Introduction to Operations Research - History, Tools, Limitations

Features, History, Tools, Limitations of Operations Research.

1. INTRODUCTION
TO
OPERATIONS RESEARCH

2. TOPICS

+ Introduction to Operational Research
History of Operational Research

% Operational Research in India

< Definition of Operational Research

“+ Features of Operational Research

“ Scope of Operational Research

«+ Methodology/Approaches of Operational
Research

+ Tools/Techniques of Operational Research

“+ Operational Research and Management Decision-
Making

«+ Limitations of Operational Research

3. INTRODUCTION TO
OPERATIONAL RESEARCH

Operational Research is a systematic and analytical
approach to decision making and problem solving.

O.R. as termed in USA, Canada, Africa, Australia and
Operational Research as termedinEurope,isan=
applied mathematics techniques statistics _
arrive at Optimal solutions to solve complex problems.

Itis poe concerned with determining the
11:11 profit, sale, output, crops yield and efficiency
And losses,risks, cost, and time of some
objective function. It have also become an important part of
INDUSTRIAL ENGINEERING PROFESSION

Some ofthe used by operation
researchers are-

STATISTICS
GAME THEORY
-PROBABILITY THEORY, etc.

4. HISTORY OF
OPERATIONAL RESEARCH

There is no clear history that marks the Birth if O.R., itis
generally accepted that the field originated in
during the )')'/e)5(:)\\'- is |) Some Say that :CharlesBabbage
isthe . becausehisresearch
into the cost of transportation and sorting of mail led to
England’s University Penny Post 1840

Modern Operations Research = = =
Bowdsey Research Station U.K. 1937 |
and improve the working of the UK’s Early Warning
Rador System.

During the =e rit) Elsabout | Menand
Women were engaged to work for.

After World Ware OperationalResearch |,'
UK became e cia ENEE within the U.K:
Ministry of Defence with expanded techniques and
graving awareness.

5. OPERATIONAL RESEARCH
IN INDIA

1) Operational Research Society ias founded in: 1957) provide a
1 forthe Operational Research Scientists as well as an avenue to widen
their horizon by > 00100100110: and application oftechniques |...
Outside the country. The Societyis affiliatedto the tt UTC ee
Operational Research Societies (IFORS).

The Headquarters of the Society 7 located |) Kolkata) 1:7 Clete ly
Road, Kolkata 700029, India. At presentthe Societyhas — — iting Chapters
located in a ¡mer Ba ] a i a
ns ;

The >) 11111" comprise advancementof, conducting of
research in, study of, promotion and propagation of knowledge in Operational
Research and Allied Techniques through exchange of information, as well as
establishment, improvementand maintenance of professionaland academic
standards of work knownas Operational Research.

Contribution to the Socley lu attainment of these objectives is
anio exemptionofincometax underSection (E

The = 2,221: 2 a quarterly journal OPSEARCH which brings out
high quality ocr of the art papers In OperationalResearch.

In orderto provide opportunityto professionalsand students to equip
themselves with the knowle: age and usage of the science of Operational
Research, the Societyis conductingan examinationon __ i
Operational Resear o

6. DEFINITION OF
OPERATIONAL RESEARCH

“ltis an: of winning wars without
actually fighting.
-Aurther Clark
LA MEN Scientific Approach ‘7 problem
solving for executive management.
-H.M. Wagner
«litis of giving bad answers to

problem which otherwise have worse
answers.

-T.L. Saaty

7. FEATURES OF
OPERATIONAL RESEARCH

“Decision-Making

“Scientific Approach
+Inter-Disciplinary Team Approach
“System Approach

“Use of Computers

«Objectives

“Human Factors

8. DECISION MAKING

Every industrial organisation faces
multifacet problems to identify best
possible solution to their problems.

OR to help the executives to
obtain lu" 11): with the use of
OR techniques.

It also helps the TE ti url to
no. his creative and judicious
capabilities, analyse and understand the
problem situation leading to better
control, better co-ordination, better
systems and finally better decisions.

9. SCIENTIFIC APPROACH

OR applies scientific methods,
techniques and tools for the : of
LEE ald 22111) o0fthe complex
problems.

In this approach there is .. >

for. andthe person bias of
the decision maker.

10. INTER-DISCIPLINARY
TEAM APPROACH

Basically the HE UE re) (aS are of
complex nature =\ife therefore require —|
team effort to handle it.

This team comprises of scientist,
mathematician and technocrats. Who
jointly use the OR tools to obtain a
optimal solution of the problem.

They tries to analyse. [cause and
Ace Jet: >between various
parameters of the problem and
evaluates the outcome of various
alternative strategies.

