Neelam Aswal MBA Sem-2 Op Res

MBA SEMESTER II MB0048 Operation Research- 4 Credits (Book ID: B1301) Assignment Set- 1 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions
Q1A .Define O.R and discuss its characteristics.

Ans. Operation research is defined as the application of scientific methods, techniques and tools to operation of a system with optimum solutions to the problems, where optimum refers to the best possible alternative. Characteristics1. OR is system oriented. OR scrutinises the problem from an organisations perspective. The results can be optimal for one part of the system, while the same can be unfavourable for another part of the system. 2. OR imbibes an inter-disciplinary team approach. Since no single individual can have a thorough knowledge of all fast developing scientific know-how, personalities from different scientific and managerial cadre form a team to solve the problem. 3. OR makes use of scientific methods to solve problems. 4. OR increases effectiveness of the managements decision-making ability. 5.OR makes use of computers to solve large and complex problems. 6.OR offers a quanititative solution. 7. OR also takes into account the human factors.

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B. Explain the nature of Operations Research and its limitations.

Ans. Nature of Operations Research1. OR is system oriented. OR scrutinises the problem from an organisations perspective.The results can be optimal for one part of the system, while the same can be unfavourable for another part of the system. 2. OR imbibes an inter-disciplinary team approach. Since no single individual can have a thorough knowledge of all fast developing scientific know-how, personalities from different scientific and managerial cadre form a team to solve the problem. 3. OR makes use of scientific methods to solve problems. 4. OR increases effectiveness of the managements decision-making ability. 5. OR makes use of computers to solve large and complex problems. 6. OR offers a quanititative solution. 7. OR also takes into account the human factors. Limitations of OR1. Magnitude of computation: Modern problems involve a large number of variables.The magnitude of computation makes it difficult to find the interrelationship. 2. Intangible factors: Non quantitative factors and human emotional factor cannot be taken into account. 3. Communication gap: There is a wide gap between the expectations of managers and the aim of research professionals.

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4. Time and Money factors: When you subject the basic data to frequent changes then incorporation of them into OR models becomes a costly affair. 5. Human facor: Implementation of decisions involves human relations and behaviour.

1. a. What are the essential programming model?

characteristics

of

linear

Ans. For a given problem situation, there are certain essential conditions that need to be solved by using linear programming. 1. Limited resources : limited number of labour, material equipment and finance 2. Objective : refers to the aim to optimize (maximize the profits or minimize the costs). 3. Linearity : increase in labour input will have a proportionate increase in output. 4. Homogeneity : the products, workers & apos; efficiency, and machines are assumed to be identical. 5. Divisibility : it is assumed that resources and products can be divided into fractions. (in case the fractions are not possible, like production of one-third of a computer, a modification of linear programming called integer programming can be used).
b. Explain the graphical method of solving a LPP involving two variables. Ans. Graphical method of solving a LPP involving two variables-

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Step 1: Write down the equations by replacing the inequality symbols by the equality symbols in the given constraints. Step 2 : Plot the straight lines represented by the equations obtained in Step 1. Step 3 : Identify the convex polygon region relevant to the problem. Decide on which side of the line, the half-plane is located. Step 4 : Determine the vertices of the polygon and find the values of the given objective function Z at each of these vertices. Identify the greatest and least of these values. These are respectively the maximum and minimum value of Z. Step 5 : Identify the values of (x1,x2) which correspond to the desired extreme value of Zithers is an optimal solution of the problem.

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2. a. Explain the simplex procedure to solve a linear programming problem.

Ans. Steps1. Locate the negative number in the last row of the simplex table. Do not include the last column.The column that has negative number is called the work column. 2. Next, form ratios by dividing each positive number in the work column, excluding the last row into the element in the same row and last column.Assign that element to the work column to yield the smallest ratio as the pivot element.If more than one element yields the same smallest ratio, choose the elements randomly.The program has no solution, if one of the element in the work column is non-negative. 3. To convert the pivot element to unity(1) and then reduce all other elements in the work column to zero, use elementary row operations. 4. Replace the x-variable in the pivot row and first column by xvariable in the first row pivot column.The variable to be replaced is called the outgoing variable and the variable that replaces it is called the incoming variable. The new first column is the current set of basic variables. 5. Repeat steps 1 through 4 until all the negative numbers in the last row excluding the last column are exhausted. 6. You can obtain the optimal solution by assigning the value to each variable in the first column corresponding to the row and last column.All other variables are considered as non-basic and have assigned value zero. The associated optimal value of the objective function is the number in the last row and last column for a

