This action might not be possible to undo. Are you sure you want to continue?
By using techniques such as mathematical modelling to analyze complex situations, operations research gives executives the power to make more effective decisions and build more productive systems based on:
More complete data Consideration of all available options Careful predictions of outcomes and estimates of risk The latest decision tools and techniques
The essential characteristics of OR are: Inter-disciplinary team approach: The optimum solution is found by a team of scientists selected from various disciplines. Holistic approach to the system: OR takes into account all significant factors and finds the best optimum solution to the total organization.
Imperfections of solution: Improves the quality of solution Use of scientific research: Uses scientific research to reach optimum solutions
To optimize the total output: It tries to optimize by maximizing the profit and minimizing the loss
It is concerned with co-ordinating and controlling the operations or activities within an organization. Operations Research can be regarded as use of mathematical and quantitative techniques to substantiate the decision making problems. It takes tools from subjects like mathematics, statistics, engineering, economics, psychology, etc and uses them to know the consequences of possible alternative actions.
ADVANTAGES Better control: An O.R approach may provide executive with an analytical and quantitative basis to identify the problem area. Better system: Often an O.R is initiated to analyze a particular problem of decision making such as best location for factories, whether to open a new warehouse, etc. It
Procurement and Exploration o Optimal buying and reordering o Replacement policies Production Management o Location and size of warehouses. retail outlets o Distribution policy o Loading and unloading facilities for trucks o Production scheduling o Optimum Product Mix o Project scheduling and allocation of resources Personnel Management o Selection of suitable personnel .R models help in improved decision making and reduce the risk of making erroneous decisions. budget allocation o Number of salesman required o Selection of product mix Purchasing. and replacement of old machinery. timing etc o Advertising media. factories. Better Co-ordination: An operation –research-oriented planning model helps in coordinating different divisions of a company. Better decisions: O. jobs sequencing.R approach gives the executive an improved insight into how he makes his decisions. Budgeting and Investments o Credit policy analysis o Cash flow analysis o Dividend policies o Investment portfolios Marketing o Product selection. Some problems that can be analyzed by operations research approach are classified as follows: Finance. production scheduling. O.also helps in selecting economical means of transportation.
Timber is a strong application area. As the health care system and hospitals in particular seek to reduce costs and make better use of resources. maintenance planning. numerous opportunities for operations research are bound to arise. semiconductor optimization.Applications by Industry: Agriculture and food: are discovering operations research applications for planting. department. Forestry uses O. A new source of opportunities: fractional fleet services that allow corporations to dispense with corporate planes by purchasing a set number of hours per year of contracted private planes. One category of manufacturing. and. Electrical and hydro-electric companies use operations research to determine how to efficiently produce power as well as trade power among their partners. operations researchers are finding growing opportunities. A recent application of revenue management by a hospital for the purpose of contract negotiation with vendors may point to a new way of containing medical costs. and fuel management are various functions that utilize the application of operations researcher in the airline industry. is seeing a vital use of O. but several airlines are reviving their internal O. in harvesting and at timber mills. With the deregulation of the power industry.R. in some cases. professionals may also offer guidance in technology adoption. resource modelling. Much O. a key aspect of any manufacturing operation.R. Manufacturing: Manufacturing organizations continue to use operations research to optimize factory operations. diagnosis. and distribution. the design of medical informatics. operations researchers can model better systems as hospital staffers and as consultants. . Airline industry: Revenue management and pricing.R. O. is driven by operations research technologies. Health care: Health care continues to offer a variety of uses for operations research.R. crew scheduling. including quality assurance. With providers obligated to supply airplanes in the face of variable demand. procurement. emergency room scheduling. parts inventory management. airline network planning. Supply chain planning.R. tied to manufacturing. is a potential growth area. and operations research technologies are heavily used by all the major oil companies. work in the industry is outsourced. Energy: The oil industry was one of the first users of operations research techniques to help manage their refinery operations. professionals. Warehouse optimization. Emergency services like 9-1-1 and air ambulances rely on operations researchers to keep response times quick and determine fleet levels.
