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Techniques of OR.pptx

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Techniques of OR.pptx

  1. 1. Techniques of OR
  2. 2. 1. Operations Research is the systematic and method oriented study of the basic structure, functions and relationships of an organization. Definitions: “OR is the art of giving bad answers to problems which otherwise have worse answers” “Operations Research is the application of scientific methods, techniques, and tools to problems involving the operation of a system so as to provide those in control of the system with optimum solution to the problem”-C.W. Churchman.
  3. 3. 1.OR Techniques A brief account of some of the important O.R techniques is given below:- 1.Allocation models: Involves the allocation of resources to activities in such a manner that some measure of effectiveness is optimized. Solution through linear and non linear programming techniques. Objective such as maximizing profit or minimizing cost under certain constraints. Eg: Transportation model and assignment model. 2. Sequencing: Placing item in certain sequence or order for service.
  4. 4. • 3. Waiting or Queuing theory: Interruptions can be occurred due to many reasons. These cause waiting line problem. Waiting line theory aims in minimizing the cost of both servicing and waiting. 4. Inventory model: Regarding the holding or storing the resources. How much to acquire and when to acquire? 5. Competitive Strategy model: These are model which arise when two or more people are competing. Game model is used to determine the optimum strategy in a competitive situation.
  5. 5. 1.5. 6. Decision theory: Concerned with making decisions under the conditions of certainty, risk and uncertainty. 7. Network analysis: determination of an optimum sequence of performing certain operations concerning some jobs to minimize overall time and money. 8. Simulation: Technique of testing a model which resembles a real life situation. Imitate an operation before actually performing it. 9. Search model: Concerns itself with search problems. A search problem is characterized by the need for designing a procedure to collect information on the basis of which one or more decisions are made.
  6. 6. • 10. Replacement theory: Concerned with situation that arise when some items need replacement because the same may be deteriorated. The model concerned with prediction of replacement cost and determination of the most economic replacement policy.
  7. 7. 1.What is the PERT ? Program (Project) Evaluation and Review Technique (PERT): is a project management tool used to schedule, organize, and coordinate tasks within a project. It is basically a method to analyse the tasks involved in completing a given project, especially the time needed to complete each task, and to identify the minimum time needed to complete the total project. 2.4. When we use PERT ? • PERT is used when activity times are uncertain. – Determine the duration of the project . – Decision making under risk (“P” for probabilistic)
  8. 8. • STEPS IN PERT 1. Identify the specific activities. 2. Determine proper sequence of the activities. 3. Construct the network diagram. 4. Estimate the time required for each activity. 5. Determine the critical path. 6. Update the PERT chart.
  9. 9. 1.Advantages of PERT • Expected project completion time. • Probability of completion before a specified date. • The critical path activities that directly impact the completion time. • The activities that have slack time and that can lend resources to critical path activities. • Activity start and end dates. 2.27. LIMITATIONS • The PERT Formula Requires Too Much Work. • The network charts tend to be large and unwieldy. • Calculating the time estimates is very complex for all the activities. • Updating of the project is time consuming and requires high costs. • Emphasis is laid only on time factors and cost factors are neglected.
  10. 10. 1.Project Management Project • A project is an interrelated set of activities that has a definite starting and ending point and that results in a unique product or service. Project management • Project management is a scientific way of planning, implementing, monitoring & controlling the various aspects of a project such as time, money, materials, manpower & other resources. Network Planning Methods Methods used for network planning are: CPM PERT Managing a project with network planning methods involves four steps: 1. Describing the Project. 2. Diagramming the Network. 3. Estimating time of completion. 4. Monitoring Project Progress.
  11. 11. Network Diagram Concepts • Activity • Precedence relationship • Successor • Event Guidelines for network diagram 1. Before an activity can begin, its preceding activities must be completed. 2. Arrows indicate logical precedence. 3. Flow of the diagram is from left to right. 4. Arrows should not intersect. 5. Dangling should be avoided.
  12. 12. 1.CRITICAL PATH METHODS(CPM) HISTORY : It was developed by J.E.KELLY of REMINGTON-RAND and M.R.WALKER of DU PONT and the emphasis was on the trade-off between the cost of project and its overall completion time. The first test was made in 1958,when CPM was applied to the construction of a new chemical plant. DEFINITION: Critical path is the sequence of activities between a project’s start and finish that takes the longest time to complete. 2.17. STEPS IN DETERMINING CRITICAL PATH • Specify the individual activities. • Determine the sequence of the activities. • Draw the network diagram. • Estimate the activity completion time. • Identify the critical path. • Update the CPM diagram.
  13. 13. • Difference between CPM & PERT CPM PERT • CPM works with fixed • PERT works with probabilistic deterministic time time • CPM is useful for repetitive and • PERT is useful for non repetitive non complex projects with a and complex projects with certain degree of time estimates. uncertain time estimates. • CPM includes time-cost trade off. • PERT is restricted to time variable. • CPM- for construction projects. • PERT- used for R&D programs.
  14. 14. 1.Linear programming is a widely used mathematical modeling technique to determine the optimum allocation of scarce resources among competing demands. Resources typically include raw materials, manpower, machinery, time, money and space. The technique is very powerful and found especially useful because of its application to many different types of real business problems in areas like finance, production, sales and distribution, personnel, marketing and many more areas of management. As its name implies, the linear programming model consists of linear objectives and linear constraints, which means that the variables in a model have a proportionate relationship. For example, an increase in manpower resource will result in an increase in work output.
  15. 15. • ESSENTIALS OF LINEAR PROGRAMMING MODEL • For a given problem situation, there are certain essential conditions that need to be solved by using linear programming. Limited resources : limited number of labour, material equipment and finance • 2. Objective : refers to the aim to optimize (maximize the profits or minimize the costs). Linearity : increase in labour input will have a proportionate increase in output. • 4. Homogeneity : the products, workers' efficiency, and machines are assumed to be identical • 5. Divisibility : it is assumed that resources and products can be divided into fractions.

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