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maximisation program, but the negative of minimisation problem. b. Explain the use of artificial variables in L.P. Ans

this number for a

Once a basic feasible solution to a linear programming problem is known, then one can create a canonical tableau for the problem with little or no effort. The system of constraints for many linear programming problems contain no obvious basic feasible solutions. By introducing into the problem a sufficient number of variables, called artificial variables, we put the system of constraints into canonical form with these variables as the basic variables. Then we apply the simplex method, not to the objective function of the original problem, but to a new objective function. 3. a. Explain the economic interpretation of dual variables. Ans. For any pair of feasible primal and dual solutions, (Objective value in the maximization problem) (Objective value in the minimisation problem). At the optimum, the relationship holds as a strict equation. Hence, for any two primal and dual feasible solutions, the value of the objective functions, when finite, must satisfy the following inequality. n m

Z = Cj Xj bi yi = w
j=1 i=1

The strict equality, z = w, holds true when both the primal and dual solutions are optimal.Consider the optimal condition z = w.Given that the primal problem represents a resource allocation model, you can think of z as representing the profit in rupees.bi represents the number

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of units available of the resource i.Therefore, we can express the equation z=w as profit (Rs) = (units of resource i) X (profit per unit of resource i) This means that the dual variables yi, represent the worth per unit of resource i. b. Define: Primal Problem and Dual Problem. Ans. Primal and Dual LP Problems Economic theory indicates that scarce (limited) resources have value. In LP models, limited resources are allocated, so they should be, valued. Whenever we solve an LP problem, we implicitly solve two problems: the primal resource allocation problem, and the dual resource valuation problem. Here we cover the resource valuation, or as it is commonly called, the Dual LP Primal

Max s.t.

c X a X
j j ij j

bi 0

for all i for all j

Xj
Dual

Min s.t.

U b U a
i i i i

ij

c j for all j 0 for all i

Ui

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Primal Dual Pair and Their Units Primal

Max s.t.

c X a X
j j ij j

bi 0

for all i for all j

Xj

where x is the variable and equals units sold

max sum (per unit profits)

* (units sold)

s.t. sum (per unit res. use)*(units sold) < res on hand

Dual

Min s.t.

U b U a
i i i i

ij

c j for all j 0 for all i

Ui

U is the variable and equals per unit resource value min sum (per unit res value) * (res on hand) s.t. sum (per unit res value) * (per unit res use) > per unit profits

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5. Describe the North-West Corner rule for finding the initial basic feasible solution in the transportation problem?

Ans. North West Corner Rule: Step 1: The first assignment is made in the cell occupying the upper left hand (North West) corner of the transportation table. The maximum feasible amount is allocated there, that is X11 = min (a1, b1). So that either the capacity of origin O1 is used up or the requirement at destination D1 is satisfied or both. This value of X11 is entered in the upper left hand corner (Small Square) of cell (1, 1) in the transportation table. Step 2: If b1 > a1 the capacity of origin O, is exhausted but the requirement at destination D1 is still not satisfied, so that at least one more other variable in the first column will have to take on a positive value. Move down vertically to the second row and make the second allocation of magnitude X21 = min (a2, b1 x21) in the cell (2, 1). This either exhausts the capacity of origin O2 or satisfies the remaining demand at destination D1. If a1 > b1 the requirement at destination D1 is satisfied but the capacity of origin O1 is not completely exhausted. Move to the right horizontally to the second column and make the second allocation of magnitude X12 = min (a1 x11, b2) in the cell (1, 2). This either exhausts the remaining capacity of origin O1 or satisfies the demand at destination D2. If b1 = a1, the origin capacity of O1 is completely exhausted as well as the requirement at destination is completely satisfied. There is a tie for second allocation; an arbitrary tie breaking choice is made. Make the second allocation of magnitude X12 = min (a1 a1, b2) = 0 in the cell (1, 2) or X21 = min (a2, b1 b2) = 0 in the cell (2, 1).

