OPERATION RESEARCH

Application of OR principles in IT industry

Table of Contents
1. Introduction 2. Purpose of the assignment 3. Gratitude to Professor and support staff 4. Goal of Operations Research 5. Phases of OR study 6. Problem Formulation 7. CASE STUDY Usage of OR principles in IT industry o A brief about the IT industry o Definition of Problem o Goal of Operation Research - Objective o Operational Details o Problem Definition o Formulation of Problem and Constraints o Solution o Problem Solving Using Solver
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o Conclusion

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1. INTRODUCTION We as students of the field of OR are glad to learn the concepts, principles and methodologies 2. PURPOSE OF THE ASSIGNMENT The purpose of this assignment is to comply with the comprehensive assignment as part of academic curriculum. 3. GRATITUDE TO THE PROFESSOR AND SUPPORTING STAFF We are extremely grateful to our professor Mr S.K De for sharing his invaluable guidance, experience and mentoring us. We are also very thankful to Mrs. Nitu Prasad and the various coordinators for helping us in completing our course. 4. GOAL OF OPERATIONS RESEARCH
The goal of operations research is to find values for n decision variables X = (x 1, x2, , xn). The decision maker must choose values for the variables so that he is in a position to optimize his objective which may include Maximize profit Maximize utilization of equipment Minimize cost Minimize raw materials or resources Minimize traveling time Definition of the problem Construction of the model Solution of the model Validation of the model Implementation of the final results.

5. PHASES OF OR STUDY

OR seeks the determination of the best (optimum) course of action of a decision problem under the restriction of limited resources. The term operations research quite often is associated almost exclusively with the use of mathematical techniques to model and analyze decision problems.

6. PROBLEM FORMULATION
Step 1. Formulate the Objective Function: Determine the quantity to be optimized and express it as a mathematical function. Doing so serves to define the input variables. Step 2. Formulate the Constraints: Identify all stipulated requirements, restrictions and limitations, and express them mathematically. Step 3. Express any hidden conditions. Such conditions are not stipulated explicitly in the problem but are apparent from the physical situation being modeled. Examples: non-negativity, Integer requirements.

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7. CASE STUDY Usage of OR principles in IT industry A brief about the IT industry India has evolved to become pioneer in the global software industry due to its cost arbitrage and abundance of technically skilled manpower. The objective of most Indian companies in this industry is to Optimize the Resource allocation in different Projects so that they utilize the resources effectively Definition of Problem In this context, I wish to apply the principles of Operation Research for a IT company which is trying to allocate different resources in different projects as some of the resources are underutilized as their technical skills vary. We will try to relocate this resources so that they are utilized properly in different projects as per their skill set Goal of Operation Research - Objective Effective Utilisation of Resources and Unallocate some resources from Current Projects Operational Details Projects No of Resources Hours per resource Total Capacity Project-1,Project-2,Project-3,Project-4 15 8 15*8=120

Problem Definition As per the problem Statement there are total 15 resources working in 3 different teams Each Project has 5 Resources working in it Capacity column represents that total capacity of that resource 8 hours 30.5 represents sum of all 5 resources working in Project 1 Percent Utilisation is (30.5+24.5+30/120) = 71%

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Basic Project 1 Resource 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 8 NR 4 NR NR 5

Problem Project 2 Project 3

Capacity 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8

3.5 NR 7 4 NR 7 6.5 NR NR 6 5 7 4.5 7 30.5 5.5 NR 24.5 30 5

NR NR

Formulation of Problem and Constraints

Formulation Project 2 Project 3

Project 1 Resource 1 2 3 4 OR PGCBM -21 8 10000 4 10000

Capacity 8 8 8 8 Page 5

3.5 10000 7

5 6 7 8 9 10 11 12 13 14 15

10000 5

4 10000 7 5 10000 6 5 7

6.5 10000 10000 10000 4.5 7 50030.5 5.5 20024.5

10000 30030

8 8 8 8 8 8 8 8 8 8 8

1000 Represents Barriers of that resource meaning second resource cannot work in project1 as skill set of that resource is utilized in Project 2 Constraints are that resources can work only 8 hours Solution: Project 2 0 0 8 8 0 8 0 0 0.5 0 0 0 0 0 0 24.5 24.5 Project 3 8 8 0 0 6 0 0 0 0 0 0 0 8 0 0 30 30 Relocation working Hrs 8 8 8 8 6 8 8 8 0.5 0 8 0 8 0 6.5

