Unit-2

1.linear programming, Simplex methods and

2.transportation problem.
3. Operation Research - Scope of application
in mining,
4. Linear programming, formulation and
solution,
5.Network planning with special reference to
CPM/PERT,
6.System approach for project scheduling.
 Linear Programming

Linear programming is an optimization method to

maximize (or minimize) an objective function in a given
mathematical model with a set of requirements
represented as linear relationships.
The main steps are:
1) Identify the variables and the constraints.
2) Find the objective function.
3) Graph the constraints and identify the vertices of the
polygon.
4) Test the values of the vertices in the objective function.
 Example
• A company creates square boxes and triangular
boxes. Square boxes take 2 minutes to make
and sell for a profit of $ 4. Triangular boxes take
3minutes to make and sell for a profit of $ 5.
Their client wants at least 25 boxes and at least
5 of each type ready in one hour. What is the
best combination of square and triangular
boxes to make so that the company makes the
most profit from this client?
 Defining mathematically
• The first step in any word problem is defining what we know and what we want to find out. In this case, we know
about the production of two different products which are dependent upon time. Each of these products also makes a
profit. Our goal is to find the best combination of square and triangular boxes so that the company makes the
maximum profit.
• Constraints
(i) First, let’s write down the key all of the inequalities we know. We can do this by considering the problem line by
line. The first line tells us that we have two kinds of boxes, square ones and triangular ones. The second tells us
some information about the square boxes, namely that they take two minutes to make and net $4 profit.
(ii) At this point, we should denote some variables questioned . Let’s let x be the number of square boxes and y be
the number of triangular boxes. These variables are both dependent upon each other because time spent making
one is time that could be spent making the other. Make a note of this so that you do not mix them up.
(iii) Now, we know that the amount of time spent making a square box is 2x.
(iv) Now, we can do the same with the number of triangular boxes, y. We know that each triangular box requires 3
minutes and nets $5. Therefore, we can say that the amount of time spent making a triangular box is 3y.
(v) We also know that both x and y must be greater than or equal to 5 because the client has specified wanting at
least 5 of each types.
(vi) Finally, we know that the client wants at least 25 boxes. This gives us another relationship between the number
of square and triangular boxes, namely x+y≥25.
(vii) Thus, overall, we have the following constraints:
We have to maximise z= 4x+5y i.e. Combined profit.
2x+3y≤60 ----- ( 1 ) as these products are achieved in one hour.
x≥5
y≥5
x+y≥25. -------(2)
 Values of X & Y

Values of X & Y can be calculated from

simultaneous equations method of solution.
2X+3Y = 60 minus
X+Y = 25 , or 2X+2Y =50
---------------------------------
Y = 10,
Thus , X+10 = 25,
Or, X= 15.
 Graphical solution

PROFIT=LOSS= 0 ZONE

PROFIT ZONE

BREAKEVEN POINT
LOSS ZONE

The optimum solution is X=15 nos. & Y=10 nos.

None of the above quantities should exceed their respective values to maintain the
maximum profit.
A such , these quantities cannot be lower than their minimum values of 5 each.
 The Objective Function
• Our objective, or goal, is to find the maximised profit.
Therefore, our objective function should define the profit.
• In this case, profit depends on the number of square
boxes created and the number of triangular boxes
created. Specifically, this company’s profit is P=4x+5y.
• Note that this function is a line, not an inequality. In
particular, it looks like a line written in standard form.
• Now, to maximize this function, we need to find the
graphical region represented by our constraints. Then, we
need to test the vertices of this region in the function P.
 Operation Research

