An introduction to management science : quantitative approaches to decision making. PDF
Preview An introduction to management science : quantitative approaches to decision making.
David R. Anderson Dennis J. Sweeney l Thomas A. Williams Mik Wisniewski l AN INTRODUCTION TO MANAGEMENT SCIENCE QUANTITATIVE APPROACHES TO DECISION MAKING second edition Australia(cid:129)Brazil(cid:129)Japan(cid:129)Korea(cid:129)Mexico(cid:129)Singapore(cid:129)Spain(cid:129)UnitedKingdom(cid:129)UnitedStates Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. AnIntroductiontoManagementScience: (cid:2)2014,CengageLearningEMEA QuantitativeApproachestoDecision WCN: 02-300 Making,2ndEdition Anderson,Sweeney,Williams ALLRIGHTSRESERVED.Nopartofthisworkcoveredbythecopyrighthereinmay andWisniewski bereproduced,transmitted,storedorusedinanyformorbyanymeansgraphic, electronic,ormechanical,includingbutnotlimitedtophotocopying,recording, Publisher:AndrewAshwin scanning,digitizing,taping,Webdistribution,informationnetworks,or DevelopmentEditor:FelixRowe informationstorageandretrievalsystems,exceptaspermittedunderSection107 or108ofthe1976UnitedStatesCopyrightAct,orapplicablecopyrightlawof SeniorProductionEditor:AlisonBurt anotherjurisdiction,withoutthepriorwrittenpermissionofthepublisher. 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Forpermissiontousematerialfromthistextorproduct, andforpermissionqueries, [email protected]. BritishLibraryCataloguing-in-PublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary. ISBN:978-1-4080-8840-1 CengageLearningEMEA CheritonHouse,NorthWay,Andover,Hampshire,SP105BE UnitedKingdom CengageLearningproductsarerepresentedinCanadaby Nelson EducationLtd. Foryourlifelonglearningsolutions,visitwww.cengage.co.uk Purchaseyournextprintbook,e-bookore-chapterat www.cengagebrain.com Printed by Croatia By Zrinsky d.d. 1 2 3 4 5 6 7 8 9 10 – 16 15 14 Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. 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Brief contents AbouttheAuthors xi Preface xiii Acknowledgements xv 1 Introduction 1 2 An Introduction to Linear Programming 33 3 Linear Programming: Sensitivity Analysis and Interpretation of Solution 85 4 Linear Programming Applications 137 5 Linear Programming: The Simplex Method 211 6 Simplex-Based Sensitivity Analysis and Duality 254 7 Transportation, Assignment and Transshipment Problems 279 8 Network Models 344 9 Project Scheduling: PERT/CPM 370 10 Inventory Models 405 11 Queuing Models 451 12 Simulation 489 13 Decision Analysis 539 14 Multicriteria Decisions 593 Conclusion:ManagementScienceinPractice 635 Appendices 639 AppendixAAreasfortheStandardNormalDistribution 641 AppendixBValuesofe(cid:2)l 642 AppendixCBibliographyandReferences 643 AppendixDSelf-TestSolutions 645 Glossary 677 Index 683 ONLINECONTENTS 15 Integer Linear Programming 16 Forecasting 17 Dynamic Programming 18 Markov Processes iii Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Contents AbouttheAuthors xi Simulation 21 Preface xiii DecisionAnalysis 21 Acknowledgements xv Multicriteriaanalysis 21 IntegerLinearProgramming 21 Forecasting 21 1 Introduction 1 DynamicProgramming 22 MarkovProcessModels 22 1.1 IntroductiontoManagementScience 2 Summary 22 DoesitWork? 2 WorkedExample 22 1.2 WhereDidMSComeFrom? 