Advanced Operations Research

and Dynamic Programming

QMT 128 SY 2016-2017, 2nd Semester
JGSOM, Ateneo de Manila University
Reminders for Jan 26, 2016

1. Index Card
2. Join FB Group Beadle Assignment
3. Read Chapter 12 Deterministic
Dynamic Programming
Reminders for Feb 2, 2016

1. Quiz # 1: Deterministic Dynamic

Programming; Bring A4 paper
Advanced Operations Research
Hard Skills Soft Skills
Analytical and Data Practice
Driven Thinking Advanced Work
Linear Logical Problem Consultation/Asking
Modelling and Solving the right questions
Programming Mathematical
Competence

Varied formulation and Practice

modelling techniques Advanced Work
Advanced OR Analytical and Data Consultation/Asking
Driven Thinking the right questions
Techniques Logical Problem
Modelling and Solving
Mathematical
Competence
Advanced Operations Research

LS 100 LS 125 MKT 101 FIN 105 ACC 20/35

ITM 14 QMT 109

Ma 18a/18b QMT 127

Ma 21/22 QMT 128 POM 105
Ma 151 QMT 129
Advanced Operations Research

1. Dynamic Programming Formulation

2. Concept Identification
Inventory Theory
Queueing Theory
3. Simulation
3x5 Index Card Due Thursday,
January 26
Name, Nickname
Year-Course, ID Number 1x1
Mobile #
Email address
High School
Person to Contact incase of emergency Relation
Contact Information
Expected Grade for the Course
What career do you see for yourself?
 Dynamic Programming
Created by Richard E. Bellman (1920-1984)

Systematic way of solving a problem by breaking it into

manageable sub-problems. The solution to one sub-problem is
input to the next.

No standard formula. Solutions made must be tailored to each

situation

Requires ingenuity, insight, experience, and PRACTICE

1 2 3 4 5

X1 X2 X3 X4 X5
 Stagecoach Problem

2 5

1 3 6 10

4 7

Find the shortest route from the source node 1 and the
terminal node 10
From QMT 127 -> Acyclic Digraph Algorithm
 Stagecoach Problem
2 5
8
1
1 3 6 0
9
4 7
1 2 3 4 5 6 7 8 9 10
1 3 9 2
2 3 8
3 1 6 4
4 5 6
5 3 2
6 4 3
7 1 2
8 3
9 2
 Stagecoach Problem
Determine the shortest route to travel from Node 1 to Node 10
given the distances between cities in the tables below
2 3 4 8 9
1 3 9 2 5 3 2
6 4 3
7 1 2

5 6 7 10
2 3 8 X 8 3
3 1 6 4 9 2
4 X 5 6
Some Definitions

s
xk
fk(s, xk)
xk*
fk*(s)
 Characteristics of a DP Problem
1. It can be divided into stages

2. Each stage has one or more states s associated with it

3. The decision xk at the kth stage transforms the current state sk

into a state sk+1 associated with the k+1st stage.

4. Given the current state sk at the kth stage, an optimal policy for the
remaining stages is independent of the decisions in the (k-1)st , (k-
2)st , 1st stage.

5. There is a recursive relationship which identifies the optimal

policy for each state of the kth stage given the optimal policy for a
state of the k+1st stage (backward and forward recursion)
 Usual Types of DP Models
1. Knapsack/Fly-Away Kit/Cargo-Loading
2. Workforce Size
3. Equipment Replacement
4. Investment
5. Inventory
Knapsack/Cargo Loading Problem:
Vessel
A 4-ton vessel can be loaded with one or more of three items.
The following table gives the unit weight wi, in tons and the unit
revenue ri for item i. How should the vessel be loaded to
maximize the total return?

