Q.1.

Explain how to transform an unbalanced transportation problem into

a balanced transportation problem where the demand of warehouses is
satisfied by the supply of factories

Ans.The transportation problem is one of the subclasses of linear

programming problem where the objective is to transport various quantities
of a single homogeneous product that are initially stored at various origins,
to different destinations in such a way that the total transportation is
minimum.
F.I. Hitchaxic developed the basic transportation problem in 1941. However it
could be solved for optimally as an answer to complex business problem only in
1951, when George B. Dantzig applied the concept of Linear Programming in
solving the Transportation models.
Transportation models or problems are primarily concerned with the optimal
(best possible) way in which a product produced at different factories or
plants (called supply origins) can be transported to a number of warehouses
(called demand destinations). The objective in a transportation problem is to
fully satisfy the destination requirements within the operating production
capacity constraints at the minimum possible cost. Whenever there is a
physical movement of goods from the point of manufacture to the final
consumers through a variety of channels of distribution (wholesalers,
retailers, distributors etc.), there is a need to minimize the cost of
transportation so as to increase the profit on sales. Transportation problems
arise in all such cases. It aims at providing assistance to the top
management in ascertaining how many units of a particular product should
be transported from each supply origin to each demand destinations to that
the total prevailing demand for the company’s product is satisfied, while at
the same time the total transportation costs are minimized.

Mathematical Model of Transportation Problem

Mathematically a transportation problem is nothing but a special linear
programming problem in which the objective function is to minimize the cost
of transportation subjected to the demand and supply constraints.
Let ai = quantity of the commodity available at the origin i,
bj = quantity of the commodity needed at destination j,
cij = transportation cost of one unit of a commodity from origin I
to destination j,
and xij = quantity transported from origin I to the destination j.
Mathematically, the problem is
Minimize z = ΣΣ xij cij
S.t.
Σxij = ai, i= 1,2,…..m
Σxij = bj, j= 1,2,…..,n
and xij ≥ 0 for all i and j .
Let us consider an example to understand the formulation of mathematical
model of transportation problem of transporting single commodity from
three sources of supply to four demand destinations. The sources of
supply can be production facilities, warehouse or supply point,
characterized by available capacity. The destination are consumption
facilities, warehouse or demand point, characterized by required level of
demand.
FORMULATION OF TRANSPORATATION PROBLEM AS A

LINEAR PROGRAMMING MODEL

Let P denote the plant (factory) where the goods are being
manufactured & W denote the warehouse (godown) where the
finished products are stored by the company before shipping to
various destinations.
Further let, xij = quantity (amount of goods) shipped from plant Pi to the
warehouse Wj, and
Cij = transportation cost per unit of shipping from plant Pi to the
Warehouse Wj.
Objective-function. The objection function can be represented as:
Minimize Z = c11x11 + C12x12 + C13x13 (i.e. cost of shipping
+ c21x21 + c22x22 + c23x23 from a plant
+ c31x31 + c32x32 + c33x33 x11 + x12 + x13 = S1
to the ware house) x21 + x22 + x23 = S2
Supply constraints. x31 + x32 + x33 = S3
Demand constraints. x11 + x21 + x31 = D1
x21 + x22 + x23 = D2
x31 + x32 + x33 = D3

Q.2. Explain how the profit maximization transportation problem into a balanced

transportation problem where the demand of warehouses is satisfied by the supply

of factories.