Project 1 Resource 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 0 0 0 0 0 8 8 0 0 8 0 0 0 6.5 30.5 30.5

Capacity 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8

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Problem Solving Using Solver

Solver, which is a add-on available in Microsoft Excel shall be used to solve this problem further. Following are the two output sheets generated using this add on Answer Report Sensitivity Report - This gives the best combination possible for the desired objective - This gives the range in which individual parameters can be adjusted for achieving the objective

Microsoft Excel 12.0 Answer Report Worksheet: [Arihant.xlsx]Sheet1 (2) Report Created: 16-06-2012 20:02:32

Target Cell (Min) Cell $J$23 Capacity Name Original Value 0 Final Value 0

Adjustable Cells Cell $E$25 $F$25 $G$25 $E$26 $F$26 $G$26 $E$27 $F$27 $G$27 $E$28 $F$28 $G$28 $E$29 $F$29 $G$29 $E$30 Name Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Original Value 0 0 8 0 0 8 0 8 0 0 0.5 0 0 0 6 0 Final Value 0 0 8 0 0 8 0 8 0 0 8 0 0 0 6 0 Page 7

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$F$30 $G$30 $E$31 $F$31 $G$31 $E$32 $F$32 $G$32 $E$33 $F$33 $G$33 $E$34 $F$34 $G$34 $E$35 $F$35 $G$35 $E$36 $F$36 $G$36 $E$37 $F$37 $G$37 $E$38 $F$38 $G$38 $E$39 $F$39 $G$39

Project 2 Project 3 Answer Project 1 Answer Project 2 Answer Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3

8 0 8 0 0 8 0 0 0 8 0 0 0 0 6.5 0 0 0 0 0 0 0 8 0 0 0 8 0 0

8 0 8 0 0 8 0 0 0 0.5 0 0 0 0 8 0 0 0 0 0 0 0 8 0 0 0 6.5 0 0

Constraints Cell $E$40 $F$40 Project 1 Project 2 Name Cell Value Status Not 30.5 $E$40=$E$41 Binding Not 24.5 $F$40=$F$41 Binding Not 30 $G$40=$G$41 Binding 8 $H$25<=$I$25 Binding 8 $H$26<=$I$26 Binding Formula Slack 0 0 0 0 0 Page 8

$G$40 Project 3 $H$25 Relocation working Hrs $H$26 Relocation working Hrs OR PGCBM -21

$H$27 Relocation working Hrs $H$28 Relocation working Hrs $H$29 $H$30 $H$31 $H$32 Relocation working Hrs Relocation working Hrs Answer Relocation working Hrs Relocation working Hrs

$H$33 Relocation working Hrs $H$34 Relocation working Hrs $H$35 Relocation working Hrs $H$36 Relocation working Hrs $H$37 Relocation working Hrs $H$38 Relocation working Hrs $H$39 Relocation working Hrs

8 $H$27<=$I$27 Binding 8 $H$28<=$I$28 Binding Not 6 $H$29<=$I$29 Binding 8 $H$30<=$I$30 Binding 8 $H$31<=$I$31 Binding 8 $H$32<=$I$32 Binding Not 0.5 $H$33<=$I$33 Binding Not 0 $H$34<=$I$34 Binding 8 $H$35<=$I$35 Binding Not 0 $H$36<=$I$36 Binding 8 $H$37<=$I$37 Binding Not 0 $H$38<=$I$38 Binding Not 6.5 $H$39<=$I$39 Binding

0 0 2 0 0 0 7.5 8 0 8 0 8 1.5

Microsoft Excel 12.0 Sensitivity Report Worksheet: [Arihant.xlsx]Sheet1 (2) Report Created: 16-06-2012 20:02:32

