Industrial Engineering Program

IND202: Operations Research

Lecture #1
Introduction to Operations
Research
Dr. Sayed Ali Zayan 2nd Term 2023/2024
Definitions of Operations Research
 The application of the scientific method to the study of operations of large
complex organizations or activities. It provides top level administrators with a
quantitative basis for decisions that will increase the effectiveness of such
organizations in carrying out their basic purposes.
 Operations research is the systematic application of quantitative methods,
techniques and tools to the analysis of problems involving the operation of
systems.
 Operations research may be described as a scientific approach to decision-
making that involves the operations of organizational system.
 Operations research is a scientific approach to problem-solving for executive
management.
 Operations Research can be defined as the use of quantitative methods to assist
analysts and decision-makers in designing, analyzing, and improving the
performance or operation of systems.
 As the discipline of operations research grew, numerous names such as
Operations Analysis, Systems Analysis, Decision Analysis, Management Science,
Quantitative Analysis, Decision Science were given to it
Necessity of Operations Research in Industry
 Complexity: In a big industry, the number of factors influencing a decision
have increased. For instance, consider a factory production schedule which
has to take into account:
▪ Customer demand
▪ Requirements of raw materials
▪ Equipment capacity and possibility of equipment failure, and
▪ Restrictions on manufacturing process.
 Scattered responsibility and authority: In a big industry, responsibility and
authority of decision- making is scattered throughout the organization and
thus the organization, if it is not conscious‫اذ لم يكن واعيا‬, may be following
inconsistent goals
 Uncertainty: With economic growth, uncertainty is also growing. This makes
each decision costlier and time consuming.
 Knowledge explosion: Operations research teams collect the latest
information for analysis purpose which is quite useful for the industries.
Features of Operations Research Approach
 Interdisciplinary approach: For solving any managerial decision problem often
an interdisciplinary teamwork is essential. This is because while attempting to
solve a complex management problem, one person may not have the complete
knowledge of all its aspects such as economic, social, political, psychological,
engineering, etc.
 Scientific approach: The scientific method consists of observing and defining the
problem; formulating and testing the hypothesis; and analyzing the results of the
test.
 Holistic approach: While arriving at a decision, an operations research team
examines the relative importance of all conflicting and multiple objectives. It
also examines the validity of claims of various departments of the organization
from the perspective of its implications to the whole organization.
 Objective-oriented approach: An operations research approach seeks to obtain
an optimal solution to the problem under analysis. For this, a measure of
desirability‫( الرغبه‬or effectiveness‫ )الفاعلية‬is defined, based on the objective(s)
of the organization. A measure of desirability so defined is then used to compare
alternative courses of action with respect to their possible outcomes.
Operations Research Approach to Problem Solving
The most important feature of operations research is the use of the scientific
method and the building of decision models. The operations research
approach to problem solving is based on three phases, namely:
 Judgement Phase;
 Research Phase, and
 Action Phase.
1) Judgement phase: This phase includes:
 identification of the real-life problem,
 selection of an appropriate objective and the values of various
variables related to this objective,
 application of the appropriate scale of measurement, i.e. deciding
the measures of effectiveness (desirability), and
 formulation of an appropriate model of the problem and the
abstraction of the essential information, so that a solution to the
decision-maker’s goals can be obtained.
Operations Research Approach to Problem Solving
2) Research phase: This phase is the largest and longest amongst all the
phases. However, even though the remaining two are not as long, they are
also equally important as they provide the basis for a scientific method.
This phase utilizes:
 observations and data collection for a better understanding of the problem,
 formulation of hypothesis and model,
 observation and experimentation to test the hypothesis on the basis of
additional data,
 analysis of the available information and verification of the hypothesis using
pre-established measures of desirability,
 prediction of various results from the hypothesis, and
 generalization of the result and consideration of alternative methods.
3) Action phase: This phase consists of making recommendations for
implementing the decision.
Methodology of Operations Research
Phases of Operations Research
Operations research is a logical and systematic approach to provide a
rational basis for decision-making. The phase and processes of OR study
must also be quite logical and systematic. There are six important steps in
OR study, but it is not necessary that in all the studies each and every step
is invariably present.
These steps are arranged in following logical order.
Step 1 Observe the Problem Environment
Step 2 Analyze and Define the Problem
Step 3 Develop a Model
Step 4 Select an Appropriate Data Input
Step 5 Provide a Solution and Test Reasonableness
Step 6 Implement the Solution
Classification of Models in OR
Classification of Models in OR
 Iconic model: This is a physical, or pictorial representation of various
aspect of a system. Example: Toys, miniature model‫ نموذج مصغر‬of a
building, scaled up model of a cell in biology, etc.
 Analogue or schematic model: This uses one set of properties to
represent another set of properties which a system under study has.
Example: A network of water pipes to represent the flow of current in
an electrical network or graphs, organizational charts and so on.
 Mathematical model or symbolic model: This uses a set of
mathematical symbols (letters, numbers, etc.) to represent the
decision variables of a system under consideration. These variables
are related by mathematical equations or inequations which
describe the properties of the system. Example: A linear
programming model, a system of equations representing an
electrical network or differential equations representing dynamic
systems, etc.
Classification of Models in OR
 Static model: This a model which does not take time into account. It
assumes that the values of the variables do not change with time
during a certain period of time horizon. Example: A linear
programming problem, an assignment problem, transportation
problem.
 Dynamic model: This model considers time as one of the important
variables. Example: A dynamic programming problem, a
replacement problem
 Deterministic model: Deterministic model is a model which does not
take uncertainty into account. Example: A linear programming
problem, an assignment problem etc.
 Stochastic model: This is a model which considers uncertainly as an
important aspect of the problem. Example: Any stochastic
programming problem, stochastic inventory models etc.
 Descriptive model: Descriptive model is one which just describes a
situation or system. Example: An opinion poll, any survey.
Classification of Models in OR
 Predictive model: This is one which predicts something based on some data.
Example: Predicting election results before actually the counting is
completed.
 Prescriptive model: Prescriptive model is one which prescribes or suggests a
course of action for a problem. Example: Any programming (linear, nonlinear,
dynamic, geometric) problem.
 Analytic model: This is a model in which exact solution is obtained by
mathematical methods in closed form. Example: General linear programming
model, specially structured transportation and assignment models.
 Simulation model: This is representation of reality through the use of a model
or device which will react in the same manner as reality under a given set of
conditions. Once a simulation model is designed, it takes only a little time, in
general, to run a simulation on a computer. It is usually less mathematically
and less time consuming and generally least expensive as well in many
situations. Example: Queueing problems, inventory problem.
Characteristics of a Good Model
 It should be reasonably simple.
 A good model should be capable of taking into
account new changes in the situation affecting its
frame significantly with ease; that is, updating the
models should be as simple and easy as possible.
 Assumptions made to simplify the model should be
as small as possible.
 Number of variables used should be small in
number as possible.
 The model should be open to parametric treatment.
Principles of Modelling
 Do not build up a complicated model when a simple one would suffice.
 Beware of molding the problems to fit a technique.
 Deductions must be made carefully.
 Models should be validated prior to implementation.
 A model should neither be pressed to do; nor criticized for failing to do that
for which it was never intended.
 Beware of overselling the model in cases where assumption made for the
construction of the model can be challenged.
 The solution of a model cannot be more accurate than the accuracy of the
information that goes into the construction.
 Models are only aids in decision-making.
 Models should not be complicated. It should be as simple as possible.
 Models should be as accurate as possible.
General Methods for Solving Operations Research Models

