CHAMELI DEVI GROUP OF INSTITUTIONS

DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

UNIT I : Introduction to Operation Research

What is Operation Research?

Operations research (British English: operational research) (OR) is a discipline that deals with
the application of advanced analytical methods to help make better decisions.

Further, the term operational analysis is used in the British (and some British Commonwealth)
military as an intrinsic part of capability development, management and assurance. In particular,
operational analysis forms part of the Combined Operational Effectiveness and Investment
Appraisals, which support British defense capability acquisition decision-making.

It is sometimes considered to be a sub-field of mathematical sciences.The terms management

science and decision science are sometimes used as synonyms.
Employing techniques from other mathematical sciences, such as mathematical
modeling, statistical analysis, and mathematical optimization, operations research arrives at
optimal or near-optimal solutions to complex decision-making problems. Because of its
emphasis on human-technology interaction and because of its focus on practical applications,
operations research has overlap with other disciplines, notably industrial
engineering and operations management, and draws on psychology and organization science.
Operations research is often concerned with determining the extreme values of some real-world
objective: the maximum (of profit, performance, or yield) or minimum (of loss, risk, or cost).
Originating in military efforts before World War II, its techniques have grown to concern
problems in a variety of industries.

The major sub-disciplines in modern operational research, as identified by the

journal Operations Research,are:

 Computing and information technologies

 Financial engineering
 Manufacturing, service sciences, and supply chain management
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

 Policy modeling and public sector work

 Revenue management
 Simulation
 Stochastic models
 Transportation
Applications
Applications are abundant such as in airlines, manufacturing companies, service organizations,
military branches, and government. The range of problems and issues to which it has contributed
insights and solutions is vast. It includes

 Scheduling (of airlines, trains, buses etc.)

 Assignment (assigning crew to flights, trains or buses; employees to projects;
commitment and dispatch of power generation facilities)
 Facility location (deciding most appropriate location for new facilities such as
warehouse; factory or fire station)
 Hydraulics & Piping Engineering (managing flow of water from reservoirs)
 Health Services (information and supply chain management)
 Game Theory (identifying, understanding; developing strategies adopted by
companies)
 Urban Design
 Computer Network Engineering (packet routing; timing; analysis)
 Telecom & Data Communication Engineering (packet routing; timing; analysis)
Phases in Operation Research Study:
Since, the main objective of operation research is to provide better quantitative information’s for
making decision. Now our aim is to learn how we can have better decisions.

ADVERTISEMENTS:

The procedure for making decisions with the OR study generally involves the following
phases:
(i) Judgment Phase:
i. Determination of operation.

ii. Determination of objectives.

 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

ADVERTISEMENTS:

iii. Determination of effectiveness of measures.

iv. Determination of type of problem, its origin and causes.

(ii) Research Phase:

i. Observation and data collection for better understanding of the problem.

ii. Formulation of relevant hypothesis and models.

iii. Analysis of available information and verification of hypothesis.

iv. Production and generation of results and consideration of alternatives.

(iii) Action Phase:

i. Recommendations for remedial action to those who first posed the problem, this includes the
assumptions made, scope and limitations, alternative courses of action and their effect.

ii. Putting the solution to work: implementation.

Without OR, in many cases, we follow these phases in full, but in other cases, we leave
important steps out. Judgment and subjective decision-making are not good enough. Thus
industries look to operation research for more objective way to make decisions. It is found that
method used should consider the emotional and subjective factors also.

For example, the skill and creative labor are important factors in our business and if management
wants to have a new location, the management has to consider the personal feeling of the
employees for the location which he chooses.

Scope of Operation Research:

In its recent years of organized development, O.R. has solved successfully many cases of
research for military, the government and industry. The basic problem in most of the developing
countries in Asia and Africa is to remove poverty and hunger as quickly as possible. So there is a
great scope for economist, statisticians, administrators, politicians and technicians working in a
team to solve this problem by an O.R. approach.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

On the other hand, with the explosion of population and consequent shortage of food, every
country is facing the problem of optimum allocation of land for various crops in accordance with
climatic conditions and available facilities. The problem of optimal distribution of water from a
resource like a canal for irrigation purposes is faced by developing country. Hence a good
amount of scientific work can be done in this direction.

Some of the problems which can be analyzed by operations research are given hereunder:
1. Finance, Budgeting and Investment:
i. Cash flow analysis, long range capital requirement, investment portfolios, dividend policies,

ii. Claim procedure, and

iii. Credit policies.

