Operations Research Essay

OPERATIONS RESEARCH INTRODUCTION Operations Research is a unique discipline, one of its kinds, best of breeds, employing several highly developed and advanced analytical techniques which in turn aids in effective decision making. It is often regarded as a sub-field of mathematics. Operations research (OR) are not only deeply involved with making and taking effective decisions. It is also concerned with minimizing losses, optimization, simulations, forecasting and predicting within an organization.

According to Morse and Kimball, Operations Research is a scientific method of providing executive departments with quantitative basis for decisions regarding the operations under their control. HISTORY Operations Research, took birth as a new field of study in Britain in 1939 -40 at the start of World War II in the efforts of military planners, and it has developed and expanded execeedingly in the last five to six decades. After the war, the techniques were used in areas such as business, industry and society.

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Since then, operational research has extended into a field widely used in industries ranging from petrochemicals to airlines, finance, logistics, and government, moving to a focus on the development of mathematical models that can be used to analyze and optimize complex systems, and has become an area of active academic and industrial research. 1 Historical Origin Prior to the war, the British army was performing exercises and experiments on the radar system for detecting the aircrafts.

In July 1938, the Superintendent of Bawdsey Research Station, revealed that even though the exercise/experiment had confirmed the technical viability of the radar system for detecting aircraft, he was not happy with its operational achievements as it was not up to the mark. Because of this, he suggested that a program which focuses more on the operational activities as opposed to the technical aspects of the system should be encouraged. The term “Operational Research” was coined as a suitable description of this new branch of applied science. On 15th May 1940, with German forces preading rapidly in France, Stanmore Research Section was asked to analyze a French request for ten additional fighter squadrons. Based upon a study of current daily losses and replacement rates, they prepared a graph, indicating how swiftly such a move would exhaust fighter strength. No aircrafts were sent and most of those currently in France were recalled. This is known to be the most strategic contribution to the course of the war made by Operations Research (as the aircraft and pilots who were saved were therefore available for the successful air defense of Britain, the Battle of Britain).

In 1941 Operational Research Section (ORS) was established in Coastal Command which was to carry out some of the most well-known OR work in World War II. Thus OR, as a separate field of specialization took birth. 2 OPERATIONAL RESEARCH IN MANAGEMENT AND DECISION MAKING To be an efficient manager, one should be able to make effective and efficient decisions. And the manager should have a basic understanding of the decision science tools used in developing a set of alternatives to choose from. Operational Research is an interdisciplinary branch of applied mathematics devoted to optimal decision making and planning.

Analyzing a process or operation, helps determine its purpose and effectiveness and gain maximum efficiency. The operation technique is utilized by functional groups such as Industrial Engineering in effort to support Operations Managers to make economically feasible decisions on a range of systematic challenges. 2 The main responsibilities of operations management are to allocate as efficiently and effectively as possible the given resources. With today’s situation in the global market and large scale systems, achieving optimum performance is quite difficult.

Many powerful decision tools and advanced technologies are available for all levels of decision makers to provide analytical power that no ordinary software or spreadsheet can deliver out of the box. Simulation, Linear and nonlinear programming, Queueing Theory and Stochastic Modeling, are some quantitative methods/techniques which are well-accepted techniques by both research and practice communities. Large profit Organizations such as Ford Motors (Chelst et al, 2001), Merrill Lynch (Atschuler et. al, 2000), AT&T(Ambset et al. 2000) and Samsung(Leachmanet. l,2002) have benefitted largely from employing OR to their day to day processes, thereby enabling them to report millions worth profit due to doing so . OR also makes its presence felt in non – profit organizations as well. US Army Recruiting Office(Knowles et. al), Warner Robins Air Logistics(Srinivasan,2006) won the world’s most prestigious award , Franz Edelman Award in 2006 for outstanding achievements in OR. Industrial Systems Engineering, use methodologies which provide practical alternatives for operations mangers to decide upon.

An important component of decision-making process is substantiating and validating alternatives, which involve decision makers, engineers and analysts. Growth of Operations Research is possible due to the widespread availability of computers. Most Operations Research involves carrying out a large number of numeric calculations and without computers this would simply not be possible. Operation Research came into existence in India, in the year 1949 when a unit was established at Regional Research Laboratory, Hyderabad.

In order to solve problems of storing, purchasing and planning Prof. R. S. Verma set up an Operation Research team at Defence Science Laboratory also. It was during 1950’s that there was a growth in Operational Research techniques in terms for civilian activities along with an interest in the professional development and education in Operation Research. In 1958, project scheduling techniques: PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method) were developed as efficient tools for scheduling and monitoring lengthy, complex and expensive projects of that time.

