Operations Research

BMC - 515

Manu K. Gupta
Department of Management Studies,

IIT Roorkee.

Session 1
Welcome

• Welcome to BMC 515!

1
Welcome

• Welcome to BMC 515!

• “Operations Research”

1
Welcome

• Welcome to BMC 515!

• “Operations Research”
• Very broad topic.

1
Welcome

• Welcome to BMC 515!

• “Operations Research”
• Very broad topic.
• Several departments across the globe.

1
Welcome

• Welcome to BMC 515!

• “Operations Research”
• Very broad topic.
• Several departments across the globe.
• ORFE, Princeton.
• ORIE, Cornell.
• IEOR, Columbia.
• ORC, MIT.
• IEOR, IIT Bombay.

1
Welcome

• Welcome to BMC 515!

• “Operations Research”
• Very broad topic.
• Several departments across the globe.
• ORFE, Princeton.
• ORIE, Cornell.
• IEOR, Columbia.
• ORC, MIT.
• IEOR, IIT Bombay.
• Acknowledgment:
• Prof. Sachin Jayaswal (IIMA)
• Prof. Sumit Kumar Yadav (IITR)

1
Welcome

• Welcome to BMC 515!

• “Operations Research”
• Very broad topic.
• Several departments across the globe.
• ORFE, Princeton.
• ORIE, Cornell.
• IEOR, Columbia.
• ORC, MIT.
• IEOR, IIT Bombay.
• Acknowledgment:
• Prof. Sachin Jayaswal (IIMA)
• Prof. Sumit Kumar Yadav (IITR)

1
What is Operations Research?

Discipline that deals with the development and application of advanced

analytical methods to improve decision-making.

- INFORMS

2
Companies Interested in OR expertise in India

• Consultancy:
• BCG, McKinsey, Bain & Co, TCS, Wipro, Infosys,...
• Big 4 - EY, PWC, KPMG, Deloitte
• ITC Infotech, FICO
• Retail
• Amazon, Flipkart, Target, Walmart, Udaan, Reliance
• Product
• Dell, Apple, Intel, Micron, Bayer
• Start-ups
• Optym, JDA, o9, Coupa, Ormae
• R&D:
• Mercedes, Ford, TCS Innovation labs, Microsoft, IBM
• Airlines, FMCG, Logistics etc.

3
Resources

1. OR Stack exchange
• https://or.stackexchange.com/
2. Yet Another Math Programming Consultant
• http://yetanothermathprogrammingconsultant.blogspot.com/
3. INFORMS case studies
• https://pubsonline.informs.org/page/ited/cases

4
Optimization

5
Optimization

Let’s play a game!

5
Optimization

Let’s play a game!

https://burrito.gurobi.com/

5
Optimization

Let’s play a game!

https://burrito.gurobi.com/

What is Gurobi?

5
Optimization

Let’s play a game!

https://burrito.gurobi.com/

What is Gurobi?
Dr. Zonghao Gu, Dr. Edward Rothberg, and Dr. Robert Bixby founded
Gurobi in 2008

5
Impact of Optimization

Refer impact document

Impact Statement - Armed Forces of India
The analysis indicated possibility of achieving an optimal fuel consumption
resulting in substantial cost savings and several secondary advantages accrued
due to savings in aircraft flying hours and intangibles effects including
reduction of crew fatigue. The implementation of the LP model has led to cost
savings of approximately Rs 2000 Crores. The developed model provides a new
framework to plan and execute frequent military exercises in a more effective
and efficient environment with significant enhancement in operational
preparedness of the armed forces.

6
Impact Statement - John Deere India Private Limited

The business deployment success story of this model on 9000 parts, in John
Deere India Pune factory, is equivalent to a strategic cost benefit of $ 1,34,000
(= 1,15,00,000 INR).

7
Linear Programming formulations
Product mix problem in a sweets shop.

Prakash sweets in Roorkee can make two types of sweets (A and B).
They use two flour and sugar to make A and B.