2. Marketing:
ADVERTISEMENTS:

i. Product selection, competitive actions,

ii. Number of salesmen, frequencies of calling on, and

iii. Advertising strategies with respect to cost and time.

3. Purchasing:
i. Buying policies, varying prices,

ii. Determination of quantities and timing of purchases,

ADVERTISEMENTS:

iii. Bidding policies,

iv. Replacement policies, and

v. Exploitation of new material resources.

4. Production Management:
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

i. Physical distribution: Location and size of warehouses, distribution centres and retail outlets,
distribution policies.

ii. Facilities Planning: Number and location of factories, warehouses etc. Loading and unloading
facilities.

iii. Manufacturing: Production scheduling and sequencing stabilisation of production,

employment, layoffs, and optimum product mix.

iv. Maintenance policies, crew size.

v. Project scheduling and allocation of resources.

5. Personnel Management:
i. Mixes of age and skills,

ii. Recruiting policies, and

iii. Job assignments.

6. Research and Development:

i. Areas of concentration for R&D.

ii. Reliability and alternate decisions.

iii. Determination of time-cost trade off and control of development projects.

Characteristics (Features) of Operation Research:

Main characteristics of operations research (O.R.) are follows:
(i) Inter-Disciplinary Team Approach:
This requires an inter-disciplinary team including individuals with skills in mathematics,
statistics, economics, engineering, material sciences, computer etc.

(ii) Wholistic Approach to the System:

While evaluating any decision, the important interactions and their impact on the whole
organisation against the functions originally involved are reviewed.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

(iii) Methodological Approach:

O.R. utilises the scientific method to solve the problem

(iv) Objective Approach:

O.R. attempts to find the best or optimal solution to the problem under consideration, taking into
account the goals of the organisation.

Methodology of Operation Research:

Operation Research, is a scientific approach for decision-making, and therefore must
follow following steps:
1. Formulating the Problem:
The problem must be first clearly defined. It is common to start the O.R. study with tentative
formulation of the problem, which is reformulated over and again during the study. The study
must also consider economical aspects.

While formulating the O.R. study, analyists must analyse following major components:
(i) The environment:
Environment involves physical, social and economical factors which are likely to affect the
problem under consideration. O.R. team or analysts must study the organisation contents
including men, materials, machines, suppliers, consumers, competitors, the government and the
public.

(ii) Decision-makers:
Operation analyst must study the decision-maker and his relationship to the problem at hand.

(iii) Objectives:
Considering the problem as whole, objectives should be defined.

(iv) Alternatives:
The O.R. study determines as to which alternative course of action is most effective to achieve
the desired objectives. Expected reactions of the competitors to the alternative must also be
considered.

2. Deriving Solution:
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Models are used to determine the solution either by simulation or by mathematical analysis.
Mathematical analysis for deriving optimum solution includes analytical or numerical procedure,
and uses various branches of mathematics.

3. Testing the Model and Solution:

A properly formulated and correctly manipulated model is useful in predicting the effect of
changes in control variables on the overall system effectiveness. The validity of the solution is
checked by comparing the results with those obtained without using the model.

4. Establishing Controls over the Solution:

The solution derived from a model remains effective so long as the uncontrolled variables retain
their values and the relationship. The solution goes out of control, if the values of one or more
variables vary or relationship between them undergoes a change. In such circumstances the
models need to be modified to take the changes into account.

5. Implementing the Solution:

Solution so obtained should be translated into operating procedure to make it easily
understandable and applied by the concerned persons. After applying the solution to the system,
O.R. group must study the response of the system to the changes made.

Operation Research Models:

Operation Research model is an idealised representation of the real life situation and represents
one or more aspects of reality. Examples of operation research models are: a map, activity charts
balance sheets, PERT network, break-even equation, economic ordering quantity equation etc.
Objective of the model is to provide a means for analysing the behaviour of the system for
improving its performance.

Classification of Models:

Models can be classified on the basis of following factors:

1. By degree of Abstraction:
i. Mathematical models.

ii. Language models.

 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

2. By Function:
i. Descriptive models.

ii. Predictive models.

iii. Normative models for repetitive problems.

3. By Structure:
i. Physical models.

ii. Analogue (graphical) models.

iii. Symbolic or mathematical models.

4. By Nature of Environment:
i. Deterministic models.

ii. Probabilistic models.

