Unit 1

Operation research
(AN INTRODUCTION)
Origin and Development Of OR

 Operations Research is an Art and Science.

 It had its early roots in World War II (1 Sep 1939-2 Sep 1945)between Allies
(Britain,United state and France) and Axis power(Nazi Germany,Fascist
Italy,Imperial Japan)
 Britain was having very limited military resources,therefore there was an
urgent need to allocate resources to the various military operations,therefore
the British military executives and managers called upon a team of scientists
to apply a scientific approach to study the strategic and tactical problems
related to air and land defence of the country.
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 Primary applications areas of Operations Research include forecasting,

production scheduling, inventory control, capital budgeting, and
transportation.
What is Operation Research?

 Operations
 The activities carried out in an organization.

 Research
 The process of observation and testing characterized by the scientific
method. Situation, problem statement, model construction, validation,
experimentation, candidate solutions.

 Operations Research is a quantitative approach to decision making based on the

scientific method of problem solving.
Some Definitions of OR

 OR is the application of the theories and probability ,linear programming

,quenuing theory to the problems of war and industry.
 OR is the art of winning wars without actually fighting. ~(Aurther Clark)
 Operations Research (OR) is a discipline that applies advanced analytical
methods to help make better decisions and solve complex problems. It uses
techniques such as mathematical modeling, statistical analysis, optimization,
and simulation to improve efficiency and performance in various industries,
including logistics, manufacturing, finance, healthcare, and military
operations.
 In simple terms, OR is about finding the best possible solution to a problem
while considering constraints like cost, time, and resources
Objective of OR
 The objectives of Operations Research (OR) include:
1. Optimization – Finding the best possible solution from a set of feasible alternatives.
2. Decision-Making – Aiding in making informed and rational decisions using scientific
methods.
3. Resource Allocation – Efficiently utilizing resources like time, money, manpower, and
materials.
4. Cost Reduction – Minimizing costs while maintaining or improving efficiency and
performance.
5. Productivity Improvement – Enhancing productivity through better planning and
process optimization.
6. Risk Management – Identifying and mitigating risks in decision-making processes.
7. Forecasting and Planning – Using statistical and mathematical models to predict future
trends and plan accordingly.
8. Process Efficiency – Streamlining operations to eliminate bottlenecks and maximize
output.
9. Coordination and Control – Improving coordination between different departments and
ensuring effective control over operations.
Methodology of OR

 The methodology of Operations Research (OR) follows a systematic,

scientific approach to problem-solving. It typically consists of the following
steps:
 1. Problem Definition
• Clearly identify and define the problem.
• Understand the objectives, constraints, and scope.
• Gather relevant data and understand system behavior.
 2. Formulation of a Mathematical Model
• Develop a mathematical representation of the problem.
• Identify decision variables, constraints, and the objective function.
• Use models such as linear programming, queuing theory, or simulation.
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 3. Model Validation and Refinement