 Analytic procedure
Solving models by classical mathematical techniques like
differential calculus, finite differences and so on, to obtain
analytic solutions.
 Iterative procedure
Starts with a trial solution and a set of rules for improving it by
repeating the procedure until further improvement is not
possible.
 Monte-Carlo technique
Taking sample observations, computing probability distributions
for the variable using random numbers and constructing some
functions to determine values of the decision variables.
Features of Operations Research Solution
Few requirements of a good solution are:
 Technically Appropriate:
The solution should work technically, meet the constraints and
operate in the problem environment.
 Reliable:
The solution must be useful for a reasonable period of time under
the conditions for which it was designed.
 Economically Viable:
Its economic value should be more than what it costs to develop it
and it should be seen as a wise investment in hiring OR talent.
 Behaviorally Appropriate:
The solution should be behaviorally appropriate and must remain
valid for a reasonable period of time within the organization.
Role of Operations Research in Engineering
The following are some of the applications of operations research in engineering:
Optimal design of water resources systems
Optimal design of structures
Production, planning, scheduling and control
Optimal design of electrical networks
Inventory control
Planning of maintenance and replacement of equipment
Allocation of resources of service to maximize the benefit
Design of material handling
Optimal design of machines
Optimal design of control systems
Optimal selection of sites for an industry.
Limitations of Operations Research
Magnitude of computation
Non-quantifiable factors
Distance between a manager and operations
researcher
Money and time costs
Implementation
Linear Programming: Concepts
Linear Programming (LP)
 The word linear refers to linear relationship among
variables in a model. That is, a given change in one
variable causes a proportional change in another
variable. For example, doubling the investment on a
certain project will also double the rate of return.
 The word programming refers to the mathematical
modelling and solving of a problem that involves the use
of limited resources, by choosing a particular course of
action (or strategy) among the given courses of action (or
strategies) in order to achieve the desired objective.
Structure of Linear Programming Model
The general structure of an LP model (or The
formulation of relevant data in Linear
Programming Problem (LPP)) is carried out in the
following four steps:
Step 1: Selection of decision variables.
Step 2: Setting the objective function.
Step 3: Identification of constraint set.
Step 4: Writing the conditions of variables.
Step 1: Select the Decision variables (activities)
 In the given data, firstly the variables are to be identified. The
evaluation of various courses of action (alternatives) and select the
best to arrive at the optimal value of objective function, is guided by
the nature of objective function and availability of resources. For this,
certain activities (also called decision variables) usually denoted by
x1, x2, . . ., xn are conducted. The value of these variables (activities)
represents the extent to which each of these is performed.
 The value of certain variables may or may not be under the decision-
maker’s control. If values are under the control of the decision-maker,
then such variables are said to be controllable, otherwise they are
said to be uncontrollable. These decision variables, usually
interrelated in terms of consumption of resources, require
simultaneous solutions. In an LP model all decision variables are
continuous, controllable and nonnegative.