5. By the Time Horizon:

i. Static models.

ii. Dynamic models.

Characteristics of a Good Model:

i. Assumptions should be simple and few.

ii. Variables should be as less as possible.

iii. It should be able to asscimilate the system environmental changes without change in its
framework.

iv. It should be easy to construct.

Constructing the Model:

A mathematical model is a set of equations in which the system or problem is described. The
equations represent objective function and constraints. Objective function is a mathematical
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

expressions of objectives (cost or profit of the operation), while constraints are mathematical
expressions of the limitations on the fulfillment of the objectives.

These expressions consist of controllable and uncontrollable variables.

The general form of a mathematical model is:

O = f (xi, yi)
where O = Objective function

xi = Controllable variables
yi = Uncontrollable variables
f = Relationship between O, and xi, yi.
Since model is only an approximation of the real situation, hence it may not include all the
variables.

Simplification in Operation Research Models:

While constructing the model, efforts should be made to simplify them, but only up to the extent
so that there is no significant loss of accuracy.

Some of the common simplifications are:

i. Omitting certain variables.

ii. Aggregating (or grouping) variables.

iii. Changing the nature of variables e.g., considering variables as constant or continuous.

iv. Changing relationship between variables i.e., considering them as linear or straight line.

v. Modify constraints.

Techniques of Operation Research:

Important techniques of Operation Research are being described hereunder:
(i) Inventory Control Models:
Operation Research study involves balancing inventory costs against one or more of the
following costs:
i. Shortage costs.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

ii. Ordering costs.

iii. Storage costs.

iv. Interest costs.

This study helps in taking decisions about:

i. How much to purchase.

ii. When to order.

iii. Whether to manufacture or to purchase i.e., make and buy decisions.

The most well-known use is in the form of Economic Order Quantity equation for finding
economic lot size.

(ii) Waiting Line Models:

These models are used for minimising the waiting time and idle time together with the costs
associated therewith.

Waiting line models are of two types:

(a) Queuing theory, which is applicable for determining the number of service facilities and/or
the timing of arrivals for servicing.

(b) Sequencing theory which is applicable for determining the sequence of the servicing.

(iii) Replacement Models:

These models are used for determining the time of replacement or maintenance of item,
which may either:
(i) Become obsolete, or

(ii) Become inefficient for use, and

(iii) Become beyond economical to repair or maintain.

(iv) Allocation Models:

These models are used to solve the problems arising when:
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

(a) There are number of activities which are to be performed and there are number of alternative
ways of doing them,

(b) The resources or facilities are limited, which do not allow each activity to be performed in
best possible way. Thus these models help to combine activities and available resources so as to
optimise and get a solution to obtain an overall effectiveness.

(v) Competitive Strategies:

Such type of strategies are adopted where, efficiency of decision of one agency is dependent on
the decision of another agency. Examples of such strategies are game of cards or chess, fixing of
prices in a competitive market where these strategies are termed as “theory”.

(vi) Linear Programming Technique:

These techniques are used for solving operation problems having many variables subject to
certain restrictions. In such problems, objectives are—profit, costs, quantities manufactured etc.
whereas restrictions may be e.g. policies of government, capacity of the plant, demand of the
product, availability of raw materials, water or power and storage capacity etc.

(vii) Sequencing Models:

These are concerned with the selection of an appropriate sequence of performing a series of jobs
to be done on a service facility or machine so as to optimise some efficiency measure of
performance of the system.

(viii) Simulation Models:

Simulation is an experimental method used to study behaviour over time.

(ix) Network Models:

This is an approach to planning, scheduling and controlling complex projects.

Applications of Operation Research:

These techniques are applied to a very wide range of problems.

Here only some of the common applications are being mentioned:

(i) Distribution or Transportation Problems:
In such problems, various centres with their demands are given and various warehouses with
their stock positions are also known, then by using linear programming technique, we can find
out most economical distribution of the products to various centres from various warehouses.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

(ii) Product Mix:

These techniques can be applied to determine best mix of the products for a plant with available
resources, so as to get maximum profit or minimum cost of production.

(iii) Production Planning:

These techniques can also be applied to allocate various jobs to different machines so as to get
maximum profit or to maximise production or to minimise total production time.

