Introduction Session on OR

8/7/2019 Introduction Session on OR

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AN OVERVIEW

OPERATIONS RESEARCH


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After reading the present module, learner will be able to

General Objectives:

Understand the concept of Operations Research

Know Phases and Process of Operations Research

Specific Objectives:

Define basic terms related with OR

Define Operation Research

Describe the phases of O.R

Draw the flow chart of O.R. approach

List out the various techniques of O.R

Give application fields of various techniques List out the components of mathematical model

State advantages and limitations of O.R

Identify the various application fields of O.R


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Table ofContents

Origin of OR

Introduction

Phases and Process of OR Techniques of OR

Advantages and Disadvantages Of OR

Applications of OR


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ORIGIN of OR

Operations Research (OR) term was coined during world war II,when the British Military Management called upon a group ofscientists to apply a scientific approach to the study of militaryoperations to win the battle.

Operations Research originated in Great Britain during World War II.The main objective was to allocate the scarce resources in aneffective manner to the various military operations and to theactivities within each operation.

The effectiveness of operations research in military spread in it toother government department and industry.

Due to the availability of faster and flexible computing facilities andthe no. of qualified O.R. professionals, it is now widely used inmilitary, business, industry, transportation, public health etc.


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INTRODUCTION

It is concerned with co-ordinating and controlling theoperations or activities within the organization

O.R. can be regarded as the mathematical andquantitative techniques to substantiate the decisionsbeing taken

O.R. takes tool from subjects like statistics, mathematics,engineering, economics, psychology etc. and uses themto know the consequences of possible alternative actions

Operations research (OR) is a discipline explicitlydevoted to aiding decision makers


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Operations: activities carried out in an organization related toattaining its goals and objectives

Research: process of observation and testing characterizedby the scientific method. Steps of the process includeobserving the situation and formulating a problem statement,constructing a mathematical model, hypothesizing that themodel represents the important aspects of the situation, and

validating the model through experimentation

Organization: society in which the problem arises or forwhich the solution is important. The organization may be acorporation, branch of government, department within a firm,

group of employees, or perhaps even an individual

Decision Maker: An individual or group in the organizationcapable of proposing and implementing necessary actions


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DEFINITIONS

OR is a scientific method of providing executivedepartments with a quantitative basis for decisionsregarding the operations under their control

Morse & Kimball

Operations research is a scientific approach to problemsolving for executive management

H.M. Wagner

Operations research is an aid for the executive in making

this decisions by providing him with the neededquantitative information based on the scientific method ofanalysis

C. Kittel


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Nature of O.R.

Inter-disciplinary team approach

Systems approach

Helpful in improving the quality of solution

Scientific method

Goal oriented optimum solution

Use of models

Require willing executives Reduces complexity


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PHASES OF

OPERATIONS RESEARCH


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1. Recognize the Problem

Decision making begins with a situation in which a problem isrecognized

The problem may be

actual or abstract it may involve current operations or proposed expansions orcontractions due to expected market shifts

it may become apparent through consumer complaints orthrough employee suggestions

it may be a conscious effort to improve efficiency or a responseto an unexpected crisis

It is impossible to circumscribe the breadth of circumstancesthat might be appropriate for this discussion


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2. Formulate the Problem

At the formulation stage, statements of objectives

constraints on solutions

appropriate assumptions

descriptions of processes data requirements

alternatives for action and metrics for measuring progress areintroduced

The analyst is usually not the decision maker and maynot be part of the organization, so care must be taken toget agreement on the exact character of the problem tobe solved from those who perceive it.


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3. Construct a Model

A mathematical model is a collection of functionalrelationships by which allowable actions aredelimited and evaluated

A model is always an abstraction that is, by necessity, simpler thanthe reality

The statements of the abstractions introduced in the construction ofthe model are called the assumptions

The appropriateness of the assumptions can be determined only bysubsequent testing of the models validity

Models must be tractable -- capable of being solved, and

valid -- representative of the true situation


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4. Find a Solution(1) The next step in the process is to solve the model to obtain a

solution to the problem

Some methods can prescribe optimal solutions while othersonly evaluate candidates, thus requiring a trial and error

approach to finding an acceptable course of action

It may be necessary to develop new techniques specificallytailored to the problem at hand

A model that is impossible to solve may have been formulatedincorrectly or burdened with too much detail. Such a casesignals the return to the previous step for simplification orperhaps the postponement of the study if no acceptable,tractable model can be found


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4. Find a Solution(2)

