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Introduction To or

This document provides an overview of operations research (OR). It defines OR as using advanced analytical techniques to improve decision-making, especially in complex systems involving resources. OR aims to optimize outcomes by balancing conflicting objectives. The document traces the origins and evolution of OR from its development during WWII to allocate military resources efficiently. It highlights examples of OR applications in various industries and functions like supply chain management, scheduling, and resource allocation.

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Revathy Nair
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608 views

Introduction To or

This document provides an overview of operations research (OR). It defines OR as using advanced analytical techniques to improve decision-making, especially in complex systems involving resources. OR aims to optimize outcomes by balancing conflicting objectives. The document traces the origins and evolution of OR from its development during WWII to allocate military resources efficiently. It highlights examples of OR applications in various industries and functions like supply chain management, scheduling, and resource allocation.

Uploaded by

Revathy Nair
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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OPERATIONS RESEARCH

Waste neither time nor money, but

make the best use of both.

Benjamin Franklin
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Module I
Introduction to Operations Research, Evolution of the field , Scope, Merits and Limitations Concept of Optimization Decision making through Operation Research Nature and significance of operations research Models and Modeling in OR General methods for solving OR models Methodology of OR, Application and Scope of OR Basic OR models.
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What is Operations Research (OR) ?


OR is a secret weapon !!!
Lindsay Blakely, CBS MONEY WATCH OCTOBER 15, 2008.

5/29/2013

What is Operations Research ? (contd.)

Operations Research: The Science of Better !!!


INFORMS Institute for Operations Research and Management Sciences, USA.
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What is Operations Research ? (contd.)


Operations Research is concerned with
scientifically deciding how to best design and operate man-machine system usually under conditions requiring the allocation of scarce resources.

OR SOCIETY OF USA
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What is Operations Research ? (contd.)


Operational Research is the application
of the methods of science to complex problems arising in the direction and management of large systems of men, machine, materials and money in industry, business, government and defense.
OR SOCIETY OF UK
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So what is Operations Research ?


Involves research on operations. To conduct and coordinate the operations/ activities within an organization. Nature of the organization is immaterial. Applied in- manufacturing, transportation, construction, telecommunications, financial planning, health care, the military, and public services etc.
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So what is Operations Research ? (contd.)


Operations Research (OR) is the use of advanced analytical/quantitative techniques to improve decision making. It is sometimes known as Operational Research, Optimisation Techniques, Management Science or Industrial Engineering.
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History of OR
Came into existence during World War II Scientists with diverse educational background - to develop a scientific approach to deal with strategic and tactical problems of various military operations. Initial objective - to allocate scarce resources in an effective manner to various military operations and to the activities within each operation. Hence the name Operations Research. During the 50s, Operations Research achieved recognition as a subject for study in the universities.

Why do managers need Operations Research ?


high costs of technology, labor and materials competitive pressures of the modern world rapid advancements in technology and knowledge new problems with little or no precedents. Have greatly increased the difficulty of managerial decision making.
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Why do managers need Operations Research ?


to effectively address these problems guide their teams successfully managers need a thorough understanding of the applicability of quantitative methods to decision making Managers cannot rely merely on their experience or intuition because the consequences of wrong decisions can be serious and costly.
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Why do managers need Operations Research ?


Complex, global organizations are constantly in need of better ways to manage their processes, resources, products, and people. OR is an indispensable decision making tool that allows these companies to do exactly that and find a competitive advantage.
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Why do managers need Operations Research ? (contd.)


The list of Fortune 500 companies getting into the OR game is expanding Mark Doherty, Executive Director of the Hanover Institute for Operations Research and Management Sciences. P&G makes significant analyses on supply chain structure with input from the OR team, since improving the slightest of margins in a company of P&Gs size can 5/29/2013 14 generate huge dividends.

Why do managers need Operations Research ? (contd.)


At RIL, there is always a linear programming that is under way, based on the world crude prices and the product demand pattern. The return on the rather high investment made in infrastructure was paying dividends, especially when the delta between the price of sour and sweet crude was significant - a direct corollary of rising crude prices Hindu Business Line 5/29/2013

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Examples of OR in action Scope of OR


Inventory/EOQ/ROL Ticketing/Route Planning Supply chain management/Sequencing Marketing/ sales forecasting, market selection/ segmentation and targeting/ pricing/salesforce sizing and deployment/transportation.

Examples of OR in action (contd.)


Telecommunications/ Capacity planning Defence and peace keeping/deployment of troops. Healthcare/Simulation Scheduling / aircrews and fleets for airlines / orders in a factory/ operating theatres in a hospital. Yield management: setting the prices of airline seats and hotel

Optimization in Operations Research


Optimization could mean either maximization or minimization. In business/ industry one is interested in maximizing profit/ productivity/ utilisation rate One is also interested in minimizing cost/ time taken to perform tasks 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.

PROBLEM DEFINITION

MODEL CONSTRUCTION
SOLUTION

OR T E C H N I Q U E S

VALIDATION IMPLEMENTATION

Nature and Significance of OR


OR approach is particularly useful in balancing conflicting objectives (goals or interests) where there are many alternative courses of action available to the decision-makers. The optimum decision must be one that is best for the organization as a whole it is often called the global optimum.

Nature and Significance of OR


Operations Research is concerned with providing the decision-maker with decision aids (or rules) derived from: A Total System Orientation Scientific Methods of Investigation.

Models of reality, generally based on quantitative measurement and techniques.

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