INTRODUCTION

TO
OPERATIONS RESEARCH

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 DecisionMaking
Limitations of Operational Research

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 termed in Europe, is an Branch of
applied mathematics that uses techniques and statistics to
arrive at Optimal solutions to solve complex problems.
It is typically concerned with determining the
maximum profit, sale, output, crops yield and efficiency
And minimum losses, risks, cost, and time of some
objective function. It have also become an important part of
INDUSTRIAL ENGINEERING PROFESSION.
Some of the PRIMARY TOOLS used by operation
researchers areSTATISTICS
GAME THEORY
PROBABILITY THEORY, etc.

HISTORY OF
OPERATIONAL RESEARCH
There is no clear history that marks the Birth if O.R., it is
generally accepted that the field originated in England
during the World War II. Some say that Charles Babbage
(1791-1871) is the Father of O.R because his research
into the cost of transportation and sorting of mail led to
Englands University Penny Post in 1840.
Modern Operations Research originated at the
Bowdsey Research Station in U.K. in 1937 to analyse
and improve the working of the UKs Early Warning
Rador System.
During the Second World War about 1000 Men and
Women were engaged to work for British Army.
After World War II, Military Operational Research in
U.K. became Operational Analysis (OA) within the U.K.
Ministry of Defence with expanded techniques and
graving awareness.

OPERATIONAL RESEARCH
IN INDIA
The Operational Research Society of India was founded in 1957 to provide a
forum for the Operational Research Scientists as well as an avenue to widen
their horizon by exchange of knowledge and application of techniques from
outside the country. The Society is affiliated to the International Federation of
Operational Research Societies (IFORS).
The Headquarters of the Society is located in Kolkata at 39, Mahanirvan
Road, Kolkata 700029, India. At present the Society has 12 Operating Chapters
located in Agra, Ahmedabad, Ajmer, Bangalore, Chennai, Delhi, Durgapur,
Jamshedpur, Kolkata, Madurai, Mumbai and Tirupati.
The Objectives of the Society comprise advancement of, 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, improvement and maintenance of professional and academic
standards of work known as Operational Research.
Contribution to the Society towards attainment of these objectives is
eligible for exemption of income tax under Section 80(G)(5)(vi) of the Income Tax
Act 1961.
The Society Publishes a quarterly journal OPSEARCH, which brings out
high quality and state of the art papers in Operational Research.
In order to provide opportunity to professionals and students to equip
themselves with the knowledge and usage of the science of Operational
Research, the Society is conducting an examination on Graduate Diploma in

DEFINITION OF
OPERATIONAL RESEARCH
It is an Act of winning wars without
actually fighting.
-Aurther Clark
It is a Scientific Approach to problem
solving for executive management.
-H.M. Wagner
It is Art of giving bad answers to
problem which otherwise have worse
answers.
-T.L. Saaty

FEATURES OF
OPERATIONAL RESEARCH
Decision-Making
Scientific Approach
Inter-Disciplinary Team Approach
System Approach
Use of Computers
Objectives
Human Factors

DECISION MAKING
Every industrial organisation faces
multifacet problems to identify best
possible solution to their problems.
OR aims to help the executives to obtain
optimal solution with the use of OR
techniques.
It also helps the decision maker to
improve his creative and judicious
capabilities, analyse and understand the
problem situation leading to better control,
better co-ordination, better systems and
finally better decisions.

SCIENTIFIC APPROACH
OR applies scientific methods,
techniques and tools for the purpose of
analysis and solution of the complex
problems.
In this approach there is no place
for guesswork and the person bias of
the decision maker.

INTER-DISCIPLINARY
TEAM APPROACH
Basically the industrial problems are of
complex nature and therefore require a
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 the cause and
effect relationship between various
parameters of the problem and
evaluates the outcome of various
alternative strategies.

SYSTEM APPROACH
The main aim of the system approach is
to trace out all significant and indirect
effects for each proposal on all subsystem on a system and to evaluate
each action 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.

USE OF COMPUTERS
The models of OR need lot of
computation and therefore, the use of
computers becomes necessary.
With the use of computers it is
possible to handle complex problems
requiring large amount of calculations.
The objective of the operations
research models is to attempt and to
locate Best or Optimal Solution.

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 objectives are
then used as the basis to compare
the alternative courses of action.

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.

SCOPE OF
OPERATIONAL RESEARCH
The scope of OR is not only confined to any
specific agency like defence services but today
it is widely used in all industrial organisations.
It can be used to find the best solution to
any problem be it simple or complex. It is
useful in every field of human activities.
Thus, it attempts to 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 next slide.

FIELDS
National Planning and Budgeting
Defence Services
Industrial Establishment and
Private Sector Units
R & D and Engineering

NATIONAL PLANNING AND

BUDGETING
OR is used for the Preparation 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.

DEFENCE SERVICES
Basically formulation of OR started from USA Army, so it
has wide application in the areas 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.

INDUSTRIAL ESTABLISHMENTS
AND PRIVATE SECTOR UNITS
OR can be effectively used in Plant Location and Setting Finance
Planning
Product and Process Planning
Facility Planning and Construction
Production Planning and Control
Purchasing
Maintenance Management
Personnel Management, etc.

