =1
i i
m
Subject to ∑a
i =1
ij yi ≤ ci , i = 1,2,…., n
yj ≥ 0, i = 1,2,…., m
From the above resource allocation model, the primal problem has n economic
activities and m resources. The coefficient cj in the primal represents the profit per unit
of activity j. Resource i, whose maximum availability is bi, is consumed at the rate aij
units per unit of activity j.
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At the optimum, the relationship holds as a strict equation. Note: Here the sense
of optimization is very important. Hence clearly for any two primal and dual feasible
solutions, the values of the objective functions, when finite, must satisfy the following
inequality.
n m
z= ∑C x
j =1
j j ≤ ∑bi yi = w
i =1
The strict equality, z = w, holds when both the primal and dual solutions are
optimal.
Consider the optimal condition z = w first given that the primal problem
represents a resource allocation model, we can think of z as representing profit in
Rupees. Because bi represents the number of units available of resource i, the equation z
= w can be expressed as profit (Rs) = ∑ (units of resource i) x (profit per unit of
resource i)
This means that the dual variables yi, represent the worth per unit of resource i
[variables yi are also called as dual prices, shadow prices and simplex multipliers].
With the same logic, the inequality z < w associated with any two feasible primal
and dual solutions is interpreted as (profit) < (worth of resources)
This relationship implies that as long as the total return from all the activities is
less than the worth of the resources, the corresponding primal and dual solutions are not
optimal. Optimality is reached only when the resources have been exploited completely,
which can happen only when the input equals the output (profit). Economically the
system is said to remain unstable (non optimal) when the input (worth of the resources)
exceeds the output (return). Stability occurs only when the two quantities are equal.
Q.5:- How can you use the Matrix Minimum method to find the initial basic
feasible solution in the transportation problem?
Ans:- The Initial basic Feasible solution using Matrix Minimum Method
Let us consider a T.P involving m-origins and n-destinations. Since the sum of
origin capacities equals the sum of destination requirements, a feasible solution always
exists. Any feasible solution satisfying m + n – 1 of the m + n constraints is a redundant
one and hence can be deleted. This also means that a feasible solution to a T.P can have
at the most only m + n – 1 strictly positive component, otherwise the solution will
degenerate.
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Matrix Minimum Method
Step 1:Determine the smallest cost in the cost matrix of the transportation table. Let it
be cij , Allocate xij = min ( ai, bj) in the cell ( i, j)
Step 2: If xij = ai cross off the ith row of the transportation table and decrease bj by ai
go to step 3.
if xij = bj cross off the ith column of the transportation table and decrease ai by bj go to
step 3.
if xij = ai= bj cross off either the ith row or the ith column but not both.
Step 3: Repeat steps 1 and 2 for the resulting reduced transportation table until all
the rim requirements are satisfied whenever the minimum cost is not unique make an
arbitrary choice among the minima.
Q.6:- Describe the Integer Programming Problem. Describe the Gomory’s All-
I.P.P. method for solving the I.P.P. problem?
and xj ³ 0 j = 1, 2, … ,n
If all the variables are constrained to take only integral value i.e. k = n, it is
called an all(or pure) integer programming problem. In case only some of the variables
are restricted to take integral value and rest (n – k) variables are free to take any non
negative values, then the problem is known as mixed integer programming problem.
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Otherwise the given IPP is modified by inserting a new constraint called Gomory’s or
secondary constraint which represents necessary condition for integrability and
eliminates some non integer solution without losing any integral solution. After adding
the secondary constraint, the problem is then solved by dual simplex method to get an
optimum integral solution. If all the values of the variables in this solution are integers,
an optimum inter-solution is obtained, otherwise another new constrained is added to
the modified L P P and the procedure is repeated. An optimum integer solution will be
reached eventually after introducing enough new constraints to eliminate all the superior
non integer solutions. The construction of additional constraints, called secondary or
Gomory’s constraints, is so very important that it needs special attention.
The iterative procedure for the solution of an all integer programming problem is as
follows:
a) If the optimum solution contains all integer values, an optimum basic feasible
integer solution has been obtained.
b) If the optimum solution does not include all integer values then proceed onto
next step.
n1
∑y
j =0
ij x j = bi ( i 0 , 1, 2 , ........, m1 )
Let it be [bk 1]
or write is as f ko
Step 5: Express each of the negative fractions if any, in the k th row of the
optimum simplex table as the sum of a negative integer and a nonnegative fraction.
∑f
j =0
kj x j ≥ f ko
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n1
Gsla ( 1 )= − f ko + ∑ f kj x j
j =0
Step 7: Starting with this new set of equation constraints, find the new optimum
solution by dual simplex algorithm. (So that Gsla (1) is the initial leaving basic variable).
Step 8: If this new optimum solution for the modified L.P.P. is an integer solution.
It is also feasible and optimum for the given I.P.P. otherwise return to step 4 and repeat
the process until an optimum feasible integer solution is obtained.
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ASSIGNMENTS - MBA – II SEMESTER
MB0032
SET 2
OPERATIONS RESEARCH
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(iii) Action Phase: It consists of making recommendations for the decision
process by those who first posed the problem for consideration or by anyone in
a position to make a decision, influencing the operation in which the problem is
occurred.
Maximize or Minimize
Z = c1 x1 + c2 x 2 +.........................+cn x n
Canonical forms :
The general Linear Programming Problem (LPP) defined above can always
be put in the following form which is called as the canonical form:
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3) the objective function is of the maximization type.
