MEE437 O Operations R i Research h

Siva Prasad D l Si P d Darla sivaprasaddarla@mail.com

School of Mechanical & Building Science VIT University

Course objective and outcomes

Purpose
To learn how to use engineering methods to support the managerial decisionmaking process. Focus in modeling and analysis of several production problems using Operations Research techniques/tools.

Objective
To understand the importance, need and role of Operations Research (OR) in an industrial organization To develop decision making models and understand how analytical tools can be used to solve managerial decision-making problems To develop student s ability to recognize, formulate and analyze engineering students recognize models to support the solution of problems

Outcome Upon completion of this course, students will be able to:

Apply OR techniques/tools like LPP, Transportation, Scheduling, Sequencing, Replacement etc. to industrial optimization problems p p p Analyze various OR models like inventory, queuing, simulation etc. and to apply them for optimization ofDarla /production/operational problems the VIT

Course Content
Linear Programming Li P i Transportation Assignment

OR

Sequencing Inventory I t Queuing theory Game theory Project Scheduling j g Simulation Replacement

Reference: 1. Operations Research: An Introduction, Hamdy A Taha, Prentice Hall 2. Introduction to Operations Reseach, Hillier and Lieberman, McGraw Hill 3. Operations Research, Kanti Swarup, P VITGupta, and Manmohan, Sultan Chand Darla / K 4. Operations Research, D S Hira and P K Gupta, S Chand

MEE437 O Operations R ti Research h

Lecture 1: Introduction to Operations Research

Siva Prasad D l Si P d Darla sivaprasaddarla@mail.com

Introduction to Operations Research

Operations Research is abbreviated as OR p

Research on Operations of a (Military) System

Operations - production, distribution, transportation - scheduling, routing, workflow improvement - elimination of bottlenecks, inventory control, BPR - site selection, facility and operational planning - construction - telecommunications mobile commmunications telecommunications, - financial planning - health care - public services etc. Research Methods mathematical, search algorithm

It is the branch of science which deals with application of methods & tools to the problems involving operations of a Darla / VIT system so as to get optimal solution for the problem.

Example: Production problem in Electronic company

Products: computers and laptops 5 production lines every line can produce both products -one line produces the whole day the same product 8 employees, 18 expensive tools employees/tools needed at a line
computers employees tools 1 3 laptops l 3 6

gain per day per line

computers gain 1000 laptops 1200

Question: determine production of/ computers and laptops which Darla VIT maximizes the gain

Example 2: Barts Barometer Business

Bart s Bart's Barometer Business (BBB) is a retail outlet which deals exclusively with weather equipment. Currently BBB is trying to decide on an inventory and reorder policy for home barometers. Barometers cost BBB Rs.2250 each and demand is about 500 per Rs 2250 year distributed fairly evenly throughout the year. Reordering costs are Rs.3600 per order and holding costs are figured at 20% of the cost of the item. item BBB is open 300 days a year (6 days a week and closed two weeks in August). Lead time is 60 working days. Question: determine (Q, s) policy which minimizes the total inventory cost

Darla / VIT

History of Operations Research

A K Erlang (1917) Problem of congestion of telephone traffic WW II (1938) Multi-disciplinary team of scientists suggested ways and
means to improve the execution of various military operations the first OR team

Use of OR --- government and industry Industrial managers realized the important of OR in solving their managerial decision problems ORSA (1950) IFORS (1957) OR team at RRL Hyderabad India (1949) RRL, Hyderabad, OR unit for the application of OR methods in national planning & survey in ISI, Calcutta, India (1953) OR Society of India (1957) and a member of IFORS (1959)

Growth of Operations Research

-Computers growth Darla / VIT -Development of mathematical techniques

What is Operations Research?

