operations research (report).pptx

8/13/2019 OPERATIONS RESEARCH (Report).pptx

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OPERATIONS RESEARCH:

THE SCIENCE OF

BETTER.


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OPERATIONS RESEARCH (ALSO KNOWN AS MANAGEMENT SCIENCE ) THE APPLICATION

OF SCIENTIFIC METHODS, TECHNIQUES AND TOOLS TO PROBLEMS INVOLVING THE

OPERATIONS OF A SYSTEM SO AS TO PROVIDE THOSE IN CONTROL OF THE SYSTEM WITH

OPTIMUM SOLUTIONS TO PROBLEMS.

Operations Research is the discipline of applying advanced analytical methods to help make

better decisions.

By using techniques such as mathematical modelling to analyze complex situations, operations

research gives executives the power to make more effective decisions and build more productivesystems based on:

More complete data

Consideration of all available options

Careful predictions of outcomes and estimates of risk

The latest decision tools and techniques

** Industrial engineering takes more of an engineering point of view, and industrial

engineers typically consider OR techniques to be a major part of their tool set.


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BETTER DECISION

MAKING.


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WHY OPERATIONS RESEARCH

NEEDED?

UNIQUELY POWERFUL APPROACH TO DECISION MAKING IN A COMPLEXWORLD

You face comp lex decis ion s

Youre having problems with processes.

Youre troubled by risk.

Your organization is n ot m aking the mo st of i ts data.

You n eed to b eat st i f f competit ion.


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OR CONSISTENTLY DELIVERS SIGNIFICANT VALUESTRATEGIC TO TACTICAL, TOP-LINE TO BOTTOM-LINETO

THE ORGANIZATIONS AND EXECUTIVES WHO USE IT.

A FEW EXAMPLES:

1 SEARSUSED O.R. TO CREATE A VEHICLE ROUTING AND SCHEDULING SYSTEM TO RUN ITS DELIVERY ANDHOME SERVICE FLEETS MORE EFFICIENTLY FOR $42 MILLION IN ANNUAL SAVINGS.

2 THE PENTAGON USED O.R. TO SOLVE THE MASSIVE LOGISTICAL PROBLEMS OF SUPPLYING OPERATION

DESERT STORM, AND TO PLAN THE SUCCESSFUL LIBERATION OF KUWAIT.

3FORD USED O.R. TO OPTIMIZE THE WAY IT DESIGNS AND TESTS VEHICLE PROTOTYPES, SAVING $250

MILLION. VEHICLE PROTOTYPES, SAVING $250 MILLION.

4 DIRECTV USED O.R. TOACCURATELY FORECAST CONSUMER ADOPTION OF SATELLITE TELEVISION.

5 UPSUSED O.R. TO REDESIGN ITS OVERNIGHT DELIVERY NETWORK, FOR $87 MILLION IN SAVINGS BETWEEN

2000 AND 2002 AND ANOTHER $189 MILLION ANTICIPATED OVER THE FOLLOWING DECADE.

6 NBCUSED O.R. TO IMPROVE ADVERTISING SALES PLANS, INCREASING REVENUES BY MORE THAN $200MILLION.

7 THECITY OF NEW HAVEN, CONNECTICUT USED O.R. TO DETERMINE DEFINITIVELY IF ITS NEEDLE

EXCHANGE PROGRAM WAS REDUCING HIV INFECTION RATES.


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INNOVATION OF THE 20TH

CENTURY.


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Charles

Babbage

Circa 1937, World War II

a team of British

scientists in England

Phillip

MorseTO CIVIL

SECTOR


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AND IT

IT Focuses on data as a

corporate resource

Stores, retrieves, formats,

displays data Understands business

process and transactions

OR

Uses data as input

Provides improved

solutions Gives global focus

Multiple objectives

Multiple criteria


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OR

ACTIVITIES


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ISSUES IN:

Transportation

inventory planning

production planning

communication operations

computer operations

financial assetsrisk management

revenue management

improving business productivity


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Mathematical logic,

SimulationNetwork analysis

Queuing theory

Game theory

ANALYTICAL METHODS USED IN



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(1)A set of potential solutions to a problem is identified and

developed (the set may be rather large).

(2)The alternatives derived in the first step are Analyzed, and

reduced to a smaller set of solutions (the solutions have to

be feasible and workable).

(3)The alternatives derived in the second step are subjected to

simulated implementation and, if feasible, exposed to an

actual analysis in a real-world environment. It has to be

pointed out that in the final step, psychology and

management sciences often play a rather important role.

3 STEPS IN OPERATIONS REASERCH

PROCESS


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Generally speaking, OR improves the effectiveness

and the efficiency of an institution.