Item wi ri
1 2 31
2 3 47
3 1 14
 Starwars Problem
General Leia is planning an all-out assault on the First Orders
Star Killer Base to prevent the destruction of the galaxy.
However, because of how depleted the rebel group has
become, she must seek to maximize the overall damage on
Star Killer Base given only a fleet of 20 ships by selecting
which areas they should attack. She has enlisted a promising
young Jedi: OR-Wan Kenobi, and his skills in Dynamic
Programming of the Force to help her decide on the plan of
attack. OR-Wan was given the table below with the damage
score and the required number of ships to achieve that
damage on the base. Use Dynamic Programming to determine
which areas the rebel group should attack.
 Starwars Problem Cont.

Area Score Required no. of Ships

Generator 80 8
Ammunitions Depot 66 2
Barracks 70 5
Headquarters 64 3
Ventilation Shafts 87 6
 Knapsack/Cargo Loading Problem:
Ateneo de Bora
You are packing for a trip to Ateneo de Boracay. In your room are
the following objects you want to bring: Swimsuit, Goggles,
Suntan Lotion, Shades, and Slippers. However, your bag can only
hold a certain capacity. Each of the items have a corresponding
value and size. Which of the items do you bring to maximize value
given that the capacity of your bag is 8?

ITEM VALUE SIZE

Swimsuit 15 1
Goggles 2 5
Suntan Lotion 9 3
Shades 5 4
Slippers 10 5
 Casino Problem
A leisure and entertainment venture is planned in the reclaimed
area fronting Manila Bay. Plans include the establishment of a
gambling casino. A building with floor space limitation of 25 sq.
yards has been purchased. Four types of games are considered:
blackjack, poker, craps, and roulette. The estimated value per
table and space required is given as follows:
Game Space Profit Added per Table
required First Second Third Fourth
Blackjack 4 10 7 4 1
Poker 5 9 9 8 8
Craps 6 11 10 9 8
Roulette 3 8 6 4 2
 Workforce Size Model
A contractor estimates that the size of the
workforce needed over the next 5 weeks is 5, 7,
8, 4, and 6 workers, respectively. Excess labor
kept on the force will cost $300 per worker per
week, and new hiring in any week will incur a
fixed cost of $400 plus $200 per worker per
week. Use Dynamic Programming to determine
the optimal workforce.
Equipment Replacement Model
Equipment Replacement Model
 Resistors Problem
A piece of equipment needs resistors to reduce the flow of an electric
current in order for it to function correctly. Installing more resistors than
the requirement incurs cost. For each week over weeks, engineers have
to determine the number of resistors it will put in or remove from the
equipment given the number of Ohms (, measurement of resistance)
required.

Excess resistors over the weekly requirement during week will incur a
cost per resistor. Installing new resistors during week means stopping
the equipment and incurring a fixed cost of and a variable cost of
where is the number of new resistors installed. Removing resistors on the
other hand is much easier, only incurring a variable cost of where
is the number of resistors removed. Assume that the weekly
requirement must be met (there could be excess resistors but never a
deficit).

Determine the general DP recurrence equations and that will

minimize total cost over weeks.
 Electricity Problem
An electric power utility forecasts that kilowatt-hours (kwh) of
generating capacity will be needed during year (the current year is
year 1). Each year, the utility must decide by how much generating
capacity should be expanded. It costs () dollars to increase
generating capacity by kwh during year . It may be desirable to
reduce capacity, so can be negative. During each year, 10% of the
old generating capacity becomes obsolete and unusable (capacity
does not become obsolete during its first year of operation).

It costs the utility () dollars to maintain units of capacity during

year . At the beginning of year 1, 100,000kwh of generating
capacity are available. Formulate dynamic programming recursion
equation(s) that will enable the utility to minimize the total cost of
meeting power requirements for the next years.
 Sheep Problem
A farmer owns k sheep. At the end of each year, a decision is
made as to how many to sell or keep. The profit from selling a
sheep in year i is Pi . The sheep kept in year i will double in
number in year i + 1. The farmer plans to sell out completely at
the end of n years.

a.) Derive the general recursive equation for the problem

b.) Solve the problem for n = 3 years, k = 2 sheep, P1 = $100, P2 =
$130, P3 = $120