Ans:
Operations Research is an interdisciplinary branch of applied
mathematics and formal science that uses methods such as
mathematical modelling, statistics, and algorithms to arrive at optimal or
near optimal solutions to complex problems. It is typically concerned with
optimizing the maxima (profit, assembly line performance, crop yield,
bandwidth, etc) or minima (loss, risk, etc.) of some objective function.
Operations research helps management achieve its goals using scientific
methods. The terms operations research and management science are
often used synonymously. When a distinction is drawn, management
science generally implies a closer relationship to the problems of
business management. The field of operations research is closely related
to Industrial engineering. Industrial engineers typically consider
Operations Research (OR) techniques to be a major part of their toolset.
Some of the primary tools used by operations researchers are statistics,
optimization, probability theory, queuing theory, game theory, graph
theory, decision analysis, and simulation. Because of the computational
nature of these fields, OR also has ties to computer science, and
operations researchers use custom-written and off-the-shelf software.
Operations research is distinguished by its frequent use to examine an
entire management information system, rather than concentrating only
on specific elements (though this is often done as well). An operations
researcher faced with a new problem is expected to determine which
techniques are most appropriate given the nature of the system, the
goals for improvement, and constraints on time and computing power.
For this and other reasons, the human element of OR is vital. Like any
other tools, OR techniques cannot solve problems by themselves.
Scope of operation Research:
Examples of applications in which operations research is currently used
include:
1. Critical path analysis or project planning: identifying those
processes in a complex project which affect the overall duration
of the project.
2. Designing the layout of a factory for efficient flow of materials.
3. Constructing a telecommunications network at low cost while
still guaranteeing QoS (quality of service) or QoS (Quality of
Experience) if particular connections become very busy or get
damaged.
4. Road traffic management and 'one way' street allocations i.e.
allocation problems.
5. Determining the routes of school buses (or city buses) so that as
few buses are needed as possible.
6. Designing the layout of a computer chip to reduce
manufacturing time (therefore reducing cost) Managing the flow
of raw materials and products in a supply chain based on
uncertain demand for the finished products.
7. Efficient messaging and customer response tactics.
8. Robotizing or automating human-driven operations processes.
9. Globalizing operations processes in order to take advantage of
cheaper materials, labour, land or other productivity inputs
Managing freight transportation and delivery systems
(Examples: LTL Shipping, intermodal freight transport).
10. Scheduling.
11. Personnel staffing.
12. Manufacturing steps.
13. Project tasks.
14. Network data traffic: these are known as queuing models or
queueing systems.
15. Sports events and their television coverage blending of raw
materials in oil.
16. Refineries determining optimal prices, in many retail and B2B
settings, within the disciplines of pricing science.
Operations research is also used extensively in government
where evidence-based policy is used.
Q. 3. Illustrate graphically the following special cases of Linear programming
problems:
i) Multiple optimal solutions, ii) No feasible solution, iii) Unbounded problem.
Ans:
Operation Research is a scientific method of providing executive
departments with a quantitative basis for decisions regarding the
operations under their control. Morse & Kimball Operations research is a
scientific approach to problem solving for executive management. – H.M.
Wagner Operations research is an aid for the executive in making these
decisions by providing him with the needed quantitative information
based on the scientific method of analysis. The mission of Operations
Research is to serve the entire Operations Research (OR) community,
including practitioners, researchers, educators, and students. Operations
Research, as the flagship journal of our profession, strives to publish
results that are truly insightful. Each issue of Operations Research
attempts to provide a balance of well-written articles that span the wide
array of creative activities in OR. Thus, the major criteria for acceptance
of a paper in Operations Research are that the paper is important to
more than a small subset of the OR community, contains important
insights, and makes a substantial contribution to the field that will stand
the test of time. Operational research, also known as operations
research, is an interdisciplinary branch of applied mathematics and
formal science that uses advanced analytical methods such as
mathematical modelling, statistical analysis, and mathematical
optimization to arrive at optimal or near-optimal solutions to complex
decision-making problems. It is often concerned with determining the
maximum (of profit, performance, or yield) or minimum (of loss, risk, or
cost) of some real-world objective. Originating in military efforts before
World War II, its techniques have grown to concern problems in a variety
of industries. Operational research, also known as OR, is an
interdisciplinary branch of applied mathematics and formal science that
uses advanced analytical methods such as mathematical modelling,
statistical analysis, and mathematical optimization to arrive at optimal or
near-optimal solutions to complex decision-making problems. It is often
concerned with determining the maximum (of profit, performance, or
yield) or minimum (of loss, risk, or cost) of some real world objective.
Originating in military efforts before World War II, its techniques have
grown to concern problems in a variety of industries.
Operational research encompasses a wide range of problem-solving
techniques and methods applied in the pursuit of improved decision-
making and efficiency. Some of the tools used by operational researchers
are statistics, optimization, probability theory, queuing theory, game
theory, graph theory, decision analysis, mathematical modelling and
simulation.
Because of the computational nature of these fields, OR also has strong
ties to computer science. Operational researchers faced with a new
problem must determine which of these techniques are most appropriate
given the nature of the system, the goals for improvement, and
constraints on time and computing power.
Work in operational research and management science may be
characterized as one of three categories:
Fundamental or foundational work takes place in three mathematical
disciplines: probability, optimization, and dynamical systems theory.
Modelling work is concerned with the construction of models, analyzing
them mathematically, implementing them on computers, solving them
using software tools, and assessing their effectiveness with data. This
level is mainly instrumental, and driven mainly by statistics and
econometrics. Application work in operational research, like other
engineering and economics' disciplines, attempts to use models to make
a practical impact on real-world problems.
• The major sub disciplines in modern operational research, as identified
by the journal Operations Research, are:
• Computing and information technologies
• Decision analysis
• Environment, energy, and natural resources
• Financial engineering
• Manufacturing, service sciences, and supply chain management
• Policy modelling and public sector work
• Revenue management
• Simulation
• Stochastic models
• Transportation