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METHODS IN OPERATIONS

RESEARCH


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Simulation Method

Simulationis a modeling and analysis tool widely used for the purpose of

designing, planning, and control of manufacturing systems. Simulation in general is

to pretend that one deals with

a real thing while really working with an imitation.

Goal:

Is to develop simulators that provide the decision maker with the ability to

conduct sensitivity studies to (1) search for improvements, and (2) to test and

benchmark the improvement ideas that are being made

Optimization Method

Optimization is the act of obtaining the best result under given circumstances. In

design, construction, and maintenance of any engineering system, engineers have to

take many technological and managerial decisions at several stages.

Goal:Is to identify and locate the very best choice based on certains criteria

Is either to minimize the effort required or to maximize the desired benefit.


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Probability and Statistics Method

The most important single mathematical tool of operations research is probability

and statistical theory.

Goal:Is to measure risk, mine data to find valuable connections and insights in

business analytics, test conclusions, and make reliable forecasts.

DataAnalysis Method

This method is rather useful in numerous applications including forecasting

and data mining based business environments.

Goal:

Is to aid the decision maker in detecting actual patterns and

interconnections in the data set.


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MODELS IN OPERATIONSRESEARCH


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LINEAR PROGRAMMING

Typically, a single objective function, representing either a

profit to be maximized or a cost to be minimized, and a set of

constraints that circumscribe the decision of variables.

NETWORK FLOW PROGRAMMING

A special case of the more general linear program. Includessuch problem as the transportation problem, the assignment

problem, the shortest path problem, the maximum flow

problem, and the minimum cost flow problem.

INTEGER PROGRAMMING

Some of the variables are required to take on discrete

values.


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NON-LINEAR PROGRAMMING

The objective and/or any constraints is non-linear.

In general, much more difficult to solve than linear.

DYNAMIC PROGRAMMING

A DP models describe a process in terms of states, decisions,

transition and returns. The process begin in some initial state wherea decision is made. The decision causes a transition to a new state.

Based on the starting state, ending state and a decision a return id

realized.

STOCHASTIC PROCESS

In many practical situations the attributes of a system randomly

change over time.


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MARKOV PROCESS

A continuous time stochastic process in which the duration of all

state changing activities are exponentially distributed. Time is a

continuous parameter.

SIMULATION

A general technique for estimating statistical measures of complexsystems.

A system is modeled as if the random variables are drawn randomly

from their known probability distributions. Each replication gives one

observation of the system response.

TIME-SERIES AND FORECASTING

A Time Series is a sequence of observations of a periodic random

variable.

Typically serve as input to OR decision models.


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INVENTORY THEORY

Inventories are materials stored, waiting for processing.

oWhen and how much raw material should be ordered?

oWhen should a production order should be released to the plant?

oWhat level of safety stock should be maintained at a retail outlet?

oHow is in-process inventory maintained in a production process?

RELIABILITY THEORY

Attempts to assign numbers to the propensity of systems to fail.

Estimating reliability is essentially a problem in probability modeling.

Extremely important in the telecommunications and networking industry.


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ICE

BREAKER!!!!+ =


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OPERRATONS RESEARCH IN

MANUFACTURING


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APPLICATIONS OF OR IN MANUFACTURING

SchedulingRouting

Workflow improvements

Elimination of bottlenecks

Inventory control

Business process re-

engineeringSite selection, or facility

Selection

General operational planning

Revenue management entails first to

accurately forecasting the demand, andsecondly to adjust the price structure over time

to more profitably allocate fixed capacity.

Supply chain decisions describe the who,

what, when, and where abstractions from

purchasing and transporting raw materials andparts to the costumers. The prime

management goal here may be to reduce

overall cost while processing customer orders

more efficiently than before.


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INTRODUCTION TO LINEAR PROGRAMMING

LINEAR PROGRAMMING (LP)A technique used in the optimization of a

linear objective function , subject to linear quality and linear inequalityconstraints.

- Determines the best way to achieve the best outcome ( e.g. maximum

profit or lowest cost ). In a given mathematical model and given some list of

requirements represented as linear equations.

LP is the ORistsfavorite tool because it is_ Simple,

_ Easy to understand,

_ Robust.

Simple means easy to implement, easy to

understand means easy to explain (to your boss), and

robust means that its like the Swiss Army Knife:

perfect for nothing, but good enough for everything.


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MATHEMATICAL FORMULATION OF LINEAR

PROGRAMMING MODEL

STEP 1Study the given situation

Find the key decision to be made

Identify the decision variables of the problem

STEP 2

Formulate the objective function to be optimizedSTEP 3

Formulate the constraints of the problem

STEP 4

Add non-negativity restrictions or constraints

The objective function, the set of constraints, and the non-negativity restrictions together form an LP model


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Pedro and Maria are in a Part-time business.

