OPERATION RESEARCH-MBA204 2025

Module 01:

1) Define Operation Research? Give a detailed history of OR & Explain the

features of OR.
Operations Research (OR) is a multidisciplinary analytical method that uses
mathematical modelling, statistical analysis, and algorithmic techniques to solve complex
decision-making problems in various fields such as business, industry, government, and
military. It systematically assesses complex situations, identifies the most efficient course
of action, and provides quantitative tools to aid in decision-making processes. OR involves
the application of scientific methods to analyze and optimize processes, resources, and
systems, aiming to improve efficiency, effectiveness, and overall decision quality. By
employing quantitative and qualitative techniques, Operations Research helps
organizations make informed, rational, and strategic decisions to achieve their objectives.

Operations research is the application of the methods of science to complex problems in

the direction and management of large systems of men, machines, materials and money in
industry, business, government and defence. The distinctive approach is to develop a
scientific model of the system incorporating measurements of factors such as chance and
risk, with which to predict and compare the outcomes of alternative decisions, strategies
or controls. The purpose is to help management in determining its policy and actions
scientifically.
– Operational Research Society, UK
Operations research is the systematic application of quantitative methods, techniques and
tools to the analysis of problems involving the operation of systems.
– Daellenbach and George, 1978
History of Operations research
• Origins of Operations Research (OR) during Wars: OR emerged as a discipline
during World War II to manage scarce resources. Early OR efforts traced back to World
War I when Thomas Edison and AK Erlang applied tactical game boards and waiting-
line theory to solve military and communication problems.
• Interdisciplinary Approach in OR: During World War II, groups comprising
specialists in mathematics, economics, statistics, engineering, behavioral, and physical

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sciences were formed in the armed forces to address complex strategic and tactical
issues. British Air Force's group, Blackett’s Circus, led by Prof. P M S Blackett,
pioneered mixed-team approach in analyzing radar equipment coordination.
• Post-War Expansion of OR: After World War II, OR techniques were applied to
civilian problems in business, industry, and research due to:
➢ Economic and industrial growth leading to complex managerial problems.
➢ Advancements in OR techniques like linear programming, statistical quality
control, dynamic programming, queuing theory, and inventory theory.
➢ Utilization of high-speed computers for real-life problem-solving.
• Institutionalization and Professional Development: OR societies were established,
such as Operational Research Society of UK (1948), Operations Research Society of
America (1952), and The Institute of Management Sciences (TIMS) (1952). India
formed OR teams at Defence Science Laboratory and the Indian Statistical Institute in
the 1950s. OR Society of India (ORSI) was founded in 1957 and became a member of
the International Federation of Operational Research Societies (IFORS) in 1964.
• Development of Project Scheduling Techniques: Program Evaluation and Review
Technique (PERT) and Critical Path Method (CPM) were developed in the 1950s for
scheduling and monitoring complex projects.
• Institutional Development and Publications: The American Institute for Decision
Sciences was established in 1967, focusing on quantitative approaches to administrative
problems and publishing the journal Decision Science. OR has been applied in diverse
fields such as hospital management, energy conservation, and environmental pollution,
showcasing its potential for addressing societal needs.
Feature of Operations research:
• Interdisciplinary Approach: OR integrates concepts and techniques from various
disciplines such as mathematics, engineering, economics, computer science, and
behavioural sciences. It combines these diverse methods to address complex problems.
• Quantitative Analysis: OR relies heavily on quantitative methods, employing
mathematical models, statistical analysis, and algorithms to analyze problems and
generate optimal solutions. It uses mathematical expressions to represent relationships
within a problem.
• Decision-Making Orientation: OR is focused on decision-making processes. It

