LECTURE 2

INTRODUCTION TO OPERATIONS RESEARCH II

DR. ANUP KUMAR TRIPATHI

DEPARTMENT OF MINING ENGINEERING

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 INTRODUCTION TO OPERATIONS RESEARCH II

SYSTEM MODELING AND ANALYSIS

This is a rare occurrence in OR, and most applications usually involve varying levels of approximations.

Figure 1 below depicts the levels of abstraction that characterize the development of an OR model.

We abstract or summarize the assumed real world from the real situation by concentrating on the
dominant variables that control the behavior of the real system.

The model expresses in an amenable manner the mathematical functions that represent the behavior of the
assumed real world.

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Figure 1: Levels of abstraction in model development.

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 Modeling is the enterprise of devising a simplified representation of a complex system with the goal of
providing predictions of the system's performance measures of interest.

Such a simplified representation is called a model.

A model is designed to capture certain behavioral aspects of the modeled system which are of interest to
the analyst / modeler in order to gain knowledge and insight into the system's behavior.

 While modeling is ultimately motivated by economic considerations, several motivational strands may be
discerned:
1. Evaluating system performance under ordinary and unusual scenarios.
2. Predicting the performance of experimental system designs.
3. Ranking multiple designs and analyzing their tradeoffs.

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PHASES OF AN OPERATIONS RESEARCH STUDY
 An OR study is rooted in teamwork, where the OR analysts and the client work side by side.

The OR analysts' expertise in modeling must be complemented by the experience and cooperation of the
client for whom the study is being carried out.

 As a decision-making tool, OR is both a science and an art.

It is a science by virtue of the mathematical techniques it embodies, and it is an art because the success of
the phases leading to the solution of the mathematical model depends largely on the creativity and
experience of the operations research team.

Effective [OR] practice requires more than analytical competence: It also requires, among other attributes,
technical judgment (for example, when and how to use a given technique) and skills in communication
and organizational survival.

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 It is difficult to prescribe specific courses of action (similar to those dictated by the precise theory of
mathematical models) for these intangible factors.

We can, however, offer general guidelines for the implementation of OR in practice.

 The principal phases for implementing OR in practice include:

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 Phase 3, dealing with model solution, is the best defined and generally the easiest to implement in an OR
study, because it deals mostly with precise mathematical models.

Implementation of the remaining phases is more an art than a theory.

1. Problem Definition
 It involves defining the scope of the problem under investigation.

This function should be carried out by the entire OR team.

The aim is to identify three principal elements of the decision problem:

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2. Model Construction
 It entails an attempt to translate the problem definition into mathematical relationships.

If the resulting model fits one of the standard mathematical models, such as linear programming, we can
usually reach a solution by using available algorithms.

Alternatively, if the mathematical relationships are too complex to allow the determination of an analytic
solution, the OR team may opt to simplify the model and use a heuristic approach, or they may consider
the use of simulation, if appropriate.

In some cases, mathematical, simulation, and heuristic models can be combined to solve the decision
problem.

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3. Model Solution
 It is by far the simplest of all OR phases because it involves the use of well-defined optimization
algorithms.

An important aspect of the model solution phase is sensitivity analysis.

It deals with obtaining additional information about the behavior of the optimum solution when the model
undergoes some parameter changes.

Sensitivity analysis is particularly needed when the parameters of the model cannot be estimated
accurately.

In these cases, it is important to study the behavior of the optimum solution in the neighborhood of the
estimated parameters.

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4. Model Validity
 It checks whether or not the proposed model does what it purports to do-that is, does it predict adequately
the behavior of the system under study?

Initially, the OR team should be convinced that the model's output does not include surprises.

In other words, does the solution make sense?

Are the results intuitively acceptable?

On the formal side, a common method for checking the validity of a model is to compare its output with
historical output data.

The model is valid if, under similar input conditions, it reasonably duplicates past performance.

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Generally, however, there is no assurance that future performance will continue to duplicate past
behavior.

Also, because the model is usually based on careful examination of past data, the proposed comparison is
usually favorable.

If the proposed model represents a new or non-existing system, no historical data would be available.

In such cases, we can use simulation as an independent tool for verifying the output of the mathematical
model.

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5. Implementation
 Implementation of the solution of a validated model involves the translation of the results into
understandable operating instructions to be issued to the people who will administer the recommended
system.

The burden of this task lies primarily with the OR team.

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