Operations research (OR) is an analytical method of

problem-solving and decision-making that is useful in the
management of organizations. In operations research,
problems are broken down into basic components and
then solved in defined steps by mathematical analysis.
Used models are based on:-
(i) Algebric Linear equations- Max. no. of variables is 3 to
comply within 3- dimension x-y-z.
(ii) Algebric Matrix- Simplex method for more than 3-
variables.
(iii) Transportation Problems.
(iv) Statistics- Standard Deviation & Probabilities
(v) Set Theory
Simplex method
Simplex method
 Simplex Method contd..1
• First, the method assumes that an extreme point is known. (If no
extreme point is given, a variant of the simplex method, called Phase
I, is used to find one or to determine that there are no feasible
solutions.) Next, using an algebraic specification of the problem, a
test determines whether that extreme point is optimal. If the test for
optimality is not passed, an adjacent extreme point is sought along
an edge in the direction for which the value of the objective function
increases at the fastest rate. Sometimes one can move along an edge
and make the objective function value increase without bound. If this
occurs, the procedure terminates with a prescription of the edge
along which the objective goes to positive infinity. If not, a new
extreme point is reached having at least as high an objective function
value as its predecessor. The sequence described is then repeated.
Termination occurs when an optimal extreme point is found or the
unbounded case occurs. Although in principle the necessary steps
may grow exponentially with the number of extreme points, in
practice the method typically converges on the optimal solution in a
number of steps that is only a small multiple of the number of
extreme points.
 Simplex method contd…2
• To illustrate the simplex method, consider the example of a
factory producing two products, x1 and x2. If the profit on the
second type is twice that on the first, then x1 + 2x2 represents
the total profit. The function x1 + 2x2 is known as the objective
function.
• Clearly, the profit will be highest if the factory devotes its entire
production capacity to making the second type of commodity. In
a practical situation, however, this may not be possible; a set of
constraints is introduced by such factors as availability of
machine time, labour, and raw materials. For example, if the
second type of commodity requires a raw material that is limited
so that no more than five can be made in any batch, then x2 must
be less than or equal to five; i.e., x2 ≤ 5. If the first commodity
requires another type of material limiting it to eight per batch,
then x1 ≤ 8. If x1 and x2 take equal time to make and the machine
time available allows a maximum of 10 to be made in a batch,
then x1 + x2 must be less than or equal to 10; i.e., x1 + x2 ≤ 10.
 Simplex method contd….3
• In the simplex method, the problem is first put into canonical form by
converting the linear inequalities into equalities by introducing “slack
variables” x3 ≥ 0 (so that x1 + x3 = 8), x4 ≥ 0 (so that x2 + x4 = 5), x5 ≥ 0 (so
that x1 + x2 + x5 = 10), and the variable x0 for the value of the objective
function (so that x1 + 2x2 − x0 = 0). The problem may then be restated as that
of finding nonnegative quantities x1, …, x5 and the largest
possible x0 satisfying the resulting equations. One obvious solution is to set
the objective variables x1 = x2 = 0, which corresponds to the extreme point at
the origin. If one of the objective variables is increased from zero while the
other one is fixed at zero, the objective value x0 will increase as desired
(subject to the slack variables satisfying the equality constraints). The
variable x2 produces the largest increase of x0 per unit change; so it is used
first. Its increase is limited by the nonnegativity requirement on the
variables. In particular, if x2 is increased beyond 5, x4 becomes negative.
• At x2 = 5, this situation produces a new solution—(x0, x1, x2, x3, x4, x5) = (10,
0, 5, 8, 0, 5)—that corresponds to the extreme point (0, 5) in the figure. The
system of equations is put into an equivalent form by solving for the nonzero
variables x0, x2, x3, x5 in terms of those variables now at zero; i.e., x1 and x4.
Thus, the new objective function is x1 − 2x4 = −10, while the constraints
are x1 + x3 = 8, x2 + x4 = 5, and x1 − x4 + x5 = 5. It is now apparent that an
increase of x1 while holding x4 equal to zero will produce a further increase
in x0. The nonnegativity restriction on x3 prevents x1 from going beyond 5.
The new solution—(x , x , x , x , x , x ) = (15, 5, 5, 3, 0, 0)—corresponds to
 Simplex method contd….4
• Two other constraints are that x1 and x2 must each be greater than or equal to zero,
because it is impossible to make a negative number of either; i.e., x1 ≥ 0 and x2 ≥ 0. The
problem is to find the values of x1 and x2 for which the profit is a maximum. Any solution
can be denoted by a pair of numbers (x1, x2); for example, if x1 = 3 and x2 = 6, the
solution is (3, 6). These numbers can be represented by points plotted on two axes, as
shown in the figure. On this graph the distance along the horizontal axis
represents x1 and that along the vertical represents x2. Because of the constraints given
above, the feasible solutions must lie within a certain well-defined region of the graph.
For example, the constraint x1 ≥ 0 means that points representing feasible solutions lie
on or to the right of the x2 axis. Similarly, the constraint x2 ≥ 0 means that they also lie
on or above the x1 axis. Application of the entire set of constraints gives the feasible
solution set, which is bounded by a polygon formed by the intersection of the lines x1 =
0, x2 = 0, x1 = 8, x2 = 5, and x1 + x2 = 10. For example, production of three items of
commodity x1 and four of x2 is a feasible solution since the point (3, 4) lies in this region.
To find the best solution, however, the objective function x1 + 2x2 = k is plotted on the
graph for some value of k, say k = 4. This value is indicated by the broken line in the
figure. As k is increased, a family of parallel lines are produced, and the line for k = 15
just touches the constraint set at the point (5, 5). If k is increased further, the values
of x1 and x2 will lie outside the set of feasible solutions. Thus, the best solution is that in
which equal quantities of each commodity are made. It is no coincidence that an optimal
solution occurs at a vertex, or “extreme point,” of the region. This will always be true for
linear problems, although an optimal solution may not be unique. Thus, the solution of
such problems reduces to finding which extreme point (or points) yields the largest
value for the objective function.
 MATRIX formation
• The Objective function is xo = x1 + 2x2 which needs to be
maximised. Here, the variable z for the value of the objective function
so that x1 + 2x2 −xo = 0.

