Professional Documents
Culture Documents
Introduction OT
Introduction OT
Introduction OT
Introduction
Business Problem
Maintaining stocks of finished goods.
Alternative Solutions
• To the marketing manager, stocks of a large variety of products area
means of supplying the company’s customers with what they want
and when they want it. Clearly, according to marketing manager, a
fully stocked warehouse is of prime importance to the company.
• On the other hand the finance manager sees stocks in terms of capital
tied up unproductively and argues strongly for their reduction.
• Finally there appears the personal manager for whom a steady level
of production is advantageous for having better labour relations.
• Solution: All these people would claim to uphold the interests
of their organization
– They do so only from their specialized point of view.
– They may come up with contradictory solution
– However they can not all be right or wrong.
Seven judges from amongst the prominent citizens were appointed for the
competition. Each judge had to rank order the teams according to their
performance. The team standing first was awarded 4 points, the second 3, the
third 2 and the team standing fourth was awarded 1 point. The point of the
judges were totaled up and a score sheet was prepared in the given table.
Before the result could be announced Team C put up a protest against Team B
stating that Team B had used a professional which was against the rules and
hence they should be disqualified. You are the Chairperson of Apna Gaon and
are the sole arbitrator in case of disputes. Your queries revealed that Team B
had indeed used professionals and therefore, should be disqualified under the
rules. What decision would you take?
SITUATION
Judges J1 J2 J3 J4 J5 J6 J7 Total
Rank 2 1 3 4 2 3 1 1
A
Score 3 4 2 1 3 2 4 19
Rank 3 2 4 1 3 4 2 4
B
Score 2 3 1 4 2 1 3 16
Rank 4 3 1 2 4 1 3 3
C
Score 1 2 4 3 1 4 2 17
Rank 1 4 2 3 1 2 4 2
D
Score 4 1 3 2 4 3 1 18
• Decision making is a key managerial responsibility, that can
be improved through:
– Disciplined thinking: Think what is realistic and feasible.
– Objective thinking: An unbiased evaluation of data.
– Systematic thinking: A step by step analysis of the problem.
– Action oriented thinking: Solution can be implemented economically.
• You may also take the view that since they were last the result
need not be changed.
• But Team C now argues that since there are only three teams,
they should be ranked first, second and third and given point 3,
2, and 1, respectively.
Judges J1 J2 J3 J4 J5 J6 J7 Total
Rank 2 1 3 3 2 3 1 3
A
Score 2 3 1 1 2 1 3 13
Rank
B
Score
Rank 3 2 1 1 3 1 2 1
C
Score 1 2 3 3 1 3 2 15
Rank 1 3 2 2 1 2 3 2
D
Score 3 1 2 2 3 2 1 14
SITUATION
Subject to (Constraints)
• In optimization models
– Decision variables may be integer or real
– Objective and constraint functions may be linear or nonlinear.
– Preferably used model in business is linear programming where all
objective and constraint functions are linear and all variables are real.
– Computational algorithms are iterative in nature, that means the
problem is solved in iterations with each new iteration bringing the
solution closer to optimum.
Steps for optimization techniques
• Problem Definition
• Construction of the model
• Solution of the model
• Validation of the model
• Implementation of the solution
– The model solution is not only anticipate what will happen and when it
will happen, but also why it will happen.
• Marketing
• Selection of product mix, marketing planning accounting
• Sales effort allocation and assignment
• Advertising and media planning
• Personal Management
• Manpower planning, wage/salary administration
• Skills and wages balancing
• Scheduling of training programmers
• Production Management
• Warehouse location and size, distribution centers, retail outlets
• Logistics, layout, engineering design
• Aggregate production planning, assembly line, blending, purchasing, inventory control
• Employment, training, layoffs and quality control
• Project scheduling and allocation of resources
• General Management
• Decision support system and MIS; forecasting
• Organisation design and control
• Strategic planning
• Government
• Economic planning, natural resources, social planning, energy
• Urban and housing problems
• Military, police, pollutio control etc.