Q. 4. How would you deal with the Assignment problems, where a) the objective
function is to be maximized?
b) Some Assignments are prohibited

Ans:-The term system approach implies that each problem should be

examined in its entirely to the extent possible and economically feasible
from the point of view of the overall system of which the problem under
consideration is one part. Under those approaches a manager makes
conscious attempt to understand the relationships among various parts
of the organisation and their role in supporting the overall performance of
the organisation. Operations objective of operations research is to
provide managers of the organisation with a scientific basis for solving
problems involving the interaction of components of the organisation as a
whole. The decision which is best for the organisation as a whole is called
an optimal decision. Operations research tries to find the best decision
relative to a large portion of the total organisation. Hence in operations
research every problem is considered in its totality, i.e. O.R. adopts
systems approach for solving the problem. In other words, “Operations
Research is the scientific study of large systems with a view to identify
problem areas and provide the mangers with a quantitative basis for
decisions which will enhance their effectiveness in achieving the
specified objectives.”
2. Inter-disciplinary Team Approach:
It is an important characteristic of O.R. According to this characteristic,
no single individual can be an expert on all aspects of a problem under
consideration. Thus, O.R. utilizes the inter disciplinary team approach.
Under this approach, a team comprising experts from different disciplines
such as mathematics, statistics, economics, management, computer
science, engineering and psychology, etc. is constituted. Such a team
when confronted with a problem determines its solution by utilizing the
diverse background and skills of the teammates. Every expert of the
team, while solving the problem, tries to abstract the essence of the
problem and then determines whether a similar type of problem has
been dealt by his team or not. If the answer is yes, then it is solution of
the current problem. In this way, each member of the team, by utilizing
his experience and expertise, may be in a position to suggest an
approach to overcome a problem that otherwise may not be possible for
an individual to tackle.
3. Methodological Approach:
O.R. utilizes scientific methods for solving a problem. Specifically, the
process begins with the careful observation and formulation of the
problem. The next step is to construct a scientific model (typically a
mathematical model) that attempts to abstract the essence of the real
problem. From this model, conclusions or solutions are obtained which
are also valid for the real problem. In an interactive fashion, the model is
then verified through appropriate experiments to determine the best or
optional solution to the problem under consideration.
4. Operations economy:
O.R. is a problem solving and a decision making science. Whenever we
have conflicts, uncertainty and complexity in any situation, O.R. can help
in the end to reduce costs and improve profits and effects substantial
“Operations Economy”. Once the old approach of management by intuit
is buried, a scientific approach to decision making is bound to help. Often
the conflicts are so tangled that they defy any intuitive solution, viz., the
marketing function frequently caught up in recoiling the following
conflicting objectives: i) product innovation, ii) high scale volume, iii)
increasing market share, iv) flexibility in the market place, and v)entry
into new markets and revenue markets. It is here that O.R. is likely to
convincingly optimize the total effectiveness.

From all above areas of applications, one may conclude that

operations research can be widely advocate a systems approach for
making timely management decisions and also used as a corrective
measure. O.R. encourages systems approach which concerned with the
cost optimization, and hence we can say: Operation Research advocates
a system approach and is concerned with optimization.

Q. 5. “Simulation is an especially valuable tool in a situation where the mathematics

needed to describe a system realistically is too complex to yield analytical
solutions”.
Elucidate

Ans:-Operations research is today recognised as an applied science

concerned with large number of diverse human activities. To be precise
an operation uses some valuable resources like men, money, machines,
time, effort, etc. The outcome of the operation has also some value. An
operations research worker is required: i) to minimize the input value for
a specific output, or /and ii) to maximize the output value for a specific
input, or /and iii) maximize some function of these values, e. g. the profit
function (difference between output & input values) or return-on-
investment function (ratio of output and input values), etc.

Some of the areas of management where techniques of operations

research are applied are listed below:

1. Finance, Budgeting and Investments:

a) cash flow analysis, long range capital requirements,

investment portfolios, dividend policies, etc.

b) Credit policies, credit risks and delinquent account

procedures.

c) Claim and complaint procedures.

d) Dividend policies, investment and portfolio management,

balance sheet and cash flow analysis.

2. Purchasing, procurement and Exploration:

a) Determining the quality and timing of purchase of raw

materials, machinery, etc.

b) Rules for buying and supplies under varying prices.

c) Bidding policies.

d) Equipment replacement policies.

e) Determination of quantities and timings of purchases.

f) Strategies for exploration and exploitation of new material

source.

3. Production Management:
 a) Product planning:

i) Location and size of warehouses, distribution centres, retail

outlets, etc.

ii) Distribution policy

b) Manufacturing & facility planning:

i) Production scheduling and sequencing

ii) Product scheduling and allocation of resources

iii) Selection & location of factories, warehouses and their sizes

iv) Determining the optimal production mix.

v) Maintenance policies & preventive maintenance.

vi) Scheduling & sequencing the production run by proper

allocation of machines.

