I.

Introduction to Operations Research

Prior to the twentieth century, business and other organizations functioned in a less complex
environment that todays. Managers of contemporary organizations must cope with the dynamic
world of increased population, inflation, recession, social consciousness, and shortages of vital
resources. Consequently, the decision making task of the modern management is more
demanding and more important than ever.

Operations Research

Operations Research (OR) is the use of scientific methodology to study systems whose design or
operation require human decision making. OR provides the means for making the most effective
decisions about systems design and operation. The strength and versatility of OR stems from its
diagnostic power through observation and modeling, as well as from its prescriptive power
through analysis and synthesis.

Operations Research can be defined as the use of quantitative methods to assist analyst and
decision-makers in designing, analyzing, and improving the performance or operation of systems.

The system being studied

financial systems,
scientific or engineering systems,
industrial system;
But regardless of the context, practically all such system lend themselves to scrutiny within the
systematic framework of the scientific method

The field of Operations Research incorporates analytical tools from many different disciplines

be applied in a rational way to help decision makers solve problems

to control the operations of systems and organizations in the most practical and
advantageous way
The toll of Operations Research can be used to optimize the performance of systems

that are already well-understood

to investigate the performance of systems that are ill-defined or poorly
understood

perhaps to identify which aspects of the system are controllable and which are not.

- mathematical,
- computational,
- analytical tools and devices
are employed merely to provide information and insights

but it is the human decision-makers who will utilize and implement what has been learned
through the analysis process to achieve the most favorable performance of the system.

Types of OR/MS Models

1. The LP Model

Of all the available techniques and decision tools in OR/MS (Management Science),
Linear Programming is one of the most widely used. Linear Programming is a
 component of the more general technique of mathematical programming. Mathematical
Programming is concerned with the development of modeling and solution procedures
for the purpose of maximizing the extend to which the goals and objectives of the
decision maker are realized. Despite the implication of its name, LP has little to do with
computer programming. In LP, the word programming is related to planning. It refers to
modeling a problem and subsequently solving it by mathematical techniques.

LP is a mathematical technique that will maximize or minimize a linear function subject to

a system of linear constraints. This linear function, together with the system of linear
constraints, forms what we called the Linear Programming Model. The canonical form
of an LP model is as follows:
.
Optimize Z = ci(X1..Xn) ---- objective function(1.1)
Subject to:
ai(X1Xn) bi , i = 1,2,n --- constraints (1.2)
X1,X2Xn 0 ----- variables (1.3)

Any problem whose mathematical formulation fits this general model is an LP Model.
An LP model consist of two basic parts an objective function and a set of constraints.
The function (1.1) being either maximized or minimized is called the objective function. It
is simply a mathematical expression that measures the effectiveness of a particular
solution for the LP problem. The restriction (1.2) in the foregoing model are called
constraints. These mathematical statements specify such elements of the problem as the
limitations of available resources or the demand that must be met. Conditions (1.3) are
called the nonnegative conditions. The Xj variables are decision variables; that is, they
are the variables whose value is determined when the LP model is solved. Their values
provide the answers that are being sought in the LP analysis.

2. Simulation Model- imitate

Breaks down the modeled system into basic or elemental modules that are then linked to
one another by well defined logical relationship (IF/THEN statement)

3. Heuristics
Refers to experience-based techniques for problem solving, learning, and discovery that
give a solution which is not guaranteed to be optimal
Can be used to develop good (approximate) solutions.
a. relies on intuitive (guess) or empirical rules that have the potential to determine
an improved solution relative to the current one.
b. It is a search procedures that intelligently move from one solution point to
another with the objective to improving the value of the model objective. When no
further improvements can be achieved, the solution is the approximate solution to
the model.

Phases of OR/MS Study:

1. definition of the Problem:
from the viewpoint of OR, this indicates the three major aspect:
a. a description of the goal or the objective of the study.
b. An identification of the decision alternatives of the system
c. A recognition of the limitations, restriction and requirements of the system.
2. model construction
depending on the definition of the problem, the OR team should decide on the
most suitable model for representing the system. Such a model specify
quantitative expressions for the objective and the constraints of the problem in
terms of its decision variables.
3. model solution
Develop a procedure
4. model validity
Test the model
5. implementation