What is operation Research , their objective &Characteristic
Operations Research is the application of scientific methods techniques and tools to problems involving the operations of a system so as to provide those in control of the system with optimum solutions to the problems.
According to Operations Research Society of America (ORSA), OR is a tool concerned with the design and operations of man-machine systems which scientifically, usually under the conditions requiring the optimum allocation of limited resources.
According to Operations Research Society of Great Britain, OR is the application of scientific medicine to compare problems arising in the direction and management of large systems of men, machine, material and money in industry, business and government.
Origin of Operations Research
Scientific management revolution of the early 1900s, it was initiated by Frederic W. Taylor,who provided the foundation of quantitative methods in management. Modern research in the use of quantitative methods in decision making, for the most part however, originated during the World War II period. At that time, teams consisting of people with diverse specialties (e.g., mathematicians, engineers, and behavioral scientists) were formed to deal with strategic and tactical problems faced by the military. After the war many of these team members continued their research into quantitative approaches to decision making.
The developments that occurred during the post – World War II period led to the growth and use of quantitative methods in non military applications. First, continued research resulted in numerous methodological developments. Probably the most significant development was the discovery by George Dantzig, in 1947, who has introduced the simplex method forsolving linear programming problems. At the same time this kind of methodological developments were taking place,like digital computers has prompted a virtual explosion in computing power. Computers enabled practitioners to use the methodological advances to solve a large no of different problems. The computer technology explosionit continues, and personal computers would now be used to solve problems larger than those solved on mainframe computers in the 1990s.
Objective of Operations Research
- The main or major objective of OR is to minimize the cost or maximize the profit.
- Provide a scientific basis to the managers of a concern for solving problems.
- OR helps in making decision in complex situation
- OR connects the knowledge of various subjects like mathematics, statistics and economic etc.
Characteristics of Operations Research
- The main characteristics is managerial decision making.
- OR employs scientific methods for the purpose of problem solving.
- OR is inter-disciplinary in nature and requires a team approach to find a solution to the problem.
- OR team consists of scientists from various fields like mathematics, statistic economics etc..
- Use of digital computer has become an integral part of the OR approach to decision making.
Scope of Operations Research
OR is useful to the directing authority in deciding optimum allocation of various limited resources such as men, machine and materials, time, money etc for achieving the optimum goal.
Finance, Budgeting and Investment
- Cash flow analysis, long range capital requirements, dividend policies , investment portfolios
- Create profit plan for the company.
- Determine the long range capital requirements as well as the ways and means to generate these requirements.
Operations Research methods may be used to help managers make better decisions. Mathematical models are abstractions of real work situations and, as such, it cannot capture all the aspects of the real situation. However, if a model can capture the relevant aspects of the problem and can then recommend a solution, it can be a valuable aid to decision making.