Indian Institute of Foreign Trade Delhi

MBA IB (19-21)

Course Name: Operations Research

Course Coordinator: Dr. Himani Gupta
Email: himani@iift.edu
Term: II Credits: 3

Course Introduction
This course is designed with the objective of exposing the participants to various decision
situations commonly faced by managers to help them understand how to structure the
decision problems as well as to obtain good practical solutions for the same and to
understand how formal modelling can help in reaching better decisions. The course aims,
in particular, to enhance the participants' problem solving capacity in economic and
management decision problems – as well as in structuring and formulating the problems
and interpreting the solutions obtained. It attempts to strengthen the participants'
analytical capacities and capabilities in preparing for decisions. To build analytical and modelling
capabilities towards problem solving.

Course Objectives
 To improve the ability to diagnose (find), articulate (state), represent (visualize),
formulate (model) and resolve (solve) complex decision problems in a practical and
systematic manner.
 To provide insights into various concepts governing business decision making, and
introduce a variety of quantitative structures, tools, techniques and thought
processes to handle the underlying complexities of real-life applications.
 To understand the role and criticality of assumptions and robustness and sensitivity
of the quantitative models in a framework of data, decision maker(s) and
imperatives of implementation for results.

Programme Learning Goals covered through this Course

LG 2.1: Able to apply knowledge of business management concepts to analyse business
problems critically and suggest innovative solutions

Pedagogy
Lectures and class exercises will form the basis of interactive learning. Many of the most
important and successful management decisions methods fall under the category of
constrained optimization techniques, where some criterion (e.g. cost or profit) has to be
optimized subject to various constraints. For that purpose, a number of (small and large)
cases will be presented and discussed in the class. Apart from the lectures there is a
special emphasis on class participation in solving the problems, assignment and analysing
the cases. Use of computer based software is essential to solve a real size business
problem. The participants would be encouraged to use computer software for solving
business problems in this course.

Linkages with Other Courses)

Operations Management and Supply chain Management

Evaluation Components

The performance will be assessed as indicated below:

Assignments and class participation 20% (**)
Case Presentation and Analysis 20% (**)
Quizzes 20%
End Term Examination 40%
TOTAL 100%

There would be two-three home assignments and all assignments have to be completed in
a group, group is consists of 4-5. The assignment must be submitted on campus360 as per
the deadline mentioned. Quizzes would be announced and may be around two-three in the
whole trimester.

Text Book

1. An Introduction to Management Science Quantitative Approaches to Decision

Making, by Anderson, Sweeney, Williams and Martin, 14th Edition by CENGAGE
Learning Publication (ASWM)

REFERENCE BOOKS

2. Taha Hamdy A., Operations Research: An introduction, 8th edition by Pearson

Education. (TAHA)
3. Fedrick S. Hiller and Gerald J. Lieberman, Introduction to operations research
concepts and cases, McGraw-Hill.
4. Wagner, Harvey M. (2010) Principles of Operations Research with
Applications to Managerial Decisions, PHI Learning.
5. Hillier and Hillier, Introduction to Management Science: A modelling and case
studies Approach with spread sheets, 3rd edition by Tata McGraw-Hill.
6. Levin R.I. et al., Quantitative Approaches to Management by Tata McGraw-Hill.
7. Ravindran, Phillips, Solberg, Operations Research Principles and Practice, John
Wiley & Sons.
8. Operations Research (2016) by Mote, V.L. and Madhava, T. First Edition by
Wiley
9. Render, B., Stair, R. M., Hanna, M.E., Hale, T.S. and Badri, T.N. (2016)
Quantitative Analysis for Management - 12th Edition; Pearson India
Education.(RSHHB)
10. Gupta, P.K. and Hira, D. (1979), Opeartions Research by S.Chand.
 11. Srivastava, U.K., Shenoy, G.V. and Sharma, S.C.(1999): Quantitative Techniques
for managerial Decisions. Second edition. New Age Publication.
12. Vohra, N.D., Quantitative Techniques in Management by, Tata McGraw Hill
Publishing Company.

