Name: Aarti Shivprasad Gupta

Roll No; 2020M117 (MMS-B)

OPERATION RESEARCH

UNIT 1: LINEAR PROGRAMMING

Linear programming (LP) or Linear Optimization may be defined as the problem of
maximizing or minimizing a linear function that is subjected to linear constraints.
The constraints may be equalities or inequalities. The optimization problems involve
the calculation of profit and loss. Linear programming problems are an important
class of optimization problems, that helps to find the feasible region and optimise
the solution in order to have the highest or lowest value of the function.
The Linear Programming Problems (LPP) is a problem that is concerned with finding
the optimal value of the given linear function. The optimal value can be either
maximum value or minimum value. Here, the given linear function is considered an
objective function. The objective function can contain several variables, which are
subjected to the conditions and it has to satisfy the set of linear inequalities called
linear constraints. The linear programming problems can be used to get the optimal
solution for the following scenarios, such as manufacturing problems, diet problems,
transportation problems, allocation problems and so on.

Components of Linear Programming

The basic components of the LP are as follows:

 Decision Variables
 Constraints
 Data
 Objective Functions

Methods to Solve Linear Programming Problems

The linear programming problem can be solved using different methods, such as the
graphical method, simplex method, or by using tools such as R, open solver etc.
Here, we will discuss the two most important techniques called the simplex method
and graphical method in detail.
a. Simplex method
The simple method is one of the most popular methods to solve linear programming
problems. It is an iterative process to get the feasible optimal solution. In this
method, the value of the basic variable keeps transforming to obtain the maximum
value for the objective function. The algorithm for linear programming simplex method
is provided below:
Step1: Establish a given problem. (i.e.,) write the inequality constraints and objective
function.
 Step 2: Convert the given inequalities to equations by adding the slack variable to
each inequality expression.
Step3: Create the initial simple xtableau. Write the objective function at the bottom
row. Here, each inequality constraint appears in its own row. Now, we can represent
the problem in the form of an augmented matrix, which is called the initial simple
xtableau.
Step4: Identify the greatest negative entry in the bottom row, which helps to identify
the pivot column. The greatest negative entry in the bottom row defines the largest
coefficient in the objective function, which will help us to increase the value of the
objective function as fastest as possible.
Step 5: Compute the quotients. To calculate the quotient, we need to divide the
entries in the far right column by the entries in the first column, excluding the bottom
row. The smallest quotient identifies the row. The row identified in this step and the
element identified in the step will be taken as the pivot element.
Step 6: Carry out pivoting to make all other entries in column is zero.
Step 7: If there are no negative entries in the bottom row, end the process. Otherwise,
start from step 4.
Step 8: Finally, determine the solution associated with the final simplex tableau.
b. Graphical Method

The problem has two decision variables, a graphical method is the best method to
find the optimal solution. In this method, the set of inequalities are subjected to
constraints. Then the inequalities are plotted in the XY plane. Once, all the inequalities
are plotted in the XY graph, the intersecting region will help to decide the feasible
region. The feasible region will provide the optimal solution as well as explains what
all values our model can take.

UNIT 2: TRANSPORTATION PROBLEM

The transportation problem in operational research is concerned with finding the

minimum cost of transporting a single commodity from a given number of sources
(e.g. factories) to a given number of destinations (e.g. warehouses). These
types of problems can be solved by general network methods, but here we use a
specific transportation algorithm.

The data of the model include

1. The level of supply at each source and the amount of demand at each destination.

2. The unit transportation cost of the commodity from each source to each destination.

Since there is only one commodity, a destination can receive its demand from more
than one source. The objective is to determine how much should be shipped from
each source to each destination so as to minimise the total transportation cost.

Types of Transportation Problem in Operational Research

1. Balanced Transportation Problem
 2. Unbalanced Transportation Problem

There are three methods as given below

a) Northwest corner method

b) Least cost method
c) Vogel’s approximation method (or Penalty method)

a) Steps for North-West Corner Method

1. Allocate the maximum amount allowable by the supply and demand constraints
to the variable x11 (i.e. the cell in the top left corner of the transportation
tableau).
2. If a column (or row) is satisfied, cross it out. The remaining decision variables in
that column (or row) are non-basic and are set equal to zero. If a row and column
are satisfied simultaneously, cross only one out (it does not matter which).
3. Adjust supply and demand for the non-crossed out rows and columns.
4. Allocate the maximum feasible mount to the first available
non- crossed out element in the next column (Norrow).
5. When exactly one row or column is left, all the remaining variables are basic and
are assigned the only feasible allocation.