Of course, the solution provided by the computer is onlya proposal. An analysis does not promise a solution butonly guidance to the decision maker

Choosing a solution to implement is the responsibility ofthe decision maker and not the analyst. The decisionmaker may modify the solution to incorporate practical orintangible considerations not reflected in the model


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5. Establish the Procedure(1)

Once a solution is accepted a procedure must bedesigned to retain control of the implementation effort

Problems are usually ongoing rather than unique.Solutions are implemented as procedures to be usedrepeatedly in an almost automatic fashion under perhapschanging conditions

Control may be achieved with a set of operating rules, ajob description, laws or regulations promulgated by agovernment body, or computer programs that acceptcurrent data and prescribe actions


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5. Establish the Procedure(2)

Once a procedure is established (and implemented), theanalyst and perhaps the decision maker are ready to tacklenew problems, leaving the procedure to handle the requiredtasks

But what if the situation changes?

An unfortunate result of many analysis is a remnantprocedure designed to solve a problem that no longer existsor which places restrictions on an organization that arelimiting and no longer appropriate

Therefore, it is important to establish controls that recognize achanging situation and signal the need to modify or updatethe solution


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6. Implement the Solution

Implementation of solutions is perhaps the most difficultpart of a problem solving exercise.

Solution process itself can be designed to smooth theway for implementation.

Persons who are likely to be affected by the changes

should take part, or at least be consulted, during thevarious stages involving problem formulation, solutiontesting, and the establishment of the procedure.


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The OR Process

Combining the steps we obtain the complete ORprocess.

In practice, the process may not be well definedand the steps may not be executed in a strictorder. Rather there are many loops in the process,with experimentation and observation at each stepsuggesting modifications to decisions madeearlier.

The process rarely terminates with all the loose

ends tied up. Work continues after a solution isproposed and implemented. Parameters andconditions change over time requiring a constantreview of the solution and a continuing repetitionof portions of the process.


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O.R. APPROACH


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TECHNIQUES OF OR(1)

Linear programming- It has been used to solve problems involvingassignment of jobs to machines, blending, product mix, advertisingmedia selection, least cost diet, distribution, transportation and manyothers.

Dynamic programming- It has been applied to capital budgeting,selection of advertising media, cargo loading and optimal routing

problems.

Waiting line or queuing theory- It has been useful to solveproblems of traffic congestion, repair and maintenance of broken-down machines, number of service facilities, scheduling and controlof air-traffic, hospital operations, counter in banks and railway

booking agencies.

Inventory control / planning- These models have been used todetermine economic order quantities, safety stocks, reorder levels,minimum and maximum stock level.


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Contd Decision theory- It has been helpful in controlling hurricuanes,

water pollution, medicine, space exploration, research anddevelopment projects.

Network analysis (PERT& CPM)- These techniques have beenused in planning, scheduling and controlling construction of dams,brides, roads and highways and development & production ofaircrafts, ships, computers etc.

Simulation- It has been helpful in a wide variety of probabilisticmarketing situations.

Theory of replacement- It has been extensively employed todetermine the optimum replacement interval for three types ofreplacement problems:

i) Items that deteriorate with time.

ii) Items that do not deteriorate with time but fail suddenly.

iii) Staff replacement and recruitment.


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What is a Mathematical Model?

Most-important step in a scientific or quantitative analysis of aproblem is to formulate a model that adequately captures theessence of a problem.

Result of such a formulation, or an abstraction, is called amathematical optimization model.

Generally speaking, a mathematical optimization model hasthe following typical components:

a set of decision variables

an objective function, expressed in terms of the decision

variables, that is to be minimized or maximized a set of constraints that limit the possible values of the

decision variables


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ADVANTAGES

Provides a tool for scientific analysis. Provides solution for various business problems.

Enables proper deployment of resources.

Helps in minimizing waiting and servicing costs.

Enables the management to decide when to buyand how much to buy?

Assists in choosing an optimum strategy.

Renders great help in optimum resource allocation.

Facilitates the process of decision making.

Management can know the reactions of theintegrated business systems.

Helps a lot in the preparation of future managers.


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LIMITATIONS

The inherent limitations concerning mathematicalexpressions

High costs are involved in the use of O.R. techniques

O.R. does not take into consideration the intangiblefactors

O.R. is only a tool of analysis and not the completedecision-making process

Other limitations

Bias

Inadequate objective functions

Internal resistance Competence

Reliability of the prepared solution


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List out the applications ofOperations Research

List the uses of Operations

Research in Management

Education

Introduction Session on OR

Documents

Transcript of Introduction Session on OR