Professional Documents
Culture Documents
By
MITKU A.
(Introduction To Operations Research)
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Major topics of the chapter
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What is operations research?
Operations Research (OR): applies
analytical methods to help organizations
make better decisions when solving
complex problems.
Managers use Operations Research to
make their organizations more
productive and efficient.
According Robert Penn, Operations
Research is “the application of scientific
principles to business management,
providing a quantitative basis for
complex decisions”.11/9/2018
Operational Research: is the application of
the methods of science to complex problems
arising in the direction and management of
large number of men, machines, materials and
money, in industry, business, government and
defense.
OR is the application of scientific methods,
techniques & tools to the problems involving
the operations of a system so as to provide
those in control of the system with optimum
solution to the problem.
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Origin / Evolution of Operations Research
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Nature of Operations Research
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Cont…
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Significance of OR
OR could be very effective in handling issues of inventory
planning and scheduling, production planning, transportation,
financial and revenue management and risk management.
…………….
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b. Decision Making: OR is used for analyzing
problems of decision making in a superior
fashion. c. Coordination: Various
departments in the organization can be
coordinated well with suitable OR. This
facilitates smooth functioning for the entire
organization.
d. Systems: With OR, any organization
follows a systematic approach for the conduct
of its business. OR essentially emphasizes the
use of computers in decision making; hence
the chances of errors are minimum
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Features of operations research
OR uses an Inter-disciplinary Team Approach,
It is one of the most important features of
operations research
OR Uses Scientific Methodological Approach
OR is a highly systematic and scientific- method
OR is an Objective-oriented Approach
The primary objective of operations research is
to find the best (optimal) solution to a problem
under consideration.
OR Uses Totalistic/Holistic Approach
Any action or decision within an organization
must first be analyzed its interactions’ and effect on
the entire organization carefully considered
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Creating a Model: OR first makes a
model. A model is a logical representation
of a problem. It shows the relationships
between the different variables in the
problem. It is just like a mathematical
formula.
Shows Important Variables: OR shows
the variables which are important for
solving the problem.
Symbolizes the Model: The OR model, its
variables and goals are converted into
mathematical symbols. These symbols can
be easily identified, and they can be used
for calculation.
Achieving the Goal: The main goal of OR
is to select the best solution for solving the
problem. 11/9/2018
Quantifying the Model: All variables in
the OR model are quantified. That is,
they are converted into numbers. This is
because only quantified data can be put
into the model to get results.
Use of Computer: The main focus is
on decision-making and problem
solving. For this purpose computers are
widely used.
Interdisciplinary: OR is
interdisciplinary, because it uses
techniques from economics,
mathematics, chemistry, physics, etc.
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steps/stages involved in OR
1. Defining and Formulating the Problem
2. Developing and Constructing a Model
A mathematical model has three important
constituents
Decision Variables and Parameters
Constraints
Objective Function
3. Solving the Model
4. Solution-Testing
5. Implementation Stage
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Models in Operations
Research
A model is an abstraction of reality.
It is a simplified and often idealized
representation of reality.
A good model will capture important
details of reality without including
innumerable minor details that would
obscure rather than illuminate
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Classifications of Models
I. By Degree of Abstraction
a. Mathematical Models and language
models are considered the most abstract
models by their complexity.
b. Construction models such as buildings,
dams, etc are among the least abstract as
they represent shapes and characteristics that
a human brain can easily understand.
II. By Structure
a. Iconic or Physical models are physical
representation of a real situation but with a
different scale.
Example: map, model of a car, etc.
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b. Analogue or Schematic Models are
models which can represent dynamic
situations.
Example graphs that represent growth of
population, flow diagram, organizational
chart, etc.
c. Symbolic or mathematical models are
also OR models which represent the
decision variables under study using
mathematical symbols such as numbers,
letters, etc.
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Main Application Areas/ Scope of
Operations Research
Military Applications
Agriculture
Environmental Protection
Facilities Location
Product-Mix
Production
Mixing or Blending
Transportation and Trans-Shipment
Portfolio Selection
Profit Planning and Contract
Media Selection/Evaluation
Staffing
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