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provides insights and solutions to help decision-makers make better, informed

decisions. OR models assist in evaluating different alternatives and choosing the most
favourable one.
• Optimization: One of the primary objectives of OR is optimization - finding the best
possible solution from a set of feasible alternatives. This could involve maximizing
profits, minimizing costs, optimizing resource allocation, or improving efficiency.
• Problem-solving Methodology: OR follows a systematic problem-solving
methodology. It includes defining the problem, constructing a mathematical model,
solving the model using appropriate techniques, testing the model's validity, and
implementing the solution in the real world.
• Simulation and Modelling: OR often utilizes simulation techniques. By creating
models that mimic real-world situations, OR professionals can test various scenarios
without experimenting in the actual environment. Simulation allows for a better
understanding of complex systems and their behaviour under different conditions.
• Iterative Process: OR is an iterative process. As new data becomes available or as
situations change, OR models can be updated and refined. This adaptability ensures
that the solutions remain relevant and effective over time.
• Problem Complexity: OR is particularly suited for dealing with complex and large-
scale problems. It can handle intricate relationships, multiple objectives, and
numerous constraints, providing structured approaches to tackle complicated real-
world challenges.
• Implementation Focus: OR is not limited to theoretical analysis. It emphasizes the
practical implementation of solutions. OR experts work closely with decision-makers
and stakeholders to ensure that the recommended strategies are feasible and applicable
in real-world settings.
• Continuous Improvement: OR promotes a culture of continuous improvement. By
analyzing the outcomes of implemented solutions, organizations can gather feedback,
learn from successes and failures, and refine their strategies, leading to ongoing
enhancement in operational efficiency.

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2) Explain in details the models & modelling in operation research?

Definition Of Models:
A model in Operations Research is a simplified representation of a real-world
system or problem. It captures the essential features of the system, enabling analysts to
understand, analyze, and solve complex problems in a structured manner. Models are
created to gain insights, predict outcomes, and facilitate decision-making.
Types Of Models:
• Mathematical Models:
➢ Equation-based Models: These models use mathematical equations to
represent relationships between variables. For example, linear equations are
used in Linear Programming (LP) models.
➢ Optimization Models: Focus on finding the best solution, considering
constraints. Linear Programming, Integer Programming, and Nonlinear
Programming are common optimization models.
➢ Simulation Models: Simulate real-world scenarios using stochastic processes.
Monte Carlo simulations are a widely used technique in OR.
➢ Queuing Models: Study waiting lines and service processes, critical in areas
like customer service and manufacturing.
➢ Inventory Models: Determine optimal inventory levels considering factors
like demand, ordering costs, and holding costs.
• Graphical Models:
➢ Flowcharts: Visual representations of processes, useful for understanding
sequential operations and decision points.
➢ Network Diagrams: Display relationships between various activities, crucial
in Project Management applications like PERT and CPM.
• Physical Models:
➢ Prototypes: Physical replicas of real-world systems, commonly used in
manufacturing and engineering fields.
➢ Scale Models: Smaller versions of real systems, used for testing and analysis
before full-scale implementation.

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Steps In Modelling Process:

• Problem Definition: Clearly define the problem, including objectives, constraints,
and variables of interest.
• Model Formulation: Translate the real-world problem into a mathematical or
graphical representation. Identify decision variables, objective function, and
constraints.
• Data Collection: Gather relevant data to parameterize the model accurately. Data
quality is crucial for the model’s reliability.
• Solution: Use appropriate techniques (e.g., linear programming solvers, simulation
software) to solve the model and obtain results.
• Validation: Validate the model by comparing its predictions with real-world
outcomes. Adjust the model if necessary.
• Implementation: Integrate the solution into the decision-making process of the
organization. Implement changes based on the model’s recommendations.
Importance Of Modelling In OR:
• Complex Problem Simplification: Models simplify intricate real-world problems,
making them manageable for analysis and decision-making.
• Risk-Free Experimentation: With models, organizations can experiment with
different scenarios and strategies without real-world consequences.
• Informed Decision-Making: Models provide decision-makers with data-driven
insights, ensuring decisions are based on evidence and analysis rather than intuition.
• Resource Optimization: Models assist in optimizing resources, whether it’s
minimizing costs, maximizing profits, or improving efficiency in processes.
• Continuous Improvement: Through feedback and iterative modelling, organizations
can refine their models, leading to continuous improvement in operations and
strategies.
3) Explain in details the methods for solving operation research models?
Operations Research (OR) models are used to address complex decision-making
problems. Depending on the type and complexity of the model, various methods and
techniques are employed to find optimal solutions.