Constraints are ,
• x1 ≤ 8 ; x2 ≤ 5 & x1 ≥ 0 and x2 ≥ 0.
• x1 + x2 ≤ 10.
• In the simplex method, the problem is first put into canonical form by
converting the linear inequalities into equalities by introducing “slack
variables”
• x3 ≥ 0 so that x1 + x3 = 8, ……………….(I)
• x4 ≥ 0 so that x2 + x4 = 5, ……………….(II)
• x5 ≥ 0 so that x1 + x2 + x5 = 10,………..(III)
The given system of Equations can be written in summerized matrix form of
Ax=b where,
A= [ 1 0 1 0 0] [x1 ] [8 ]
[1 1 0 1 0 ] , x= [x2 ] and b= [ 5 ]
[1 1 0 0 1] [x3 ] [ 10 ]
Now, by solving these matrix for Ax=b, we can get values of x1 & x2 for maximizing xo =
x1 + 2x2 .
 Simplex method contd…5
• In fact , for more no. of variables than 3, the help of
Algebraic MATRIX is taken to simplify the process. The
above explanation of the method is just to help how
the MATRIX is reduced to find the variables under
Objective statement so that solution to the problem is
achieved.
• The linear equation solution is just possible by solving
through process of simultaneous equations upto 3
variables in the objective statement. Thus, Simplex
method is extension of the Linear programming for
determining more than 3 variables by adopting
MATRIX reduction method.
 Transportation Problem
Transportation problems are used to
find the minimum cost of
transportation of goods from m source
to n destination. In this article we will
learn transportation problem,
formulation, types and finally how it
differs from assignment problem.
For Balanced Transportation to destination, Mtl. At Source= Mtl. to Destination

m
 Types of Transportation Problem
The two categories of transportation problems are balanced and
unbalanced transportation problems. As we all know, a
transportation problem is a type of Linear Programming Problem (LPP)
in which items are carried from a set of sources to a set of
destinations based on the supply and demand of the sources and
destinations, with the goal of minimizing the total transportation cost.
It is also known as the Hitchcock problem.
Introduction to Balanced and Unbalanced Transportation
Problems
Balanced Transportation Problem
The problem is considered to be a balanced transportation problem
when both supplies and demands are equal.
Unbalanced Transportation Problem
Unbalanced transportation problem is defined as a situation in which
supply and demand are not equal. A dummy row or a dummy column
is added to this type of problem, depending on the necessity, to make
it a balanced problem. The problem can then be addressed in the
same way as the balanced problem.
Methods of Solving Transportation
Problems :-
• There are three ways for determining
the initial basic feasible solution. They
are

(1) NorthWest Corner Cell Method.

