Application of Operation Research

in Fashion Industry

OR Assignment 1

Submitted to
Prof. Kishlay Kashyap
FMS
Nift Patna

Introduction

Submitted by
Ratnesh Kumar Mishra
MFM Sem-II
Nift Patna

Operation Research represents the study of optimal resource allocation. The fashion industry is very
complicated. It is made up of the following industries:
Fibre and fabric industry,
Garments industry
Retail industry
OR addresses a wide variety of issues of above industries in transportation, inventory planning, production
planning, communication operations, computer operations, financial assets, risk management, revenue
management, and many other fields where improving business productivity is paramount. OR reflects an
analytical method of problem solving and decision-making that is useful in the management of organizations of
fashion industry. OR improves the effectiveness and the efficiency of an institution, hence some of the benefits
offered by OR include:

Decrease Cost or Investment

Increase Revenue or Return on Investment
Increase Market Share
Manage and Reduce Risk
Improve Quality
Increase Throughput while Decreasing Delays
Achieve Improved Utilization form Limited Resources
Demonstrate Feasibility and Workability

OR Functions and Methods: OR supports the key decision making process, allows to solve urgent problems,
can be utilized to design improved multistep operations (processes), setup policies, supports the planning and
forecasting steps, and measures actual results. The following three methods are used to solve the problems of
fashion industry:
Simulation methods: where the goal is to develop simulators that provide the decision-maker with the
ability to conduct sensitivity studies to (1) search for improvements, and (2) to test and benchmark the
improvement ideas that are being made.
Optimization methods: where the goal is to enable the decision maker to search among possible choices in
an efficient and effective manner, in environments where thousands or millions of choices may actually be
feasible, or where some of the comparing choices are rather complex. The ultimate goal is to identify and
locate the very best choice based on certain criterias.
Data-analysis methods: where the goal is to aid the decision-maker in detecting actual patterns and interconnections in the data set. This method is rather useful in numerous applications including forecasting and
data mining based business environments.

Application of OR in Fibre and Fabric Industry

OR applications include scheduling, routing, workflow improvements, elimination of bottlenecks, inventory

control, business process re-engineering, site selection, or facility and general operational planning. Revenue
and supply chain management reflect two growing applications that are distinguished by their use of several OR
methods to cover several functions. Revenue management entails first to accurately forecasting the demand, and
secondly to adjust the price structure over time to more profitably allocate fixed capacity. Supply chain
decisions describe the who, what, when, and where abstractions from purchasing and transporting raw materials
and parts, through manufacturing actual products and goods, and finally distributing and delivering the items to
the customers. The power of utilizing OR methods allows examining this rather complex and convoluted chain
in a comprehensive manner, and to search among a vast number of combinations for the resource optimization
and allocation strategy that seem most effective, and hence beneficial to the operation.

Application of OR in Garment Industry

In garment industry the organization may need to design a sampling plan in order to meet specific quality
control objectives. In a garment manufacturing, operations that compete for the same resources must be
scheduled in a way that deadlines are not violated. Application of OR is useful in various department of garment
manufacturing organizations.In cutting department cut scheduling problem concerns finding a feasible cutting
schedule having the minimum number of lays. The availability of multiple solutions allows greater flexibility
and permits decision makers to apply additional criteria in selecting an appropriate cutting schedule. A hybrid
flowshop (HFS) problem on the pre-sewing operations and a master production scheduling (MPS) problem of
apparel manufacture are solved by a proposed two-tier scheduling model. OR helps to plan a MPS for the
factory so that the costs are minimized when the production orders are completed before and after the delivery
dates required by the customers and it also helps to minimize the completion time of the pre-sewing operations
in the cutting department while the production quantities required by the sewing department at several
predetermined times can be fulfilled by the cutting department.
OR projects focus on the industrial deployment of computer-based methods for assembly line balancing,
business process reengineering, capacity planning, pull scheduling, and setup reduction, primarily through the
integration of the philosophies of the Theory of Constraints and Lean Manufacturing. The main benefits are :