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Methods For Solving Or Models:

• Linear Programming (LP): Linear programming is used when the relationships
between variables in the model are linear. LP aims to maximize or minimize an
objective function while satisfying a set of linear constraints. The simplex method
and the graphical method are common techniques for solving LP problems. LP is
used in resource allocation, production planning, transportation, and supply chain
management.
• Nonlinear Programming (NLP): Nonlinear programming is used when the
relationships between variables are nonlinear. Various optimization techniques like
the gradient descent method, the Newton-Raphson method, and genetic algorithms
are used to find optimal solutions in NLP problems. NLP is applied in fields such
as engineering design, financial modeling, and logistics.
• Integer Programming (IP): Integer programming is used when decision variables
must take integer values (0, 1, 2, etc.).Branch and bound, branch and cut, and
cutting plane methods are commonly employed for solving IP problems. IP is used
in facility location, project scheduling, and network design.
• Dynamic Programming (DP): Dynamic programming is used for solving
problems with a sequential decision-making process. DP breaks down complex
problems into subproblems and uses recursion to find the optimal solution. The
Bellman equation is a key concept in dynamic programming. DP is used in project
management, inventory control, and route optimization.
• Queuing Theory: Queuing theory deals with waiting line and service processes.
The M/M/1, M/M/c, and Erlang-C models are used to analyze queuing systems.
Markov chains and probability theory play a significant role in queuing theory.
Queuing theory is applied in service systems like call centers, healthcare facilities,
and traffic management.
• Simulation: Simulation uses computer models to imitate the behavior of real-world
systems. Monte Carlo simulation, discrete event simulation, and agent-based
modeling are popular techniques. These models are programmed and run iteratively
to observe system behavior. Simulation is used in complex systems such as
manufacturing processes, transportation networks, and financial markets.
• Heuristic Methods: Heuristic methods provide approximate solutions for complex

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problems when exact solutions are difficult to find. Metaheuristic algorithms like
genetic algorithms, simulated annealing, and ant colony optimization are used to
find near-optimal solutions. Heuristics are applied in vehicle routing, machine
scheduling, and optimization problems in which finding an exact solution is
impractical.
• Game Theory: Game theory is used for modeling strategic interactions and
decision-making between multiple parties. Nash equilibrium, mixed strategies, and
payoff matrices are used to analyze and find solutions in game theory. Game theory
is employed in economics, political science, and competitive business strategy.
• Network Flow Algorithms: Network flow algorithms are used for problems
involving the flow of resources through a network. The Ford-Fulkerson algorithm,
Dijkstra's algorithm, and the maximum flow-minimum cut theorem are commonly
used for network flow problems. Network flow algorithms are used in
transportation, communication, and network design.
• Metaheuristic Methods: Metaheuristic methods are general problem-solving
strategies that can be applied to a wide range of optimization problems. Examples
include genetic algorithms, simulated annealing, particle swarm optimization, and
tabu search. Metaheuristic methods are versatile and can be applied to various
optimization problems, including scheduling, routing, and resource allocation.
4) Write a note on Applications, Advantages and opportunities of OR?
Applications of Operations Research:
• Business and Industry: OR is extensively used in supply chain management,
inventory optimization, production scheduling, and logistics planning. Businesses
employ OR for market analysis, pricing strategies, and demand forecasting, aiding in
better decision-making and profitability.
• Healthcare: OR models optimize healthcare resource allocation, staff scheduling, and
patient flow management in hospitals. It helps in optimizing ambulance routing, organ
transplant matching, and healthcare policy planning.
• Transportation and Logistics: OR techniques optimize route planning, vehicle
scheduling, and traffic management. Airlines use OR for crew scheduling and aircraft
maintenance optimization, leading to cost savings and improved operational
efficiency.