b) Steps for Least Cost Method

1. Assign as much as possible to the cell with the smallest unit cost in the entire
tableau. If there is a tie then choose arbitrarily.
2. Crossouttheroworcolumnwhichhassatisfiedsupplyordemand.Ifarowandcolum n
are both satisfied then cross out only one of them.
3. Adjust the supply and demand for those rows and columns which are not
crossed out.
4. When exactly one row or column is left, all the remaining variables are basic
and are assigned the only feasible allocation.

c) Steps for Vogel’s Approximation Method

1. Determine apenalty cost for each row(column)by subtracting the lowest unit cell
cost in the row (column) from the next lowest unit cell cost in the same row
(column).
2. Identify the row or column with the greatest penalty cost. Break the ties
arbitrarily (if there are any). Allocate as much as possible to the variable with
the lowest unit cost in the selected row or column. Adjust the supply and
demand and cross out the row or column that is already satisfied. If a row and
column are satisfied simultaneously, only cross out one of the two and allocate
a supply or demand of zero to the one that remain s.

 If there is exactly one row or column left with a supply or demand of zero, stop.
 If there is one row (column) left with a positive supply (demand), determine
the basic variables in the row (column) using the Minimum Cell Cost Method.
Stop.
 If all of the rows and columns that were not crossed out have zero supply and
demand (remaining), determine the basic zero variables using the Minimum
Cell Cost Method. Stop.
 In any other case, continue with Step1.
UNIT 3: ASSIGNMENT PROBLEM

The assignment problem is a special case of linear programming problem; it is one

of the fundamental combinational optimization problems in the branch of
optimization or operations research in mathematics. Its goal consists in assigning
resources (usually workers) to tasks (usually jobs) one a one to one basis while
minimizing assignment costs. As a general rule, all Jobs must be performed by exactly
one worker and every worker must be assigned exclusively to one job. Any worker can
be assigned to perform any job, incurring in some cost that may vary depending on
the work-job assignment.
Assignment Algorithm (Or) Hungarian Method
First check whether the number of rows is equal to number of columns, if it is so, the
assignment problem is said to be balanced. Then proceed to step1. If it is not balanced,
then it should be balanced before applying the algorithm.

Step 1: Subtract the smallest cost element of each row from all the elements in the
row of the given cost matrix. See that each row contains at least one zero.

Step 2: Subtract the smallest cost element of each column from all the elements
in the column of the resulting cost matrix obtained by step 1 and make sure each
column contains at least one zero.

Step 3: (Assigning the zeros) (a) Examine the rows successively until a row with
exactly one unmarked zero is found. Make an assignment to this single unmarked
zero by encircling it.
Cross all other zeros in the column of this encircled zero, as these will not be
considered for any future assignment. Continue in this way until all the rows have
been examined.
(b) Examine the columns successively until a column with exactly one unmarked zero
is found. Make an assignment to this single unmarked zero by encircling it and cross
any other zero in its row. Continue until all the columns have been examined.

Step 4: (Apply Optimal Test) (a) If each row and each column contain exactly one
encircled zero, then the current assignment is optimal.
(b) If at least one row or column is without an assignment (i.e., if there is at least
one row or column is without one encircled zero), then the current assignment is
not optimal. Go to step
5. Subtract the smallest cost element of each column from all the elements in the
column of the resulting cost matrix obtained by step 1 and make sure each column
contains at least one zero.

Step 5: Cover all the zeros by drawing a minimum number of straight lines as follows:
(a) Mark the rows that do not have assignment.
(b) Mark the columns (not already marked) that have zeros in marked rows.
(c) Mark the rows (not already marked) that have assignments in marked columns.
(d) Repeat (b) and (c) until no more marking is required.
(e) Draw lines through all unmarked rows and marked columns. If the number of
these lines is equal to the order of the matrix then it is an optimum solution
other wise not.
Step 6: Determine the smallest cost element not covered by the straight lines.
Subtract this smallest cost element from all the uncovered elements and add this
to all those element which are lying in the intersection of these straight lines and
do not change the remaining elements which lie on the straight lines.

Step 7: Repeat steps (1) to (6), until an optimum assignment is obtained.

