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Operation Research
During World War II
The British military brought together a group of
scientists
to allocate insufficient resources
o for example, food, medics, weapons, troops, etc.
in the most effective way possible to different
military operations.Operation Research
e@ Operation research is the application of method of
science to complex problems in the direction and
management of large systems of men, machine,
materials, and money in industry, business,
government and defence.
e The purpose is to help management in determining its
policy and action scientifically. - OR Society UKOperation Research
OR is concerned with scientifically deciding how to
best design and operate man-machine systems that
usually require the allocation of scarce resources.
o OR Society America
OR is the art of finding bad answers to problems which
otherwise have worse answers
Use of Scientific method
Helps in better and improved decision makingOperation Research
Different Techniques of OR for Decision Making
Linear Programming
Transportation Problem
Assignment Model
Game Theory
Sequencing and Queuing Theory
Replacement Problem
Project Management (CPM, PERT)Operation Research
e A key person in the post war development of OR was
George B Dantzing
e Develop simplex method for solving Linear
programming problem in 1947
e@ Operation Research Society of America (ORSA)
founded in 1952,Operation Research
e In 1952, The Institute of Management Science (TIMS) was
founded as international society to identify, extend and unify
scientific knowledge pertaining to management
e At the same time, Prof. R S Verma also set up an OR team at
Defence Science Laboratory for Solving problems of store,
purchase and planning.
e In India, OR came into existence in 1949, when an OR unit
was established at Regional Research Laboratory, Hyderabad
for planning and Organising Research.Application/Use/Scope
@ Agricultural Optimum distribution of water, optimum distribution of land
to crop,
e Government : Urban and housing problems, Police control, ste.
e Industry/Business
© Finance and Accounting
) Marketing
Purchasing and Procurement
Facilities Planning
Manufacturing,
> Personnel Management
e Defence Which course of action to be used during warDecision Making
the selection of a course of action from among two
or more possible options
all about choosing from the available options.
The better choices you make, the better
decision-maker you'll become.
A decision-making process is a series of steps
taken by an individual to determine the best
option or course of action to meet their needs.Decision Making Environment
e@ the environment in which a decision is made.
© the information available,
© knowledge of the situation,
o nature of the problem, and
oO whether there’s a certainty, uncertainty,
or risk to which the decision is made
under.Decision Making Environment
There are three types of Decision Making Environments:
e Certainty
e Uncertainty
e Risk SituationsDecision Making Under Certainty
Under conditions of certainty,
© accurate, measurable, and reliable information on
which to base decisions is available.
There is only one outcome of each alternative
Safest decision-making environment and,
consequently, the least risky.Decision Making Under Certainty
Under conditions of certainty,
© accurate, measurable, and reliable information on
which to base decisions is available.
There is only one outcome of each alternative
Safest decision-making environment and,
consequently, the least risky.Decision Making Under Certainty
Techniques
e Linear Programming
Queuing Model
Inventory Model
Capital Budgeting
BEP AnalysisDecision Making Risk Situations
e the decision maker has incomplete information
about available alternatives but has a good idea of
the probability of outcomes for each alternative.
e Multiple outcome for each alternative with known
probability of occurrence of each outcome
e Such decisions are associated with events that could
either be very successful or quite disastrous for the
organization.Decision Making Under Uncertainty
e The decision-maker is not aware of all available
alternatives, the risks associated with each, and the
consequences of each alternative or their probabilities.
e@ Multiple outcome of each alternative and probability is
unknown
e For Example,
o A Grocery shop owner must decide how many packets of
milk to purchase every day in the face of uncertain demandMODEL
Definition — A model is an ideal representation of a real life system. System can be a
uel Lepresentatian Ot a Teal iie;sy ores
problem, process, operation, object or event
Examples — Photographs, Roadmap, accounting statements like Profit and Loss account and
balance sheet are all models since they partially represents the reality.
Types of Models
There are many ways to classify models
1. Classifications based on Functions
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© ChataPt
In Linear Programming (LP), the
graphical method is a visual way to
solve two-variable linear programming
problems. It is particularly useful when
dealing with problems that involve only
two decision variables. Here are the
basic steps of the graphical method:
i. Objective Function Representation:
* Represent the objective function as
a straight line on a graph. The
coefficients of the decision
variables °’ 2rmine the slope of
this line.
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3. Feasible Region Identification:
* Identify the feasible region, which is
the area where all constraints
overlap.
4. Optimal Solution Determination:
* The point where the objective
function line enters the feasible
region and is tangent to it (touches
but doesn't cross) represents the
optimal solution.
5. Objective Function Value Calculation:
* Calculate the objective function
value at the optimal solution point.