That is, x1 ≥ 0, x2 ≥ 0, . . ., xn ≥ 0.
Step 1: Select the Decision variables (activities)
A variable in the context of Operations Research problems is often seen in the
following ways:
 Number of different types of products to be manufactured per day (or per
week) in a manufacturing problem (product mix).
 Number of products to be sold in a sales problem.
 Number of resources (such as men / machine / material) required to do
certain job in an allocation problem.
 Number of units of certain model or type to be bought at lowest cost
 Number of ingredients to be mixed or used in production process problem.
 Number of units to be ordered, in the purchasing problem
 Number of units to be advertised, in a marketing problem
 Number of units of fertilizers or ingredients in a fertilizer to be used in an
agriculture problem.
 Number of tablets / capsules to purchase in a medical/patients problem
Step 2: Setting Objective Function
 The objective function of each LP problem is expressed in terms of decision
variables to optimize the criterion of optimality (also called measure-of-
performance) such as profit, cost, revenue, distance etc. In its general form, it is
represented as:
 Optimize (Maximize or Minimize)

Z = c1x1 + c2 x2 + . . . + cn xn,
where

▪ Z is the measure-of-performance variable, which is a function of

x1, x2, . . ., xn.
▪ Quantities c1, c2, . . ., cn are parameters that represent the
contribution of a unit of the respective variable x1, x2, . . ., xn
 This is to set the goal in the problem.
 There are only two types of objective functions in Operations Research.
 These are: Maximization (of profits) and Minimization (of costs).
 Step 3: The constraints (Identifying the Constraint Set)
 There are always certain limitations (or constraints) on the use of
resources, such as: labor, machine, raw material, space, money, etc.,
that limit the degree to which an objective can be achieved. Such
constraints must be expressed as linear equalities or inequalities in terms
of decision variables. The solution of an LP model must satisfy these
constraints.
 A constraint set is a set of the hurdles‫ العقبات‬or limitations in achieving
the objective. The different types of constraints we come across m linear
programming problem are given below:

Types of Constraints
Step 3: The constraints (Identifying the Constraint Set)
1. Availability Constraint: This is related by an inequality, less than or
equal to (≤) and is used when the availability of resource is limited or
when maximum limit is imposed‫مفروض‬.
Examples:
a) Suppose you are cooking some curry dish and you have to put
some salt in it, say 10 gm. You will be constrained to put less than
or equal to 10 gin-only, but excess is not allowed.
b) Suppose you have only $10/- in you wallet and went to a
restaurant. You will be constrained to order worth less than or
equal to $10/- only. Here x <10 where x is Dollar spent.
c) You have a machine on which you can utilize 8 hours a day. Thus
you can have a maximum of 48 hours a week (of 6 days). Now
number of hours you can utilize on the machine (say x) < 48.
Step 3: The constraints (Identifying the Constraint Set)
2. Requirement Constraint: This constraint is used to show a relation
'greater than or equal to  ' type of inequality. This constraint is used
when certain minimum limit is imposed. Here, more than certain limit
is permitted but lesser quantity is not allowed.

Examples:
a) You are to buy a readymade trouser or skirt. You will be
constrained to choose greater than or equal to the required
length.
b) You have a production unit at which you have an order for 50
units. Now if the number of units to be produced is x, then x  50.
c) Suppose you are pricing a product then you will say it should be
greater than or equal to its (manufacturing and transport) costs.
Step 3: The constraints (Identifying the Constraint Set)
3. Exact Constraint: This is the constraint which can deviate to neither
side. This is represented in the equation (=) form.