OR is a scientific method of providing executive departments with a quantitative basis for decisions under their control Morse and Kimball OR is the application of scientific methods, techniques and tools to problems involving the operations of a system so p g p y as to provide those in control of the system with optimum solution to the problem Churchman, Ackoff & Arnoff OR is the art of giving bad answers to problems which otherwise have worse answers Saaty OR is applied decision theory Miller and Starr OR is a scientific knowledge through interdisciplinary team g g p y effort for the purpose of determining the best utilization of Darla / VIT limited resources H A Taha

Characteristic features of OR
Its broad view point Decision making Scientific approach pp Objective Inter-disciplinary team

Phases of OR study
Identification and definition of problem Construction of the model Solution of the model Validation of the model Implementation of the final results
Darla / VIT

1. Potential solution to problem 2. Feasible solution 3. Simulate it in a real-world environment, psychology and g management science

Methods
Group I: Optimization methods methodssearch among possible alternatives

Group II: Simulation methodssensitivity study to (i) search for improvement and (ii) test and benchmark the improvement id t t db h k th i t ideas

G oup : ata a a ys s et ods Group III: Data-analysis methodsdetecting actual pattern and inter-connections

Group IV: Heuristic methodssearch among alternatives starts from several solutions
Darla / VIT

Elements of OR Model
What are the decision alternatives? Under what restrictions or constrains is the decision made? What is an appropriate objective criterion for evaluating the alternatives? Parameters and data

Maximize or Minimize OBJECTIVE FUNCTION subject to bj t t CONSTRAINTS

Darla / VIT

Art of Modeling

Real World System

Assumed Real World System

MODEL O

Levels of abstraction in model development

Darla / VIT

Need for the required techniques/tools

Once you h O have th t l you only need to use it wisely, OR the tool l dt i l became to be associated with the name of Management S Science If the only tool you have is a hammer, you tend to see every problem as a nail . nail.
Abraham Maslow (1908 -1970)

Darla / VIT

Operations Research Techniques/Tools

Deterministic
Linear Programming Network Flow Programming Dynamic Programming y g g Scheduling Integer Programming Non-Linear Programming Heuristic Programming

Stochastic
Probabilistic Programming g g Markov Chains Probabilistic Inventories Queuing theory i h Discrete Simulation Reliability theory Game theory

Darla / VIT

Case Studies
Kelloggs
The largest cereal producer in the world. world LP-based operational planning (production, inventory, distribution) system saved $4.5 million in 1995.

Procter and Gamble

A large worldwide consumer goods company. Utilised integer programming and network optimization worked in concert with Geographical Information System (GIS) to re-engineering product sourcing and g p y ( ) g gp g distribution system for North America. Saved over $200 million in cost per year.

Hewlett-Packard
Robust supply chain design based on advanced inventory optimization techniques. pp y g y p q Realized savings of over $130 million in 2004

Walmart *
Walmart, the world s largest retailer, always offers merchandise world's at relatively low prices as compared to its competitors. With low operation and production costs, effective supply chain (inventory models), g( p ) g Cross-Docking (transportation model), use of economic scale, information management (RFID), Walmart continues to offer low prices on its goods.

Source: Heng-Soon GAN Operations Research: Making More Out of Information Systems HengDarla / VIT 2005. * Not from the source

MEE437 Operations Research

Lecture 2 and 3 : Linear Programming (LP)

Siva Prasad D l Si P d Darla sivaprasaddarla@mail.com

History of LP

Simplex Method (George Dantzig 1947) first fi application of linear programming Diet problem li i f li i Di bl Ellipsoid (Khachyan 1979) the first polynomial-time algorithm Interior Point the first practical polynomial-time algorithm p p y g
Projection method (Karmakar 1984) Affine method (Dikin 1967) Logarithmic Barrier method (Frisch 1955, Fiacco 1968, Gukk et al 1986)

Areas: Military, industry, agriculture, transportation, economics, health systems, and even behavioural and social sciences It is imp. foundation for the development: integer, stochastic, network q p g g flow and quadratic programming Linearity Proportionality property Additivity property
Darla / VIT

LP (Mathematical) Formulation
Q Q1. A company manufactures two different types of products A and p y yp p B. Each product requires processing on milling machine and drilling machine. But each type of machines has limited hours available per week. The net profit per unit of the products, resource week products requirements of the product and availability of resources are summarized:
Product A Milling m/c (hrs) Drilling m/c (hrs) Profit (Rs.) per unit 2 4 250 Product B 5 2 400 Available hours 200 240