(iv) Assignment of Personnel:

Similarly, this technique can be applied for assignment of different personnel with different
aptitude to different jobs so as to complete the task within a minimum time

(v) Agricultural Production:

We can also apply this technique to maximise cultivator’s profit, involving cultivation of number
of items with different returns and cropping time in different type of lands having variable
fertility.

(vi) Financial Applications:

Many financial decision making problems can be solved by using linear programming technique.

Some of them are:

(i) To select best portfolio in order to maximise return on investment out of alternative
investment opportunities like bonds, stocks etc. Such problems are generally faced by the
managers of mutual funds, banks and insurance companies.

(ii) In deciding financial mix strategies, involving the selection of means for financing firm,
projects, inventories etc.

Limitations of Operations Research:

i. These do not take into account qualitative and emotional factors.

ii. These are applicable to only specific categories of decision-making problems.

iii. These are required to be interpreted correctly.

 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

iv. Due to conventional thinking, changes face lot of resistance from workers and sometimes
even from employer.

v. Models are only idealised representation of reality and not be regarded as absolute.

Unit III: Transportation Model:

TRANSPORTATION PROBLEM
Introduction A special class of linear programming problem is Transportation Problem, where
the objective is to minimize the cost of distributing a product from a number of sources (e.g.
factories) to a number of destinations (e.g. warehouses) while satisfying both the supply limits
and the demand requirement. Because of the special structure of the Transportation Problem the
Simplex Method of solving is unsuitable for the Transportation Problem. The model assumes
that the distributing cost on a given rout is directly proportional to the number of units distributed
on that route. Generally, the transportation model can be extended to areas other than the direct
transportation of a commodity, including among others, inventory control, employment
scheduling, and personnel assignment.

Transportation Algorithm
The steps of the transportation algorithm are exact parallels of the simplex algorithm, they are:
Step 1: Determine a starting basic feasible solution, using any one of the following three methods
North West Corner Method Least Cost Method Vogel Approximation Method
Step 2: Determine the optimal solution using the following method 1.MODI (Modified
Distribution Method) or UV Method.
The special structure of the transportation problem allows securing a non artificial basic feasible
solution using one the following three methods.

North West Corner Method

Least Cost Method
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Vogel Approximation Method

The difference among these three methods is the quality of the initial basic feasible solution they
produce, in the sense that a better that a better initial solution yields a smaller objective value.
Generally the Vogel Approximation Method produces the best initial basic feasible solution, and
the North West Corner Method produces the worst, but the North West Corner Method involves
least computations.

North West Corner Method:

The method starts at the North West (upper left) corner cell of the tableau (variable x11).
Step -1: Allocate as much as possible to the selected cell, and adjust the associated amounts of
capacity (supply) and requirement (demand) by subtracting the allocated amount.
Step -2: Cross out the row (column) with zero supply or demand to indicate that no further
assignments can be made in that row (column). If both the row and column becomes zero
simultaneously, cross out one of them only, and leave a zero supply or demand in the uncrossed
out row (column).
Step -3: If exactly one row (column) is left uncrossed out, then stop. Otherwise, move to the cell
to the right if a column has just been crossed or the one below if a row has been crossed out. Go
to step -1.

Least Cost Method

The least cost method is also known as matrix minimum method in the sense we look for the row
and the column corresponding to which Cij is minimum. This method finds a better initial basic
feasible solution by concentrating on the cheapest routes. Instead of starting the allocation with
the northwest cell as in the North West Corner Method, we start by allocating as much as
possible to the cell with the smallest unit cost. If there are two or more minimum costs then we
should select the row and the column corresponding to the lower numbered row. If they appear
in the same row we should select the lower numbered column. We then cross out the satisfied
row or column, and adjust the amounts of capacity and requirement accordingly. If both a row
and a column is satisfied simultaneously, only one is crossed out. Next, we look for the
uncrossed-out cell with the smallest unit cost and repeat the process until we are left at the end
with exactly one uncrossed-out row or column.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Vogel Approximation Method (VAM): VAM is an improved version of the least cost method
that generally produces better solutions. The steps involved in this method are:
Step 1: For each row (column) with strictly positive capacity (requirement), determine a penalty
by subtracting the smallest unit cost element in the row (column) from the next smallest unit cost
element in the same row (column).
Step 2: Identify the row or column with the largest penalty among all the rows and columns. If
the penalties corresponding to two or more rows or columns are equal we select the topmost row
and the extreme left column.
Step 3: We select Xij as a basic variable if Cij is the minimum cost in the row or column with
largest penalty. We choose the numerical value of Xij as high as possible subject to the row and
the column constraints. Depending upon whether ai or bj is the smaller of the two ith row or jth
column is crossed out
Step 4: The Step 2 is now performed on the uncrossed-out rows and columns until all the basic
variables have been satisfied.

