You are on page 1of 7



Operations Research was founded after World War II by the Operations Research Society of America (ORSA), which became part of the Institute for Operations Research and the Management Science (INFORMS). Operations research (O.R.) is the discipline of applying advanced analytical methods to help make better decisions. By using techniques such as mathematical modeling to analyze complex situations, operations research gives executives the power to make more effective decisions and build more productive systems based on: More complete data Consideration of all available options

Careful predictions of outcomes and estimates of risk The latest decision tools and techniques

Operational research (OR) encompasses a wide range of problem-solving techniques and methods applied in the pursuit of improved decision-making and efficiency, such as simulation, mathematical optimization, queuing and other stochastic-process models, Markov decision processes, econometric methods, data envelopment analysis, neural networks, expert systems, decision analysis, and the analytic hierarchy process. The major sub disciplines in modern operational research, Computing and information technologies Environment, energy, and natural resources Financial engineering Manufacturing, service sciences, and supply chain management Marketing Engineering[7] Policy modeling and public sector work Revenue management Simulation Stochastic models


The OR approach comprises 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. Tying each of these steps together is a mechanism for continuous feedback; Figure 1 show this schematically.

Figure The Operations Research Approach


The fashion industry is a very large industry which consists of divisions from fibers to garments. Various industries related to the fashion industry are: Fiber related Yarn Yarn processing Fabric Fabric processing Garment Support sector (Educational Institute, Accessories manufacturer, machine manufacturer, software developers, Research and development firms etc) Quantitative Technique: Quantitative techniques are the set of scientific techniques intended to express the business constraints and the risks underlying a business operation into measurable terms and thereby reduce the decision making process to a more analytical and a more objective process. Quantitative techniques embrace many a functional areas for their application they can be applied in the field of production, finance, quality control, maintenance, fashion, stores and allied fields. Quantitative techniques are available for their use in personnel management where they can be used to: 1. Study labor turn over and accident rate. 2. Determine optimum manpower planning. 3. Decide the number of persons to be put on permanent roll and the number of persons to be kept as standby to meet absenteeism. Quantitative techniques are also available for application in the production management to: 1. Decide the number of machines that can be manned by a single operator. 2.Study time lost due to various causes such as waiting time, hunting time, queue time, transit time etc Quantitative techniques are available for application in quality control to: 1. See whether the manufacturing process is under control and thereby identify presence of assignable causes.

2. Decide, at the reduced cost of inspection, acceptability or otherwise of an incoming lot. Quantitative techniques are equally useful in the marketing management to: 1. Determine optimum product mix. 2. Determine the least cost route of transportation of goods from companys different plants to different warehouses. 3. Choose between different Medias of advertising and bidding strategies 4. Draw sales forecast. Quantitative techniques also have been successfully employed in the material department, research and development department and many other departments.

APPLICATION OF OPERATIONS RESEARCH IN THE RETAIL INDUSTRY The application of scientific methods to the solution of managerial and administrative problems, involving complex systems or processes. Operational research strives to find the optimum plan for the control and operation of a system or process. It was originally used during World War II as a means of solving logistical problems. It has since developed into a planning, scheduling, and problem solving technique applied across the industrial, commercial, and public sectors. Example: Most airlines utilize a revenue maximizing technique called yield management (YM), which allows the airlines to allocate their fixed capacity of seats to various fare categories in the most profitable manner possible. The discriminatory pricing goal is to sell only non-discounted seats to the business travel segment. Suggests that yield management techniques may also be appropriate in certain retail settings where capacity (i.e. product inventory) is not necessarily perishable in the same sense as unsold seats on an airline

flight however, its value may decline with the culmination of a well-defined shopping period (e.g. the Christmas holiday shopping period). Examines how knowledge of customer price sensitivity as it pertains to this shopping period, coupled with the appropriate use of discount pricing, can maximize the revenue gained from sales of a seasonal product associated with a specific holiday



Overcoming significant technical and human difficulties, Zara recently deployed a new process relying extensively on sophisticated Operations Research models to determine every single shipment of inventory it sends from its two central warehouses to its 1500 stores worldwide. This new process has increased sales by an estimated 34%, corresponding to an estimated realized impact of approximately $233M and $353M in additional revenues for 2007 and 2008, respectively.

BIBLIOGRAPHY: te_for_Operations_Research_and_the_Management_Sciences