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• Finance and Investments: OR is applied in portfolio optimization, risk management,

and algorithmic trading in the financial sector. Banks use OR for credit risk
assessment, fraud detection, and customer relationship management.
• Manufacturing and Engineering: OR aids in production process optimization,
quality control, and facility layout planning. Engineering projects benefit from OR
through project scheduling, resource allocation, and cost estimation.
• Military and Defense: OR models are used in military strategy planning, resource
allocation, and troop movement optimization. Defense agencies utilize OR for
logistics planning, inventory management, and maintenance scheduling.
• Environment and Energy: OR helps in environmental impact assessment, natural
resource management, and renewable energy optimization. Energy companies employ
OR for demand forecasting, energy distribution, and smart grid management.
Telecommunications: OR optimizes network design, call routing, and bandwidth
allocation in telecommunications systems. Telecom companies use OR to enhance
service quality, reduce costs, and improve customer satisfaction.
Advantages of Operations Research:
• Optimization: OR provides optimal solutions, maximizing efficiency, minimizing
costs, and improving resource utilization.
• Informed Decision-Making: OR models offer insights into complex problems,
enabling decision-makers to make informed and strategic choices.
• Improved Efficiency: By streamlining processes and operations, OR enhances overall
efficiency and productivity in various industries.
• Resource Allocation: OR assists in optimal allocation of resources, ensuring effective
utilization of manpower, materials, and finances.
• Risk Management: OR models assess risks and uncertainties, allowing businesses to
develop contingency plans and mitigate potential losses.
• Adaptability: OR models can be adapted to changing scenarios, ensuring solutions
remain relevant and effective over time.
Opportunities in Operations Research:
• Data Analytics: With the rise of big data, OR professionals have opportunities in data
analytics, utilizing large datasets to develop predictive models and actionable insights.
• Healthcare Optimization: As healthcare systems evolve, there is a growing need for

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OR experts to optimize patient care, hospital operations, and healthcare policy

planning.
• Supply Chain Optimization: With global supply chains becoming more complex,
OR specialists are in demand for optimizing supply chain networks, inventory
management, and demand forecasting.
• Environmental Sustainability: OR professionals can contribute to environmental
sustainability by optimizing renewable energy systems, waste management, and
conservation efforts.
• Digital Transformation: OR techniques are vital in optimizing digital platforms,
improving user experiences, and enhancing online services for businesses and
consumers.
• Cybersecurity: OR methods are employed in cybersecurity for threat detection, risk
analysis, and decision-making to protect sensitive data and systems.

5) What is LPP? Discuss in details the structure of Linear Programming

models along with assumptions of an LP models?
Linear Programming (LP): Linear Programming (LP) is a mathematical method used to
optimize (maximize or minimize) a linear objective function subject to a set of linear
equality and inequality constraints. It is widely applied in various fields for decision-
making and resource allocation problems where limited resources need to be allocated
efficiently to achieve the best outcome.
Structure of Linear Programming Models:
• Decision Variables (X1, X2, ..., Xn): These represent the quantities of decision
variables to be determined, such as production levels, investments, or allocations.
• Objective Function (Z): The objective function defines the goal of the optimization,
either to maximize (max Z) or minimize (min Z) a linear expression of the decision
variables.
Objective Function:

• Constraints (Ax ≤ b): Constraints restrict the feasible values of decision variables. A
matrix (A) represents the coefficients of decision variables in each constraint. The

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vector (x) represents the decision variables. The vector (b) represents the right-hand
side constants of the constraints.

• Non-negativity Constraints: Decision variables usually cannot take negative values in

LP models. Xi≥0 for all i = 1 to n.
Assumptions of LP Models:
• Linearity: LP assumes that the relationships between decision variables in the objective
function and constraints are linear. This means the coefficients in the objective function
and constraints are constants.
• Additivity: The total contribution of each decision variable is the sum of its individual
contributions. This property allows breaking down complex problems into smaller,
manageable parts.
• Divisibility: Decision variables are infinitely divisible. In real-world applications, this
might not always hold true, especially when dealing with items like machinery or labor,
which cannot be divided into smaller parts.
• Certainty: LP assumes that all coefficients in the objective function and constraints are
known with certainty. In practical situations, these coefficients are usually estimates and
subject to change.
• Independence: LP assumes that the decision variables are independent of each other.
Changes in one variable do not affect the coefficients of other variables in the objective
function or constraints.
• Continuity: LP assumes that decision variables can take any real value within their non-
negative constraints. In some cases, this might not be true; for example, production
quantities often need to be integers.