The graphical \ :hod is intuitive and
provides a visual understanding of the
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provides a visual understanding of the
problem. However, it is limited to two-
dimensional problems and becomes
impractical for problems with more than
two decision variables. In such cases,
algebraic methods like the Simplex
method are more commonly used.
Keep in mind that the graphical method
is best suited for educational purposes
and gaining a conceptual
understanding of linear programming.
In real-world applications with more
complex problems, software tools and
algorithms an pically employed.
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Yo Unatur i
The graphical method in Linear
Programming (LP) has several
characteristics:
1. Applicability to Two Variables:
* The graphical method is most
applicable when dealing with linear
programming problems involving
only two decision variables. It
becomes impractical for problems
with more than two variables.
2. Visual Representation:
* It provides a visual representation
of the pro! v n, making it easier to
understana and explain the solution
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3. Feasible Region Determination:
* The method helps in identifying the
feasible region, which is the set of
solutions that satisfy all constraints.
This region is determined by the
intersection of constraint lines.
4. Optimal Solution at Intersection:
* The optimal solution to the linear
programming problem is found at
the corner point where the objective
function line touches the feasible
region. This point represents the
maximum or minimum value of the
objective frsction.
5. Limited to Lin-ur Constraints:
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dimensional graph.
6. Inapplicability to Unbounded
Solutions:
* The method assumes that feasible
regions and solutions are bounded.
If the feasible region is unbounded,
the graphical method may not
provide a clear solution.
‘7. Educational Tool:
* While the graphical method is a
practical approach for learning and
teaching linear programming
concepts, it is not commonly used
in practice LV + solving large, real-
world probiems due to its
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8. Limited for Sensitivity Analysis:
* Itis less suitable for sensitivity
analysis, which involves examining
how changes in the coefficients of
the objective function or constraints
affect the optimal solution. Other
methods, like the Simplex method,
are more suitable for sensitivity
analysis.
In summary, the graphical method is a
valuable tool for introductory
understanding of linear programming,
especially for -=~blems with two.
variables. Howe ver, for more complex
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© ChatGPT
The Simplex method is an algorithm
used to solve linear programming (LP)
problems. lt was developed by George
Dantzig in 1947 and remains one of the
most widely used methods for solving
LP problems. The Simplex method
works by iteratively improving the
solution at each step until an optimal
solution is reached. Here's a brief
overview of the steps involved:
i. Standard Form:
* Start with a linear programming
problemi L \ndard form, where
the objective is to maximize (or
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i. Standard Form:
* Start with a linear programming
problem in standard form, where
the objective is to maximize (or
minimize) a linear function subject
to linear equality constraints.
2. Initial Feasible Solution:
* Begin with an initial feasible
solution. This solution must satisfy
the equality constraints, and non-
basic variables are typically set to
zero.
3. Optimality Test:
* Check wh y, »rthe current solution
is optimal. If the coefficients of the
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zero.
3. Optimality Test:
* Check whether the current solution
is optimal. If the coefficients of the
objective function for all non-basic
variables are non-negative (for
maximization problems) or non-
positive (for minimization
problems), the solution is optimal.
4. Pivot Operation:
* If the solution is not optimal, select
a variable to enter the basis (non-
basic to basic) and a variable to
leave the , is (basic to non-basic).
This choice 1s based on the entering
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test.
5. Update the Solution:
* Adjust the values of the basic and
non-basic variables to obtain a new
feasible solution. This is done
through elementary row operations.
6. Repeat:
* Repeat steps 3 to 5 until an optimal
solution is reached. The algorithm
ensures that at each iteration, the
objective function value improves,
moving towards the optimum.
‘7. Termination:
* The algor’ Vv terminates when the
optimality conditions are met, and
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* The algorithm terminates when the
optimality conditions are met, and
the current solution is optimal.
The Simplex method efficiently explores
the feasible region of a linear
programming problem by moving from
one vertex to another along the edges.
While it is effective for small to
moderate-sized problems, for large-
scale problems, more advanced
algorithms or optimization software
may be preferred.
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© ChataPt
The Simplex method in linear
programming (LP) has several
characteristics:
1. Iterative Process:
* The Simplex method is an iterative
process that systematically moves
from one feasible solution to
another, improving the objective
function value at each step.
2. Optimality Test:
* Itincludes an optimality test at each
iteration to determine whether the
current sc J >nis optimal. The
method continues until an optimal
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3. Movement Along Edges:
* The method moves along the edges
of the feasible region, starting from
an initial feasible solution and
progressing toward the optimal
solution by adjusting the values of
decision variables.