Modified Distribution Method

The Modified Distribution Method, also known as MODI method or u-v method, which provides
a minimum cost solution (optimal solution) to the transportation problem. The following are the
steps involved in this method.
Step 1: Find out the basic feasible solution of the transportation problem using any one of the
three methods discussed in the previous section.
Step 2: Introduce dual variables corresponding to the row constraints and the column constraints.
If there are m origins and n destinations then there will be m+n dual variables. The dual variables
corresponding to the row constraints are represented by ui, i=1,2,…..m where as the dual
variables corresponding to the column constraints are represented by vj, j=1,2,…..n. The values
of the dual variables are calculated from the equation given below ui + vj = cij if xij> 0
Step 3: Any basic feasible solution has m + n -1 xij> 0. Thus, there will be m + n -1 equation to
determine m + n dual variables. One of the dual variables can be chosen arbitrarily. It is also to
be noted that as the primal constraints are equations, the dual variables are unrestricted in sign.
Step 4: If xij=0, the dual variables calculated in Step 3 are compared with the cij values of this
allocation as cij – ui – vj. If al cij – u i – vj ≥ 0, then by the theorem of complementary slackness
it can be shown that the corresponding solution of the transportation problem is optimum. If one
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

or more cij – u i – vj< 0, we select the cell with the least value of cij – ui – vj and allocate as
much as possible subject to the row and column constraints. The allocations of the number of
adjacent cell are adjusted so that a basic variable becomes non-basic.
Step 5: A fresh set of dual variables are calculated and repeat the entire procedure from Step 1 to
Step 5.

Unbalanced Transportation Problem

In the previous section we discussed about the balanced transportation problem i.e. the total
supply(capacity) at the origins is equal to the total demand (requirement) at the destination. In
this section we are going to discuss about the unbalanced transportation problems i.e. when the
total supply is not equal to the total demand, which are called as unbalanced transportation
problem. In the unbalanced transportation problem if the total supply is more than the total
demand then we introduce an additional column which will indicate the surplus supply with
transportation cost zero. Similarly, if the total demand is more than the total supply an additional
row is introduced in the transportation table which indicates unsatisfied demand with zero
transportation cost.

Degenerate Transportation Problem

In a transportation problem, if a basic feasible solution with m origins and n destinations has less
than m+n -1 positive Xij i.e. occupied cells, then the problem is said to be a degenerate
transportation problem. The degeneracy problem does not cause any serious difficulty, but it can
cause computational problem wile determining the optimal minimum solution. There fore it is
important to identify a degenerate problem as early as beginning and take the necessary action to
avoid any computational difficulty. The degeneracy can be identified through the following
results: “In a transportation problem, a degenerate basic feasible solution exists if and only if
some partial sum of supply (row) is equal to a partial sum of demand (column). For example the
following transportation problem is degenerate. Because in this problem a1 = 400 = b1 a2 + a3 =
900 = b2 + b3

UNIT IV : Assignment Problem

 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Meaning of Assignment Problem:

An assignment problem is a particular case of transportation problem where the objective is
to assign a number of resources to an equal number of activities so as to minimise total cost
or maximize total profit of allocation.

The problem of assignment arises because available resources such as men, machines etc.
have varying degrees of efficiency for performing different activities, therefore, cost, profit or
loss of performing the different activities is different.

Definition of Assignment Problem:

Suppose there are n jobs to be performed and n persons are available for doing these jobs.
Assume that each person can do each job at a term, though with varying degree of
efficiency, let cij be the cost if the i-th person is assigned to the j-th job. The problem is to
find an assignment (which job should be assigned to which person one on-one basis) So
that the total cost of performing all jobs is minimum, problem of this kind are known as
assignment problem.
The assignment problem can be stated in the form of n x n cost matrix C real
members as given in the following table:

Hungarian Method for Solving Assignment Problem:

The Hungarian method of assignment provides us with an efficient method of finding the
optimal solution without having to make a-direct comparison of every solution. It works on
the principle of reducing the given cost matrix to a matrix of opportunity costs.