(2) Least Call Cell Method.
(3) Vogel’s Approximation Method (VAM).
Balanced Tr. Problem by NW method
contd…
NE method contd….
Balanced Tr. Prob. Contd…
Unbalanced Tr. Problem soln. contd…
Observation & Answer
OR Cycle
 OR is Multi-disciplinary
• An OR team consists of experts from science,
mathematics and engineering i.e. they are from
different disciplines. They are expert in their field. Each
one of them evaluates the problem in their own
perspective and provide alternative strategies to an
on-going problem.
• Operation research is used to solve complex problems
of business through mathematical analysis. This
technique is used in various fields of agriculture,
production, and business management. The
effectiveness of this method is observed through
improved business operations and management styles.
• The central objective of operations research is optimization, i.e., "to do things best under the
given circumstances." This general concept has great many applications, for instance, in
agricultural planning, biotechnology, data analysis, distribution of goods and resources,
emergency and rescue operations, engineering systems design, environmental management,
financial planning, health care management, inventory control, manpower and resource
allocation, manufacturing of goods, military operations, production process control, risk
management, sequencing and scheduling of tasks, telecommunications, and traffic control.
• Closely related disciplines (with significant overlaps among these) include decision analysis,
systems analysis, management science, control theory, game theory, optimization theory,
constraint logic programming, artificial intelligence, fuzzy decision-making, multi-criteria
analysis, and so on. All these disciplines share the objective of improving a quantitative
decision making procedure. The same comment applies to operations research-related
business applications such as supply-chain management, enterprise resource planning, total
quality management, just-in-time production and inventory management, and materials
requirements planning.
• Following the general optimization paradigm, when applying operations research, a decision-
maker selects the key decision variables that will influence the overall quality of decisions.
This quality is expressed by the objective function that is maximized (profit, product quality,
speed of service or job completion, and so on), or minimized (cost, loss, risk of some
undesirable event, etc.). In addition to the objective function, a set of (physical, technical,
economic, environmental, legal, societal, etc.) constraints is also considered. Then, by
systematically adjusting the values of all decision variables, a "good" (feasible) or "very best"
(optimal) solution is selected. Of course, feasibility and optimality can only be defined in the
context of the given problem (model) formulation.
 History & usage in Modern Perspective
• The (somewhat vague) term “Operations Research” was coined during
World War I. The British military brought together a group of scientists
to allocate insufficient resources — for example, food, medicines,
weapons, troops, etc. — in the most effective way possible to different
military operations. So the term “operations” is from “military
operations”. Successfully conducting military operations was a huge deal
and Operations Research (OR) became its own academic discipline in
universities in the 40s.
• Its vast use is made in Medical science these days in Hospital
Management between resources like
1. Doctors & Staffs
2. Equipment & Appliances
3. Space ( Beds/ Wards/ Operation Theatres etc.)
4. Medicines
5. Up-gradation of Staffs & Equipment.
 Network on CPM & PERT
Project management can be understood as a systematic way of planning,
scheduling, executing, monitoring, controlling the different aspects of
the project, so as to attain the goal made at the time of project
formulation. PERT and CPM are the two network-based project
management techniques, which exhibit the flow and sequence of the
activities and events. Program (Project) Management and Review
Technique (PERT) is appropriate for the projects where the time
needed to complete different activities are not known.
On the other hand, the Critical Path Method or CPM is apt for the projects
which are recurring in nature.
The two scheduling methods use a common approach for designing the
network and for ascertaining its critical path. They are used in the
successful completion of a project and hence used in conjunction with
each other.
 Difference Between CPM/CPT & PERT

The truth is that CPM/CPT is different from PERT

in a way that the latter concentrates on time
while the former stresses on the time-cost
trade-off. In the same manner, there are many
differences between PERT and CPM, which we
are going to discuss in the Chart produced
next.
BASIS FOR
COMPARISON PERT CPM / CPT

Meaning PERT is a project CPM is a statistical technique of

management technique, project management that manages
used to manage uncertain well defined activities of a project.
activities of a project.