4. Variable Selection:
* Variables are selected to enter or
leave the basis in a way that
improves the objective function.
This selection is based on the
negative coefficients of the entering
variable ir Lv objective function
and the minimum ratio test for the
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leaving variable.
5. Efficiency for Small to Moderate
Problems:
* The Simplex method is effective for
small to moderate-sized linear
programming problems. However,
for large-scale problems, more
advanced algorithms may be more
efficient.
6. Bounded Feasible Region:
* The method assumes that the
feasible region is bounded, and the
solution space is finite. This
assumptle- sures the algorithm's
convergenuc.
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convergence.
‘7. Gaussian Elimination Technique:
* It employs a Gaussian elimination
technique to perform elementary
row operations, updating the
solution matrix to achieve a new
feasible solution.
8. Initialization:
* Requires an initial feasible solution
to begin the iterations. This initial
solution can be obtained by setting
non-basic variables to zero.
9. Degeneracy Handling:
* The Simp! v method may
encounter degeneracy, where the
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@ You
The big M method in LP model
© ChataPt
The Big M method is an extension of the
Simplex method used to solve linear
programming (LP) problems,
particularly when dealing with problems
that involve inequality constraints. The
Big M method introduces artificial
variables to convert inequality
constraints into equality constraints,
making them compatible with the
Simplex meth. Here are the key steps
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&@ cnavri
The Big M method is an extension of the
Simplex method used to solve linear
programming (LP) problems,
particularly when dealing with problems
that involve inequality constraints. The
Big M method introduces artificial
variables to convert inequality
constraints into equality constraints,
making them compatible with the
Simplex method. Here are the key steps
involved in the Big M method:
i. Convert Inequality Constraints:
* Transform v ch inequality
constraint into an equality
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nivurveu ut
IS Diy wisi.
1. Convert Inequality Constraints:
* Transform each inequality
constraint into an equality
constraint by introducing a non-
negative "slack" or "surplus"
variable.
2. Introduce Artificial Variables:
* Introduce artificial variables for
each inequality constraint to make
the system of equations feasible.
Assign a large positive constant (M)
as the coefficient for these artificial
variables. v
3. Formulate the initial Tableau:
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tne equations.
4. Pivot Operations:
* Perform pivot operations using the
Simplex method to eliminate
artificial variables from the basis.
Continue iterating until all artificial
variables are removed from the
basis.
5. Optimality Test:
* Apply the optimality test to check
whether the solution is optimal for
the original problem. If not, continue
the iterations.
6. Remove Artificial Variables:
* Ifartificial ables remain in the
basis after the optimality test,
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7. Final Solution:
* Once the artificial variables are
removed, the solution to the
modified system represents the
solution to the original LP problem.
8. Adjust Objective Function:
* Adjust the coefficients in the
objective function to account for the
artificial variables. These
coefficients were set to M during
the process, so they need to be
updated.
9. Final Optimality Test:
* Perform a final optimality test to
ensure the “tution obtained is
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ensure the solution obtained is
optimal for the original problem.
The Big M method is a technique to
handle inequality constraints within the
framework of the Simplex method.
However, it has some limitations, such
as sensitivity to the choice of the big M
constant and potential numerical
instability. Interior-point methods are
alternatives that are often used in
practice, especially for large-scale
linear programming problems.
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Duality is a fundamental concept in
linear programming (LP) that
establishes a relationship between two
related optimization problems: the
primal problem and the dual problem.
Here are key aspects of duality in LP:
1. Primal Problem:
* The primal problem is the original
linear programming problem that
seeks to maximize or minimize an
objective function subject to a set of
linear constraints.
2. Dual Problem:
* The dual } \ lem is derived from
the primal problem. For a
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2. Dual Problem
* The dual problem is derived from
the primal problem. For a
maximization (minimization) primal
problem, a minimization
(maximization) dual problem is
formulated. The variables in the
dual problem correspond to the
constraints of the primal problem.
3. Objective Functions:
* The objective function of the dual
problem is formed by the
coefficients of the primal problem's
constrain’ Lv imilarly, the
coefficients of the primal problem's
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constraints in the dual problem.
4. Feasibility:
* Ifa feasible solution exists for the
primal problem, it implies that there
is a feasible solution for the dual
problem and vice versa. This is
known as the Weak Duality
Theorem.
5. Optimality:
* If an optimal solution exists for the
primal problem, the optimal value of
the primal objective function is
equal to the optimal value of the
dual objective function. This is
known as wv Strong Duality
Thanram
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6. Dual Simplex Method:
* The Simplex method can be applied
to solve both the primal and dual
problems simultaneously. The Dual
Simplex method is an extension of
the Simplex method that exploits
the duality relationship.
