What is Operations Research?

The terminology "Operations Research" is somewhat funny, since it is not any more concerned with operations, nor does its application involve any research.

What is Operations Research?

Operations Research is the discipline of applying advanced analytical methods to help make better decisions. By using techniques such as mathematical modeling to analyze complex situations, operations research gives executives the power to make more effective decisions.

What is Operations Research?

OR is the application of scientific methods, techniques and tools to problems involving the operations of system so as to provide these in control of the operations with optimum solutions to the problem.

Historical Development of OR

The main origin of OR was during the second world war. At that time, the military management in England were having very limited military resources, it was necessary to decide upon the most effective utilization of them, e.g: the efficient ocean transport, effective bombing etc.

Scientific Methods in OR

It involves three phases:Judgment PhaseResearch PhaseAction Phase

Judgment Phase

1. Identification of the problem

2. Selection of Objective

3. Application of appropriate measures

4. Formulation of problem relative to objective

Research Phase

1.1. Observation and data collectionObservation and data collection

2.2. Formulation of hypothesisFormulation of hypothesis

3.3. Observation and experimentation to test the Observation and experimentation to test the hypothesishypothesis

4.4. Analysis of available information and verification Analysis of available information and verification of hypothesisof hypothesis

5.5. Prediction of results from hypothesis.Prediction of results from hypothesis.

6.6. Generalization of result and consideration of Generalization of result and consideration of alternativesalternatives

Action Phase

RecommendationsRecommendationsImplementationImplementation

Step I: Formulating the problem

Step II: Collecting data and constructing mathematical model

Step III: Solving the mathematical model

Step IV: Testing the model and its solution

Step V: Implementing the solution

Methodology of OR

Advantages of OR

Substantial amount of time and effort is Substantial amount of time and effort is savedsaved

Reduce the chance of errorsReduce the chance of errors Errors can easily be detected and Errors can easily be detected and

correctedcorrected Ability to judge applicability and limitations Ability to judge applicability and limitations

of solution techniques to a particular of solution techniques to a particular problemproblem

Shortcomings of OR

Solution to a problem is derived either bySolution to a problem is derived either by

making it simplified or simplifying assumptions making it simplified or simplifying assumptions

and thus, such solutions have limitationsand thus, such solutions have limitationsSometimes model do not represent the realistic Sometimes model do not represent the realistic

solutions in which decisions must be madesolutions in which decisions must be madeMany real world problems just cannot have an Many real world problems just cannot have an

OR solutionOR solution

Applications of OR

1.1. In AgricultureIn Agriculture Optimum allocation of land to various crops in accordance Optimum allocation of land to various crops in accordance

with the climatic conditionswith the climatic conditions Optimum distribution of water from various resourcesOptimum distribution of water from various resources

2.2. In FinanceIn Finance To maximize per capita income with minimum resourcesTo maximize per capita income with minimum resources To find out the profit plan for the companyTo find out the profit plan for the company

3.3. In IndustryIn Industry Decide optimum allocation of various limited resources such Decide optimum allocation of various limited resources such

as men, machines, material, money, time etc.as men, machines, material, money, time etc.

4.4. In MarketingIn Marketing Where to distribute the products for sale so that the total cost of Where to distribute the products for sale so that the total cost of

transportation is minimumtransportation is minimum How to select the best advertising media How to select the best advertising media How, when and what to purchase at the minimum possible costHow, when and what to purchase at the minimum possible cost

5.5. In Personnel ManagementIn Personnel Management To appoint the most suitable persons on minimum salaryTo appoint the most suitable persons on minimum salary To determine the best age of retirement for the employeesTo determine the best age of retirement for the employees

6.6. In Production ManagementIn Production Management To find out the number and size of the items to be producedTo find out the number and size of the items to be produced In scheduling and sequencing the production run by proper In scheduling and sequencing the production run by proper

allocation of machinesallocation of machines

Applications of OR