Operations Research Fundamentals
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Questions and Answers

What is another term used for the field of Operations Research?

  • Decision Analysis
  • Quality Theory
  • Industrial Engineering
  • Management Science (correct)

    • Which of the following models assumes all data are known with certainty?

  • Inventory Models
  • Deterministic Models (correct)
  • Stochastic Models
  • Simulation Models

    • What is the primary goal of Stochastic Models?

  • To estimate system performance (correct)
  • To optimize system performance
  • To simulate system performance
  • To characterize system performance

    • When did Operations Research begin in a systematic way?

    <p>In the late 1930s</p> Signup and view all the answers

    Who is credited with the development of Scientific Management?

    <p>Frederick Taylor</p> Signup and view all the answers

    What is the term used to describe the combination of Operations Research and Management Science in the U.S.?

    <p>ORMS</p> Signup and view all the answers

    Which of the following is an example of a Deterministic Model?

    <p>Linear Programming</p> Signup and view all the answers

    What is the term used to describe the study of waiting lines?

    <p>Queuing Theory</p> Signup and view all the answers

    What is the age deduction per year in the Austin Auto Auction model?

    <p>$800</p> Signup and view all the answers

    What is the mileage deduction per mile in the Austin Auto Auction model?

    <p>$0.025</p> Signup and view all the answers

    What is the expression for the expected winning bid in the Austin Auto Auction model?

    <p>P - 800(A) - 0.025(M)</p> Signup and view all the answers

    What is the assumption behind the Austin Auto Auction model regarding the factors influencing the value of a used car?

    <p>Only the age and mileage of the car affect its value.</p> Signup and view all the answers

    What is crucial for the successful implementation of model results?

    <p>User involvement throughout the modeling process</p> Signup and view all the answers

    What should a managerial report include?

    <p>The recommended decision and other pertinent information</p> Signup and view all the answers

    What is the purpose of the Austin Auto Auction model?

    <p>To determine the starting bid of a car in an auction.</p> Signup and view all the answers

    What is the variable x1 in the Iron Works, Inc. model?

    <p>The production level of product 1 this month.</p> Signup and view all the answers

    What is the purpose of a what-if analysis in an OR-based decision support system?

    <p>To test the sensitivity of the model solution to different assumptions and data</p> Signup and view all the answers

    What is an example of OR application in the field of logistics?

    <p>All of the above</p> Signup and view all the answers

    What is the contract requirement for product 1 in the Iron Works, Inc. model?

    <p>At least m units of product 1 must be produced this month.</p> Signup and view all the answers

    What is the primary goal of an OR-based decision support system?

    <p>To support decision-making with data-driven insights</p> Signup and view all the answers

    What is the unit profit of product 2 in the Iron Works, Inc. model?

    <p>p2</p> Signup and view all the answers

    What is the purpose of providing training sessions during the workday?

    <p>To increase user involvement and understanding of the model</p> Signup and view all the answers

    What is the auctioneer's strategy in the Austin Auto Auction example?

    <p>To set the starting bid at seventy percent of the predicted final winning bid</p> Signup and view all the answers

    What is a component of an OR-based decision support system?

    <p>All of the above, including what-if analysis</p> Signup and view all the answers

    What is the objective of the mathematical model in Iron Works, Inc?

    <p>Maximize the total monthly profit</p> Signup and view all the answers

    What is the constraint on the total amount of steel used during monthly production?

    <p>a1x1 + a2x2 &lt; b</p> Signup and view all the answers

    What is the constraint on the monthly production level of product 1?

    <p>x1 &gt; m</p> Signup and view all the answers

    What is the constraint on the monthly production level of product 2?

    <p>x2 &lt; u</p> Signup and view all the answers

    What is the profit per unit of product 1 in the given example?

    <p>100</p> Signup and view all the answers

    What is the allocated amount of steel in the given example?

    <p>2000</p> Signup and view all the answers

    What is the constraint on the production level of product 2 in the given example?

    <p>x2 &lt; 720</p> Signup and view all the answers

    What is the steel required per unit of product 2 in the given example?

