1. AN OVERVIEW ON OPERATION RESEARCH AND TOOLS AND TECHNIQUES USED
- ADITYA JHUNJHUNWALA,17001
The British/Europeans refer to "operational research", the Americans to "operations research" - but both
are often shortened to just "OR" (which is the term we will use). Another term, which is used, for this
field is "management science" ("MS"). The Americans sometimes combine the terms OR and MS
together and say "OR/MS" or "ORMS". Yet other terms sometimes used are "industrial engineering"
("IE"), "decision science" ("DS"), and “problem solving”. In recent years there has been a move towards a
standardization upon a single term for the field, namely the term "OR". “Operations Research
(Management Science) is a scientific approach to decision making that seeks to best design and operate a
system, usually under conditions requiring the allocation of scarce resources.” A system is an
organization of interdependent components that work together to accomplish the goal of the system.
HISTORY OF OPERATION RESEARCH
The name operations investigate advanced in the year 1940. Amid World War 2, a group of researcher
(Blackett's Circus) in UK connected logical strategies to examine military operations to win the war and
the procedures consequently created was named as operation explore.
As a formal train, operations inquire about started from the endeavours of armed force guides at the
season of World War II. In the years following the war, the techniques began to be utilized widely to
issues in business, industry and society. As far back as at that point, OR has formed into a subject as often
as possible utilized in ventures including petrochemicals, coordination’s, aircrafts, fund, government, and
so on.
Along these lines, the Operational Research started amid World War II in incredible Britain with the
foundation of gatherings of researchers to break down the vital and strategic issues related with military
operations. The point was to find the most proficient utilization of constrained military assets by the use
of quantitative systems.
India was among the couple of countries which started using O.R. In 1949, the primary Operational
Research unit was built up at Hyderabad which was named Regional Research Laboratory found. In the
meantime an extra unit was propelled in Defence Science Laboratory to settle the Stores, Purchase and
Planning Problems. In 1953 at Calcutta, an O.R. unit was built up in Indian Statistical Institute. The goal
was to utilize O.R. strategies in National Planning and Survey. In 1955, Operations Research Society of
India was made, which is among the main individuals from International Federation of Operations
Research social orders. Today, the use of O.R. systems have spread out from armed force to an extensive
variety of offices at all levels.
2. THE METHODOLOGY OF OR
When OR is used to solve a problem of an organization, the following seven-step procedure should be
followed:
Step 1. Formulate the Problem OR analyst first defines the organization's problem - Defining the problem
includes specifying the organization's objectives and the parts of the organization (or system) that must be
studied before the problem can be solved.
Step 2. Observe the System - The analyst collects data to estimate the values of parameters that affect the
organization's problem. These estimates are used to develop (in Step 3) and evaluate (in Step 4) a
mathematical model of the organization's problem.
Step 3. Formulate a Mathematical Model of the Problem - The analyst, then, develops a mathematical
model (in other words an idealized representation) of the problem. In this class, we describe many
mathematical techniques that can be used to model systems.
Step 4. Verify the Model and Use the Model for Prediction - The analyst now tries to determine if the
mathematical model developed in Step 3 is an accurate representation of reality. To determine how well
the model fits reality, one determines how valid the model is for the current situation.
Step 5. Select a Suitable Alternative Given a model and a set of alternatives - The analyst chooses the
alternative (if there is one) that best meets the organization's objectives. Sometimes the set of alternatives
is subject to certain restrictions and constraints. In many situations, the best alternative may be impossible
or too costly to determine.
Step 6. Present the Results and Conclusions of the Study - In this step, the analyst presents the model and
the recommendations from Step 5 to the decision-making individual or group. In some situations, one
might present several alternatives and let the organization choose the decision maker(s) choose the one
that best meets her/his/their needs. After presenting the results of the OR study to the decision maker(s),
the analyst may find that s/he does not (or they do not) approve of the recommendations. This may result
from incorrect definition of the problem on hand or from failure to involve decision maker(s) from the
start of the project. In this case, the analyst should return to Step 1, 2, or 3.
Step 7. Implement and Evaluate Recommendation - If the decision maker(s) has accepted the study, the
analyst aids in implementing the recommendations. The system must be constantly monitored (and
updated dynamically as the environment changes) to ensure that the recommendations are enabling
decision maker(s) to meet her/his/their objectives.
OPERATIONAL RESEARCH TOOLS AND TECHNIQUES
Operations Research utilizes any appropriate apparatuses or systems accessible. The regular every now
and again utilized devices/strategies are scientific systems, cost investigation, electronic calculation.