Session Plan:

sess
TOPIC
ion

I. Introduction

1 Introduction to operations research, Scope of operations

research in management, Problem solving and decision making, Reading-1, 2
Optimization – model development, data preparation, model ASWM -1
solution, report generation and implementation, Deterministic
vs. stochastic models, Role of computers in solving quantitative TAHA-1
modelling problems

II. Linear Programming

2-4 Introduction to linear programming, standard linear

programming problem, Examples of formulating business
problems as linear programming problems, graphical solution of
linear programmes with only two decision variables, Extreme
points and the optimal solution. An overview of simplex
ASWM (CH1-
Algorithm and computing procedure, Duality and shadow prices,
5) TAHA(2-4)
Use of LP optimization software and Excel Solver, Interpretation
of computer solutions including sensitivity analysis and
applications of linear programming. Special cases of LPP
graphically and by simplex algorithm through iteration.
Introduction of integer programming through solver.

Cases (1, 2 & 3): To be given later

III. Transportation and Assignment Problems

5-7 LP formulation of the transportation problem, Tableau
formulation, balanced and unbalanced transportation problem.
Developing an initial basic feasible solution, testing for
optimality and carrying out iterative improvements using
duality, Unique and multiple optima, maximization in
Transportation. Use of optimization software, Interpretation of
computer solutions including sensitivity analysis. ASWM -6,19
Assignment problems – formulation and solution, The assignment TAHA(5)
problem and the Hungarian method of solving the assignment
problem, unbalanced assignment problems, Use of computer
software for solving transhipment and assignment problems,
application of transhipment and assignment problems.

Cases (4 ,5 & 6): To be given later

IV. Integer Programming

8 Integer programming; Understanding the need of integer

programming; Types of integer programming- pure, mixed and
non-zero; Solution of integer programming maximization ASWM -7
problem using Branch and Bound method. Computation using
solver and interpretation of results. TAHA(8)

Research Article, simulation game will be given in class

V. Queuing Theory

9-10 Characteristics of queuing systems, Poisson process and

exponential distribution, Single-channel queuing model with
ASWM -11
Poisson arrivals and exponential service time, Multiple-channels
with Poisson arrivals and exponential service times, use of TAHA(16)
computer software for analysis of queuing systems, Queuing
decision models.

Case (9 &10): To be given later

VI. Game Theory

11- Introduction to decision analysis; Decision analysis under

12 deterministic setup; Decision analysis under uncertainty and
risk. ASWM -13, 5.4

Introduction to Game theory; Formulation of two-person, zero- TAHA(13)

sum games, graphical/ LPP solution of 2Xn and mX2 and mXn
zero sum games.

VII. Analytical Hierarchy Process

13 ASWM-14
Scoring Models, Analytical Hierarchy Process
 Case (11): To be given later
VIII. Simulation

14 Scenario building and Simulation, Advantages and disadvantages

of Simulation, Types of simulation, Generation of random
ASWM-12
phenomena, Monte Carlo simulation, Process simulation,
Practical applications of simulation. TAHA- 17

Case(12): To be given later

15 Case analysis and presentations

Total 15 Session in hours 30

Website references

Site Content

www.lindo.com LINDO System: Optimization software

www.optiriskindia.com Optimization suite: AMPL Studio + FortMP (Deterministic);

AMPL Studio + FortSP (Stochastic)

www.ample.com Optimization software; CPLEX and MINOS are solvers

www.sas.com Statistical Analysis System web site

www.informs.org Institute for Operations Research and Management Science

www-01.ibm.com IBM ILOG CPLEX Optimizer

www.treeplan.com Decision Toolkit (RiskSim, SensIt, TreePlan)

www.solver.com Premium solver web site

http://faculty.umf.maine.edu Articles on applications of OR

http://interfaces.journal.informs.org Articles of Interfaces