4 Problems 24 1.3 ManagementScienceApplications 5 CaseProblem UhuruCraftCooperative,Tanzania 27 Assignment 5 Appendix1.1 UsingExcelforBreakevenAnalysis 27 DataMining 5 Appendix1.2 TheManagementScientistSoftware 30 FinancialDecisionMaking 6 Forecasting 6 2 An Introduction to Linear Logistics 6 Programming 33 Marketing 6 Networks 6 2.1 AMaximizationProblem 35 Optimization 7 ProblemFormulation 36 ProjectPlanningandManagement 7 MathematicalStatementoftheGulfGolf Queuing 7 Problem 39 Simulation 7 2.2 GraphicalSolutionProcedure 40 Transportation 8 ANoteonGraphingLines 48 1.4 TheMSApproach 8 SummaryoftheGraphicalSolutionProcedurefor ProblemRecognition 9 MaximizationProblems 50 ProblemStructuringandDefinition 9 SlackVariables 51 ModellingandAnalysis 10 2.3 ExtremePointsandtheOptimalSolution 53 SolutionsandRecommendations 11 2.4 ComputerSolutionoftheGulfGolfProblem 54 Implementation 11 InterpretationofComputerOutput 55 1.5 Models 12 2.5 AMinimizationProblem 57 1.6 ModelsofCost,RevenueandProfit 15 SummaryoftheGraphicalSolutionProcedurefor CostandVolumeModels 15 MinimizationProblems 58 RevenueandVolumeModels 16 SurplusVariables 59 ProfitandVolumeModels 17 ComputerSolutionoftheM&DChemicals BreakevenAnalysis 17 Problem 61 1.7 TheModellingProcess 18 2.6 SpecialCases 62 1.8 ManagementScienceModelsand AlternativeOptimalSolutions 62 Techniques 20 Infeasibility 63 LinearProgramming 20 UnboundedProblems 64 TransportationandAssignment 20 2.7 GeneralLinearProgrammingNotation 66 NetworkModels 20 Summary 67 ProjectManagement 20 WorkedExample 68 InventoryModels 21 Problems 71 QueuingModels 21 v Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. vi CONTENTS CaseProblem1WorkloadBalancing 76 4.5 FinancialApplications 168 CaseProblem2ProductionStrategy 77 PortfolioSelection 170 CaseProblem3Blending 78 FinancialPlanning 174 Appendix2.1 SolvingLinearProgrammesWithExcel 79 RevenueManagement 178 Appendix2.2 SolvingLinearProgrammesWiththe 4.6 DataEnvelopmentAnalysis 182 ManagementScientist 82 Summary 190 Problems 191 3 Linear Programming: Sensitivity CaseProblem1PlanninganAdvertising Analysis and Interpretation of Campaign 200 CaseProblem2PhoenixComputer 202 Solution 85 CaseProblem3TextileMillScheduling 202 3.1 IntroductiontoSensitivityAnalysis 86 CaseProblem4WorkforceScheduling 204 CaseProblem5CinergyCoalAllocation 205 3.2 GraphicalSensitivityAnalysis 88 Appendix4.1 ExcelSolutionofHewlittCorporation ObjectiveFunctionCoefficients 88 FinancialPlanningProblem 207 Right-HandSides 93 3.3 SensitivityAnalysis:ComputerSolution 97 InterpretationofComputerOutput 97 5 Linear Programming: The SimultaneousChanges 99 Simplex Method InterpretationofComputerOutput–ASecond 211 Example 101 5.1 AnAlgebraicOverviewoftheSimplex CautionaryNoteontheInterpretationofDual Method 212 Prices 104 AlgebraicPropertiesoftheSimplex 3.4 MorethanTwoDecisionVariables 105 Method 213 TheModifiedGulfGolfProblem 106 DeterminingaBasicSolution 213 TheKenyaCattleCompanyProblem 109 BasicFeasibleSolution 214 FormulationoftheKCCProblem 111 5.2 TableauForm 216 ComputerSolutionandInterpretationfortheKCC Problem 112 5.3 SettingUptheInitialSimplex Tableau 217 3.5 TheTaiwanElectronicCommunications(TEC) Problem 115 5.4 ImprovingtheSolution 218 ProblemFormulation 