OPERATIONS RESEARCH

Identify the application of operation research in real life business problem

Operations Research is the subject of advanced analytical methods for decision making,
which are designed and applied. It is sometimes regarded as a mathematical subfield.

 SETTING UP SUPERMARKET TO SERVE MAXIMUM PEOPLE

Let us consider six neighbouring towns A, B, C, D, E, and F. The distance kij between towns i
and j (in miles) is indicated in Table 3.1 for towns that have roads connecting them. The
population of the towns Pi is also given in the first row of Table 1. A supermarket chain
wishes to set up supermarkets at two towns such that the two supermarkets are accessible to
the maximum number of people of the six neighbouring towns.1 Supermarkets are considered
accessible if the distance is less than 30 miles. We define a binary variable dij which equals 1
if the town j is less than 30 miles from town i and 0 otherwise. Thus, dAB equals 0 (because
town B is more than 30 miles away from town A), whereas dAE equals 1(because town E is
less than 30 miles away from town A). Further, dAA equals 1, because town A is less than 30
miles away from town A. Also, dAD equals 0, because there is no road connecting towns A
and D. The other values of dij can be similarly obtained and are given in Table 2.
TABLE 1

POPULATIO 3 8 2 12 7 10
N A B C D E F
(In thousand)
A - 50 26 - 15 32
B 50 - - 34 28 -
C 26 - - 29 40 17
D - 34 29 - 18 24
E 15 28 40 18 - 43
F 32 - 17 24 43 -

TABLE 2

POPULATIO
N A B C D E F
(In thousand)
A 1 0 1 0 1 0
B 0 1 0 0 1 0
C 1 0 1 1 0 1
D 0 0 1 1 1 1
E 1 1 0 1 1 0
F 0 0 1 1 0 1

We define a decision binary variable Si which equals 1 if a supermarket is located at town i,

and 0 otherwise. We also define a decision binary variable Xi which equals 1 if a town i is
served by at least one supermarket. Because our goal is to ensure that maximum number of
people of the six neighbouring towns can access the super markets, the objective function is:
Max P X i A B F i = ∑, ,.. Because we intend to have only 2 super markets, there is a
constraint: i A B F i S = ∑ ≤, ,.. 2 (Constraint 1) The decision binary variable Si equals 1 if a
supermarket is located at town i. This supermarket at town i will serve town i and other towns
j accessible to town i for which Xj equals 1. If XA equals 1, then Sj has to equal 1 for at least
one of the three towns (A, C, or E), which are accessible from town A (given in the Ath row
of Table 3.2) because that supermarket will serve that town A. If XA equals 0, it does not
matter if Sj equals 0 or 1 for the towns which are accessible from town A. This can be
modelled by the following constraint: X d i S for i A B F j A B F ≤ = ij j … = ∑, ... ,, .,
(Constraint 2)
The solution for this problem is SD = SE = 1, which implies that setting up supermarkets at D
and E cater to the maximum population of all the six towns in the neighbourhood. Towns C,
D, and F will be catered by the supermarket in town D. Towns A, B, D, and E will be catered
by the supermarket in town E.