R&D AND ENGINEERING

Research and development being the
heart of technological growth, OR has
wide scope and can be applied in Technology Forecasting and Evaluation,
Technology and Project Management,
Preparation of Tender and Negotiation,
Value Engineering,
Work/Method Study and so on.

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

C
K

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

LINEAR PROGRAMMING
This technique is used to find a solution
for optimising a given objective. Objective
may be maximizing profits or minimising
costs.
Objective function and Boundary conditions
are linear in nature. LPP techniques solve
Product-Mix and Distribution problems of
enterprise.
Its also used to allocate Scarce Resources in
optimum manner in problems of scheduling,
product mix, etc.

QUEUING THEORY
This theory deals with the situations in which
queue is formed, e.g. customers waiting for
services, machines waiting for repairmen, and
aircrafts waiting for landing strips, etc.
If the Queue will be long the cost will be high
due to long waiting hour.
This technique is used to analyse the
feasibility of adding facilities and to access the
amount and cost of waiting time.
This calculations can then be used to
determine the desirable number of service
facilities.

SEQUENCING
Models have been developed to find
a sequence for Processing Jobs so
that the total elapsed time for all the
jobs will be minimum.
The models also help to resolve
the conflict between the objectives
of maximizing machines utilization
and complying with predetermined
delivering rates.

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 objective of transportation
is to Schedule Shipment from sources
to destinations in such a way so as to
Minimize the Total Transportation Cost.

INTEGER PROGRAMMING
Integer means complete or whole
number. By using the Integer
Programming Algorithm a series of
continuous linear programming
problem are solved in such a way
that the solution containing unacceptable non-integer value are
ruled out and the best higher
programming solution is obtained.

ASSIGNMENT PROBLEMS
It is a special type of linear programming
problem. It deals 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.
E.g. 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.

DECISION THEORY AND

GAME THEORY
Decision Theory is primarily considered with
decision making under the conditions of:
Risk
Uncertainity
Game Theory is concerned with:
Decision Making under Conflict
Hence, both Decision Theory and Game
Theory assist the Decision-Maker in Analysing
Problems with numerous alternative course of
action and consequences.

REPLACEMENT PROBLEMS
This Theory is concerned with situations that arise when
some items such as machines, men, etc. require
replacement due to their decreasing efficiency, failure or
break-down.
Sooner or later all the equipments are required to be
replaced because of:
Obsolescence
Discovery of New Technology
Better Design of Equipment
In Replacement Decisions we consider:
Cost of Equipment to be Installed
Cost of Equipment Replaced, etc.
Hence, this theory helps to solve all Replacement
Problems.

SYMBOLIC LOGIC
Symbols are more meaningful and
accurate. Everything is Symbolic in this
world.
Words, classes of things, functional
systems and rules are substituted with
symbols.
The whole problem is converted into
algebraic equations and propositions.
Business Problems are not commonly
converted into symbols but calculations
are done on computers, that is why
symbols have extensive applications.

OPERATIONAL RESEARCH AND

MANAGEMENT
DECISION-MAKING
Operation Research increases the creative capabilities
of a decision maker.
It increases the effectiveness of mgt. decisions.
Management is most of the time making decisions. It is
thus a decision science which helps mgt. to take better
decisions.
Nowadays, business problems have become so
complex that it is almost impossible for a human being
to comprehend all important factors, OR Techniques can
be helpful in such situations.
It also helps in ascertaining best locations for
factories and warehouses, project scheduling as well as
most economic means of transportation.
OR study approach in business decisions leads to
better control, better co-ordination, better system and at
the end better decision.

LIMITATIONS OF
OPERATIONAL RESEARCH
Magnitude of Computation
Non-Quantifiable Factors
Distance between User and
Analyst
Time and Money Costs
Implementation

MAGNITUDE OF COMPUTATION
Operations research models try to find
out optimal solution taking into account
all the factors. But, these factors are
enormous
and,
expressing them in quantity,
and,
establishing relationships among these,
Require voluminous calculations which
can be handled only by computers.

NON-QUANTIFIABLE FACTORS
OR provides solution only when all
elements related to a problem can
be quantified. All relevant variables
do not lend themselves to
quantification. Factors which
cannot be quantified, find no place
in OR study. Models in OR do not
take into account qualititative
factors or emotional factors which
may be quite important.

DISTANCE BETWEEN USER

AND ANALYST
OR being specialists job requires
a mathematician or statistician,
who might not be aware of the
business problems.
Similarly, a manager fails to
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.

TIME AND MONEY COST

When basic data are subjected to
frequent changes, incorporating them
into the OR models is a costly
proposition.
Moreover, a fairly good solution at
present may be,
More desirable than a perfect OR
solution available after sometime. The
computational time increases depending
upon the size of the problem and
accuracy of results desired.

IMPLEMENTATION
Implementation of any decision is
a delicate task. It must take into
account the complexities of human
relations and behaviour.
Sometimes, resistance is offered
due to psychological factors which
may not have any bearing on the
problem as well as its solution.

THANK YOU