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Step 3: Start from the new north west corner of the transportation table satisfying destination requirements and exhausting the origin capacities one at a time, move down towards the lower right corner of the transportation table until all the rim requirements are satisfied. 6. Use the simplex method to Maximise z = 3x1 x2

Subject to the constraints 2x1 + x2 2 x1 + 3x2 3 x2 4, x1, x2 0. Ans. Z=9

Neelam Aswal MBA Sem-2 Op Res

MBA SEMESTER II MB0048 Operation Research- 4 Credits (Book ID: B1301) Assignment Set- 2 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions
1. a. Explain the terms: Pure strategy, Mixed Strategy, Saddle point, Competitive games, Payoff matrix, Rectangular games.

Ans. Pure Strategy-During the game,if a players strategy is to adopt a specific course of action, irrespective of the opponents strategy, the players strategy is called pure strategy. Mixed Strategy- If the player chooses his course of action according to pre-assigned probabilities, then the players strategy is called mixed strategy.Thus,if a player A decides to adopt courses of action A1 and A2 with perspective probabilities 0.4 and 0.6, it is mixed strategy. Saddle point- Saddle point is the position where the maximin(maximum of the row minimums) and minimax(minimum of the column maximums) coincide. Competitive games- A competitive game has the following characteristics1.The number of players or competitors is finite. 2.Each player has finite number of courses of action or moves. 3.A game is played when each player adopts any one course of action. 4.Every time a game is played, the corresponding combination of courses of action leads to a transaction or payment to each player. The

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payment is called pay-off or gain.The pay-off monetary(money) or some benefit, such as increased sales. 5.The players do not communicate with each other.

may

be

Payoff matrix- In a two-person zero-sum game with the players A and B.Let A1,A2,.Am be the m courses of action for player A. Let B 1,B2, Bn be the n courses of action for player B.Let aij (i=1,2,.m; j=1,2, .n) be the pay-off (gain) of player A when he plays the course of action, Ai and player B plays the course of action Bj.Then, the following matrix is the pay-off(gain) matrix of player A. Player B B1B2Bn
a
A Player A A2 . . .
12 11

..............................................................a1n
21

a22 a2n . . . . . .

am1am2
Am

amn

This is a m x n game. Here, aij is As gain and Bs loss. Therefore, (-aij) is the gain of B. To obtain the pay-off matrix of B, write (-a ij) in the place of aij in the above matrix and then write the transpose of the matrix. Rectangular games-A rectangular game is a game where

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1.Two players participate 2.The gain of one player is the loss of the other.

b. Explain the Maximin and Minimax principle used in Game Theory. Ans. Minimax (sometimes minmax) is a decision rule used in decision theory, game theory, statistics and philosophy for minimizing the possible loss for a worst case (maximum loss) scenario. Alternatively, it can be thought of as maximizing the minimum gain (maximin). Originally formulated for two-player zero-sum game theory, covering both the cases where players take alternate moves and those where they make simultaneous moves, it has also been extended to more complex games and to general decision making in the presence of uncertainty.

Maximin-

Frequently, in game theory, maximin is distinct from minimax. Minimax is used in zero-sum games to denote minimizing the opponent's maximum payoff. In a zero-sum game, this is identical to minimizing one's own maximum loss, and to maximizing one's own minimum gain."Maximin" is a term commonly used for non-zero-sum games to describe the strategy which maximizes one's own minimum payoff. In non-zero-sum games, this is not generally the same as minimizing the opponent's maximum gain, nor the same as the Nash equilibrium strategy.
2. a. Explain the steps involved in Monte-Carlo simulation.

Ans. Step1-Define the problem Step2- Constuct an appropriate model Step3-Prepare the model for Experimentation Step4-Using step 1 to 3, experiment with the model Step5-Summarize and Examine the results obtained in step4

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Step6-Evaluate the results of the simulation Step7-Formulate proposals for advice to management
b. What are the advantages and limitations of using simulation?

Ans. Advantages of simulation1.The study of very complicated system or sub-system can be done with the help of simulation. Simulation has been described as What to do when all else fails. 2.By using simulation, we can investigate the consequences for a system of possible changes in parameters in terms of the model. 3.The Knowledge of a system obtained in designing and conducting the simulation is very valuable. 4.It enables us to assess the possible risks involved in a new policy before actually implementing it. 5.The simulation of complicated systems helps us to locate which variables have the important influences on system performance. Limitations of Simulation1.Simulation generates a way of evaluating solutions but it does not generate the solution techniques. 2. Sometimes simulation models are expensive and take a long time to develop it.For example, a corporate planning model may take a long time to develop and prove expensive also. 3.The simulation model does not produce answers by itself.The user has to provide all the constraints for the solutions which he wants to examine. 4.Not all situations can evaluated using simulation.Only situations involving uncertainity are considered.

