Introduction to Operational Research

Introduction to Operational Research

• Operational Research (OR) is a systematic and analytical approach to decision-making and problem-solving.
• OR, as used in various countries, is a branch of applied mathematics using techniques and statistics to find optimal solutions.
• OR aims to maximize profit, output, and efficiency and minimize losses, costs and time.
• OR is a vital part of industrial engineering.
• Key tools for OR researchers include statistics, game theory, and probability theory.

History of Operational Research

• The exact origin of OR is unclear, but it emerged in England during World War II.
• Some attribute the origin to Charles Babbage (1791-1871) due to his research into the cost of transportation and sorting of mail.
• OR originated with research at the Bowdsey Research Station in the UK in 1937 to analyze the UK's early radar warning systems.
• During World War II, approximately 1000 men and women worked on operations research for the British Army.
• After WWII, military OR in the UK evolved into Operational Analysis (OA) within the UK Ministry of Defence, incorporating expanded techniques.

Operational Research in India

• The Operational Research Society of India was established in 1957.
• Its purpose is to support operational research scientists and provide a platform to expand knowledge.
• The society is affiliated with the International Federation of Operational Research Societies (IFORS).
• The organization has 12 operating chapters across various Indian cities.
• OR in India aims to advance knowledge and conduct research through information exchange.
• It strives to maintain professional and academic standards.
• Contributing members receive income tax exemptions under section 80(G)(5)(vi) of the Income Tax Act 1961.
• The society publishes a quarterly journal ("OPSEARCH").
• The society has offered a Graduate Diploma in Operational Research since 1973.

Definition of Operational Research

• OR is defined as "an act of winning wars without actually fighting" (Arthur Clark).
• It's a scientific approach for executive management decision-making problems (H.M. Wagner).
• OR is the "art of giving bad answers to a problem that otherwise would 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 in OR

• OR helps industrial organizations solve problems and find optimal solutions effectively.
• Improves decision-maker creativity, analysis, and coordination.
• Employs scientific methods, techniques, and tools for problem analysis and solution.
• Aims to eliminate guesswork and personal biases in decision-making.

Inter-Disciplinary Team Approach

• Industrial problems require a team effort involving scientists, mathematicians, and technocrats.
• OR tools are employed to find optimal solutions and analyze the cause-and-effect of variables within a problem statement.
• The team assesses and evaluates diverse alternatives/strategies.

System Approach

• The primary goal of the system approach is to analyze and assess the effects of proposed solutions across all the inter-related systems to a subject matter.
• It investigates the inter-relationships and interplay of diverse interconnected sub-systems/elements/agents.

Use of Computers

• OR models frequently demand significant computational resources.
• Thus, computers are critical for handling complex problems with extensive calculations.
• OR Models aim at finding the "Best/Optimal Solutions".
• Organizational objectives are analyzed and used as a benchmark for comparing alternative actions/approaches.

Human Factors

• Human psychology and behavior significantly influence problem-solving efforts in OR.
• A thorough understanding of human factors is crucial to effective OR study.
• OR is incomplete without incorporating human aspects into analyses.

Scope of Operational Research

• OR applications extend to various organizations, not just defense services.
• Applicable across all fields of human activity.
• OR attempts to resolve conflicts of interest among different elements/agents within an entity.
• OR aims at finding the optimal solution of a problem for a particular entity/organization.

Fields of Application of Operations Research

• National Planning and Budgeting (e.g., Five-Year Plans, Annual Budgets)
• Defence Services (new technology development, resource optimization, project management)
• Industrial Establishments and Private Sector Units (plant location, production planning)
• Research and Development and Engineering

Methodologies/Approaches of Operational Research

• Orientation
• Problem Definition
• Data Collection
• Model Formulation
• Solution
• Analyses and Information
• Implementation and Monitoring

Techniques/Tools of Operational Research

• Linear Programming (LPP)
• Queuing Theory (to quantify queue behavior).
• Sequencing (finding the optimal order of jobs).
• Transportation Problems (handling logistics and transportation)
• Integer Problems
• Assignment Problems
• Decision Theory and Game Theory
• Replacement problems
• Symbolic logic

Linear Programming

• Optimizes a given objective (maximizing or minimizing) for problems with linear objective and constraints.

Queuing Theory

• Studying queue formations/management in systems with waiting times.

Sequencing

• Establishing optimal job processing sequences to minimize overall elapsed time.

Transportation Problems

• To optimize transportation/shipment costs across multiple sources and destinations.

Time and Money Cost

• Data shifts necessitate costly adjustments to OR models.
• More desirable solutions often emerge sooner despite not being perfect.