Operations Research (Grade A)

Summary:

Chapter 1 of BMIS355: Quantitative Methods of Business Decisions introduces Operations Research and its application in decision-making. The chapter discusses Operations Research models and the phases of an Operations Research study. To illustrate the concepts, an example of ticket purchasing is presented.

In the example, a businessperson needs to travel between Beirut and Cyprus for five weeks. The decision-making process involves considering different ticket-purchasing alternatives. The alternatives include buying 5 regular roundtrip tickets, purchasing two one-way tickets and four roundtrip tickets that span a weekend, or opting for 5 roundtrips that span a weekend.

The objective is to minimize the cost, and the restriction is to travel and return weekly. The chapter outlines the decision-making process, which includes identifying the alternatives, defining the restrictions, and determining an appropriate objective criterion.

Calculating the costs for each alternative, the optimal solution is determined to be the one with the lowest cost. The chapter also presents the general formula for the Operations Research model, emphasizing the importance of feasibility and optimality in finding the best solution.

Furthermore, the chapter outlines the phases of an Operations Research study, which include problem definition, model construction, model solution, model validation, and solution implementation.

Overall, Chapter 1 introduces Operations Research, its models, and its application in real-world decision-making scenarios. The ticket purchasing example serves as a practical illustration of how Operations Research techniques can be used to optimize decision outcomes.

Excerpt:

Operations Research

School of Business
Department of Management Information Systems

BMIS355: Quantitative Methods of Business Decisions – Chapter 1 | Part 1

What is Operations Research?

Outline
Operations Research Models
Phases of an Operation Research Study

Operations Research Models
Consider the following “Tickets Purchasing” example:
A businessperson has a 5-week commitment to travelling between Beirut (BEI) & Cyprus (CYP).
Weekly departure from Beirut occurs on Mondays for returns on Wednesdays.
A regular roundtrip ticket costs $400.
A %20 discount is granted if the roundtrip dates span a weekend.
A one-way ticket in either direction costs %75 of the regular price.
How should the tickets be bought for the 5-week period?