Adjustable Cells Cell $E$25 $F$25 $G$25 $E$26 $F$26 $G$26 $E$27 $F$27 $G$27 $E$28 $F$28 $G$28 $E$29 Name Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Final Reduced Objective Allowable Allowable Value Cost Coefficient Increase Decrease 0 8 8 1E+30 8 0 0 0 1E+30 0 8 0 0 0 1E+30 0 10000 10000 1E+30 10000 0 3.5 3.5 1E+30 3.5 8 0 0 0 1E+30 0 4 4 1E+30 4 8 0 0 0 1E+30 0 10000 10000 1E+30 10000 0 10000 10000 1E+30 10000 8 0 0 0 1E+30 0 7 7 1E+30 7 0 10000 10000 1E+30 10000 Page 9

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$F$29 $G$29 $E$30 $F$30 $G$30 $E$31 $F$31 $G$31 $E$32 $F$32 $G$32 $E$33 $F$33 $G$33 $E$34 $F$34 $G$34 $E$35 $F$35 $G$35 $E$36 $F$36 $G$36 $E$37 $F$37 $G$37 $E$38 $F$38 $G$38 $E$39 $F$39 $G$39 Constraints Cell $E$40 $F$40 $G$40 $H$25

Project 2 Project 3 Project 1 Project 2 Project 3 Answer Project 1 Answer Project 2 Answer Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3 Project 1 Project 2 Project 3

0 6 0 8 0 8 0 0 8 0 0 0 0.5 0 0 0 0 8 0 0 0 0 0 0 0 8 0 0 0 6.5 0 0

4 0 5 0 0 0 10000 5 0 7 0 6.5 0 10000 10000 0 6 0 10000 5 10000 0 7 0 4.5 0 7 0 0 0 5.5 10000

4 0 5 0 0 0 10000 5 0 7 0 6.5 0 10000 10000 0 6 0 10000 5 10000 0 7 0 4.5 0 7 0 0 0 5.5 10000

1E+30 0 1E+30 0 1E+30 0 1E+30 1E+30 0 1E+30 1E+30 1E+30 0 1E+30 1E+30 1E+30 1E+30 0 1E+30 1E+30 1E+30 1E+30 1E+30 1E+30 1E+30 0 1E+30 1E+30 1E+30 0 1E+30 1E+30

4 0 5 1E+30 0 1E+30 10000 5 1E+30 7 0 6.5 0 10000 10000 0 6 1E+30 10000 5 10000 0 7 0 4.5 1E+30 7 0 0 0 5.5 10000

Name Project 1 Project 2 Project 3 Relocation working Hrs

Final Value 30.5 24.5 30 8

Shadow Price 0 0 0 0

Constraint Allowable Allowable R.H. Side Increase Decrease 30.5 1.5 6.5 24.5 7.5 0.5 30 2 6 8 6 2 Page 10

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$H$26 $H$27 $H$28 $H$29 $H$30 $H$31 $H$32 $H$33 $H$34 $H$35 $H$36 $H$37 $H$38 $H$39

Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Answer Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs Relocation working Hrs

8 8 8 6 8 8 8 0.5 0 8 0 8 0 6.5

0 0 0 0 0 0 0 0 0 0 0 0 0 0

8 8 8 8 8 8 8 8 8 8 8 8 8 8

6 0.5 0.5 1E+30 0.5 6.5 6.5 1E+30 1E+30 6.5 1E+30 6 1E+30 1E+30

2 7.5 7.5 2 7.5 1.5 1.5 7.5 8 1.5 8 2 8 1.5

Conclusion 1. Number of Variables 15*3 = 45 2. Number of Possible Solutions 15+3-1 = 17 3. As we can see from above reports we have reduced the number of resources from 15 to 12 4. Relocation working hours for Resource 10, 12 and 14 is 0 5. These three resources can be released from these projects and assigned somewhere else 6. Resource 2 has been allocated to Project 3 and so on and so forth for other resources 7. Binding represents the resources are utilized to full capacity

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