‘7. Complementary Slackness:
* The principle of complementary
slackness states that for an optimal
solution pair (primal and dual), the
product of the slack variables in the
primal and dual problems is zero.
8. Economic Interpretation:
* The dual\ \ bles in the dual
problem often have an economic
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propiem.
9. Sensitivity Analysis:
* Duality provides insights into the
sensitivity of the optimal solution to
changes in the coefficients of the
objective function or constraints in
both the primal and dual problems.
Understanding duality is crucial for
gaining insights into the structure of
linear programming problems,
interpreting the meaning of solutions,
and conducting sensitivity analysis. It
plays a significant role in the
development L ‘gorithms and
techniques for solving linear
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Go Medium : x
Primal Problem ES
(i) Objectiveis to minimize (i). Objectiveis to maximize
(il) ith primal variable, x; (il) ith dual constraint
(iil). jth. primal constraint (iil) jth dual variable, y,
(wv) Bgignal variable x; unrestrictedin sign (jv) Dual constraint is = type
\ constraint jis = type (v) Dual variable y; unrestricted in sign
6
‘constraints type (vi) Dual constraints < type
pyomo 101 — A Dual
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The primal and dual linear
programming (LP) models are two
related optimization problems derived
from each other. Here are the key
differences between the primal and
dual LP models:
1. Objective Function:
* Primal: In the primal model, the
objective is to either maximize or
minimize a linear function.
Dual: In the dual model, the
objective is to either minimize or
maximize a linear function. The dual
objective \ tion is derived from
the constraints of the primal
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problem.
2. Decision Variables:
* Primal: The decision variables in the
primal model represent the
quantities to be determined or
optimized.
Dual: The dual variables in the dual
model correspond to the
constraints of the primal model.
They are associated with the
resources or constraints of the
primal problem.
3. Constraints:
* Primal: The constraints in the
v
primal mo. . represent limitations
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priniar prowiciin.
3. Constraints:
* Primal: The constraints in the
primal model represent limitations
on resources or activities.
* Dual: The dual constraints are
derived from the coefficients of the
primal objective function. Each
constraint in the primal becomes a
variable in the dual, and vice versa.
4. Direction of Optimization:
* Primal: The primal model is
concerned with either maximizing
or minimizing the objective
function. |
* Dual: The dual model is concerned
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* Dual: The dual model is concerned
with minimizing or maximizing a
cost or resource requirement
associated with the constraints.
5. Feasibility and Optimality:
* Primal: Feasible solutions to the
primal model satisfy the
constraints, and an optimal solution
maximizes or minimizes the
objective function.
Dual: Feasible solutions to the dual
model satisfy its constraints, and an
optimal solution maximizes or
minimizes the dual objective
function.
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function.
6. Shadow Prices:
* Primal: The shadow prices (dual
values) in the primal model
represent the marginal value of
additional resources or the rate of
change in the objective function per
unit change in the right-hand side of
constraints.
Dual: The shadow prices (dual
values) in the dual model represent
the marginal cost or value of
relaxing the constraints in the
primal moe'~",
7. Economic Inte. pretation:
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primal model.
7. Economic Interpretation:
* Primal: The primal variables often
have an economic interpretation
related to quantities or activities.
* Dual: The dual variables often have
an economic interpretation related
to prices, costs, or resource
availability.
8. Optimal Solutions:
* Primal: An optimal solution to the
primal problem corresponds to an
optimal solution in the dual
problem, and their objective values
are equal. v
* Dual: An ontimal solution ta the
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Integer Programming (IP) is an
extension of linear programming (LP) in
which some or all of the decision
variables are required to take integer
values. In linear programming, variables
can take any real value within a given
range, but in integer programming, the
variables are restricted to being
integers. The two main types of integer
programming are:
i. Pure Integer “ygramming (PIP):
* In PIP, all decision variables must
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integers. The two main types of integer
programming are:
i. Pure Integer Programming (PIP):
* In PIP, all decision variables must
take integer values. Mathematically,
it is represented as follows:
az,€Z foralli=1,2,...,n
where ; is an integer variable.
2. Mixed Integer Programming (MIP):
* In MIP, some variables are required
to take integer values, while others
can take continuous (non-integer)
values. Mathematically, it is
represent.“ as follows:
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Post-optimality analysis in the context
of linear programming refers to
examining the sensitivity of the solution
and the impact of changes to the
coefficients of the objective function or
the right-hand side values of the
constraints after obtaining the optimal
solution. This analysis helps in
understanding the robustness of the
solution and provides insights into how
changes in the input parameters affect
the optimal solution.
Here are key bs dots of post-optimality
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