Operations Research Using Excel

A Case Study Approach

Vikas Singla

• Publisher: CRC Press
• Year: 2021
• Print ISBN:
  9780367646431
• eBook ISBN:
  9781000453461
• Topic: Technology & Engineering
• Subtopic: Desktop Applications
• Index: Technology & Engineering

The field of operations research provides a scientific approach to managerial decision making. In a contemporary, hypercompetitive ever-changing business world, a manager needs quantitative and factual ways of solving problems related to optimal allocation of resources, profit/loss, maximization/minimization etc. In this endeavor, the subject of doing research on how to manage and make operations efficient is termed as Operations Research.

The reference text provides conceptual and analytical knowledge for various operations research techniques. Readers, especially students of this subject, are skeptic in dealing with the subject because of its emphasis on mathematics. However, this book has tried to remove such doubts by focusing on the application part of OR techniques with minimal usage of mathematics. The attempt was to make students comfortable with some complicated topics of the subject. It covers important concepts including sensitivity analysis, duality theory, transportation solution method, Hungarian algorithm, program evaluation and review technique and periodic review system.

Aimed at senior undergraduate and graduate students in the fields of mechanical engineering, civil engineering, industrial engineering and production engineering, this book:

• Discusses extensive use of Microsoft Excel spreadsheets and formulas in solving operations research problems
• Provides case studies and unsolved exercises at the end of each chapter
• Covers industrial applications of various operations research techniques in a comprehensive manner
• Discusses creating spreadsheets and using different Excel formulas in an easy-to-understand manner
• Covers problem-solving procedures for techniques including linear programming, transportation model and game theory

1 Operations Research

An Introduction

DOI: 10.1201/9781003212966-1

1.1 Introduction

Two kids are competing to build a house out of plastic building blocks. Both would most likely use a different, but not completely different, method of combining blocks in order to build a house, despite using similar resources and trying to produce similar output. In a more complex example, car manufacturing involves more than ten thousand parts grouped into hundreds of components to build a single car. Two competing manufacturers would be using similar inputs to produce similar output of a car. However, one house or a particular car is better than the competitor. It could be better on one or more of various key performance indicators such as quality, aesthetics, durability, creation time, etc. The question is why there is a difference in output when similar inputs are used. Here comes the importance of understanding of operations. In the simplest terms, operations can be defined as the process of doing work. This process is an interaction or a combination of various activities arranged in a certain way so as to convert resources into formation of a desired product or service (Figure 1.1). A kid or a car manufacturer applying operations in a more efficient and effective manner would be able to provide more productive outputs and be able to defeat competitor.

FIGURE 1.1 Operation as a conversion process.

Historically, to make a process more effective, the work has been categorized into more specialized arenas. F.W. Taylor, considered as the father of scientific management, very successfully segregated managerial work from operations work. Specialization of work by breaking down into as minute entity as possible and segregating them into various disciplines such as finance, marketing, sales, personnel management, etc. resulted in studying of operations as a separate discipline. Henry Ford through its Model T established such specialization to its highest degree when the company by using similar resources as its competitors built a cheaper version of car by modifying the production process to mass production. No competitor was able to match the efficiency of Ford cars even by using the same resources, similar processes and comparable output. Thus, operation is further defined as the method of managing processes.

However, specialization of disciplines does not imply isolation or working in separation. By definition, operations deal with processes or how a work is being done. Processes are involved in every discipline of an organization. Accounting, finance, product design, production, marketing, quality control, etc. and many more functions work by carrying out certain activities. Each function performs activities according to a certain process to fulfil its role and then interlinks with other functions. Marketing department through its feedback surveys analyses consumer preferences and places them with production department, which in order to produce more or new items, asks for more budget from finance to procure materials and hire more people. Human resource manager steps in to apply processes of hiring. Purchase department starts processes of procuring more material and machines and so forth. This entails that in addition to internal processes of every function, they should gel with each other effectively. This makes managing of processes or study of operations management as encompassing every function of an organization and not as a separate entity. Also as discussed, a process is a way of doing a work and work is being performed by every organization. A small carpenter, a retail store, manufacturing companies, service firms, and defence equipment producers all indulge in processes making application of operations management in order to manage their processes essential. Scale and complexity of companies in the present hypercompetitive business scenario force them to produce better whether in terms of quality, price, delivery time or any other feature. The availability of limited resources which are being fought over by various players further puts pressure to use valuable and restricted resources to produce more valuable products. Proper planning, coordination of various functions and managing of overall operations have been found very effective in achieving such goal.

Solving diverse and complex process problems requires a systematic and mathematical approach by using quantitative analysis. A variety of monikers such as management science, decision science, and operations research (OR) have been used to describe body of knowledge dedicated to study and research of mathematical structured methods used in decision-making. The above discussion focussed on explaining the importance of operations in a variety of functions of different organizations. Thus, this book used Operations Research (OR) as its title.

1.1.1 Genesis of OR

Promulgation of scientific methods of management in the early 20th century encouraged the establishment of quantitative approach to decision-making. This approach became increasingly useful during World War II when the armed forces strongly applied quantitative methods to help in strategic problems. For instance, British forces were considered to first utilize methods of OR to understand the application of radar technology in intercepting enemy aircrafts. Due to the all-encompassing nature of OR as discussed in solving process problems of different functions, such application of OR methods was found to be successful by forming teams consisting of experts from different disciplines such as mathematics, engineering, supply chain, etc. Effective results obtained from OR methods provided an impetus to its flourish into other fields such as agriculture, manufacturing and services.

From various definitions available pertaining to OR, management science or decision sciences, a common understanding that emanates is that the OR discipline is a scientific method providing decision makers quantitative tools for solving problems. The key points in these definitions are: first...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Author
• Chapter 1 Operations Research: An Introduction
• Chapter 2 Linear Programming
• Chapter 3 Linear Programming: Simplex Method
• Chapter 4 Sensitivity Analysis and Duality Theory
• Chapter 5 Network Model I: Transportation Model
• Chapter 6 Network Model II: Assignment Model
• Chapter 7 Network Model III: Travelling Salesman, Vehicle Routing and Shortest Path Problem
• Chapter 8 Project Scheduling: PERT and CPM
• Chapter 9 Game Theory
• Index