Operations Research for Managers PDF

OPERATIONS RESEARCH FOR MANAGERS Dr. Anitha Jandhyala Department of Management Studies OPERATIONS RESEARCH FOR MANAGERS Unit 1: Introduction to Operations Research Dr. Anitha Jandhyala Department of Management Studies OPERATIONS RESEARCH FOR MANAGERS Unit-1 Contents Sl. No....

OPERATIONS RESEARCH FOR MANAGERS Dr. Anitha Jandhyala Department of Management Studies OPERATIONS RESEARCH FOR MANAGERS Unit 1: Introduction to Operations Research Dr. Anitha Jandhyala Department of Management Studies OPERATIONS RESEARCH FOR MANAGERS Unit-1 Contents Sl. No. Topics Definition, scope of operations research approach and limitations of OR, Brief history, characteristics of 1. OR, OR model-definition and objective. Classification of OR models, solving the OR models, Phases of OR, Mathematical formulation 2. of LP problems. Problems on Formulation ( Maximization problem) 3. Problems on Formulation (Maximization problem) 4. Problems on Formulation ( Minimization problem) 5. Problems on Formulation ( Minimization problem) 6. Graphical solution method-procedure ( Maximization problem) 7. Solving Problems by using Graphical solution method ( Maximization problem) 8. Solving Problems by using Graphical solution method ( Minimization problem) Operations Research - Meaning Operations research (OR) is an analytical method of problem-solving and decision-making that is useful in the management of organizations. In operations research, problems are broken down into basic components and then solved in defined steps by mathematical analysis. OR means to use scientific and mathematical techniques for making decisions and solving problems. It is concerned with co-ordinating and controlling the operations or activities within an organization. It can be regarded as use of mathematical and quantitative techniques to substantiate the decisions being taken. Operations Research OR helps to take decisions about operations and production. It takes tools from subjects like mathematics, statistics, engineering, economics, psychology, etc. and uses them to know the consequences of possible alternative actions. Operations Research - Definition It is concerned with scientifically deciding how to best design and operate man-machine systems usually under conditions requiring the allocation of scarce resources. - O.R. Society of America O.R. 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 solution to the problem. -Churchman, Ackoff and Arnoff Scope of Operations Research Industrial management: a) production b) product mixc) inventory control d) demand e) sale and purchase f) transportation g) repair and maintenance h) scheduling and control Defense operations: a) army b) air force c) navy all these further divided into sub-activity, that is, operation, intelligence administration, training. Scope of Operations Research Economics: ⮚maximum growth of per capita income in the shortest possible time, by taking consideration the national goals and restrictions impose by the country. The basic problem in most of the countries is to remove poverty and hunger as quickly as possible. Agriculture section: ⮚with population explosion and consequence shortage of food, every country is facing the problem of optimum allocation land to various crops in accordance with climatic conditions. ⮚optimal distribution of water from the various water resource. Other areas: hospital b) transport c) LIC Limitations of Operations Research Mathematical models which are essence of OR do not take into account qualitative factors or emotional factors. Mathematical models are applicable to only specific categories of problems Being a new field, there is a resistance from the employees the new proposals. Management, may offer a lot of resistance due to conventional thinking. OR is meant for men not that men are meant for it. Application of Operations Research Allocation and Distribution in Projects: ⮚Optimal allocation of resources such as men materials machines, time and money to projects. ⮚Determination and deployment of proper workforce. ⮚Project scheduling, monitoring and control. Application of Operations Research Production and Facilities Planning: ⮚ Factory size and location decision. ⮚Estimation of number of facilities required. ⮚Preparation of forecasts for the various inventory items and computation of economic order quantities and reorder levels. ⮚ Scheduling and sequencing of production runs by proper allocation of machines. ⮚Transportation loading and unloading, ⮚Warehouse location decision. ⮚Maintenance policy decisions. Application of Operations Research Programmes Decisions: ⮚What, when and how to purchase to minimize procurement cost. ⮚Bidding and replacement policies. Application of Operations Research Marketing: ⮚Advertising budget allocation. ⮚ Product introduction timing. ⮚Selection of advertising media. ⮚Selection of product mix. Application of Operations Research Programmes Decisions: ⮚What, when and how to purchase to minimize procurement cost. ⮚Bidding and replacement policies. Application of Operations Research Marketing: ⮚Advertising budget allocation. ⮚ Product introduction timing. ⮚ Selection of advertising media. ⮚ Selection of product mix. ⮚Customer’s preference of size, colour and packaging of various products. Application of Operations Research Organization Behaviour: ⮚Selection