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6) Explain the application areas of Linear Programming? Discuss the

advantages and Limitations of LP?
Application Areas of Linear Programming (LP):
• Supply Chain Management: LP optimizes production, distribution, and inventory
levels to minimize costs while meeting demand. It aids in supplier selection,
production scheduling, and transportation planning.
• Operations Management: LP assists in workforce scheduling, facility layout
design, and process optimization. It ensures efficient allocation of resources and
minimizes operational costs.
• Finance and Investment: LP is used in portfolio optimization, asset allocation,
and fund management. It helps investors maximize returns given certain constraints
and risk factors.
• Marketing: LP models pricing strategies, advertising budgets, and product mix
optimization. It maximizes profit by allocating resources effectively across
marketing channels.
• Telecommunications: LP optimizes network design, traffic routing, and
bandwidth allocation. It ensures efficient use of resources in communication
networks.
• Manufacturing: LP is applied in production planning, workforce scheduling, and
facility utilization. It minimizes production costs while meeting demand
requirements.
• Agriculture: LP models crop planning, irrigation scheduling, and fertilizer
allocation. It helps farmers maximize yield and minimize costs.
• Healthcare: LP optimizes healthcare resource allocation, staff scheduling, and
patient flow management. It ensures efficient use of hospital resources.
• Education: LP is used in school timetabling, course scheduling, and classroom
allocation. It helps educational institutions optimize resource usage.
• Environmental Management: LP models waste management, pollution control,
and resource conservation. It aids in optimizing environmental policies and
practices.

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Advantages of Linear Programming:

• Optimization: LP provides optimal solutions, maximizing or minimizing
objectives subject to constraints, ensuring efficient resource utilization.
• Simplicity and Transparency: LP models are straightforward and easy to
interpret, making them accessible for decision-makers.
• Versatility: LP can be applied to a wide range of problems in different fields,
showcasing its versatility.
• Quantitative Analysis: LP provides quantitative insights, aiding in data-driven
decision-making and strategic planning.
• Resource Allocation: LP assists in optimal allocation of resources, enhancing
productivity and reducing wastage.
Limitations of Linear Programming:
• Assumptions: LP relies on certain assumptions like linearity and certainty, which
might not always hold true in real-world situations.
• Complexity: LP models can become complex, especially in large-scale
applications, leading to computational challenges.
• Integer Constraints: LP assumes continuous variables, but many real-world
problems involve discrete decision variables, requiring modifications for accurate
modelling.
• Limited Scope: LP does not handle nonlinear relationships well, limiting its
applicability in problems with nonlinear constraints or objectives.
• Solution Sensitivity: LP solutions are sensitive to changes in coefficients, making
them less robust in situations with uncertain or changing parameters.
• Human Factors: LP models might not consider qualitative factors or human
judgment, which are crucial in some decision-making processes.

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7) Discuss the Guidelines on Linear Programming model formulation and

write the General mathematical model of LPP.
• Step 1: Identify the decision variables
(a) Express each constraint in words. For this you should first see whether the constraint
is of the form ≥ (at least as large as), of the form ≤ (no larger than) or of the form =
(exactly equal to).
(b) Express verbally the objective function.
(c) Verbally identify the decision variables with the help of Step (a) and (b). For this
you need to ask yourself the question – What decisions must be made in order to
optimize the objective function? Having followed Step 1(a) to (c) decide the symbolic
notation for the decision variables and specify their units of measurement. Such
specification of units of measurement would help in interpreting the final solution of
the LP problem.
• Step 2: Identify the problem data
To formulate an LP model, identify the problem data in terms of constants, and
parameters associated with decision variables. It may be noted that the decision-maker
can control values of the variables but cannot control values in the data set.
• Step 3: Formulate the constraints
Convert the verbal expression of the constraints in terms of resource requirement and
availability of each resource. Then express each of them as linear equality or inequality,
in terms of the decision variables defined in Step 1. Values of these decision variables
in the optimal LP problem solution must satisfy these constraints in order to constitute
an acceptable (feasible) solution. Wrong formulation can either lead to a solution that
is not feasible or to the exclusion of a solution that is actually feasible and possibly
optimal.
• Step 4: Formulate the objective function
Identify whether the objective function is to be maximized or minimized. Then express
it in the form of linear mathematical expression in terms of decision variables along
with profit (cost) contributions associated with them. After gaining enough experience
in model building, readers may skip verbal description. The following are certain
examples of LP model formulation that may be used to strengthen the ability to translate
a real-life problem into a mathematical model.