Examples:
a) You have to order the lens power for your spectacles. Here you
will not permit lesser or greater than your specified power.
b) When you purchase the shoe, you neither allow 'less than nor
'greater than' your feet size.
c) The doctor prescribes certain quantity of antibiotic that must be
the exact dosage.
d) Certain design specification in manufacturing will be exact kind
Step 4: Writing Conditions of Variables

Here the conditions of the decision variables

will be predetermined.
The conditions often found in LPP are in two
kinds. These are non-negative and
unrestricted.
A non-negative conditions is represented by
'greater than equal to zero' ( 0)
Assumptions of an LP Model
In all mathematical models, assumptions are made for reducing the complex
real-world problems into a simplified form that can be more readily analyzed.
The following are the major assumptions of an LP model:

 Certainty:
In LP models, it is assumed that all its parameters such as: availability of
resources, profit (or cost) contribution per unit of decision variable and
consumption of resources per unit of decision variable must be known and
constant.

 Additivity:
The value of the objective function and the total amount of each resource
used (or supplied), must be equal to the sum of the respective individual
contribution (profit or cost) of the decision variables. For example, the total
profit earned from the sale of two products A and B must be equal to the sum
of the profits earned separately from A and B. Similarly, the amount of a
resource consumed for producing A and B must be equal to the total sum of
resources used for A and B individually.
Assumptions of an LP Model
 Linearity (or proportionality):
The amount of each resource used (or supplied) and its contribution
to the profit (or cost) in objective function must be proportional to the
value of each decision variable. For example, if production of one
unit of a product uses 5 hours of a particular resource, then making 3
units of that product uses 3×5 = 15 hours of that resource.
 Divisibility (or continuity):
The solution values of decision variables are allowed to assume
continuous values. For instance, it is possible to collect 6.254 thousand
liters of milk by a milk dairy and such variables are divisible. But, it is
not desirable to produce 2.5 machines and such variables are not
divisible and therefore must be assigned integer values. Hence, if any
of the variable can assume only integer values or are limited to
discrete number of values, LP model is no longer applicable.
Advantages of Using Linear Programming
Following are certain advantages of using linear programming
technique:
 Linear programming technique helps decision-makers to use their
productive resources effectively.
 Linear programming technique improves the quality of decisions. The
decision-making approach of the user of this technique becomes
more objective and less subjective.
 Linear programming technique helps to arrive at optimal solution of a
decision problem by taking into account constraints on the use of
resources. For example, saying that so many units of any product may
be produced does not mean that all units can be sold.
 Linear programming approach for solving decision problem highlight
bottlenecks in the production processes. For example, when a
bottleneck occurs, machine cannot produce sufficient number of
units of a product to meet demand. Also, machines may remain idle.
Limitations of Linear Programming
In spite of having many advantages and wide areas of applications, there are
some limitations associated with this technique. These are as follows:
 Linear programming assumes linear relationships among decision variables.
However, in real-life problems, decision variables, neither in the objective
function nor in the constraints are linearly related.
 While solving an LP model there is no guarantee that decision variables will get
integer value. For example, how many men/machines would be required to
perform a particular job, a non-integer valued solution will be meaningless.
Rounding off the solution to the nearest integer will not yield an optimal
solution.
 The linear programming model does not take into consideration the effect of
time and uncertainty.
 Parameters in the model are assumed to be constant but in real-life situations,
they are frequently neither known nor constant.
 Linear programming deals with only single objective, whereas in real-life
situations a decision problem may have conflicting and multiple objectives.
Application Areas of Linear Programming
Linear programming is the most widely used technique of
decision-making in business and industry and in various other
fields, such as:
Production Management
Financial Management
Marketing Management
Personnel Management
Applications in Agriculture
Applications in Military
Formulation of Linear Programming Problems
Problem 1:
A manufacturing company is producing two products A and B. Each
of the products A and B requires the use of two machines P and Q. A
requires 4 hours of processing on machine P and 3 hours of
processing on machine Q. Product B requires 3 hours of processing
on machine P and 6 hours of processing on machine Q. The unit
profits for products A and B are $20 and $30 respectively. The
available time in a given quarter on machine P is 1000 hours and on
machine Q is 1200 hours. The market survey has predicted that 250
units of products A and 300 units of product B can be consumed in a
quarter.
The company is interested in deciding the product mix to maximize
the profits. Formulate this problem as LP model.
Formulation of Linear Programming Problems
Solution:
Formulating the problem in mathematical equations
Let
XA = the quantity of product of type A manufactured in a quarter.
XB = the quantity of products of type B manufactured in a quarter.
Z = the profit earned in a quarter. (Objective function, which is to be maximized).
Therefore,
Max. Z = 20 XA + 30 XB
Z is to be maximized under the following conditions:
4XA + 3XB ≤ 1000 (Time constraint of machine P)
3XA + 6XB ≤ 1200 (Time constraint of machine Q)
XA ≤ 250 (Selling constraint of product A)
XB ≤ 300 (Selling constraint of product B)
XA and XB  0 (Condition of non-negativity).