Operations Research is also known as management science, decision science or industrial engineering. It helps in providing quantitative aid to the management in a decision-making process.
According to the Operational Research Society of UK, Operational Research is the application of methods of modern science on complex problems arising in the direction and management of large systems of men, machines, materials and money in the 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.
According to Randy Robinson, Operations Research is the application of scientific methods to improve the effectiveness of operations, decisions and management. By means such as analyzing data, creating mathematical models and proposing innovative approaches, Operations Research professionals develop scientifically based information that gives insight and guides decisionmaking. They also develop related software, systems, services and products.
According to T. L. Saaty Operations Research is a tool for improving quality of answers. He says, “Operations Research is the art of giving bad answers to problems which otherwise have worse answers”.
According to P. M. Morse and G. E. Kimbal Operations Research is a quantitative approach and described it as “ a scientific method of providing executive departments with a quantitative basis for decisions regarding the operations under their control”.
According to Miller and Starr Operations Research is applied decision theory, which uses any scientific, mathematical or logical means to attempt to cope with the problems that confront the executive, when he tries to achieve a thorough-going rationality in dealing with his decision problem”.
Characteristics of Operations Research:
It has decision-making approach
The main objective of Operations Research is to find the best or optimal solution to the problem under consideration. Operations Research is the scientific study of large systems with a view to identify problem areas and provide the managers with a quantitative basis for decisions which will enhance their effectiveness in achieving the specified objectives.
Thus Operations Research helps in identifying, understanding, analyzing an on-going problem to make a sound decision. This approach leads to a better control and coordination within an organization.
It has a scientific approach
It uses various scientific methods, models and tools to solve complex organizational problems. By this approach, a personal bias can be avoided.
It has an interdisciplinary team approach
A team effort is required to solve industrial problems which are complex in nature. An OR team consists of experts from science, mathematics and engineering i.e. they are from different disciplines. They are expert in their field. Each one of them evaluates the problem in their own perspective and provide alternative strategies to an on-going problem. From these strategies, optimum strategy is selected using OR tools.
In this way, each member of the team by utilizing his experience and expertise may be in a position to suggest an approach that otherwise may not be thought of.
It has a system approach
The nonfunctioning of any aspect of the operational system of an organization has a significant effect on the system as a whole.
The main aim of the system approach is to trace for each strategy (proposal) all significant and indirect effects on all sub-system on a system and to evaluate each action in terms of effects for the system as a whole. For system approach, mathematical models are used. The models of OR need a lot of computation and therefore, the use of computers becomes necessary in OR. Using computers complex problems requiring a large number of calculations can be solved easily.
It is a continuing process
It cannot stop on the application of the model to one problem, because the application of the model to one problem may create new problems in other sectors and in the implementation of the decisions taken. Thus OR is a continuous process.
Stages of Development of Operations Research
Step I: Observe the problem environment:
The first step of OR study is the observation of the environment in which the problem exists. This step includes activities like conferences, site visit, research, observations etc. These activities give sufficient information and support to OR analyst to proceed and formulate the problem in better way.
Step II: Analyze and define the problem:
In this step analyzation and definition of the problem is done. In addition to the problem definition, the objectives, uses and limitations of OR study of the problem are also defined. The end results of this step are a clear grasp of the need for a solution and understanding of its nature
Step III: Develop a model
The next step is to develop the model, which is a representation of same real or abstract situation. These models are basically mathematical models representing systems, process, or environment in form of equations, relationships or formulae. In this step, the interrelationships among variables are defined. The proposed model is tested in the field under different environmental constraints and modified in order to work.
A model may also be modified if the management is not satisfied with the answer that it gives or the answer is not as per the objectives.
Step IV: Select appropriate data input
To get a correct result from OR, the input data should be authenticated. Activities in this step include analysing internal-external data and facts, collecting opinions and using computer data banks. Purpose of this step is to test the model and provide sufficient input data.
Step V: Provide a solution and test its reasonableness
In this step, the solution to the problems is obtained with the help of 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 model is carried out. This step is repeated till the desired objective is achieved. Thus the model is fine-tuned.
Step VI: Implement the solution
This is the last phase of the OR study. In OR the decision-making is scientific but the implementation of decision involves many behavioural issues involving the workers and supervisors to avoid further conflicts. Therefore, before implementation the implementation authority has to resolve the issues. A properly implemented solution obtained through OR techniques results in improved working conditions and wins management support.