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.
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
• 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.
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.
• 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.
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)
• 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
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
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.
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.
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.
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.
• 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.
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.
• 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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