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8) Explain the different phases of Management Science?

Management science, also known as operations research, involves the use of mathematical
modelling and analytical methods to solve complex decision-making problems in various
fields. The development of management science can be divided into several phases, each
marked by the evolution of methodologies and techniques. While the exact categorization
might vary.
Different phases of management science in operations research:
• Origins (1940s-1950s):
➢ World War II: Operations research originated during World War II to support
military planning and logistics. Mathematicians and scientists were tasked with
solving complex military operations problems. Early focus was on military
applications, including optimal resource allocation, troop movement, and strategy
planning.
• Development and Expansion (1950s-1960s):
➢ Expansion to Civilian Applications: After the war, operations research techniques
were applied to civilian problems in areas such as transportation, manufacturing,
and project management.
➢ Mathematical Programming: Linear programming and integer programming
techniques were developed and widely applied to optimization problems.
➢ Simulation and Stochastic Models: Introduction of simulation techniques to model
real-world systems and stochastic models to handle uncertainty.
• Computational Era (1960s-1980s):
➢ Advancements in Computing: The availability of computers led to the development
of sophisticated algorithms and models. This era saw the rise of algorithms for
network optimization, nonlinear programming, and integer programming.
➢ Decision Support Systems: Integration of operations research models into decision
support systems for business and policy-making.
• Integration and Maturity (1980s-2000s):
➢ Integration with Information Technology: Operations research techniques became
integrated with information technology, allowing real-time decision-making in
various industries.
➢ Supply Chain Optimization: Focus on optimizing supply chain operations,

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inventory management, and logistics.

➢ Data Envelopment Analysis (DEA): Introduction of DEA, a non-parametric
method for measuring the efficiency of decision-making units.
• Modern Era (2000s-Present):
➢ Big Data and Analytics: Embracing big data analytics and machine learning
techniques for decision-making.
➢ Optimization in Online Services: Optimization algorithms used in online
advertising, recommendation systems, and other internet-based services.
➢ Sustainability and Green Operations: Operations research applied to sustainable
practices, including green supply chain management and renewable energy.
• Future Trends (Beyond 2020s):
➢ Artificial Intelligence Integration: Further integration of AI and machine learning
techniques with operations research methods for more intelligent and adaptive
decision-making.
➢ Robust Optimization: Focus on developing models that are robust to uncertainty
and variations in data.
➢ Ethical and Social Implications: Addressing ethical considerations in decision-
making processes, especially in AI-driven operations research applications.
9) Write a short on Big-M Method.
The Big-M Method is a widely used technique in operations research for solving linear
programming problems. It is particularly useful for handling problems that involve both
continuous and discrete decision variables. The Big-M Method extends the applicability of
linear programming by allowing the inclusion of additional constraints that might not be
strictly linear. In many real-world scenarios, certain constraints are not strictly linear; they
involve conditional decision variables or binary choices. The Big-M Method addresses these
situations by introducing a large positive constant (denoted as 'M') into the objective function
for each conditional variable. This 'M' value acts as a penalty for violating the condition,
ensuring that the objective function is always minimized or maximized within the given
constraints.
Steps in the Big-M Method:
• Convert the Problem: Transform the problem into standard form, ensuring that all

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constraints are expressed as equalities.

• Introduce Surplus Variables: If necessary, introduce surplus variables to convert
inequalities into equalities.
• Add Slack Variables: Introduce slack variables to convert inequalities into equalities,
ensuring that all variables are non-negative.
• Formulate the Initial Simplex Tableau: Set up the initial tableau with the objective
function, including the 'M' terms for conditional variables.
• Iterative Process: Apply the simplex method iteratively, pivoting through different
tableaus until an optimal solution is reached.
Advantages of the Big-M Method:
• Versatility: The Big-M Method allows the inclusion of complex conditional constraints,
making it versatile for a wide range of real-world problems.

• Optimality: When applied correctly, the Big-M Method guarantees an optimal solution
to the linear programming problem.

• Integration with Software: Modern optimization software often incorporates the Big-M
Method, making it accessible and easy to implement for complex problem-solving.

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