2. OPERATION RESEARCH
•Is an analytical method of problem-solving
and decision-making that is useful in the
management of organizations. In operations
research, problems are broken down into
basic components and then solved in defined
steps by mathematical analysis.
3. SOME AREAS OF MANAGEMENT WHERE O.R
TECHNIQUES HAVE BEEN SUCCESSFULLY UTILIZED
ARE AS FOLLOW:
1. Allocation and Distribution in Projects.
2. Production and Facilities Planning
3. Programmes Decisions
4. Marketing
5. Organization Behaviour
6. Finance
7. Research and Development
4. (i) Optimal allocation of resources such as men
materials machines, time and money to projects.
(ii) Determination and deployment of proper
workforce.
(iii) Project scheduling, monitoring and control.
Allocation and Distribution In
Projects
5. (i) Factory size and location decision.
(ii) Estimation of number of facilities required.
(iii) Preparation of forecasts for the various inventory items and
computation of economic order quantities and reorder levels.
(iv) Scheduling and sequencing of production runs by proper
allocation of machines.
(v) Transportation loading and unloading,
(vi) Warehouse location decision.
(vii) Maintenance policy decisions.
Production and Facilities
Planning
6. (i) What, when and how to purchase to minimize
procurement cost.
(ii) Bidding and replacement policies.
Programmes Decisions
7. (i) Advertising budget allocation.
(ii) Product introduction timing.
(iii) Selection of advertising media.
(iv) Selection of product mix.
(v) Customer’s preference of size, colour and
packaging of various products.
Marketing
8. (i) Selection of personnel, determination of retirement
age and skills.
(ii) Recruitment policies and assignment of jobs.
(iii) Recruitment of employees.
(iv) Scheduling of training programs.
Organization Behaviour
9. (i) Capital requirements, cash flow analysis.
(ii) Credit policies, credit risks etc.
(iii) Investment decision.
(iv) Profit plan for the company.
Finance
10. (i) Product introduction planning.
(ii) Control of R&D projects.
(iii) Determination of areas for research and development.
(iv) Selection of projects and preparation of their budgets.
(v) Reliability and control of development projects thus it
may be concluded that operation research can be widely
utilized in management decisions and can also be used as
corrective measure.
Research and Development
11. THE PROCESS OF OPERATIONS
RESEARCH CAN BE BROADLY BROKEN
DOWN INTO THE FOLLOWING STEPS:
1. Formulating the Problem
2. Constructing a Model to Represent the System under
Study
3. Deriving Solution from the Model
4. Testing the Model and the Solution Derived from it
5. Establishing Controls over the Solution
6. Implementation of the Solution
12. Some of the commonly used techniques of operation
research are as follows:
1. Linear programming.
2. Waiting line theory or queuing theory.
3. Inventory control models.
4. Replacement problems.
5. Network Analysis.
6. Sequencing.
7. Dynamic programming.
Tools of Operation Research
14. Linear programming
Linear programming, mathematical modeling
technique in which a linear function is maximized or
minimized when subjected to various constraints.
This technique has been useful for guiding
quantitative decisions in business planning, in
industrial engineering, and to a lesser extent in the
social and physical sciences.
15. Waiting line theory or Queuing
theory
Queuing theory is a branch of mathematics that
studies how lines form, how they function, and why
they malfunction. Queuing theory examines every
component of waiting in line, including the arrival
process, service process, number of servers, number
of system places, and the number of customers
which might be people, data packets, cars, or
anything else.
16. Inventory Control
Inventory control, also called stock control, is the
process of ensuring the right amount of supply is
available in an organization. With the appropriate
internal and production controls, the practice
ensures the company can meet customer demand
and delivers financial elasticity.
17. Replacement Problems
The Replacement Theory in Operations Research is
used in the decision making process of replacing a
used equipment with a substitute; mostly a new
equipment of better usage. The replacement might
be necessary due to the deteriorating property or
failure or breakdown of particular equipment.
18. Network Analysis
The network analysis is a method used to analyze,
control and monitoring of business processes and
workflows.
19. Sequencing
Sequencing problems are concerned with an
appropriate order (sequence) for a series of jobs to
be done on a finite number of service facilities (like
machines) in some well-defined technological order
so as to optimize some efficiency measure such as
total elapsed time or overall cost etc.
20. Dynamic programming
Dynamic Programming (DP) is a technique used to
solve a multi-stage decision problem where
decisions have to be made at successive stages. This
technique is very much useful whenever if an
optimization model has a large number of decision
variables. It is not having any generalized
formulation.
21. Assignment Problems
Assignment Problem is a special type of linear
programming problem where the objective is to
minimise the cost or time of completing a number
of jobs by a number of persons
22. Decision Theory
Decision theory is primarily concerned with helping
people and organizations in making decisions. It
provides a meaningful conceptual frame work for
important decision making. The decision making
refers to the selection of an act from amongst
various alternatives, the one which is judged to be
the best under given circumstances.
23. Integer Programming
It is also called integer linear programming. It can be
express as the optimization of a linear function
subject to a set of linear constraint over integer
variables.
24. Transportation Problems
The transportation problem is a special type of
linear programming problem where the objetive
consists in minimizing transportation cost of a given
commodity from a number of sources or origins (e.g.
factory, manufacturing facility) to a number of
destinations (e.g. warehouse, store).
25. Simulation
Simulation is a method of solving decision making
problem by designing ,constructing and
manipulating a model of the real system. It is a
useful technique for solving a business problem
where many values of the variables are not known or
partly known in advance and there is no easy way to
find these values.
26. Goal Programming
Goal Programming is an extension of Linear
Programming in which targets are specified for a set
of constraints. In Goal Programming there are two
basic models: the pre-emptive (lexicographic) model
and the Archimedian model. In the pre-emptive
model, goals are ordered according to priorities.
27. Markov Analysis
Markov analysis is a method used to forecast the
value of a variable whose predicted value is
influenced only by its current state, and not by any
prior activity. In essence, it predicts a random
variable based solely upon the current circumstances
surrounding the variable
28. Game Theory
Game theory studies situations in which parties
compete, and also possibly cooperate, to influence
the outcome of the parties’ interaction to each
party’s advantage. The situation involves conflict
between the participants called players because
some outcomes favour one player at the expense of
the other players.
29. Heuristic Models
A heuristic is a well-defined intelligent procedure
based on intuition, problem context and structure
designed to find an approximate solution to an
optimization problem. In contrast with exact
methods that are designed to find optimal solutions,
heuristic methods find solutions that are not
necessarily optimal.
30. Routing Models
A network routing problem consists of finding an
optimum route between two or more nodes in
relation to total time, cost, or distance. Various
constraints may exist, such as a prohibition on
returning to a node already visited or a stipulation of
passing through every node only once.