What is it ? A technique of planning and A method to control cost and time.

control of time.

Orientation Event-oriented Activity-oriented

Eavolution Evolved as Research & Evolved as Construction project

Development project

Model Probabilistic Model Deterministic Model

Focus Time Time-cost trade-off

BASIS FOR COMPARISON PERT CPM
Scope of R & D Research and Non-research projects
Development Project like civil construction,
ship building etc.

Estimates Three time estimates One time estimate

Appropriate for High precision time Reasonable time

estimate estimate

Management of Unpredictable Activities Predictable activities

Nature of jobs Non-repetitive nature Repetitive nature

Critical and Non-critical No differentiation Differentiated

activities

Crashing concept Not Applicable Applicable

 Definition of PERT
• PERT is an acronym for Program (Project) Evaluation and
Review Technique, in which planning, scheduling, organizing,
coordinating and controlling uncertain activities take place.
The technique studies and represents the tasks undertaken to
complete a project, to identify the least time for completing a
task and the minimum time required to complete the whole
project. It was developed in the late 1950s. It is aimed to
reduce the time and cost of the project.
• PERT uses time as a variable which represents the planned
resource application along with performance specification. In
this technique, first of all, the project is divided into activities
and events. After that proper sequence is ascertained, and a
network is constructed. After that time needed in each activity
is calculated and the critical path (longest path connecting all
the events) is determined.
 Advantages & Disadvantages of PERT
• Advantages of PERT
• Shows dependencies between each step in the
work breakdown structure
• Can help you find the longest path (also known as the “critical path”) to
a project’s completion
• Identifies different time completions for each step
• Potentially speeds up a project’s completion by allowing for overlapping
tasks to be identified and initiated
• Allows you to easily visualize and organize a complex project
• Disadvantages of PERT
• Could become too convoluted to understand as an exceptionally
complex project could contain hundreds of dependencies and steps
• Requires a lot of effort—not ideal for smaller projects
• Is difficult to immediately visualize the timeline and a solid deadline for
the project due to variable time estimates for each step
 Definition of CPM
• Developed in the late 1950s, Critical Path Method or CPM is an
algorithm used for planning, scheduling, coordination and
control of activities in a project. Here, it is assumed that the
activity duration is fixed and certain. CPM is used to compute
the earliest and latest possible start time for each activity.
• The process differentiates the critical and non-critical activities
to reduce the time and avoid the queue generation in the
process. The reason for the identification of critical activities is
that, if any activity is delayed, it will cause the whole process
to suffer. That is why it is named as Critical Path Method.
Terms commonly used in Network Diagram
Advantages of Critical Path Method (CPM):

• It figures out the activities which can run parallel to each other.
• It helps the project manager in identifying the most critical elements of the
project.
• It gives a practical and disciplined base which helps in determining how to
reach the objectives.
• CPM is effective in new project management.
• CPM can strengthen a team perception if it is applied properly.
• CPM provides demonstration of dependencies which helps in the scheduling
of individual activities.
• It shows the activities and their outcomes as a network diagram.
• It gives a fair and concise procedure of documenting of project.
• It helps in determining the slack time.
• An explicit and clear approach of communicating project plans, schedules,
time and cost performance is developed.
• It is extensively used in industry.
• It helps in optimization by determining the project duration.
Disadvantages of Critical Path Method (CPM):

• The scheduling of personnel is not handled by the

CPM.
• In CPM, it is difficult to estimate the completion time
of an activity.
• The critical path is not always clear in CPM.
• For bigger projects, CPM networks can be
complicated too.
• It also does not handle the scheduling of the
resource allocation.
• In CPM, critical path needs to be calculated precisely.
 Gantt Chart

