Scopes and Applications of Operations Research
May 08, 2024 | Dewmini Chamudika
OPERATIONS RESEARCH
Operations Research is relatively a new discipline, which originated in World War II, by Britain and U.S.A., during the 1939-1945, for scientific methods to the planning of military operations and became very popular throughout the world. India is one of the few first countries in the world who started using operations research. Operations Research is used successfully not only in military/army operations but also in business, government and industry. Now a day’s operations research is almost used in all the fields.
Operational Research is the 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 defence. Its distinctive approach is to develop a scientific model of the system, incorporating measurements of factors such as change and risk, with which to predict and compare the outcomes of alternative decisions, strategies or controls. The purpose is to help management determine its policy and actions scientifically.
Stages of Development of Operations Research
The stages of development of O.R. are also known as phases and process of O.R, which has six important steps. These six steps are arranged in the following order:
Step I: Formulation of Problem
Step II: Construction of Mathematical Model
Step III: Deriving the solution from the model
Step IV: Testing the model and the solution derived from it
Step V: Controlling the solution
Step VI: Implement the solution
Step I: Formulation of problem
First of all one must formulate the problem in the form of an appropriate model. To do so the following information will be required.
Who has to take the decision?
What are the objectives?
What are the controlled variables?
What are the uncontrolled variables?
What are the restrictions?
Since wrong formulation cannot yield a right decision, one must be considerably careful while executing this phase.
Step II: Construction of Mathematical Model
This phase is concerned with the reformulation of the problem in an appropriate form which is convenient for analysis. The most suitable form for this purpose is to construct mathematical model representing the system under study. Model must include 3 important factors.
Decision Variable.
Constraints or Restrictions.
Objective function.
Step III: Deriving the solutions from the model
After formulating the mathematical model for the problem under consideration, the next phase is to derive a solution from this model. Here in OR we are always
in search for an optimal solution. Optimal solution is the one which maximizes or minimizes the objective function.
Step IV: Provide a solution and test its reasonableness
This step is to get a solution with the help of model and input data. This solution is not implemented immediately, instead the solution is used to test the model and to find there’s any limitations. Suppose if the solution is not reasonable or the behaviour of the model is not proper, the model is updated and modified at this stage. The output of this stage is the solution(s) that supports the current organizational objectives.
Step V: Controlling the solution
The model requires immediate modification as soon as the controlled variables (one or more) changes significantly, otherwise the model goes out of control. As the conditions are constantly changing in the world and the solution may not remain valid for a long-time.
Step VI: Implement the solution
At this step the solution obtained from the previous step is implemented. The implementation of the solution involves many behavioural issues. Therefore, before implementation the implementation authority has to resolve the issues. A properly implemented solution results in quality of work and gains the support from the management.
Scopes & Applications of Operations Research
Today, almost all fields of business and government utilizing the benefits of Operations Research. There are voluminous of applications of Operations Research. Although it is not feasible to cover all applications of O.R. in brief.
DEFENCE:
In modern time war the military operations are carried out by air force, army & navy therefore there is a necessarily to formulate optimum strategies that may give maximum benefit operations research helps military executives and managers to select the best strategies (course of action) to win the battle thus operations research has got great scope in defence.
LIC:
Operations research techniques are also applicable to enable LIC officers to decide the premium rates of various policies for the best interest of corporation.
AGRICULTURE:
With increase of population and consequent shortage of food, there is need to increase agriculture output for a country. But there are many problems faced by the agriculture department of a country ego.
Climatic Condition.
Problem of optimal distribution of water from the resources etc.
Thus there is a need of best policy under the given restrictions. Operations research is the technique to determine best policy.
MANAGEMENT
The following are the abbreviated set of typical operations research applications in an organization just to show how widely these techniques are used today:
1. Accounting:
•Assigning audit teams effectively
•Credit policy analysis
•Cash flow planning
•Developing standard costs
•Establishing costs for by-products
•Planning of delinquent account strategy
2.Construction:
•Project scheduling, monitoring and control
•Determination of proper work force
•Deployment of work force
•Allocation of resources to projects
3. Facilities Planning:
•Factory location and size decision
•Estimation of number of facilities required
•Hospital planning
•International logistic system design
•Transportation loading and unloading
•Warehouse location decision
4. Finance:
•Building cash management models
•Allocating capital among various alternatives
•Building financial planning models
•Investment analysis
•Portfolio analysis
•Dividend policy making
5. Manufacturing:
•Inventory control
•Marketing balance projection
•Production scheduling
•Production smoothing
6. Marketing:
•Advertising budget allocation
•Product introduction timing
•Selection of Product mix
•Deciding most effective packaging alternative
7.Organizational Behaviour / Human Resources:
•Personnel planning
•Recruitment of employees
•Skill balancing
•Training program scheduling
•Designing organizational structure more effectively
8. Purchasing:
•Optimal buying
•Optimal reordering
•Materials transfer
9. Research and Development:
•R & D Projects control
•R & D Budget allocation
•Planning of Product introduction