The real development of Operation Research in the national field was carried out by Prof. Mohalanobis in India when he used it in national planning. 3 Operation Research is also being widely used in our Railways, waiting or queueing problems of passengers for tickets at booking windows or trains queueing up in line up yard, waiting to be sorted out are tackled by various Operation Research techniques. EVOLUTION OF OPERATIONAL RESEARCH AS AN ACADEMIC DISCIPLINE Operational Research is known to be originated while providing support during World War II.

It was actually to ensure maximum damage to opponent’s infrastructure with minimum resource deployment. Operational Research, mathematical modeling and optimization procedures were used to increase effectiveness in a competitive environment. Operational Research as a discipline can be classified into three set of categories. They correspond to tools, models and methodology. Tools include ABC analysis, 80:20 rules and breakeven analysis. Models include blending models, optimized distribution System, and portfolio optimization of assets.

And OR methodologies include project management system, multi- criteria optimization , game theory, simulation methodology, data envelopment, enterprise resource planning systems and conflict resolution methods. These tools, methods and techniques have found application and uses in variety of situations. Also as mentioned above many outstanding academicians like Prof. R. S. Verma and Prof. Mohalanobis have contributed to this field. SIGNIFICANCE Operation Research has a bright future due to its multidisciplinary character.

The major significance can be seen in its contribution towards the needs of society. For Instance, problems in the area of hospital management, energy conservation, environmental pollution, etc. have been solved by Operation Research specialists and this is an indication that Operation Research can also contribute towards the improvement in the social life and areas of global need. The various other areas where the significance can be better understood are as below: Business Operations

Operational Research is useful and effective in handling concerns related to inventory planning and scheduling, production planning, transportation, financial and revenue management and risk management. OR could be used in any situation where improvements in the productivity of the business are of supreme importance. Control With OR, organizations are greatly comforted from the burden of supervision of all the routine and dull tasks. The problem areas are identified analytically and quantitatively. Tasks such as scheduling and replenishment of inventories benefit immensely from OR.

Coordination Various departments in the organization can be coordinated well with suitable Operational Research techniques. This assists in the smooth functioning of the entire organization. When there are many alternative courses of action available to the decision-makers, the Operation Research approach is useful in striking a balance between conflicting objectives. Optimum decision is the one that is best for the organization as a whole it also called as the global optimum. A decision that is considered best for one or more sections of the organization is usually called suboptimum decision.

Operation Research makes an effort to resolve the conflicts of interest between various departments of the organization and seeks the best possible solution which may not be acceptable to one department but is in the interest of the organization as a whole. Operation Research provides the decision-maker with decision aids derived from: ? A total system orientation, ?Scientific methods of investigation, and ?Models of reality, generally based on quantitative measurement and techniques. In addition to its use in industry, this new technique is used in a number of socio-economic problems.

Operation Research has come to be used in a very large number of areas such as problems of traffic, question of deciding a suitable fare structure for public transport, or industrial process like ore-handling. Its use has now extended to academic spheres, such as the problems of communication of information, socio-economic fields and national planning. 2 THE OPERATIONS RESEARCH APPROACH Since O. R. represents a built-in structure to help make decisions, it is important to have a clear understanding of this structure so that it can be applied to a general problem.

In order to achieve this, O. R. approach is now featured below. This approach consists of the following seven sequential steps: 1. Orientation, 2. Problem Definition, 3. Data Collection, 4. Model Formulation, 5. Solution 6. Model Validation and Output Analysis, and 7. Implementation and Monitoring. TECHNIQUES USED IN OPERATION RESEARCH There are various techniques used in operations research such as Decision Analysis Decision analysis refers to a set of quantitative methods for analyzing decisions that use expected utility as the criterion for identifying the preferred alternative. Decision analysis provides tools for quantitatively analyzing decisions with uncertainty and/or multiple conflicting objectives, and these tools can be especially useful when there is limited directly relevant data so that expert judgment plays a significant role in the decision making process. It provides a systematic quantitative approach to making better decisions, rather than a description of how unaided decisions are made. A general decision making process can be divided into the following steps: 1. Defining the problem 2. Determining the requirements 3.

Establishing Goals 4. Identifying various alternatives 5. Defining Criteria 6. Selecting a decision making tool 7. Evaluating alternatives against the set criteria 8. Validating solutions against problem statement. Linear programming Linear programming is a mathematical technique for determining a way to achieve the optimal outcome. It is considered as mathematics based decision tools. Linear programming arose as a mathematical model developed during Second World War to plan expenditures and returns in order to reduce costs to the army and increase losses to the enemy.

In Operation Research optimization means to find out the maximum profit and minimum loss in any deal which we can done in Quantitative Techniques, in this we can narrowing our choices to the very best when there are virtually immeasurable feasible options5 . 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. Equation : Linear Function to be maximised C1 X1 + C2X2 Problem Constraints a11x1+a 12x 2