11. SYSTEM APPROACH

The main of the system approach is
‘+ trace | significant... indirect
jo toreach 1 1fon all sub=
system on a system andto
== 510101 In terms of effects for the
system as a whole.

The inter-relationship and
interaction of each sub-system can be
handled with the help of
mathematical/analytical models of OR to
obtain acceptable solution.

12. USE OF COMPUTERS

111: models: °; need : |
“1111161101 and therefore, the use of
computers becomes necessary.

With the use of computers it is
mes handle complex problems
requiring large amount of calculations.

The... of the operations
research models is to attempt and to
== Best or Optimal Solution.

13. OBJECTIVE

Operational Research always try to
find the best and optimal solution
to the problem.

For this purpose objectives of
the organisation are defined and
analysed. These |: / are
then used as the : to compare
the alternative courses of action.

14. HUMAN FACTORS

In deriving, Quantitative Solutions
we do not consider human factors,
which doubtlessly play a great role
in the problems.

So, study of O.R. is incomplete
without study of human factors.

15. SCOPE OF
OPERATIONAL RESEARCH

The scope of ORis not only confined to any
specific agency like defence services but today
itis widely used in all industrial organisations™

Itcanbe to find the best solution to
any problem be it simple or complex. It is
‘21 in every field of human activities.

THUS, Hoi Se) resolve. the conflicts of
interest among the components of
organization in a way that is best for the
organisation as a whole.

The main fields where OR is extensively
used are given in = |...

16. FIELDS

«National Planning and Budgeting
“Defence Services

“Industrial Establishment and
Private Sector Units

“R 8 D and Engineering

17. NATIONAL PLANNING AND
BUDGETING

OR is used forthe : 1: of-

+ Five Year Plans
«+ Annual Budgets
*% Forecasting of Income and Expenditure

“ Scheduling of Major Projects of National
Importance

+ Estimation of GNP

“ GDP

“+ Population

“+ Employment and Generation of Agriculture
Yields, etc.

18. DEFENCE SERVICES

Basically 11111111] of OR Started from.‘ '-7.7.'/,,)7 soit
has wide application in the such as:

+ Development of New Technology

+ Optimization of Cost and Time

+ Tender Evaluation

+ Setting and Layouts of Defence Projects

+ Assessment of “Threat Analysis”

+ Strategy of Battle

+ Effective Maintenance and Replacement of Equipment
+ Inventory Control,

+ Transportation

+ Supply Depots, etc.

19. INDUSTRIAL ESTABLISHMENTS
AND PRIVATE SECTOR UNITS

ne. effectively used |,

“Plant Location and Setting Finance
Planning

“Product and Process Planning
“Facility Planning and Construction
< Production Planning and Control
“ Purchasing

« Maintenance Management

+ Personnel Management, etc.

20. R&D AND ENGINEERING

Research and development being the
heart of technological growth, OR has
wide scope: >=»: applied |.

“ Technology Forecasting and Evaluation,
+ Technology and Project Management,

«+ Preparation of Tender and Negotiation,
“Value Engineering,

+ Work/Method Study and so on.

21. METHODOLOGIES/APPROACHES
OF OPERATIONAL RESEARCH

1. ORIENTATION

2. PROBLEM DEFINITION

3. DATA COLLECTION

4. MODEL FORMULATION

5. SOLUTION

6. ANALYSES AND INFORMATION

7. IMPLEMENTATION AND
MONITORING

22. TECHNIQUES/TOOLS OF
OPERATIONAL RESEARCH

“Linear Programming

+ Queuing Theory

+“ Sequencing

+ Transportation Problems

“Integer Problems

+ Assignment Problems

“Decision Theory and Games Theory
< Replacement Problems

+ Symbolic Logic

23. LINEAR PROGRAMMING

This technique is used to find a solution
for) 11101" a given objective: 2) 1-11
may be maximizing profits or minimising
costs.

Objective function and Boundary conditions
are |), Jin nature. LPP > 11 solve
Product-Mix and Distribution problems of
enterprise.

lts also usedto ... : Scarce Resources in
optimum manner in problems of scheduling,
product mix, etc.

24. QUEUING THEORY

This theory : - + withthe > in which
queue is formed, e.g. customers waiting for
services, machines waiting for repairmen, and
aircrafts waiting for landing strips, etc.

If the (el (v7) Will be (11 the re | Will "high
due to long waiting hour.

This technique is -: to analyse the
feasibility of adding facilities and to access the
amount and cost of waiting time.

This can then be used to
determine the desirable number of service
facilities.