• Test the model with real or historical data.
• Validate assumptions and refine the model if necessary.
• Ensure the model accurately represents the real-world problem.
 4. Solution and Analysis
• Apply appropriate OR techniques (e.g., optimization, simulation, game
theory).
• Use computational tools and algorithms to find solutions.
• Analyze results for feasibility and effectiveness.
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 5.Implementation of Results
• Translate mathematical solutions into actionable decisions.
• Apply findings to real-world scenarios and operations.
• Communicate solutions to stakeholders.
 6. Monitoring and Feedback
• Evaluate the performance of the implemented solution.
• Gather feedback and make necessary adjustments.
• Update the model as conditions change over time.
Application Of OR
 Operations Research (OR) has a wide range of applications across various industries.
Some key areas of application include:
 1. Business & Management
• Inventory management
• Production planning and scheduling
• Supply chain optimization
• Marketing and advertising strategies
• Financial portfolio management
 2. Manufacturing & Industry
• Production process optimization
• Quality control and assurance
• Workforce scheduling
• Facility layout and design
• Maintenance and reliability analysis
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 3. Transportation & Logistics
• Vehicle routing and scheduling
• Traffic flow optimization
• Airline scheduling and crew management
• Warehouse location and distribution network design
• Shipping and freight management
 4. Healthcare & Medical Services
• Hospital resource allocation
• Patient scheduling and appointment systems
• Medical supply chain management
• Emergency response planning
• Disease spread modeling and control
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 Defense & Military Operations
• War strategy and combat simulation
• Resource allocation for military logistics
• Intelligence and surveillance analysis
• Risk assessment in defense planning
• Troop deployment optimization
 6. Government & Public Sector
• Urban planning and development
• Disaster management and relief operations
• Public transportation systems optimization
• Energy distribution and management
• Environmental protection and sustainability
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 7.Telecommunications & Network Optimization
• Network traffic management
• Data transmission and signal processing
• Wireless spectrum allocation
• Call center operations optimization
• Cybersecurity and risk assessment
 8. Finance & Banking
• Risk assessment and fraud detection
• Loan and credit management
• Investment portfolio optimization
• Revenue management and pricing strategies
• Forecasting stock market trends
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 9.Agriculture & Food Industry
• Crop yield prediction and optimization
• Supply chain management for food distribution
• Resource allocation for farming operations
• Pricing strategies in agribusiness
• Climate impact modeling on agriculture
 10. Sports & Entertainment
• Team and player performance analysis
• Tournament scheduling and logistics
• Fan engagement and ticket pricing strategies
• Optimal broadcasting and media planning
OR & managerial decision making

OR (Operations Research) is a discipline that uses advanced analytical methods

to help make better decisions. It's like having a super-powered problem-solving toolkit.
Here's how OR helps with managerial decision-making:
•Provides a structured approach: OR offers a systematic way to analyze complex
situations, breaking them down into smaller, manageable parts.
•Considers all options: OR helps identify and evaluate all possible courses of action,
not just the most obvious ones.
•Uses data and models: OR relies on data analysis and mathematical models to predict
the outcomes of different decisions.
•Optimizes outcomes: OR aims to find the best possible solution, whether it's maximizing
profit, minimizing costs, or improving efficiency.
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 OR (Operations Research) is a discipline that uses advanced analytical
methods to help make better decisions. It's like having a super-powered
problem-solving toolkit.
 Here are some common OR techniques used in decision-making:
• Linear programming: Used to optimize resource allocation, like scheduling
production or transportation.
• Decision analysis: Helps make decisions under uncertainty, using probabilities
and expected values.
• Simulation: Creates a virtual model of a system to test different scenarios
and their impact.
• Game theory: Analyzes strategic interactions between decision-makers, like
in competitive markets.
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 Benefits of using OR in managerial decision-making:

• Improved decision quality: OR leads to more informed and objective decisions.
• Increased efficiency: OR helps optimize processes and resource utilization.
• Reduced costs: OR can identify cost-saving opportunities.
• Better risk management: OR helps assess and mitigate risks.
• Competitive advantage: OR can give organizations an edge by enabling them to
make better decisions faster.
Characterstics of OR
 Operations Research (OR) is a systematic and scientific approach to decision-
making. Its key characteristics include:
 1. Decision-Oriented
• OR focuses on helping organizations make better decisions by analyzing complex
problems.
 2. Scientific and Systematic Approach
• Uses mathematical models, statistical methods, and analytical techniques to solve
problems logically.
 3. Interdisciplinary in Nature
• Combines knowledge from mathematics, economics, statistics, engineering, and
computer science.
 4. Uses Mathematical Models
• Develops mathematical representations of real-world problems to find optimal
solutions.
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 5.Focuses on Optimization
• Aims to maximize or minimize objectives like cost, profit, time, or efficiency.
 6. Considers Constraints and Limitations
• Takes into account resource limitations, such as budget, manpower, and time.
 7. Based on Quantitative Analysis
• Relies on numerical data and objective analysis rather than intuition or
guesswork.
 8. Uses Computers and Algorithms
• Many OR problems are complex and require computational tools and
algorithms for solutions.
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 9.Involves Simulation and Experimentation

• Simulates real-world scenarios to test different strategies before
implementation.
 10. Continuous Improvement and Feedback
• OR solutions are continuously refined based on real-world performance and
feedback.
Thank you