4. Marketing Management:

a) Product selection, timing, competitive actions.

b) Advertising strategy & choice of different media of

advertising.

c) Number of salesman, frequency of calling of accounts, etc.

d) Effectiveness of market research.

e) Size of the stock to meet the future demand.

5. Personnel Management:

a) Recruitment policies & assignment of jobs.

b) Selection of suitable personnel with due consideration for age

and skills, etc.

c) Establishing equitable bonus systems.

6. Research & Development:

a) Determination of areas of concentration of research and

development.
 b) Reliability & evaluation of alternative designs.

c) Control of development projects.

d) Coordination of multiple research projects.

e) Determination of time & cost requirements.

From all above areas of applications, one may conclude that

operations research can be widely used in taking timely management
decisions and also used as a corrective measure. The application of this
tool involves certain data and not merely a personality of decision maker,
and hence we can say: Operations Research has replaced management
by personality.
Q.6 Describe Gomory’s method of solving an all-integer programming
problem

Ans.How to convert profit maximization transportation problem to an

equivalent cost minimization transportation problem can be understood
by following Illustration as:
A firm has three factories located in city A, B & C and supplies goods to
four dealers, dealer 1, 2, 3 & 4, spread all over the country. The
production capacities of these factories are 1000, 700 & 900 units per
month respectively. The monthly orders from the dealers are 900, 800,
500 & 400 units respectively. Per unit return (excluding transportation
costs) are Rs. 8, 7 & 9 at the three factories. Unit transportation costs
from the dealers are given below:
Factory Dealers
1 2 3 4
City - A 2 2 2 4
City - B 3 5 3 2
City - C 4 3 2 1
Optimal distribution system to maximize the total r eturn to be
determined.
From the given data, we compute a matrix of net returns as done in table
below;
(Transportation matrix (Net return) for the Maximization
problem)
Factory Dealers Factory
capacity
1 2 3 4
City - A 6 6 6 4 1000
City - B 4 2 4 5 700
City - C 5 6 7 8 900
To convert the given maximization problem to an equivalent
minimization problem, we identify the cell (element) which has the
highest contribution per unit (in this problem C-4 has highest per unit
contribution, Rs.8), and subtract all elements from this highest element.
The resultant matrix is a transportation problem with minimizing
objective function. This has been given in the following table.
(Transportation matrix for the Minimization problem)
Factory Dealers Factory
capacity
1 2 3 4
City - A 2 2 2 4 1000
City - B 4 6 4 3 700
City - C 3 2 1 0 900
 Dealer 900 800 500 400 2600
requirement

The minimization problem is solved as a usual transportation

problem. The resulting optimal solution is also the optimal solution to the
original (maximization) problem. The value of the objective function is
computed by referring the matrix of the maximization problem. It should
be noted that the converted minimization problem will have at least one
element with zero value.
4. Write the difference in the simplex solution procedure for a
maximization problem and a minimization problem of linear
programming.

The difference in the simplex solution procedure for a maximization

problem and a minimization problem of linear programming can be
explained by the steps followed to solve the minimization/ minimization
problem as follows ;

1. Introduce stack variables (Si’s) for “£” type of constraint.

2. Introduce surplus variables (Si’s) and artificial variables (Ai) for “³”
type of constraint.

3. Introduce only Artificial variable for “=” type of constraint.

4. Cost (Cj) of slack and surplus variables will be zero and that of
artificial variable will be “M”

5. Find Zj – Cj for each variable.

6. Slack and artificial variables will form basic variable for the first
simplex table. Surplus variable will never become basic variable for
the first simplex table.

7. Zj = sum of [cost of variable x its coefficients in the constraints –

Profit or cost coefficient of the variable].

8. Select the most negative value of Zj – Cj. That column is called key
column. The variable corresponding to the column will become
basic variable for the next table.

9. Divide the quantities by the corresponding values of the key

column to get ratios; select the minimum ratio. This becomes the
key row. The basic variable corresponding to this row will be
replaced by the variable found in step 6.

10. The element that lies both on key column and key row is
called Pivotal element.

11. Ratios with negative and “a” value are not considered for
determining key row.

12. Once an artificial variable is removed as basic variable, its column

will be deleted from next iteration.

13. For maximisation problems, decision variables coefficient will

be same as in the objective function. For minimisation problems,
 decision variables coefficients will have opposite signs as compared
to objective function.

14. Values of artificial variables will always is – M for both

maximisation and minimisation problems.

15. The process is continued till all Zj – Cj ³ 0.