of personnel, determination of retirement age and skills. ⮚ Recruitment policies and assignment of jobs. ⮚ Recruitment of employees. ⮚Scheduling of training programs. Application of Operations Research Finance: ⮚Capital requirements, cash flow analysis. ⮚Credit policies, credit risks etc. ⮚ Investment decision. ⮚ Profit plan for the company. Application of Operations Research Research and Development: ⮚Product introduction planning. ⮚ Control of R&D projects. ⮚ Determination of areas for research and development. ⮚Selection of projects and preparation of their budgets. ⮚ Reliability and control of development projects thus it may be concluded that operation research can be widely utilized in management decisions and can also be used as corrective measure. Operations Research - Brief history Based on the history of Operations Research, it is believed that Charles Babbage (1791-1871) is the father of Operational Research due to the fact that his research into the cost of transportation and sorting of mail resulted in England’s universal Penny Post in 1840. Operations Research - Brief history The name operations research evolved in the year 1940. During World War 2, a team of scientist (Blackett’s Circus) in UK applied scientific techniques to research military operations to win the war and the techniques thus developed was named as operation research. Operations Research - Brief history As a formal discipline, operations research originated from the efforts of army advisors at the time of World War II. In the years following the war, the methods started to be employed extensively to problems in business, industry and society. Ever since then, OR has developed into a subject frequently employed in industries including petrochemicals, logistics, airlines, finance, government, etc. Operations Research - Brief history As a formal discipline, operations research originated from the efforts of army advisors at the time of World War II. In the years following the war, the methods started to be employed extensively to problems in business, industry and society. Ever since then, OR has developed into a subject frequently employed in industries including petrochemicals, logistics, airlines, finance, government, etc. Characteristics of Operations Research Decision making: Operations research is a decision science which helps management to make better decisions. Use of Information Technology (IT): O.R. often requires a computer to solve the complex mathematical model or to perform a large number of computations that ae involved. Use of digital computer has become an integral part of the operations research approach to decision making. Characteristics of Operations Research Quantitative solution: Operations research provides the managers with a quantitative basis for decision making. OR attempts to provide a systematic and rational approach for quantitative solution to the various managerial problems Human factors: In deriving quantitative solution we do not consider human factors, which doubtlessly plays a great role in the problems. So study of the OR is incomplete without a study of human factors Characteristics of Operations Research System orientation: O.R. study the situation or problem as a whole. This means that an activity by any part of an organization has some effect on the activity of every other part. The optimum result of one part of a system may not be the optimum for some other part. Therefore, to evaluate a decision, one must identify all possible interactions and determine their impact on the organization as a whole. Characteristics of Operations Research Scientific approach: ⮚ O.R. uses scientific methods to solve the problems. Most of the scientific studies such as chemistry, physics, biology etc. can be carried out in the laboratories, without much interference form the outside world. ⮚ Under OR the problem is to be analyzed and defined clearly. ⮚ Observations are made under different conditions to study the behavior of the system. ⮚ On the basis of these observations a hypothesis describing how the various factors involved are believed to interact and the best solution to the problem is formulated. ⮚ To test the hypothesis experiment is designed and executed. Observations are made and measurement’ s are recorded. Finally results of the experiments are studied and the hypothesis is accepted or rejected. So, OR is the use of scientific method to solve the Characteristics of Operations Research Inter-disciplinary team approach: O.R. is performed by a team of scientists whose individual members have been drawn from different scientific and engineering disciplines. For example, one may find a mathematician, statistician, physicist, psychologist, economist and an engineer working together on an OR problem Operations Research Model OR Model: Definition of OR model: It is the simplified representation of the problem under study, wherein only the most important features will be highlighted. Objective of an OR model: is to provide a means to analyze the behavior of a system for the purpose of improving its performance Conditions to be satisfied for a Good OR model: ⮚ New formulations need to be considered ⮚ Assumptions should be very less ⮚variables should be minimum ⮚Cost and Time should be minimum THANK YOU Dr. Anitha Jandhyala Department of Management Studies [email protected]