Opportunity cost show the relative penalties associated with assigning resources to an
activity as opposed to making the best or least cost assignment. If we can reduce the cost
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

matrix to the extent of having at least one zero in each row and column, it will be possible to
make optimal assignment.

The Hungarian method can be summarized in the following steps:

Step 1: Develop the Cost Table from the given Problem:
If the no of rows are not equal to the no of columns and vice versa, a dummy row or dummy
column must be added. The assignment cost for dummy cells are always zero.

Step 2: Find the Opportunity Cost Table:

(a) Locate the smallest element in each row of the given cost table and then subtract that
from each element of that row, and

(b) In the reduced matrix obtained from 2 (a) locate the smallest element in each column
and then subtract that from each element. Each row and column now have at least one zero
value.

Step 3: Make Assignment in the Opportunity Cost Matrix:

The procedure of making assignment is as follows:
(a) Examine rows successively until a row with exactly one unmarked zero is obtained.
Make an assignment single zero by making a square around it.

(b) For each zero value that becomes assigned, eliminate (Strike off) all other zeros in the
same row and/ or column

(c) Repeat step 3 (a) and 3 (b) for each column also with exactly single zero value all that
has not been assigned.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

(d) If a row and/or column has two or more unmarked zeros and one cannot be chosen by
inspection, then choose the assigned zero cell arbitrarily.

(e) Continue this process until all zeros in row column are either enclosed (Assigned) or
struck off (x)

Step 4: Optimality Criterion:

If the member of assigned cells is equal to the numbers of rows column then it is optimal
solution. The total cost associated with this solution is obtained by adding original cost
figures in the occupied cells.

If a zero cell was chosen arbitrarily in step (3), there exists an alternative optimal solution.
But if no optimal solution is found, then go to step (5).

Step 5: Revise the Opportunity Cost Table:

Draw a set of horizontal and vertical lines to cover all the zeros in the revised cost
table obtained from step (3), by using the following procedure:
(a) For each row in which no assignment was made, mark a tick (√)

(b) Examine the marked rows. If any zero occurs in those columns, tick the respective rows
that contain those assigned zeros.

(c) Repeat this process until no more rows or columns can be marked.

(d) Draw a straight line through each marked column and each unmarked row.

If a no of lines drawn is equal to the no of (or columns) the current solution is the optimal
solution, otherwise go to step 6.

Step 6: Develop the New Revised Opportunity Cost Table:

(a) From among the cells not covered by any line, choose the smallest element, call this
value K
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

(b) Subtract K from every element in the cell not covered by line.

(c) Add K to very element in the cell covered by the two lines, i.e., intersection of two lines.

(d) Elements in cells covered by one line remain unchanged.

Step 7: Repeat Step 3 to 6 Unlit an Optimal Solution is Obtained:

The flow chart of steps in the Hungarian method for solving an assignment problem
is shown in following figures:
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Unbalanced Assignment Problem:

 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Any assignment problem is said to be unbalanced if the cost matrix is not a square matrix,
i.e. the no of rows and the no of columns are not equal. To make it balanced we add a
dummy row or dummy column with all the entries is zero.

Example :
There are four jobs to be assigned to the machines. Only one job could be assigned to one
machine are given in following matrix.

Find an optimum assignment of jobs to the machines to minimize the total processing time
and also find for which machine no job is assigned. What is the total processing time to
complete all the jobs.

Solution:
Since the cost matrix is not a square matrix the problem is unbalanced. We add a dummy
job 5 with corresponding entries zero. Modified matrix.

Step 1 & 2:
We subtract the smallest element from all the elements in the respective row and column.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Step 3 & 4:
Now we give the zero assignment in our usual manners & get the following matrix.

But the solution is not optimal because only four assignments are made

Step 5:
In this step we draw minimum no. of lines to cover all zeros.

The no of lines to cover all zeros = 4 < the order of matrix. We form the 2nd modified matrix
by subtracting the smallest uncovered element (i) from the remaining uncovered elements
and add to the element at the point of intersection of lines.
 CHAMELI DEVI GROUP OF INSTITUTIONS
DEPARTMENT OF MANAGEMENT
Handouts
Subject –Operation Research

Step 6:
Again Repeat step (3) & (4) and find following matrix.

Here total no of assignment (= 5) which is equal to no of rows or no of columns. Then this is

optimal solution.

The pattern of assignment is given below:

For machines E no job is assigned, optimum (minimum)

Cost = 10 + 3 + 6 + 1

= Rs.20