    <p>3</p> Signup and view all the answers

    What is the total cost of land, lumber, supplies, and labor for each house?

    <p>$105,000</p> Signup and view all the answers

    What is the monthly fixed cost for Ponderosa Development Corp?

    <p>$40,000</p> Signup and view all the answers

    What is the marginal revenue per house for Ponderosa Development Corp?

    <p>$115,000</p> Signup and view all the answers

    What is the variable cost per house for Ponderosa Development Corp?

    <p>$105,000</p> Signup and view all the answers

    What is the breakeven point for monthly sales of the houses?

    <p>4 houses</p> Signup and view all the answers

    What is the monthly profit if 12 houses per month are built and sold?

    <p>$80,000</p> Signup and view all the answers

    What is the total monthly salary of the employees in Ponderosa Development Corp?

    <p>$35,000</p> Signup and view all the answers

    What is the revenue function for Ponderosa Development Corp?

    <p>r(x) = 115,000x</p> Signup and view all the answers

    Study Notes

    Operations Research

    • Also known as Management Science (MS) or Decision Science (DS)
    • Combines Operational Research (OR) and Management Science (MS) in the US, referred to as OR/MS or ORMS

    Operations Research Models

    • Deterministic Models: assume all data is known with certainty
      • Examples:
        • Linear Programming
        • Network Optimization
        • Integer Programming
        • Nonlinear Programming
        • Inventory Models
    • Stochastic Models: explicitly represent uncertain data via random variables or stochastic processes
      • Examples:
        • Discrete-Time Markov Chains
        • Continuous-Time Markov Chains
        • Queuing Theory (waiting lines)
        • Decision Analysis
        • Game Theory
        • Inventory models
        • Simulation

    History of Operations Research

    • A relatively new discipline, only 70 years old
    • Developed from mathematics, physics, and engineering in the late 1930s
    • Key contributors:
      • Frederick Taylor (Scientific Management)
      • Henry Gannt (Project Scheduling)
      • F.W.Harris (Inventory Theory)
      • William Shewart (Control Charts)
      • Andrey A. Markov (Markov Processes)
      • E.K. Erlang (Queuing Theory)
      • H. Dodge and H. Roming (Quality Theory)

    Implementation and Follow-Up

    • Successful implementation of model results is critical
    • Secure user involvement throughout the modeling process
    • Continue to monitor the contribution of the model and refine or expand as necessary

    Report Generation

    • Prepare a managerial report based on model results
    • Include:
      • Recommended decision
      • Pertinent information about results (e.g., sensitivity to assumptions and data)

    Components of OR-Based Decision Support System

    • Data base (e.g., nurse profiles, external resources, rules)
    • Graphical User Interface (GUI)
    • Algorithms, pre- and post-processor
    • What-if analysis
    • Report generators

    Examples of OR Applications

    • Rescheduling aircraft in response to groundings and delays
    • Planning production for printed circuit board assembly
    • Scheduling equipment operators in mail processing and distribution centers
    • Developing routes for propane delivery
    • Adjusting nurse schedules in light of daily fluctuations in demand

    Austin Auto Auction Example

    • Auctioneer uses a simple mathematical model to decide starting bid
    • Model takes into account car's original price, age, and mileage
    • Starting bid is 70% of expected winning bid

    Iron Works, Inc. Example

    • Manufacturer produces two products from steel
    • Wants to maximize total monthly profit
    • Constraints:
      • Limited steel allocation
      • Minimum production level for product 1
      • Maximum production level for product 2
      • Non-negativity constraint for product 2

    Ponderosa Development Corp. Example

    • Builds one style house in the valley
    • Costs include land, labor, and sales commission
    • Selling price is $115,000
    • Identify all costs and denote marginal cost and marginal revenue for each house
    • Write monthly cost function, revenue function, and profit function

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    3rd Lecturer.ppt

    Description

    Introduction to Operations Research, also known as Management Science or Decision Science, including its different models such as deterministic and stochastic models.

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