116 5.5 CalculatingtheNextTableau 222 ComputerSolutionandInterpretation 117 InterpretingtheResultsofanIteration 224 Summary 121 MovingTowardaBetterSolution 225 WorkedExample 121 InterpretingtheOptimalSolution 228 Problems 123 SummaryoftheSimplexMethod 228 CaseProblem1ProductMix 134 5.6 TableauForm:TheGeneralCase 230 CaseProblem2InvestmentStrategy 135 Greater-Than-or-Equal-toConstraints(‡) 230 CaseProblem3TruckLeasingStrategy 136 EqualityConstraints 234 EliminatingNegativeRight-HandSide 4 Linear Programming Values 235 SummaryoftheStepstoCreateTableau Applications 137 Form 236 4.1 TheProcessofProblemFormulation 138 5.7 SolvingaMinimizationProblem 237 4.2 ProductionManagementApplications 140 5.8 SpecialCases 239 Make-or-BuyDecisions 140 Infeasibility 239 ProductionScheduling 143 UnboundedProblems 240 WorkforceAssignment 150 AlternativeOptimalSolutions 242 4.3 Blending,DietandFeed-MixProblems 156 Degeneracy 243 4.4 MarketingandMediaApplications 163 Summary 244 MediaSelection 163 WorkedExample 245 MarketingResearch 166 Problems 248 Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CONTENTS vii 6 Simplex-Based Sensitivity CaseProblem1DistributionSystemDesign 336 Appendix7.1 ExcelSolutionofTransportation, Analysis and Duality 254 AssignmentandTransshipmentProblems 338 6.1 SensitivityAnalysiswiththeSimplex Tableau 255 8 Network Models ObjectiveFunctionCoefficients 255 344 Right-HandSideValues 258 8.1 Shortest-RouteProblem 345 SimultaneousChanges 265 AShortest-RouteAlgorithm 346 6.2 Duality 266 8.2 MinimalSpanningTreeProblem 354 InterpretationoftheDualVariables 268 AMinimalSpanningTreeAlgorithm 355 UsingtheDualtoIdentifythePrimalSolution 270 8.3 MaximalFlowProblem 357 FindingtheDualofAnyPrimalProblem 270 Summary 362 Summary 272 WorkedExample 362 WorkedExample 273 Problems 363 Problems 274 CaseProblem AmbulanceRouting 368 7 Transportation, Assignment 9 Project Scheduling: and Transshipment Problems 279 PERT/CPM 370 7.1 TransportationProblem:ANetworkModeland 9.1 ProjectSchedulingWithKnownActivity aLinearProgrammingFormulation 280 Times 372 ProblemVariations 283 TheConceptofaCriticalPath 373 AGeneralLinearProgrammingModelofthe DeterminingtheCriticalPath 374 TransportationProblem 285 ContributionsofPERT/CPM 378 7.2 TransportationSimplexMethod:ASpecial- SummaryofthePERT/CPMCriticalPath PurposeSolutionProcedure 286 Procedure 379 PhaseI:FindinganInitialFeasibleSolution 288 GanttCharts 380 PhaseII:IteratingtotheOptimalSolution 291 9.2 ProjectSchedulingWithUncertainActivity SummaryoftheTransportationSimplex Times 381 Method 300 TheDaughertyPorta-VacProject 382 ProblemVariations 302 UncertainActivityTimes 382 7.3 AssignmentProblem:TheNetworkModeland TheCriticalPath 385 aLinearProgrammingFormulation 303 VariabilityinProjectCompletionTime 386 ProblemVariations 305 9.3 ConsideringTime–CostTrade-Offs 388 AGeneralLinearProgrammingModelofthe CrashingActivityTimes 389 AssignmentProblem 306 Summary 392 MultipleAssignments 307 WorkedExample 392 7.4 AssignmentProblem:ASpecial-Purpose Problems 394 SolutionProcedure 307 CaseProblem R.C.Coleman 401 FindingtheMinimumNumberofLines 311 Appendix9.1 ActivityonArrowNetworks 402 ProblemVariations 311 7.5 TransshipmentProblem:TheNetworkModel 10 Inventory Models andaLinearProgrammingFormulation 