R. plan purchasing and production. including the scheduling and pricing of containers. .R. and the improvement of systems like the electrical grid. where the services use O. The healthy package delivery field is one that continues to rely heavily on the work of O. transportation. areas. professionals in the manufacture and development of products.R. tactical planning. and in the management of drug portfolios representing the assortment of different drugs maintained by companies. can help the fight against terror via routing and rerouting traffic in case of terrorist attack. Pharmaceuticals: Pharmaceutical companies continue to use O. and railroads. strategic planning. applications to forecast sales.R. Consultants to the military employ operations researchers. Real-time dispatching and delivery truck routing are important O. war gaming. heavily.R. The U.R. Operations researchers can offer guidance on what are the right offers to give to the right customers.R. clothing manufacturers and stores are exploring O. O. logistics. Bureau of Labor Statistics reports that in the United States.S. Applications In The Public Sector Homeland security: Homeland security and related interstate and federal systems may represent opportunities for operations researchers. Telecommunications although experiencing difficult financial times. offering a potential growth area. who can advise planners about where to spend and place resources within the system. and when it is no longer profitable to target certain segments of the market. and that many operations research analysts in private industry work directly or indirectly on national defence. for personnel force management. operations research remains strong in the military. the military remains the largest employer of operations researchers in the Federal Government. Mining and similar sectors working with natural resources may rely on the lessons of the forestry industry. Transportation: Operations researchers perform logistics for air traffic control. and war theatre optimization. Another important area for operations researchers is international freight.Marketing: Marketing departments use operations research to determine the best ways to target their diversified customer bases. may again rely on operations researchers in various areas as the economy and the field stabilize. Retailing: Although retailing companies don't currently use O. do pricing. and improve supply chain management. trucking. as well. Military: Conceived during war.
important Trends by application Data mining: With the widespread emergence of very large databases. E-commerce: Even after the dot. models for decision support on how to bid intelligently. Some credit card companies use operation researchers to work on credit scoring. portfolio models. E-commerce offers opportunities in business-tobusiness and consumer areas of online purchasing. and supply procurement. whose use is growing rapidly. online auctions. detecting fraud. operations researchers have made recommendations in drug treatment. many different organizations are finding vital help from O. Environmental applications: Operations researchers offer aid in pollution control and the design of systems to prevent shipping accidents. vendor purchasing models. Marketing: Direct marketing models. AIDS prevention. Insurers rely heavily on operations researchers to do risk analysis and pricing. bidders are looking to O. and hedge fund strategies. give superior solutions in diverse database-plumbing applications – such as predicting purchasing behaviour. O.R.com bust. and even gas pipeline operations. . professionals in extracting the information they really want. with work in portfolio selection. In addition to sellers. Public health: In public health. among other applications.R. assessing credit risk. and anticipating customer attrition.Municipalities and states: These levels of government rely more on operations researchers to deal with highway traffic delays and the development of intelligent traffic systems. Online grocers that make home delivery are another area of opportunity for operations researchers. Customer Relations Management (CRM) – all rely on the service of operations researchers. Revenue management: The practice of retail management has extended from the airlines to hotels.R. both at the businessto-business and consumer level.'s data mining methods. Banks rely on risk management modelling. car rental operations. Financial engineering: Financial engineering and related work is seeing some instances of growth for operations researchers. segmenting customers. cruises. customer segmentation. and organ donation.
deciding the appropriate place to site new facilities such as a warehouse. retail staffing. Operations researchers in the field work for major software companies and consultants. It includes: scheduling airlines. manufacturing companies. military branches. Some large and mid-size companies use O. particularly those optimizing the supply chain. and hospital nurses.R. managing the flow of water from reservoirs. In the modern society. and identifying and understanding the strategies adopted by companies for their information systems Limitations of Operations Research Dependence on an Electronic Computer: O. Applications of management science Applications of management science are abundant in industry as airlines. including both planes and crew. The range of problems and issues to which management science has contributed insights and solutions is vast. with O. . identifying possible future development paths for parts of the telecommunications industry. Some large companies rely extensively on operations researchers before introducing new product lines or services.R.R techniques try to find out an optimal solution taking into account all the factors. Supply chain management: SCM continues to rely heavily on operations researchers.-based forecasting systems to plan sales and growth. air traffic control. and in government. being used for sales forces. as well as major manufacturers and mid-sized companies. Strategic planning: This remains an area where operations researchers offer great potential. call centers. these factors are enormous and expressing them in quantity and establishing relationship among these require voluminous calculations that can only be handled by computers.Scheduling: Scheduling continues to offer employment for operations researchers. factory or fire station. service organizations. bus crewing. Operations researchers have also been instrumental in turning around ailing companies. establishing the information needs and appropriate systems to supply them within the health service.
All relevant variables do not lend themselves to quantification.R models Money and Time Costs: When the basic data are subject to frequent changes. Moreover. Non. .R being specialist’s job requires a mathematician or a statistician.R techniques provide a solution only when all the elements related to a problem can be quantifies. a fairly good solution at present may be more desirable than a perfect O.R solution available after sometime Implementation: Implementation of decisions is a delicate task. Factors that cannot be quantified find no place in O.Quantifiable Factors: O.R models Distance between Manager and Operations Researcher: O.R models is a costly affair. a manager fails to understand the complex working of O. It must take into account the complexities of human relations and behaviour. incorporating them into the O. Similarly. who might not be aware of the business problems.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.