Operations

Research
Ma. Roniel-Leinor N. Velasco, ECE,MSIEM

June 29, 2019

Ma. Roniel-Leinor N. Velasco, ECE,MSIEM
• Master of Science in Industrial Engineering &
Management
- Polytechnic University of the Philippines
• Bachelor of Science in Electronics & Communications
Engineering
- Universidad de Manila
• Operations Planning: Materials Planning Engineer
- Unioil Petroleum Phil.

• Part Time Lecturer II

- Universidad de Manila

• Part Time Instructor

- AMA University
Operations Research:
• Attack of modern science on complex problems arising in the direction
and management of large systems of men, machines, materials and
money in industry, business, government and defense.
- Operational Research Society of Great Britain

• The application of scientific methods to improve the effectiveness of

operations, decisions and management. By means such as analyzing
data, creating mathematical models and proposing innovative
approaches.
- Randy Robinson
Operations Research:
• A quantitative approach and described it as “ a scientific method of
providing executive departments with a quantitative basis for decisions
regarding the operations under their control”.
- P.M Morse and G.E Kimball

• A tool of improving quality of answers. He says, “O.R. is the art of giving

bad answers to problems which otherwise have worse answers”.
- T. L Satty
Operations Research:
• Is an applied decision theory, which uses any scientific, mathematical or
logical means to attempt to cope with the problems that confront the
executive, when he tries to achieve a thorough-going rationality in
dealing with his decision problem.
- D.W. Miller and M.K. Starr

• Is a scientific methodology (analytical, mathematical, and quantitative)

which by assessing the overall implication of various alternative courses of
action in a management system provides an improved basis for
management decisions.
- Pocock
History:
Stages:

Process Activities Process Process Output

Site visits, conferences, Step 1: Observe the Sufficient information

observations & PROBLEM and support to
research environment proceed
Stages:

Process Activities Process Process Output

Objectives & Step 2: Analyze and Clear grasp of need for

Limitations define the and nature of solution
PROBLEM requested
Stages:

Process Activities Process Process Output

*Define Step 3: Develop a Model that works

interrelationships, MODEL under stated
*Formulate equations environmental
*Use OR Model/ constraints
alternate Model
Stages:

Process Activities Process Process Output

*Analyze internal & Step 4: Select Sufficient inputs to

external data, facts. appropriate DATA operate and test
*Collect options input model
*Computer data banks
Stages:

Process Activities Process Process Output

*Test the models Step 5:Provide a Solution that support

*Find limitations solution and test its current organizational
*Update the model REASONABLENESS goals
Stages:

Process Activities Process Process Output

*Resolve behavioural Step 6: IMPLEMENT Improved working and

issues the solution management support
*Sell the idea for longer run
*Give explanations operation of model
*Management
involvement
Relationship Manager vs OR Specialist:
Steps in PROBLEM recognition: Involvement:

Recognize from organization

symptoms that a problem Manager
exists.

Decide what variables are Manager & OR

involved; state the problem in
quantitative relationships
Specialist
among the variables.
Relationship Manager vs OR Specialist:
Steps in PROBLEM recognition: Involvement:
Investigate methods for solving
the problems. Determine
appropriate quantitative tools to OR Specialist
be used

Attempt solutions to the OR Specialist

problems; find various solutions;
state assumptions underlying
these solutions; test alternative
solutions.
Relationship Manager vs OR Specialist:
Steps in PROBLEM recognition: Involvement:
Determine which solutions is
most effective because of
practical constraints within the
Manager & OR
organization; decide what the Specialist
solutions means in the
organization.

Choose the solution to be used. Manager

Relationship Manager vs OR Specialist::

Steps in PROBLEM recognition: Involvement:

“Sell” the decision to operating Manager & OR

managers; get their
understanding and
Specialist
cooperation.
Tools & Techniques:
Linear Programming
• This is a constrained optimization technique, which optimize some
criterion within some constraints.
• A mathematical programming technique designed to optimize the
usage of limited resources.
Tools & Techniques:
Game Theory
• This is used for making decisions under conflicting situations where
there are one or more players/opponents.
Tools & Techniques:
Decision Theory
• Decision theory is concerned with making decisions under conditions
of complete certainty about the future outcomes and under conditions
such that we can make some probability about what will happen in
future.
Tools & Techniques:
Queuing Theory
• This is used in situations where the queue is formed. The objective
here is minimizing the cost of waiting without increasing the cost of
servicing.
Tools & Techniques:
Inventory Models
• Inventory model make a decisions that minimize total inventory cost.
This model successfully reduces the total cost of purchasing, carrying,
and out of stock inventory.
Tools & Techniques:
Simulation
• Is a procedure that studies a problem by creating a model of the
process involved in the problem and then through a series of organized
trials and error solutions attempt to determine the best solution.
Tools & Techniques:
Non-linear Programming
• Is used when the objective function and the constraints are not linear
in nature.
Tools & Techniques:
Dynamic Programming
• Is a method of analyzing multistage decision processes. In this each
elementary decision depends on those preceding decisions and as well
as external factors.
Tools & Techniques:
Markov Process
• Markov process permits to predict changes over time information
about the behavior of a system is known. This is used in decision
making in situations where the various states are defined.
Tools & Techniques:
Network Scheduling
• This technique is used extensively to plan, schedule, and monitor large
projects (for example computer system installation, R & D design,
construction, maintenance, etc.).
• The aim of this technique is minimize trouble spots (such as delays,
interruption, production bottlenecks, etc.) by identifying the critical
factors.
Tools & Techniques:
Information Theory
• This used to evaluate the effectiveness of flow of information with a
given system.
Applications:
Accounting:
• Assigning audit teams effectively
• Credit policy analysis
• Cash flow planning
• Developing standard costs
• Establishing costs for byproducts
• Planning of delinquent account strategy
Applications:
Construction:
• Project scheduling, monitoring and control
• Determination of proper work force
• Deployment of work force
• Allocation of resources to projects
Applications:
Facilities Planning:
• Factory location and size decision
• Estimation of number of facilities required
• Hospital planning
• International logistics system design
• Transportation loading and unloading
• Warehouse location decision
Applications:
Finance:
• Building cash management models
• Allocating capital among various alternatives
• Building financial planning models
• Investment analysis
• Portfolio analysis
• Dividend policy making
Applications:
Manufacturing:
• Inventory control
• Marketing balance projection
• Production scheduling
• Production smoothing
Applications:
Marketing:
• Advertising budget allocation
• Production introduction timing
• Selection of product mix
• Deciding most effective packaging alternative
Applications:
Organizational Behavior / Human Resources:
• Personnel planning
• Recruitment of employees
• Skill balancing
• Training program scheduling
• Designing organizational structure more effectively
Applications:
Purchasing:
• Optimal buying
• Optimal reordering
• Material transfer
Applications:
Research & Development:
• Optimal buying
• Optimal reordering
• Material transfer
Limitations:
• Magnitude of Calculations

• Money & Time Costs

• Non-quantifiable Factors

• Implementation
THANK
YOU