UNIT 4: GAME THEORY
Game theory is a type of decision theory in which one’s choice of action is
determined after taking into account all possible alternatives available to an
opponent playing the same game, rather than just by the possibilities of several
outcome results. Game theory does not insist on how a game should be played but
tells the procedure and principles by which action should be selected. Thus it is a
decision theory useful in competitive situations. Game is defined as an
activitybetweentwoormorepersonsaccordingtoasetofrulesattheendofwhicheachpers
on receives some benefit or suffers loss. The set of rules defines the game. Going
through the set of rules once by the participants defines a play.
Properties of a Game
a) There are finite numbers of competitors called ‘players’

b) Each player has a finite number of possible courses of action called ‘strategies’

c) All the strategies and their effects are known to the players but player does not
know which strategy is to be chosen.

d) A game is played when each player chooses one of his strategies. The strategies
areas med to be made simultaneously with an outcome such that no player
knows his opponents strategy until he decides his own strategy.

e) The game is a combination of the strategies and in certain units which determines
the gain or loss.

f) The figures shown as the out comes of strategies in a matrix form are called ‘pay-off
matrix’.

g) The player playing the game always tries to choose the best course of action
which results in optimal pay off called ‘optimal strategy’.

h) The expected pay off when all the players of the game follow their optimal
strategies is known as ‘value of the game’. The main objective of a problem of a
game is to find the value of the game.

i) The game is said to be ‘fair’ game if the value of the game is zero otherwise it’s
known as ‘unfair’.

The strategy of a player is the predetermined rule by which player decides his course of
action from his own list during the game.
The two types of strategy are

 Pure strategy

 Mixed strategy
Pure Strategy: If a player knows exactly what the other player is going to do, a
deterministic situation is obtained and objective function is to maximize the gain.
Therefore, the pure strategy is a decision rule always to select a particular course of
action.

Mixed Strategy: If a player is guessing as to which activity is to be selected by the other

on any particular occasion, a probabilistic situation is obtained and objective function
is to maximize the expected gain. Thus the mixed strategy is a selection among
pure strategies with fixed probabilities.
The Maximin-Minimax Principle
a) Maximin Criteria: The maximising player lists his minimum gains from each
strategy and selects the strategy which gives the maximum out of these
minimum gains.

b) Minimax Criteria: The minimising player lists his maximum loss from each
strategy and selects the strategy which gives him the minimum loss out of these
maximum losses.
Classification of game
a) Zero-Sum Games – the winner(s) receive(s) the entire amount of the payoff
which is contributed by the loser (strictly competitive).
b) Non-Zero Sum Games – the gains of one player differ from the losses of the
other. Some other parties in the environment may share in the gain or losses (not
strictly competitive).
Domin ancerule
The principle of dominance in Game Theory states that if one strategy of a player
dominates over the other strategy in all conditions then the later strategy can be
ignored.

A strategy dominates over the other only if it is preferable over other in all conditions.
The concept of dominance is especially useful for the evaluation of two-person zero-
sum games where a saddle point does not exist.

Rule :

1. Rule of row:

If all the elements of a Row are less than or equal to the corresponding elements of any
other Row-j, then the Row-i is dominated by the Row-j and it is removed from the
matrix. eg. If Row-3 ≤ Row-4, then removeRow-3

2. Rule of column:

If all the elements of Column-i are greater than or equal to the corresponding
elements of any other Column-j, then the Column-i is dominated by the Column-j and
it is removed from the matrix.
eg. If Column-2 ≥ Column-4, then remove Column-2
UNIT 5: DECISION THEORY
The study of human decision-making is one of the truly interdisciplinary sciences. In
its half- century of existence, decision theory has developed, through contributions
from several academic disciplines, into an academic field in its own right that is still
in close contact with an unusually large number of other disciplines.