However, operations analysts given unique significance to the improvement and the utilization of systems
like direct programming, amusement hypothesis, choice hypothesis, lining hypothesis, stock models and
recreation. Notwithstanding the above strategies, some other basic apparatuses are non-straight
programming, whole number programming, dynamic programming, sequencing hypothesis, Markov
process, arrange planning (PERT/CPM), emblematic Model, data hypothesis, and esteem hypothesis.
There is numerous different Operations Research instruments/procedures likewise exists.
3. The concise clarifications of a portion of the above systems/instruments are as per the following:
Linear Programming:
This is a constrained optimization technique, which optimize some criterion within some constraints. In
Linear programming the objective function (profit, loss or return on investment) and constraints are
linear. There are different methods available to solve linear programming.
Game Theory:
This is used for making decisions under conflicting situations where there are one or more
players/opponents. In this the motive of the players are dichotomized. The success of one player tends to
be at the cost of other players and hence they are in conflict.
Decision Theory:
Decision theory is concerned with making decisions under conditions of complete certainty about the
future outcomes and under conditions such that we can make some probability about what will happen in
future.
Queuing Theory:
Choose the solution to be used. ‘Sell’ the decision to operating managers; get their understanding and
cooperation. Manager and O.R. Specialist This is used in situations where the queue is formed (for
example customers waiting for service, aircrafts waiting for landing, jobs waiting for processing in the
computer system, etc). The objective here is minimizing the cost of waiting without increasing the cost of
servicing.
Inventory Models:
Inventory model make a decisions that minimize total inventory cost. This model successfully reduces the
total cost of purchasing, carrying, and out of stock inventory.
Simulation:
Simulation is a procedure that studies a problem by creating a model of the process involved in the
problem and then through a series of organized trials and error solutions attempt to determine the best
solution. Some times this is a difficult/time consuming procedure. Simulation is used when actual
experimentation is not feasible or solution of model is not possible.
Non-linear Programming:
This is used when the objective function and the constraints are not linear in nature. Linear relationships
may be applied to approximate non-linear constraints but limited to some range, because approximation
becomes poorer as the range is extended. Thus, the non-linear programming is used to determine the
approximation in which a solution lies and then the solution is obtained using linear methods.
Dynamic Programming:
Dynamic programming is a method of analysing multistage decision processes. In this each elementary
decision depends on those preceding decisions and as well as external factors.
Integer Programming:
If one or more variables of the problem take integral values only then dynamic programming method is
used. For example number or motor in an organization, number of passenger in an aircraft, number of
generators in a power generating plant, etc.
4. APPLICATIONS OF OPERATIONS RESEARCH
Today, almost all fields of business and government utilizing the benefits of Operations Research. There
are voluminous of applications of Operations Research. Although it is not feasible to cover all
applications of O.R. in brief. The following are the abbreviated set of typical operations research
applications to show how widely these techniques are used today:
Accounting:
Assigning audit teams effectively, Credit policy analysis, Cash flow planning, Developing standard costs,
Establishing costs for by products, Planning of delinquent account strategy
Construction:
Project scheduling, monitoring and control, Determination of proper work force, Deployment of work
force, Allocation of resources to projects
Facilities Planning:
Factory location and size decision, Estimation of number of facilities required, Hospital planning,
International logistic system design, Transportation loading and unloading, Warehouse location decision.
Finance:
Building cash management models, Allocating capital among various alternatives, Building financial
planning models, Investment analysis, Portfolio analysis, Dividend policy making.
Manufacturing:
Inventory control, Marketing balance projection, Production scheduling, Production smoothing.
Marketing:
Advertising budget allocation, Product introduction timing, Selection of Product mix, Deciding most
effective packaging alternative.
Organizational Behaviour / Human Resources:
Personnel planning, Recruitment of employees, Skill balancing, Training program scheduling, Designing
organizational structure more effectively.
Purchasing:
Optimal buying, optimal reordering, Materials transfer.
5. LIMITATIONS OF OPERATIONS RESEARCH
Operations Research has number of applications; similarly it also has certain limitations. These
limitations are mostly related to the model building and money and time factors problems involved in its
application. Some of them are as given below:
I.Distance between O.R. specialist and Manager
Operations Researchers job needs a mathematician or statistician, who might not be aware of the business
problems. Similarly, a manager is unable to understand the complex nature of Operations Research. Thus
there is a big gap between the two personnel.
II.Magnitude of Calculations
The aim of the O.R. is to find out optimal solution taking into consideration all the factors. In this modern
world these factors are enormous and expressing them in quantitative model and establishing
relationships among these require voluminous calculations, which can be handled only by machines.
III.Money and Time Costs
The basic data are subjected to frequent changes, incorporating these changes into the operations research
models is very expensive. However, a fairly good solution at present may be more desirable than a perfect
operations research solution available in future or after some time.