25. SEQUENCING

Models have been developed to
a sequence for Processing Jobs so

that the "5 1E EA for all the
jobs will be minimum.

The models alsohelpto
| between the objectives
of maximizing machines utilization
and complying with predetermined
delivering rates.

26. TRANSPORTATION PROBLEMS

Transportation problems deals with
transportation of a product

= From a number of sources

= With limited supplies

- To number of destinations

_ With specified demands

= At the total transportation cost.

The main. ~~: of transportation
: + Schedule Shipment = sources
(GR: ESE Erin such a way SO as to
Minimize the Total Transportation Cost.

27. INTEGER PROGRAMMING

Integer .... complete or whole
number. By using the ==
Programming Algorithm ~~
continuous linear programming
problem are solved in such a way
that the (1) containing "|
acceptable non-integer value
lo and the best higher
programming solution is obtained.

28. ASSIGNMENT PROBLEMS

It is a special type of linear programming
problem. It - in allocating the various
resources or items to various activities in
a one to one basis in such a way that the
time or cost involved in minimised and
the sale or profit is maximized.

- . Manager may like to know which
job should be assigned to which person
so that all jobs can be completed in the
shortest possible time.

29. DECISION THEORY AND
GAME THEORY

rss primarily considered with
decision making under the conditions of:

Risk
= Uncertainity

(er, 29 1110) Zis Concerned with:
Decision Making under Conflict

Hence, both Decision Theory and Game
Theory = the 501015 in Analysing
Problems with numerous alternative course of
action and consequences.

30. REPLACEMENT PROBLEMS

This Theory is concerned With Ce ite oie when
some items such as machines, men, etc. require
replacement due to their decreasing efficiency, failure or
break-down.

oo all the equipments are required to be
replaced because of:

Obsolescence
Discovery of New Technology
_ Better Design of Equipment

y

y

Replacement Decisions .....-
Cost of Equipment to be Installed
Cost of Equipment Replaced, etc.

Hence, this theory helps to solve all Replacement
Problems.

N

y

31. SYMBOLIC LOGIC

Symbols are ~:~ meaningful and
accurate. Everything is Symbolic in this
world.

Words, classes of things, functional
systems and rules are... with
symbols.

-' = whole problem is converted :
algebraic equations and propositions.

Business Problems are not commonly
converted into symbols but :
aredoneon : ,thatis why
symbols have extensive applications.

32. OPERATIONAL RESEARCH
AND MANAGEMENT
DECISION-MAKING

Operation Research (co the creative capabilities
~~ decision maker

increases effectiveness mgft. decisions
Management is most of the time making decisions. It is
ttusa whichhelps mgt. to take better
decisions.

Nowadays, 1 1101. havebecomeso
complex that it is almost impossible for a human being
to comprehend all important factors, OR Techniques can
be helpful in such situations.

| ascertaining bestlocations _
factories and warehouses, project scheduling as well as
most economic means of transportation.

OR study approachin business decisions to
better control, better co-ordination, better system and at
the end better decision.

33. LIMITATIONS OF
OPERATIONAL RESEARCH

<Magnitude of Computation
<Non-Quantifiable Factors

«Distance between User and
Analyst

«Time and Money Costs
«Implementation

34. MAGNITUDE OF COMPUTATION

Operations research models try to
+ optimal solution taking into account
allthe: factors: Bubthesei factors are
enormous

and,

expressing them in quantity,

and,

establishing relationships among these,
Require voluminous calculations which
can be handled 11101 E

35. NON-QUANTIFIABLE FACTORS

OR provides solution when |
o related to a problem can
be .Allrelevant variables
do not lend themselves to
quantification. Factors which
cannot be quantified, find no place
in OR study. ModelsinOR >
take into account -Eliiciio
0 emotionalfactors >
may be quite important.

36. DISTANCE BETWEEN USER
AND ANALYST

OR being 36545 1) requires
a mathematician or statistician,
might not be aware
business problems.

Similarly, a eee see Sto
understand the complex working of
OR. Thus there is a gap between
the two. Management itself may
offer a lot of resistance due to
conventional thinking.

37. TIME AND MONEY COST

When basic are subjected to
Ec ES incorporating them
into the OR models is a costly
proposition.

Moreover, a fairly : =>) at
present may be,
More desirable thana == ©
solution available after sometime. The
computational time increases
depending upon the size of the problem
and accuracy of results desired.

38. IMPLEMENTATION

Implementation of any decision is a
delicate task. It must = ——
the complexities of human
relations and behaviour.
Sometimes, is offered
==. psychological factors :: ::
may not have any bearing on the
problem as well as its solution.

39. THANK YOU ©