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5.It is the trial-and-error approach that produces different solutions in repeated runs.This means it does not generate optimal solutions to problems.

3. a. Distinguish between PERT and CPM. What is a critical path?

Ans.PERT 1.PERT was developed in connection with an R&D work.Therefore, it had to cope with the uncertainities that are associated with R&D activities.In PERT, the total project duration is regarded as a random variable.Therefore,associated probabilities are calculated so as to characterise it. 2.It is an event-oriented network because in the analysis of a network,emphasis is given on the important stages of completion of a task rather than the activities required to be performed to reach a particular event or task. 3.PERT is normally used for projects involving activities of nonrepetitive nature in which time estimates are uncertain. 4.It helps in pinpointing critical areas in a project so that necessary adjustment can be made to meet the scheduled completion date of the project. CPM 1.CPM was developed in connection with a construction project, which consisted of routine tasks whose resource requirements and duration were known with certainity. Therefore, it is basically deterministic. 2.CPM is suitable for establishing a trade-off for optimum balancing between schedule time and cost of the project. 3.CPM is used for projects involving activities of repetitive nature.

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Critical path- A critical path defines a chain of critical activities that connects the start and end events of the arrow diagram.In other words, the critical path identifies all the critical activities of a project.

b. Write a short note on PERT/CPM networks in Operations Research.

Ans.PERT/CPM networks consist of two major components as discussed below:

a)

Events:An event represents a point in time that signifies the completion of some activities and the beginning of new ones.The beginning and end points of an activity are thus described by 2 events usually known as the tail and head events.Events are commonly represented by circles(nodes) in the network diagram.They do not consume time and resource. Activities:Activities of the network represent project operations or tasks to be conducted.An arrow is commonly used to represent an activity,with its head indicating the direction of progress in the project.Activities originating from a certain event cannot start until the activities terminating at the same event have been completed.They consume time and resource.

b)

4A. State the general form of an integer programming problem.

Ans. Standard form is the usual and most intuitive form of describing a linear programming problem. It consists of the following four parts:

Neelam Aswal MBA Sem-2 Op Res

A linear function to be maximized e.g. Problem constraints of the following form e.g.

Non-negative variables e.g.

Non-negative right hand side constants

The problem is usually expressed in matrix form, and then becomes:

b. Describe the branch and bound method for the solution of integer programming problem?

Ans Branch and bound (BB or B&B) is a general algorithm for finding optimal solutions of various optimization problems, especially in discrete and combinatorial optimization. It consists of a systematic enumeration of all candidate solutions, where large subsets of fruitless candidates are discardeden masse, by using upper and lower estimated bounds of the quantity being optimized.

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4. How can you use the Matrix Minimum method to find the initial basic feasible solution in the transportation problem.

Ans. Matrix Minimum Method: Step 1: Determine the smallest cost in the cost matrix of the transportation table. Let it be Cij, Allocate Xij = min (aj, bj) in the cell (i, j). Step 2: If Xij = aj cross off the ith row of the transportation table and decrease bj by ai go to step 3. If xij = bj cross off the ith column of the transportation table and decrease ai by bj go to step 3. If Xij = ai = bj crosss off either the ith row or the ith column but not both. Step 3: Repeat steps 1 and 2 for the resulting reduced transportation table until all the rim requirements are satisfied whenever the minimum cost is not unique make an arbitrary choice among the minima. The Initial Basic Feasible Solution: Let us consider a T.P involving m-origins and n-destinations. Since the sum of origin capacities equals the sum of destination requirements, a feasible solution always exists. Any feasible solution satisfying m+n -1 of the m+n constraints is a redundant one and hence can be deleted. This also means that a feasible solution to a T.P can have at the most only m + n -1 strictly positive component, otherwise the solution will degenerate. It is always possible to assign an initial feasible solution to a T.P. in such

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a manner that the rim requirements are satisfied. This can be achieved either by inspection or by following some simple rules.

5. Solve the following transportation problem.

9 7 6 6 4

1 2 3 5 8 4

9 7 9 1 1 6

6 7 1 1 2 2

9 5 3 2 4

1 0 5 1 1 1 0 2

5 6 2 9 2 2

Ans. The minimum transportation cost is Rs 112 as 0