Stages of Development of Operation Research

The six methodologies involved in operation research are as follows:

1. Observe the problem environment 

2. Analyze and define the problem 

3. Develop a model 

4. Select the appropriate data input 

5. Provide a solution and evaluate its reasonableness 

6.  Implement the solution 

The quantitative basis for decision-making provided to managers by Operations Research (OR) enhances a manager’s ability to make long-range plans and solve the routine problems of running an enterprise/ concern. OR is a systematic and logical approach to providing a rational footing for making decisions. OR like scientific research, is based on a scientific methodology that involves the following steps. 

Step I: Observe the problem environment 

The first step of the OR study is the observation of the environment in which the problem exists. This step includes activities like conferences, site visits, research, observations, etc. These activities give sufficient information and support to OR analysts to proceed and formulate the problem in a better way. OR is not a one-man activity. It takes a team, with members with various skills and specializations assigned various tasks and functions, depending on their strengths or the areas they excel at. Therefore, two things must be done in this step. 

• Form the team that will conduct the OR study.  

Consider the multifunctional nature of OR when choosing the members of the team. You want them to be qualified to conduct OR, so you do not have to start pulling in just any random person from the other departments midway through the study for the simple reason that the existing members turn out to be unable to do the job. It advised that the areas or divisions that are directly or even indirectly affected by or related to, the OR be represented in the team.  

If the OR is on product design, you would want to include the engineering, assembly, and quality control divisions to represent, along with someone from finance and marketing, specifically those that participate in customer and market research. Install a team leader who will be able to steer the team in the right direction, and one with the ability to manage both the work and the members of the OR team. 

• Ensure that all members of the team fully understand the issues at hand 

Specifically on the matter regarding the OR. What are they supposed to study, and what should they pay attention to? For what reason are they conducting this specific activity, and how will it benefit the organization? These are only a few of the primary questions you must address before the team members so that they will not be “flying blind.” Bringing them into the loop will also motivate them to do the best they can in the OR study. It is also important that you can instil an appreciation within the team for the objectives of the activity and for what have done so far (if there are). 

Step II: Analyse and define the problem 

Most processes - even the scientific method - put this on the first step and is considered by most to be the most difficult part of the entire process, since it will set the tone for the rest of the activities or tasks that will follow. If you do not know the problem, you will simply be spinning your wheels and going nowhere. 

If, on the other hand, you were able to identify a problem, but it is not the actual or real problem, then you will also end up wasting a lot of time and resources, and you might even end up making the wrong decisions. In defining the problem, you must identify its scope and the results that you desire or expect to have at the end. This time, you will be more specific. Instead of saying that you want to improve the company’s product design system, you will have a more targeted objective, such as “to lower the unit production cost of the product.” 

Once you have identified the specifics, delve deeper into it. 

• Identify the specific factors that will affect the objective 

Clearly distinguish those that are within your control from those that are not and determine all feasible alternative courses of action that may be taken. Say that you want to lower the unit production cost of the product, so the factors may include the flexibility of product design, and factors of production used (e.g., direct materials, direct labour, overhead). 

• Identify the constraints on the courses of action 

There are bound to be limits that all decision-makers in business must operate within. It is possible that the nature of the product and even government regulations and legislation do not provide enough room for flexibility in product design. Availability of resources – especially the alternative resources should you decide to change some of the inputs into the product – is also another constraint. 

Step III: Develop a model 

Modelling is what sets OR apart from other decision-making processes. Where other approaches would directly investigate the system and analyze it, OR goes about it by formulating a model, or a representation of the system, and using that model for its analysis. Modeling allows the researchers to simplify the system while maintaining its accuracy and faithfulness to the original. Besides, it is much easier - and less costly - to analyze the model instead of the actual system. The team conducting OR may create distinct types of models, and there are four general types of models that are often formulated and employed. 

• Analog models 

These are models with physical properties that are significantly smaller than the actual system being studied and have similar characteristics to the latter. These similarities make the model and the original analogous, even if they are not identical. 

• Simulation models 

This involves the approach where the behaviour of individual elements within the system is mimicked or mirrored. In other words, a model of a real-life situation is created, and that’s where techniques such as sampling and experimentation, if necessary, are conducted. This method is usually favoured as it allows testing for future improvement. Through simulation, you can analyze even complex systems by producing estimates of statistical measures. Values are inputted and, with every replication, you can observe the response of the system. Currently, when technology plays a particularly significant role in all businesses, computer simulation is often applied. This allows you to look for areas of improvement, specifically in an automated business environment. 

• Mathematical models 

OR is considered one of the many branches of mathematics, so do not be surprised when you find yourself having to apply many mathematical methods in your OR. Without going into the most intricate details, let us list down the various logical methods employed in OR, which were also cited by Springer. The preference for the usage of mathematical models is how they effectively map out all the variables and describe their relationships with each other. 

• Physical models 

As the name implies, this is a tangible model, which is a copy of the original system but scaled down appropriately. Unlike the analogic models, which are simply made to be analogous to the original system, these scaled-down versions are smaller replicas of the original. Among the four model categories, this is the hardest to pull off, especially in the case of complex systems. 

Step IV: Select the appropriate data input 

In this step, there are two things you should take note of before you can go about successful data collection. Of course, this is under the assumption that you already know what type of data you should collect. To get a correct result from OR, the input data must be verified. Activities in this step include analyzing internal-external data and facts, gathering ideas, and using computer data banks. The purpose of this step is to evaluate the model and provide adequate input data 

• Sources of data 

There are many identifiable sources of data, depending on the data type you need. We look to existing standards, such as current and historical trends, and set values. Another source is the system or process that is being studied, particularly how it works. 

• Methods and tools for data collection 

Observation remains one of the most used methods of data collection and, thanks to automation and computerization, combined with the flexibilities brought on by the internet, data collection is facilitated. What used to take businesses years to collect data and process it into valuable information is now doable in just a matter of hours, days even. 

Step V: Provide a solution and evaluate its reasonableness 

In this step, the solution to the problem is obtained with the help of the model and data input. Before implementing this solution, the solution itself is used for testing and finding limitations. If the solution is not reasonable and the model is not behaving properly, then updating and modification of the model are conducted. This step is repeated until the desired objective is achieved. Thus, the model is fine-tuned. 

Does the process end once you have identified the solution? No, it does not. You still must make sure that the model you used in your analysis is, indeed, an accurate representation of the system. This is the validation part. And that is not all. If you thought you were done with the analysis bit, there is still more analysis to be done. In this case, you will be going over various “what if” scenarios, where you will consider the possible outcomes if the solutions obtained are implemented. 

Step VI: Implement the solution 

This is the last phase of the OR study. Finally, you settled\ on the best solution or recommendation and decide. It is time to implement that decision. Of course, you need to still have control over the implementation, which is why there should be a team in place to oversee the implementation. It is highly recommended that you place some members of the OR team in the implementing team. 

Monitoring is a must since you want to ensure that the solution decided upon is the one being implemented. This is also a way to remain on your toes since unforeseen circumstances might lead to some aspects of the solution needing some tweaking along the way.