OPERATION RESEARCH

ME354
OPERATION RESEARCH

Lecture -2

Applications of Operation Research

NITK , Surathkal
OPERATION RESEARCH
Course plan
Topics to be covered Hrs
Introduction to OR 2
Applications of OR 2
Formulation of LPP 3
Solutions of LPP Graphical solution 15
Simplex Method
Big M Method
Dual Simplex Method
Two Phase model
Transportation Problems Travelling Salesman Problems 6

Assignment Problems Maximization Application 6

PERT and CPM Total, Free and Independent Float, Network Crashing 6
Job Sequencing 4
Game Theory 4
Waiting Line Theory NITK , Surathkal
Queuing Theory 4
 Reference books
➢ Introduction to Operations Research-Frederick S. Hillier, Gerald J. Lieberman,
McGraw-Hill Education,2014.

➢ S.D. Sharma & H. Sharma, Operations Research- Theory, Methods &

Applications- Kedarnath &Ramnath Publishers, 2002.

➢ Taha H.A., Operations Research – An Introduction, 7th Edition, Prentice Hall

Pub, 2002.

➢ Shambling and Stevens, Operations Research – Fundamental Approach.

McGraw-Hill Inc, US, 1974. NITK , Surathkal
OPERATION RESEARCH
Introduction to Operations Research
➢ Operational Research is a systematic and analytical approach to decision making and

problem solving.

➢ It is typically concerned with determining the maximum profit, sale, output, crops

yield and efficiency and minimum losses, risks, cost, and time are some of objective

functions.

➢ Seeks solutions to problems that arise in complex organizations

NITK , Surathkal
OPERATION RESEARCH
A uniquely powerful approach to
decision making
•Simulation Giving you the ability to try out approaches and test ideas for

improvement

•Optimization Narrowing your choices to the very best when there are virtually

innumerable feasible options and comparing them is difficult

•Probability and Statistics Helping you measure risk, mine data to find

valuable connections and insights, test conclusions, and make reliable forecasts

NITK , Surathkal
OPERATION RESEARCH
OR: the general steps
Operations Research is a quantitative approach to decision making based on the scientific
method of real-world problem solving.
An OR study usually contains the following steps:
1. Identify the problem;
2. Formulate the problem as a math model;
3.Validate the model (by historical or new data);
4. Develop effective algorithms or
computer packages to solve the model;
5. Obtain numerical solution for the model;
6. Implementation NITK , Surathkal
OPERATION RESEARCH
Operation Research
An OR study consists of:
The art of mathematical modeling of complex situations
By observing the problem in reality and analyzing the data on hand, we choose the corresponding math
model, then fix the function forms and in particular the parameters;
The science of the development of solution techniques to solve these models
1. construct algorithms for small-scale problems and develop computer packages for large-scale problem
2. usually, we obtain a set of solutions with respect to the variation of model parameters.
The ability to effectively communicate the results to decision maker
results are reported in an easy-to-understand way, with explanations on
1. the correspondences of functions/parameters to reality;
2. the conditions for the model’s applicability;
3. the different optimal solutions according to different parameters. NITK , Surathkal
OPERATION RESEARCH The Impact of Operations Research
• International federation of Operational Research societies (IFORS)
• Institute of Operations Research and the management sciences (INFORMS)

Organization Area of Application Annual savings

Ingram Micro Data driven marketing campaigns $350 million more revenue

Continental Airlines Reassign crews to flights when schedule $40 million

disruptions occur
Swift and company Improve sales and manufacturing performance $12 million
Chevron Optimize refinery operations $1 billion
Samsung Electronics Reduce manufacturing times and inventory levels $200 million more revenue

NITK , Surathkal
OPERATION RESEARCH
Applications of Operation
Research
1. Allocation and Distribution in Projects:
2. Production and Facilities Planning:
3. Programmes Decisions:
4. Marketing:
5. Organization Behaviour:
6. Finance:
7. Research and Development:
8. Military NITK , Surathkal
OPERATION RESEARCH Case studies on OR Applications

Case 1. Continental Airlines (now merged with United Airlines).

Case 2. General Motors .

Case 3. Samsung Electronics

NITK , Surathkal
OPERATION RESEARCH A New Era for Crew Recovery at
Continental Airlines
➢ Airlines face schedule disruptions daily because of unexpected events, including inclement

weather, aircraft mechanical problems, and crew unavailability

➢ These disruptions can cause flight delays and cancellations.

➢ Crews may not be in position to service their remaining scheduled flights.

➢ CALEB Technologies developed the Crew Solver decision-support system for

Continental Airlines to generate globally optimal, or near optimal, crew-recovery solutions.

Continental estimates the Crew Solver system helped it save

approximately US $40 million NITK , Surathkal
OPERATION RESEARCH General Motors Increases Its
Production Throughput
➢ General Motors Corporation (GM) initiated a long-term project to predict and improve the

throughput performance of its production lines to increase productivity

(1) They developed algorithms for estimating throughput performance, identifying

bottlenecks, and optimizing buffer allocation,

(2) They installed real-time plant-floor data-collection systems to support the algorithms, and

(3) They established common processes for identifying opportunities and implementing

performance improvements.
GM has increased revenue and saved over $2.1 billion in over NITK , Surathkal
30 vehicle plants and 10 countries
OPERATION RESEARCH Short Cycle Time and Low Inventory
in Manufacturing at Samsung Electronics
➢ SLIM is a set of methodologies and scheduling applications for managing cycle time in

semiconductor manufacturing.

➢ SLIM includes methodology for calculating target cycle times and target WIP levels for

individual manufacturing steps, heuristic algorithms for factory floor scheduling, and

optimization-based capacity analysis.

➢ It reduced manufacturing cycle times to fabricate dynamic random access memory devices

from more than 80 days to less than 30.

SLIM enabled Samsung to capture an additional $1 billion in NITK , Surathkal
sales revenue