 Operation Research

Operation Research is defined as the concept of reduction in cost to maximize the profit with
innovation and different techniques of research.

1. Application of OR in decision making Of modern problems

1. Growth of Business: Operations Research (OR) employs optimization models to help

businesses make the most efficient use of their resources. This includes workforce,
production processes, and supply chain management. Additionally, OR aids in forecasting
future trends and demands, allowing businesses to align their expansion strategies with
market needs.

2. Innovative Techniques: In the realm of innovative techniques, OR plays a pivotal role in

optimizing research and development (R&D) processes. It helps in resource allocation,
project timeline management, and project prioritization. Furthermore, OR models guide
decision-makers in adopting new technologies, evaluating their impact on operations,
costeffectiveness, and long-term benefits.

3. New Entry of Business: When a new business seeks entry into a market, OR is instrumental
in analyzing market conditions and competitor behaviors. It assists in evaluating various
entry strategies and considering associated risks. This allows decision-makers to make
informed choices about the most effective and sustainable approach for market entry.

4. Globalization: OR contributes significantly to the optimization of global supply chains. It

considers factors such as transportation, inventory management, and demand forecasting to
enhance overall efficiency in a global context. Additionally, OR models aid in risk
management by analyzing and addressing the complexities associated with global
operations, such as geopolitical factors, currency fluctuations, and regulatory changes.

5. Growth in Capital: In the financial domain, OR is applied to optimize investment portfolios. It

takes into account risk, return, and diversification to guide investors in making well-informed
decisions in a dynamic financial environment. Financial planning and capital allocation also
benefit from OR methodologies, ensuring optimal resource utilization and maximizing
returns on investments.

2. Techniques used in application of Operation research:

 Statistical Techniques:

1. Probability Models: Probability models are employed to represent uncertainties and

variability in decision-making processes. Probability theory helps quantify
uncertainties and estimate the likelihood of different outcomes.
 2. Regression Analysis: Regression models are utilized to analyze relationships between
variables, helping in understanding how changes in one variable may influence
another. This aids in decision-making based on observed patterns.

3. Queuing Theory: Queuing theory is applied to analyze and optimize waiting lines or
queues. It aids in managing resources efficiently, such as minimizing customer
waiting times in service systems.

4. Simulation: Statistical simulation involves creating models of systems and running

experiments to observe their behavior under different conditions. It is particularly
valuable for understanding complex systems and making decisions in uncertain
environments.

 Programming Techniques:

1. Linear Programming (LP): LP is a mathematical technique used for optimization

where a linear objective function is maximized or minimized, subject to linear
equality and inequality constraints. It finds applications in resource allocation,
production planning, and transportation logistics.

2. Transformation Techniques: Transformation involves converting a problem into a

different form to make it more amenable to analysis or to apply specific methods. In
Operations Research, transformation techniques may be used to reformulate a
problem into a mathematical model that can be solved using optimization techniques
like LP.

3. Assignment Problem: The assignment problem is a specific type of linear

programming problem used in resource allocation scenarios. It is applied when tasks
need to be assigned to resources in the most efficient manner, such as job
assignments, worker-machine assignments, and project task assignments.

4. Networking Techniques: Networking techniques, including Critical Path Method

(CPM) and Program Evaluation and Review Technique (PERT), are used in project
management to schedule and control complex projects. They help identify critical
paths, manage dependencies, and optimize project timelines.

5. Gaming Theory: Gaming theory in Operations Research deals with strategic

interactions and decision-making in competitive situations. It is applied in scenarios
where multiple decision-makers are involved, and outcomes depend on the decisions
of others. Applications include competitive bidding, pricing strategies, and supply
chain coordination.

3. Importance of operation research:

1. Growth of Business:

• OR facilitates the growth of businesses by optimizing processes and resource

allocation. It helps in identifying efficient production methods, managing supply
chains, and making strategic decisions that contribute to overall business expansion.

2. Planning:
 • OR is instrumental in strategic planning. It assists organizations in developing efficient
plans for resource allocation, project scheduling, and long-term strategic goals.
Through modeling and analysis, OR helps in creating robust plans that consider
uncertainties and constraints.

3. Techniques:

• OR provides a diverse set of analytical techniques, including optimization, simulation,

and statistical modeling. These techniques enable organizations to solve complex
problems, make informed decisions, and optimize various processes for efficiency
and effectiveness.

4. Capital Formation:
Effective utilization of resources, as facilitated by OR, contributes to capital formation.
By optimizing investment portfolios, managing finances, and making datadriven
decisions, businesses can enhance their financial stability and generate capital for
future growth.

5. Decision Making:
OR is a key tool in decision-making processes. It provides quantitative and analytical
support, helping decision-makers evaluate various alternatives, identify optimal
solutions, and make choices that align with organizational objectives.

6. Innovative Ideas or Concepts:

OR encourages innovation by providing a structured approach to problem-solving. It
fosters creativity in developing new methods, processes, or models to address
challenges and capitalize on opportunities in different domains.

7. Profit Maximization:
OR contributes to profit maximization by optimizing business operations. Through
techniques like linear programming and optimization, organizations can identify the
most efficient ways to allocate resources, reduce costs, and maximize revenue.

8. Maximum Utilization of Labor:

OR helps in optimizing workforce management by matching labor resources with
tasks efficiently. This leads to improved productivity, reduced idle time, and better
utilization of human resources within the organization.

9. Maximum Output with Given Resources:

OR is all about optimizing resource utilization, ensuring that the organization
achieves the highest possible output with the given resources. This efficiency is
crucial for competitiveness and sustainability in today's dynamic business
environment.

4. Define Assignment problem:

Assignment is defined as delegation of multiple tasks to multiple people for optimum output.
optimum output means reduction of cost to maximize the profit. The constraint (limitation) for
assignment is 1 person 1 job