Develop D l a LPP model t determine the maximum profit. d l to d t i th i fit

Darla / VIT

LP (Mathematical) Formulation

Q2. Two Crude Petroleum distills crude from two sources: Saudi Arabia,Venezuela They have three main products: Gasoline, Jet Fuel, Lubricants Yields
Gasoline Saudi Arabia Venezuela 0.3barrels 0.4barrels 0 4barrels Jet Fuel 0.4barrels 0.2barrels 0 2barrels Lubricants 0.2barrels 0.3barrels 0 3barrels

Availability and cost

Availability Saudi Arabia Venezuela 9000 barrels 6000 barrels Cost $20/barrel $15/barrel

Production Requirements (per day) Gasoline 2000 barrels Jet fuel 1500 barrels Lubricants 500 barrels
Darla / VIT

Question: Formulate LP to the minimize production cost.

LPP Formulation

It is nothing but the process of determining a particular plan of action from amongst several alternatives. The term linear indicates that all alternatives relationships involved in the problem are linear. Objective Function

General format of Linear Programming Problem (LPP) Max or Min Z = c1x1 + c2x2 + .. + cjxj + + cnxn subject to j a11x1 + a12x2 + . + a1jxj + .+ a1nxn or or = b1 a21x1 + a22x2 + . + a2jxj + .+ a2nxn or or = b2
..

ai1x1 + ai2x2 + . + aijxj + .+ ainxn or or = bi

..

Set of constraints

am1x1 + am2x2 + . + amjxj + .+ amnxn or or = bm x1, x2, x3, . xn 0 Non-negative constraints Darla / VIT

LP Problem
LPP Formulation Max / Min Z = ci xi subject to aij xi or or = bj xi 0

j = 1, 2, ..m i = 1, 2, ..n

Example Max Z = x1 + 5x2 Objective Function subject to 5x1 + 6x2 4 j Set of 3x1 + 4x2 9 constraints x1, x2 0 Non-negative Non negative constraints

Darla / VIT

LPP Mathematical Formulation

Find xi that Max / Min Z = ci xi subject to aij xi or or = bj xi 0 j = 1, 2, ..m i = 1, 2, .n

A solution is an assignment of values to variables. A feasible solution is an assignment of values to variables such that all g the constraints are satisfied. The objective function value of a solution is obtained by evaluating the objective function at the given solution. solution An optimal solution (assuming minimization) is one whose objective function value is less than or equal to that of all other feasible solutions.

Darla / VIT

Graphical Solution of LP
Steps: 1. Plot the feasible solution space p p 2. Find optimum solution if exist by choosing a convenient iso-profit (iso-cost) line and move it in increasing (decreasing) direction in maximization (minimization) LP problem Optimum solution can always be identified with one of the feasible corner (or extreme) point of the solution space or two corner points as in case of alternative optimum. optimum It is the key idea for development of Simplex Method. Convex set A set S is said to be convex iff, for all x1 and x2 S and satisfying 0 ; 01; x1 + (1- )x2 S ( )
Darla / VIT

Basics of Simplex Method

Consider the LPP, Min or Max z = CT X Subject to AX or or = b X0

Standard th St d d mathematical formulation of LPP ti l f l ti f Max z = CT X Subject to AX = b X0 mth order square submatrix of A is B such that |B|0, then B is basic matrix. Set the variables not associated with columns of B equal to zeros. The system AX=b AX b results in a system of m linear equation in m unknowns possessing unique lt i t f li ti i k i i solution. This solution is called a basic solution. The variables associated with the column of B are called b.v. and the other variables are called n.b.v. i bl ll d b A basic solution in which at least one b.v. takes the value zero is called degenerate basic solution. Every b.f.s. to a LPP corresponds to an extreme point of the set of feasible solution and conversely. Darla / VIT

Simplex Method for LPP

Steps: 1. Initial basic feasible solution (b.f.s.) 2. Test of optimality, if optimal, stop. 3. Get improved b.f.s. and go to step 2. Procedure to get i d improved bfs d bf
Determining entering variable from set of bv Determining leaving variable from set of nbv g g Get improved solution using Gauss Jordan computational procedure