314 405 ProblemVariations 319 10.1 PrinciplesofInventoryManagement 406 AGeneralLinearProgrammingModelofthe TheRoleofInventory 406 TransshipmentProblem 320 InventoryCosts 407 7.6 AProductionandInventoryApplication 320 10.2 EconomicOrderQuantity Summary 324 (EOQ)Model 408 WorkedExample 325 TheHow-Much-to-OrderDecision 411 Problems 327 TheWhen-to-OrderDecision 413 Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. viii CONTENTS SensitivityAnalysisfortheEOQModel 414 11.4 SomeGeneralRelationshipsforQueuing ExcelSolutionoftheEOQModel 415 Models 466 SummaryoftheEOQModelAssumptions 415 11.5 EconomicAnalysisofQueues 468 10.3 EconomicProductionLotSizeModel 416 11.6 OtherQueuingModels 470 TotalCostModel 418 11.7 Single-ChannelQueuingModelwith EconomicProductionLotSize 420 PoissonArrivalsandArbitraryService 10.4 InventoryModelwithPlannedShortages 421 Times 471 10.5 QuantityDiscountsfortheEOQModel 425 OperatingCharacteristicsfortheM/G/1 Model 471 10.6 Single-PeriodInventoryModelwith ConstantServiceTimes 472 ProbabilisticDemand 427 JulianoShoeCompany 428 11.8 Multiple-Channel Model with Poisson ArabianCarRental 431 Arrivals, Arbitrary Service Times and No Queue 473 10.7 Order-Quantity,ReorderPointModelwith OperatingCharacteristicsfortheM/G/k ProbabilisticDemand 433 ModelwithBlockedCustomers TheHow-Much-to-OrderDecision 434 Cleared 473 TheWhen-to-OrderDecision 435 11.9 QueuingModelswithFiniteCalling 10.8 PeriodicReviewModelwithProbabilistic Demand 437 Populations 476 OperatingCharacteristicsfortheM/M/1Model MoreComplexPeriodicReviewModels 440 withaFiniteCallingPopulation 476 Summary 441 WorkedExample 442 Summary 479 Problems 443 WorkedExample 479 Problems 481 CaseProblem1WagnerFabricatingCompany 447 CaseProblem2RiverCityFireDepartment 448 CaseProblem1RegionalAirlines 486 Appendix10.1 DevelopmentoftheOptimalOrder CaseProblem2OfficeEquipment,Inc 487 Quantity(Q)FormulafortheEOQModel 449 Appendix10.2 Development of the Optimal Lot Size 12 Simulation 489 (Q*) Formula for the Production Lot Size Model 450 12.1 RiskAnalysis 492 PortaComProject 492 What-IfAnalysis 492 11 Queuing Models 451 Simulation 493 SimulationofthePortaComProblem 501 11.1 StructureofaQueuingSystem 452 Single-ChannelQueue 454 12.2 InventorySimulation 504 DistributionofArrivals 454 SimulationoftheButlerInventory DistributionofServiceTimes 455 Problem 507 Steady-StateOperation 456 12.3 QueuingSimulation 509 11.2 Single-ChannelQueuingModelwithPoisson HongKongSavingsBankATMQueuing ArrivalsandExponentialServiceTimes 456 System 510 OperatingCharacteristics 457 CustomerArrivalTimes 510 OperatingCharacteristicsfortheDome CustomerServiceTimes 511 Problem 458 SimulationModel 511 Managers’UseofQueuingModels 458 SimulationoftheATMProblem 515 ImprovingtheQueuingOperation 459 SimulationwithTwoATMs 516 ExcelSolutionoftheQueuingModel 461 SimulationResultswithTwoATMs 518 11.3 Multiple-ChannelQueuingModelwithPoisson 12.4 OtherSimulationIssues 520 ArrivalsandExponentialServiceTimes 462 ComputerImplementation 520 OperatingCharacteristics 462 VerificationandValidation 521 OperatingCharacteristicsfortheDome AdvantagesandDisadvantagesofUsing Problem 464 Simulation 522 Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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