Any LPP can be put in the cannonical form by the use of five elementary
transformations:
2. Any inequality in one direction (< or >) may be changed to an inequality in the opposite
direction (> or <) by multiplying both sides of the inequality by –1.
4. An inequality constraint with its left hand side in the absolute form can be changed
into two regular inequalities. For example: | 2x1+3x2 | < 5 is equivalent to 2x1+3x2
< 5 and 2x1+3x2 > – 5 or – 2x1 – 3x2 < 5.
5. The variable which is unconstrained in sign (i.e., > 0, < 0 or zero) is equivalent
to the difference between 2 nonnegative variables. For example, if x is unconstrained
in sign then x
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Q.3:- What are the different steps needed to solve a system of equations by
the simplex method?
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Q.4:- What do you understand by the transportation problem? What is the
basic assumption behind the transportation problem? Describe the MODI
method of solving transportation problem?
Ans:- This model studies the minimization of the cost of transporting a commodity
from a number of sources to several destinations. The supply at each source and the
demand at each destination are known. The transportation problem involves m
sources, each of which has available ai (i = 1, 2, .....,m) units of homogeneous
product and n destinations, each of which requires bj (j = 1, 2...., n) units of products.
Here ai and bj are positive integers. The cost cij of transporting one unit of the product
from the i th source to the j th destination is given for each i and j. The objective is to
develop an integral transportation schedule that meets all demands from the inventory
at a minimum total transportation cost. It is assumed that the total supply and the total
demand are equal.
The first approximation to (2) is always integral and therefore always a feasible
solution. Rather than determining a first approximation by a direct application of the
simplex method it is more efficient to work with the table given below called the
transportation table. The transportation algorithm is the simplex method specialized to
the format of table it involves:
The solution to T.P is obtained in two stages. In the first stage we find Basic
feasible solution by any one of the following methods a) Northwest corner rale b)
Matrix Minima Method or least cost method c) Vogel’s approximation method. In the
second stage we test the B.Fs for its optimality either by MODI method or by stepping
stone method.
Modified Distribution Method / Modi Method / U – V Method .
Step 1 : Under this method we construct penalties for rows and columns by
subtracting the least value of row / column from the next least value.
Step 2 : We select the highest penalty constructed for both row and column.
Enter that row / column and select the minimum cost and allocate min (ai, bj)
Step 3 : Delete the row or column or both if the rim availability / requirements is
met. Step 4 : We repeat steps 1 to 2 to till all allocations are over.
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Step 5 : For allocation all form equation ui + vj = cj set one of the dual variable
ui / vj to zero and solve for others.
Step 6 : Use these value to find Δij = cij – ui – vj of all Δij >, then it is the optimal
solution.
Step 7 : If any Dij £ 0, select the most negative cell and form loop. Starting
point of the loop is +ve and alternatively the other corners of the loop are –ve and
+ve. Examine the quantities allocated at –ve places. Select the minimum. Add it at
+ve places and subtract from –ve place. Step 8 : Form new table and repeat steps 5
to 7 till Δij > 0
Q.5:- Describe the North-West Corner rule for finding the initial basic feasible
solution in the transportation problem?
Step1: The first assignment is made in the cell occupying the upper left hand (north
west) corner of the transportation table. The maximum feasible amount is allocated
there, that is x11 = min (a1,b1)
x21 = min (a2, b1 – x21) in the cell (2,1). This either exhausts the capacity of origin
O2 or satisfies the remaining demand at destination D1.
(a1 – x11, b2) in the cell (1, 2) . This either exhausts the remaining capacity of origin
O1 or satisfies the demand at destination D2 .
Step 3: Start from the new north west corner of the transportation table satisfying
destination requirements and exhausting the origin capacities one at a time, move
down towards the lower right corner of the transportation table until all the rim
requirements are satisfied.
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Q.6:- Describe the Branch and Bound Technique to solve an I.P.P. problem?
Ans:- The Branch And Bound Technique Sometimes a few or all the variables
of an IPP are constrained by their upper or lower bounds or by both. The most general
technique for the solution of such constrained optimization problems is the branch and
bound technique. The technique is applicable to both all IPP as well as mixed I.P.P.
the technique for a maximization problem is discussed below:
Further let us suppose that for each integer valued xj, we can assign lower and upper
bounds for the optimum values of the variable by
x j > I + 1 ___________________________ ( 6)
To explain how this partitioning helps, let us assume that there were no
integer restrictions (3), and suppose that this then yields an optimal solution to L.P.P.
– (1), (2), (4) and (5). Indicating x1 = 1.66 (for example). Then we formulate and
solve two L.P.P’s each containing (1), (2) and (4).
Then the solution having the larger value for z is clearly optimum for the given
I.P.P. However, it usually happens that one (or both) of these problems has no optimal
solution satisfying (3), and thus some more computations are necessary. We now
discuss step wise the algorithm that specifies how to apply the partitioning (6) and
(7) in a systematic manner to finally arrive at an optimum solution.
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We start with an initial lower bound for z, say z (0) at the first iteration which is
less than or equal to the optimal value z*, this lower bound may be taken as the
starting Lj for some xj.
In addition to the lower bound z (0) , we also have a list of L.P.P’s (to be
called master list) differing only in the bounds (5). To start with (the 0 th iteration) the
master list contains a single L.P.P. consisting of (1), (2), (4) and (5). We now discuss
below, the step by step procedure that specifies how the partitioning (6) and (7) can
be applied systematically to eventually get an optimum integer valued solution.
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