Pedro must work for 4 hours to complete 1

case of TV set and 2 hours for Maria to

complete a set of TV case. Pedro must work

for 3 hours to complete a case of stereo set

and 4 hours for Maria to complete a set. Theyare not to work for more than 20 hours. The

price for each TV set and Stereo set are

P80.00 and P64.00, respectively. Maximizethe Profit.


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OR PROBLEMS


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CRITICAL PATH ANALYSIS

A project-management technique that lays out all the activities needed to complete a

task, the time it will take to complete each activity and the relationships between the

activitiesThe critical path refers to the way the diagram shows those activities that must be

completed, and complete in a specific order, so that the project can be completed

successfully and on time.

FLOORPLANNING

Designing the layout of equipment in a factory or components on a computer chip to

reduce manufacturing cost.

NETWORK OPTIMIZATION

It is a special type of linear programming model. Network models have three mainadvantages over linear programming:

1. They can be solved very quickly.

2. They have naturally integer solutions.

3. They are intuitive.


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FACILITY LOCATION

The success of the organization is also depends on the decision of facility location

It refers to selection of specific site for establishment of the physical unit of

production process.Refers to the location of service organization

NEED OF FACILITY LOCATION

Selection of the location is long

term decision of organization

One selection of facility location is

very expensive and some

infeasible to alter the location

It plays a vital role in the

organization

SELECTING A WRONG

FACILITY LOCATION RESULTS:

Low profit margin

High cost of production

Poor production efficiency

High distribution cost

Labor trouble

Closure of organization


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BAYESIAN SEARCH THEORY

LOOKING FOR A TARGET

Is the application of Bayesian statistics to the search for lost objects. It has

been used several times to find lost sea vessels, for example the USS Scorpion.

It also played a key role in the recovery of the flight recorders in the Air FranceFlight 447 disaster of 2009.

OPTIMAL SEARCH

Sometimes it's OK to find just ANY path to the goal as long as you get there. But

sometimes you want to find the BEST path to the goal. The fastest, cheapest, oreasiest route to take is oftentimes more important than finding SOME path.

Thats where optimal search comes in.

ROUTING

Is the process of selecting paths in a network along which to send network

traffic. Routing is performed for many kinds of networks, including the telephone

network (circuit switching), electronic data networks (such as the Internet),

and transportation networks.


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SUPPLY CHAIN MANAGEMENT

Managing the flow of raw materials and

products based on uncertain demand

for the finished products.

AUTOMATION

Automating or integrating robotic

systems in human-driven operations

processes.

GLOBALIZATION

Globalizing operations processes in

order to take advantage of cheaper

materials, labor land, or other

productivity inputs.

TRANSPORTATION

Managing freight transportation and

delivery systems

SCHEDULING

Personnel Staffing

Manufacturing Steps

Project Tasks

Network Data TrafficSports events and their television

coverage


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Transportation: managing freight transportation and delivery systems

(Examples: LTL Shipping, intermodal freight transport)

Perfecting the Scheduled Railroad at Canadian Pacific Railway

Problem: Finding a better alternative in handling the many details and

constraints of scheduling.

The OR solution: Canadian Pacific turned to the concept of operating everyaspect of the railway on a fixed schedule. Working with Multi-Modal Applied

Systems, the railway developed an operating plan that was tightly matched to

traffic patterns.

Optimizing Production Planning and Trade at Jan de Wit Company

Problem: The company had to split the planning to control the productive

process

The OR solution: Jan de Wit implemented a decision support system based on

linear programming as a production-planning and trade tool.


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Manufacturing steps

Samsung Cuts Manufacturing Cycle Time and Inventory to Compete

Problem: Need to reduce cycle time. The huge work-in-process inventory

was expected to lose value rapidly. And a survey finding that Samsung's

cycle times were noncompetitive implied that customers might be enticed

to switch to vendors offering shorter lead times.

The OR solution: The project was named SLIM (short cycle time and low

inventory in manufacturing). SLIM delivered a set of methodologies and

scheduling applications for managing cycle time, including:

Methodology for calculating target cycle times and target work in process

levels for individual manufacturing steps


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OPERATIONS

RESEARCH IN ACTION


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Scheduling

ex. Aircrews & the fleet for airlines

Facility Planningex. Warehouse, Factory or Fire station

Planning and Forecasting

ex. Telecommunication Industry

Yield ManagementThe changing of supply and demand

Credit ScoringThe credibility of the person to pay

MarketingEvaluating the value of sale promotions

Defense and Peace KeepingFinding ways to deploy troops

rapidly


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OR BENEFITS

Decrease cost or Investment

Increase Revenue or Return on Investment

Increase Market Share

Manage & Reduce Risk

Improve Quality

Increase through output while decreasing delays

Achieve Improve Utilization from limited resources

Demonstrate Feasibility & Workability


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