OR TECHINQUES or TOOLS

PRESENTED BY LIJIN MATHEW

B1 MBA

Techniques

1. Linear Programming

2. Queuing Theory3. Inventory Control

Method4. Net Work Analysis5. Replacement

Problems6. Sequencing7. Integer

Programming8. Assignment

Problems

9. Assignment Problems

10. Transportation Problems

11. Decision Theory and Game Theory

12. Markov Analysis13. Simulation14. Dynamic

Programming15. Goal Programming16. Symbolic Logic

Linear Programming

Linear programming technique is used to find solution for optimizing a given objective

objectives may be maximizing profit, minimizing cost, etc

This technique is used to allocate scare resources in an optimum manner in problems of scheduling ,product mix, etc

Queuing Theory

It is also called waiting line theory This theory deals with the situations in which queue

is formed eg: customers waiting for service, machines

waiting for repairmen, aircraft waiting for landing, etc It aims at minimizing the overall cost due to

servicing and waiting This technique is used to add new facilities to reduce

the cost of waiting time

Inventory Control Method

It aims at optimizing inventory levels Inventory planning answers two question how much to buy and when to buy

Net work Analysis

Net work are very popular and widely used quantitative technique

This model helps the managers to plan, schedule, monitor and control large projects, such as construction of building, making a ship, etc

It helps the managers to determine total project completion time, probability that a project will be completed by a certain date, least cost way of shortening total project completion time, etc

Program Evaluation Review Technique(PERT), Critical Path Method(CPM), Gantt chart are coming under net work analysis

Replacement Problems

It concerned with the situations arise when some items such as men, machine, electric bulbs, etc require replacement due to their decreasing efficiency, failure or down

It solves the replacement problems such as decisions regarding replacement in cost, return, etc.

Sequencing

This model developed to find a sequence for processing a job, so the total elapsed time for all the jobs will be minimum

It also helps to resolve the conflict between the objectives of maximizing machine utilization and complying with predetermined delivery dates

Integer Programming

Integer means complete or whole number One Important limitation of linear programming

model is the assumption that all the variables can take any value, may be decimal or fraction

When figures are rounded off the solution will be poor

By using integer programming algorithm a series of continuous linear programming problem solved in such a way that the solution containing unacceptable non-integer value are ruled out and the best higher programming solution is obtained

Assignment Problems

Special type of linear programming it deals with allocating the various resources

to various activities in such a way that the time or cost involved is to be minimized; sale or profit is maximized

Transportation Problems

It deals with transportation of a product from a number of sources with limited supplies to a number of destinations with specified demands at the minimum transportation cost

Aims to minimize the transportation cost

Decision Theories and Game Theories

Decision theory is primarily concerned with decision making under the conditions of risk and uncertainty

Game theory is concerned with decision making under conflict

The decision maker is to identify the best for situation In decision theory we can use decision tables and decision

trees, which can be used to graphically represent and solve decision making problem

The game theory assist the decision maker to have the knowledge of courses of action available to his opponent

Markov Analysis

Markov analysis permits one to predict changes over time when information about the behavior of a system is known

It is based on probability theories It allows a manager to determine future market

share both in the short run and long run If current situation is known, along with the

propensity of the system to change over time, it is possible to use Markov analysis to predict future conditions

Simulation

All real life problems cannot be stated in mathematical form

Simulation is a general technique that allows us to develop a dynamic model that acts like a real process

Developing a good simulation model is difficult but simulation allows us to solve problems that are difficult or impossible to solve otherwise

Dynamic Programming

It is introduced when the problems occur which have multi faced solutions

Here all possible results are analyzed and the best solution is selected

For solving each practical problem of specific dynamic programming, separate algorithm has to be developed

in dynamic programming computational work is reduced considerably

Goal Programming

In linear programming it focus on single objective and rest are taken as less important

In real practice there may be number of important objectives

Charles and Cooper developed “Goal programming in 1961”

In this several objective functions are considered, Each objective function has a fixed value called “target”

Goal Programming model is used to minimize deviations from these “targets”

Symbolic Logic

Symbols are more meaningful and accurate The whole problem is converted into algebraic

equations and propositions Business problems are not commonly converted into

symbols, but calculations are done on computers

15

Techniques

1. Linear Programming - solution for optimizing a given objective

2. Queuing Theory – to minimize the cost for queue3. Inventory Control Method – optimizing inventory levels, when

to buy and how much to buy4. Net Work Analysis - used to predict work completion time of

large project5. Replacement Problems – helps to take decisions regarding

replacement6. Sequencing – develop a sequence of process to do a job,

minimize time7. *Integer Programming – unacceptable non integer values are

ruled out8. Assignment Problems – allocating various resources to various

activities9. Transportation Problems – to minimize the transportation cost

of a product

Cont……

10. Decision Theory and Game Theory – decision making under risk and uncertainty, in conflict situations respectively

11. Markov Analysis – allows predict future market12. Simulation – developing dynamic model to solve real life

problems13. Dynamic Programming – multi faced solutions, selecting best

one14. *Goal Programming- several objectives “target” minimize

deviation from it15. Symbolic Logic – using symbols, problem is converted into

algebraic equations and propositions

Thank You…………………..