Operations Research (OR)

LEC 01

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 CE4101

 Syllabus:
Linear programming, Decision making andsimulation,
Psychology in administration, Materials management,
Demand forecasting, Inventory control, Personnel
management, Stores management, Construction
equipment and plants, Replacementstudies

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 Definition:
A systematic approach in solving problems, which uses
one or more mathematical and/or analytical tools in the
process of analysis.

Murty defines Operations Research as a discipline that

deals with techniques for system optimization (1993).

 C.W Churchman (one of the pioneers of OR) defined it as

the application of scientific methods and techniques and
tools to problems involving the operations of a system so
as to provide those in control of the system with optimum
solutions to problems.
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 Numerous OR techniques are available to use:
-Nonlinear, Linear (LP),
-Discrete Event Simulation (DES),
-Integer and dynamic programming,
-Computer simulation,
-PERT/CPM,
-Queueing Theory (QT) and sequencing
And….
-Scheduling algorithm.

Combination of such techniques in optimization studies,

especially in practice.
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Operations Research techniques are used to answer the
common managerial questions such as:

• How many and much resources are required to meet the key performance
target?

 • Which alternatives require minimum cost and generate maximum profit?

 • What is the optimal resource schedule to minimize overhead cost?

 • What is the maximum and minimal resource utilization level?

 • Where are primary and secondary constraints or bottlenecks?

 • What range of queue and process time is allowed to achieve goal?

 • What is the current capacity and required capacity to meet the goal?

• What are the anticipated risks for accepting or making new product or
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model?
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 Operation Research approach / methodology:

 Step 1 Define the problem

 Step 2 Identify the decision variables and collect relevant data

Step 3 Formulate a mathematical model of the system operations and goal

or objective

 Step 4 Solve the model for an optimum solution and alternatives

 Step 5 Perform sensitivity analyses

Step 6 Update the model based on the management’s prescription and

decisions

Step 7 Implement
This is one of the most important steps where the decisions determined by
the model are implemented. Hence, active participation from the
management is crucial in achieving the goal.
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 Case study 1

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 Case study 2

Imagine that, you have 5 weeks business trip from Dhaka to Khulna.
And you don’t want to stay on weekends in Khulna. So, you planned to
go to Khulna on Sunday morning and return on Thursday evening.
A regular round trip ticket on Biman Bangladesh is 4000Tk, but a 20%
discount offer is there if the ticket spans a weekend. A one way ticket in
either direction cost 75% of regular price.
How should you buy a 5 week ticket?

 This is a decision making problem….decide!!!

To decide we need answer of three questions.
1. What are the decision alternatives
2. Under what restriction/constrain is the decision made?
3. What is appropriate criterion for evaluating alternatives?

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1. Alternatives:
a.Buy 5 regular tickets Dhk-Khl-Dhk
Departure on Sunday –Return on Thursday
b.Buy 1 Dhk-Khl (for first move) , 4 Khl-Dhk-Khl with
weekends and 1 Khl-Dhk (for return) tickets
c.Buy 1 Dhk-Khl-Dhk to cover first Sunday to depart and
last Thursday to return; and 4 Khl-Dhk-khl to cover
remaining legs. All ticket in this alternative covers atleast
one weekend.
2.Constrain: No stay in Khulna on weekend-
Leave Dhk on Sunday and return on Thursday
3.Objective criterion: Price of the ticket i.e.
Cost/Money---should be minimum
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Cost:
Alternative 1:
4000*5=20,000
Alternative 2:
0.75*4000+4*0.8*4000+0.75*4000=18,800
Alternative 3:
5*0.8*4000= 16,000

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Operations Research (OR)
An Overview
During World War II, first used by Royal Air Force of
Britain, then term ‘operation research’ was first used by
British Air Ministry.

A set of diversified scientists from England and the

United States developed scientific methods of planning
military logistics such as most economical method of
disseminating resources to various war sites.

Rapid development in techniques occurred between

1950-1970
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The End

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