Invented by Henry Lawrence Gantt , an

American Mech. Engineer & Management
consultant invented it in 1910.
It is used for Small projects & Maintenance
programmes exceeding 3 Hrs.
Gantt Chart of a Thesis Submission
 Risk associated with Project Management
with actions
1) Risk of Uncertainty with situational variability
& Estimates- set strategy.
2) Risk of Accident- adopt Risk assessment &
Mitigation method.
3) Safety & Health Risk- Timely mitigation,
Monitoring on adverse situation
4) Marketability Risk- Change strategy.
5) Risk of political Interference- strong liaising.
6) Risk of regulatory environment- timely
Compliances .
 System Approach for Scheduling
The system approach to project management is
 a method of organizing and managing project
activities in a systematic and organized manner.
 It involves breaking down a project into smaller, more
manageable components, and then using a set of
standardized processes and tools to plan, execute, and
control the project.
 The system approach typically includes the use of
project management software, clear project objectives,
a detailed project plan, and a system for monitoring
and controlling project progress.
 This approach is designed to improve project efficiency
and effectiveness by reducing the risk of project failure
and ensuring that all stakeholders are aligned and
working towards the same goals.
 FEATURES OF SYSTEM APPROACH TO PROJECT MANAGEMENT

1. Breakdown of project into smaller components: The system

approach involves breaking down a project into smaller, more
manageable components, which makes it easier to plan, execute,
and control the project.
2. Standardized processes and tools: The system approach uses a
set of standardized processes and tools, such as flow diagrams,
Gantt charts, and PERT diagrams, to plan, execute, and control the
project. These tools help to streamline project management
activities and reduce unnecessary steps or delays.
3. Detailed project plan: The system approach includes a detailed
project plan that outlines the schedule for each phase of the project,
the resources required, and the budget. This plan is used to guide
the project from start to finish and ensure that it is completed on
time and within budget.
4. System for monitoring and controlling progress: The system
approach includes a system for monitoring and controlling the
project progress, which helps to identify and address any issues or
problems that arise during the project. This helps to keep the project
on track and ensure that it is completed as planned.
5. Clear roles and responsibilities: The system approach
clearly defines the roles and responsibilities of all stakeholders,
which helps to improve communication and coordination
among project team members.
6.Continual improvement: The system approach
encourages continuous improvement, by regularly reviewing
and updating the project plan and processes to identify areas
for improvement and optimize performance.
7. Risk management: The system approach includes a
risk management plan to identify and mitigate potential risks
and issues that may arise during the project.
8. Quality management: The system approach includes a
Quality management plan to ensure that the project
deliverables meet the quality standards and requirements.
9.. Alignment with organizational goals: The system
approach aligns the project goals and objectives with the
organizational goals and objectives.
10. Integration: The system approach integrates all aspects
of the project and all stakeholders to ensure a cohesive and
successful project outcome.
Example of System approach to Project Management
Example of System approach to Project Management
 Benefits of system approach to project
management
• Simplified model (only symbolic relations between processes)]] The system approach
to project management offers several benefits, including:
• Holistic approach: It is the realization of the holistic approach to project
preparation and implementation, because project is treated as a product of
multidimensional determinants (technological, financial, ergonomic).
• Improved efficiency: By breaking down a project into smaller components, it
becomes easier to plan, execute, and control the project. Standardized processes
and tools also help to streamline project management activities and reduce
unnecessary steps or delays.
• Increased predictability: A detailed project plan and system for monitoring and
controlling project progress can help to identify potential issues and risks before they
become major problems. This can improve the predictability of project outcomes and
help to ensure that the project is completed on time and within budget.
• Better communication: The system approach facilitates better communication
among project stakeholders by clearly defining roles, responsibilities and
communication channels.
• Better alignment: It helps all stakeholders to align their goals and objectives with
the project goals and objectives which helps in achieving the project objectives on
time and within budget.
• Better control: The system approach provides a framework for monitoring and
controlling the project progress, which helps to identify and address any issues or
problems that arise during the project. This helps to keep the project on track and
ensure that it is completed as planned.
• Improved quality: It helps to ensure that the project deliverables meet the quality
standards and requirements by using standardized processes and tools.
End of UNIT-2