In 1961, Patrick Suppes listed the major sciences that arc involved in decision
theory. As can be seen in table I, he divided them into four groups according to
whether the emphasis is normative or descriptive and whether invididual decisions
or group decisions are at the focus of interest.
Types of decision making:
Decisions are made based upon the information data available about the occurrence
of events as well as the decision situation. There are two types of decision making
situations: certainty and uncertainty

a) Decision making under certainty: In this case the decision maker has the
complete knowledge of consequence of every decision choice with certainty. In
this decision model, assumed certainty means that only one possible state of
nature exists.
b) Decision making under uncertainty: Under conditions of uncertainty, only pay-offs
are known and nothing is known about the likelihood of each state of nature.
Such situations arise when a new product is introduced in the market or a new
plant is setup.
Decision tree
A decision tree is a method you can use to help make good choices, especially
decisions that involve high costs and risks. Decision trees use a graphic approach to
compare competing alternatives and assign values to those alternatives by
combining uncertainties, costs, and payoffs into specific numerical values. If you are
a project manager, business analyst, or
a project decision maker, this primer is for you. If you are interested incognitive
science, artificial intelligence, data mining, medical diagnosis, formal problem solving,
or game theory, this primer provides an introduction to basic concepts of decision
tree analysis.
• Maximin criteria
This criterion is the decision to take the course of action which maximizes the
minimum possible pay-off. Since this decision criterion locates the alternative
strategy that has the least possible loss, it is also known as a pessimistic decision
criterion. The working method is:

1. Determine the lowest outcome for each alternative.

2. Choose the alternative associated with the maximum of these.

• Minimax criteria
This criterion is the decision to take the course of action which minimizes the
maximum possible pay-off. Since this decision criterion locates the alternative
strategy that has the greatest possible gain. The working method is:

1. Determine the highest outcome for each alternative.

2. Choose the alternative associated with the minimum of

these. Advantages of using decision trees

Decision trees offer advantages over other methods of analyzing alternatives. They
are:

 Graphic. You can represent decision alternatives, possible outcomes, and chance
events schematically. The visual approach is particularly helpful in
comprehending sequential decisions and out come dependencies.
 Efficient. You can quickly express complex alternatives clearly. You can easily
modify

a
Decision tree as new information becomes available. Setup a decision tree to
compare how changing input values affect various decision alternatives. Standard
decision tree notation is easy to adopt.
 Revealing. You can compare competing alternatives—even without complete
information—in terms of risk and probable value. The Expected Value(EV) term
combine s relative investment costs, anticipated payoffs, and uncertainties into
a single numerical value. The EV reveals the overall merits of competing
alternatives.
 Complementary. You can use decision trees in conjunction with other project
management tools. For example, the decision tree method can help evaluate
project schedules

UNIT 6: WAITING LINES MODEL

The waiting line models help the management in balancing between the cost
associated with waiting and the cost of providing service. Thus, queuing or waiting
line models can be applied in such situations where decisions have to be taken to
minimize the waiting time with minimum investment cost.

Basic Terminology: Waiting Line Models

The present section focuses on the standard vocabulary of Waiting Line Models
(Queuing Theory).

 Queuing Model: It is a suitable model used to represent a service or problem,

where customers arrive randomly to receive some service, the service time being
also a random variable.
 Arrival: The statistical pattern of the arrival can be indicated through the
probability distribution of the number of the arrivals in an interval.
 Service Time: The time taken by a server to complete service is known as
service time.
 Queue: A group of items waiting to receive service, including those receiving the
service, is known as queue.
 Waiting time in queue: Time spent by a customer in the queue before being served.
 Waiting time in the system: It is the total time spent by a customer in the
system. It can be calculated as follows: Waiting time in the system = Waiting time
in queue + Service time
 Average idle time: The average time for which the system remain sidle.
UNIT 7: SIMULATION
A simulation of a system or an organism is the operation of a model or simulator
which is
a representation of the system or organism. The model is a
enable to manipulation which would be impossible, too expensive or unpractical to
perform on the entity it portrays. The operation of the model can be studied & for it,
properties concerning the behaviour of the actual
system can be inferred. Simulation is the process of
designing a model of area system and conducti ng experiments with this model for
the purpose of understanding the behaviour for the operation of the system

XsimulatedY’istrueifandonlyif:1)X and Yare formal systems 2)Y is taken to be the real

system. 3) X is taken to be an approximation to the real system. 4) The rules of
validity in X are non-error-free otherwise X will become the real system. Simulation is
the use of a system model that has the designed characteristics of reality in order to
produce the essence of actual operation.

Steps of Simulation

Process Step 1: Identify

the problem.

Step2:(a) Identify the decision variable(b) Decide the performance objective and the
decision rules.

Step 3: Construct a numeral

model Step 4: Validate the model

Step 5: Design the

experiments Step 6: Run

the simulation model Step

7: Examine the results