• One packet of A needs 3kg of flour and 3kg of sugar.

• One packet of B needs 3kg of flour and 4kg of sugar.

Prakash Sweets has 21 kg of flour and 28 kg of sugar. These sweets are

sold at profit of Rs 100 and 90 per packet respectively. Find the best
product mix.

8
Product mix problem in a sweets shop.

Prakash sweets in Roorkee can make two types of sweets (A and B).
They use two flour and sugar to make A and B.

• One packet of A needs 3kg of flour and 3kg of sugar.

• One packet of B needs 3kg of flour and 4kg of sugar.

Prakash Sweets has 21 kg of flour and 28 kg of sugar. These sweets are

sold at profit of Rs 100 and 90 per packet respectively. Find the best
product mix.

Can you formulate this problem as a mathematical program?

8
Mathematical Programming formulation

1. First, define your decision variables.

9
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of packet A and B that you
would like to produce. Give mathematical notations to these
variables.

9
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of packet A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:

9
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of packet A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:
• Then, write down system constraints:‘System constraints’ are the
relationships between different variables that specify various
constraints/limits or other characteristics of the system. In this case,
the constraints are the availability of flour and sugar along with the
requirements to produce packet A and B. Express them
mathematically.

9
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of packet A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:
• Then, write down system constraints:‘System constraints’ are the
relationships between different variables that specify various
constraints/limits or other characteristics of the system. In this case,
the constraints are the availability of flour and sugar along with the
requirements to produce packet A and B. Express them
mathematically.
3. Finally, write the objective function:

9
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of packet A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:
• Then, write down system constraints:‘System constraints’ are the
relationships between different variables that specify various
constraints/limits or other characteristics of the system. In this case,
the constraints are the availability of flour and sugar along with the
requirements to produce packet A and B. Express them
mathematically.
3. Finally, write the objective function:
• ‘Objective function’ is the ultimate objective that you have. It is
against this objective that the optimal decision variables are to be
calculated. In this case, the objective is to maximize the profit.
Write it mathematically.
9
Production Planning Problem1

Please read the problem statement.

1 Source: https://medium.com/@rahulpandey.igsa/
opining- on-optimization- 1- a- simple- production- planning- problem- to-learn- first- steps- of- modeling- ccaf6369bf2f

10
Production Planning Problem1

Please read the problem statement.

Figure 1: Production planning problem

1 Source: https://medium.com/@rahulpandey.igsa/
opining- on-optimization- 1- a- simple- production- planning- problem- to-learn- first- steps- of- modeling- ccaf6369bf2f

10
Mathematical Programming formulation

1. First, define your decision variables.

11
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of products A and B that you
would like to produce. Give mathematical notations to these
variables.

11
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of products A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:

11
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of products A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:
• Then, write down system constraints:‘System constraints’ are the
relationships between different variables that specify various
constraints/limits or other characteristics of the system. In this case,
the constraints are the commitments of suppliers and capacity limits
of operations. Express them mathematically.

11
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of products A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:
• Then, write down system constraints:‘System constraints’ are the
relationships between different variables that specify various
constraints/limits or other characteristics of the system. In this case,
the constraints are the commitments of suppliers and capacity limits
of operations. Express them mathematically.
3. Finally, write the objective function:

11
Mathematical Programming formulation

1. First, define your decision variables.

• ‘Decision variables’ are the parameters that you want the model to
decide. In this case, it is the quantities of products A and B that you
would like to produce. Give mathematical notations to these
variables.
2. Then, write down system constraints:
• Then, write down system constraints:‘System constraints’ are the
relationships between different variables that specify various
constraints/limits or other characteristics of the system. In this case,
the constraints are the commitments of suppliers and capacity limits
of operations. Express them mathematically.
3. Finally, write the objective function:
• ‘Objective function’ is the ultimate objective that you have. It is
against this objective that the optimal decision variables are to be
calculated. In this case, the objective is to maximize the profit.
Write it mathematically.

11
 Thank you!
[email protected]

11