Tie break and Exceptional cases p

Tie for the entering variable: arbitrarily Tie for the leaving variable: arbitrarily degeneracy (cycling) No l i variable: unbounded z leaving i bl At least one of bv has zero in net evaluation row: multiple optimal bv is ve on optimality condition: no solution ve Artificial variable is +ve at basis on optimality condition: no solution
Darla / VIT

Artificial-variable technique
1.Big M method or Penalty method
Introduce non-negative artificial variable I t d ti tifi i l i bl Assign an overwhelming penalty i.e. huge positive number say M in z Max z = cTx M(sum of all artificial variables) where M > > 0 h

2. Two-Phase method

Phase I Minimize z = sum of artificial variables, subject to revised constraints z variables The optimal solution of phase I problem (with z=0) will be ibfs for the original problem. Note: At the end of Phase I Case(1): min z = 0 and no artificial variable in basis, proceed Phase II Case(2): min z=0 and artificial variable = 0, proceed Phase II but it never becomes positive during Phase II computation. p g p Case(3): artificial variable > 0 at optimal solution of Phase I, then no solution for original problem Phase II Min/Max z = original objective function Start from the bfs obtained at the end of the phase I, use the simplex method Darla / VIT to solve the original problem.

Duality

Every LPP has associated with it another LPP called the dual.
Primal Problem Dual Problem

Subject to

Subject to

Objective Funtion: Min cT X j Variable xi 0 Variable xi unrestricted in sign jth constraint, Aj X = bj jth constraint, Aj X bj Coefficient matrix A Right hand side vector b

Objective Funtion: Max YT b j ith constraint, YT Ai ci ith constraint, YT Ai = ci jth variable yj unrestricted in sign jth variable yj 0 Coefficient matrix AT
Darla / VIT

Right hand side vector c

MEE437 Operations Research

Lecture 4: Transportation Problem and Assignment Problem

Siva Prasad D l Si P d Darla sivaprasaddarla@mail.com

Transportation Problem
Determination of a minimum cost for transportation of a single commodity from a number of sources to a number of destinations.

Min z = c11 x11 + c12x12 + .. + cijxij + + cmnxmn = Subject to

c x
i =1 j =1

ij ij

x
j=1
n

ij

= bi
= aj

for i = 1, 2, m for j = 1, 2, n

x
i =1

ij

xij 0, for all i and j Feasible solution: TP will have feasible solution if and only if y

b = a
i =1 i j =1

Unbalanced TP is converted to balanced TP by adding dummy destination or dummy source. Initial bfs must have m + n 1 basic variables.
Darla / VIT

Solution of the transportation problem

Basic steps of the transportation technique
Step 1: Determine an initial bfs. Step 2: Determine an entering variable. Test for optimality condition. If optimum, stop; otherwise go to next step. p , p; g p Step 3: Determine a leaving variable and find improved bfs. Go to step 2.

For Step 1 Methods f obtaining an initial bfs: h d for b i i i i i l bf

Northwest corner rule (NWC rule) Least cost method Vogels approximation method (VAM) Russells approximation method

For Step F St 2 & 3 Methods for optimality test:

MODIfication method (MODI method) Stepping Stone method
Darla / VIT

Assignment Problem
Consider the situation of assigning jobs (or workers) to machines. A job is assigned to a machine which incurs a cost. The objective is to assign the jobs to the machines (one cost job per machine) at the least total cost.

Min z = c11 x11 + c12x12 + .. + cijxij + + cnnxnn = Subject to

c x
i =1 j =1

ij ij

x
j =1
n i =1

ij

=1
=1

for i = 1, 2, n for j = 1, 2, n

ij

1, if the i th job is assigned to the jth machine xij = 0, if the i th job is not assigned to the jth machine

Hungarian Method
Create a new assignment matrix with zero entries, if not at least set ( n) of zero entries (= entries that constitute a feasible solution.
Darla / VIT

Reference
1. 2. 3. 4. Operations Research: An Introduction, Hamdy A Taha, Prentice Hall Linear Programming, N Paul Loomba, McGraw-Hill Introduction to Operations Reseach, Hillier and Lieberman, McGraw Hill Operations Research, Kanti Swarup, P K Gupta, and Manmohan, Sultan Chand

Darla / VIT