 Defects and wastage - Reduce defects and unnecessary physical wastage, including excess use of raw
material (inputs), preventable defects, costs associated with reprocessing defective items, and unnecessary
product characteristics which are not required by customers
Cycle Times - Reduce manufacturing lead times and production cycle times by reducing waiting times
between processing stages, as well as process preparation times and product/model conversion times
Inventory levels - Minimize inventory levels at all stages of production, particularly works-in-progress
between production stages. Lower inventories also imply lower working capital requirements
Labor productivity - Improve labor productivity, both by reducing the idle time of workers and ensuring
that when workers are working, they are using their effort as productively as possible
Utilization of equipment and space - Use equipment and manufacturing space more efficiently by
eliminating bottlenecks and maximizing the rate of production though existing equipment, while minimizing
machine downtime
Flexibility - Have the ability to produce a more flexible range of products with minimum changeover costs
and changeover time
Output In regards to reduced cycle times, increased labor productivity and elimination of bottlenecks and
machine downtime can be achieved, companies can generally increase the output from their existing
facilities

Application of OR in Retail Industry

In the retail industry application of OR is as follows:
ROI Maximization: The retailers try to know the number of units (retail stores) to build in a particular
DMA (designated marketing area) to maximize return on total investments within that DMA. In such
situation the optimization model would need to consider the variables like warehousing, distribution, and
supply chain costs, overhead, operating costs (labor, utilities, taxes, etc.), advertising efficiencies, media
advertising costs, positioning, marketing strategy, the breadth and depth of merchandise , real estate and
construction costs, employee training and sharing efficiencies among the stores etc. A nonlinear integer
programming optimization model with stochastic and dynamic components is used to solve such problems.
Optimal Distribution System: Transportation models, inventory models, and advertising response models
is used to get optimal distribution system
Optimal Product Line: Choice modeling would be used to measure consumers product line preferences
and elasticities, given different market conditions.
Optimal Positioning and Advertising Messaging: Survey research would be employed to provide a first
approximation of target-audience definition. The final optimization model would involve choice modeling

experiments among the broadly-defined target audience to identify a set of optimal solutions, which would

also precisely define corresponding optimal target audiences.

Route or delivery system optimization
Promotional optimization
Package design optimization
Product features optimization
Pricing optimization
Industry and category forecasting
Inventory optimization
Retail category optimization
Store design optimization

Application of Operation Research

in Fashion Industry

OR Assignment 1

Introduction
Operation Research represents the study of optimal resource allocation. The fashion industry is very
complicated. It is made up of the following industries:
Fibre and fabric industry,
Garments industry
Retail industry
OR addresses a wide variety of issues of above industries in transportation, inventory planning, production
planning, communication operations, computer operations, financial assets, risk management, revenue
management, and many other fields where improving business productivity is paramount. OR reflects an
analytical method of problem solving and decision-making that is useful in the management of organizations of
fashion industry. OR improves the effectiveness and the efficiency of an institution, hence some of the benefits
offered by OR include:

Decrease Cost or Investment

Increase Revenue or Return on Investment
Increase Market Share
Manage and Reduce Risk
Improve Quality
Increase Throughput while Decreasing Delays
Achieve Improved Utilization form Limited Resources
Demonstrate Feasibility and Workability

OR

Submitted to
Prof. Kishlay Kashyap
FMS
Nift Patna

Submitted by
Ratnesh Kumar Mishra
MFM Sem-II
Nift Patna

Functions and Methods: OR supports the key decision

making process, allows to solve urgent problems, can be utilized to design improved multistep operations

(processes), setup policies, supports the planning and forecasting steps, and measures actual results. The
following three methods are used to solve the problems of fashion industry:
Simulation methods: where the goal is to develop simulators that provide the decision-maker with the
ability to conduct sensitivity studies to (1) search for improvements, and (2) to test and benchmark the
improvement ideas that are being made.
Optimization methods: where the goal is to enable the decision maker to search among possible choices in
an efficient and effective manner, in environments where thousands or millions of choices may actually be
feasible, or where some of the comparing choices are rather complex. The ultimate goal is to identify and
locate the very best choice based on certain criterias.
Data-analysis methods: where the goal is to aid the decision-maker in detecting actual patterns and interconnections in the data set. This method is rather useful in numerous applications including forecasting and
data mining based business environments.

Application of OR in Fibre and Fabric Industry

OR applications include scheduling, routing, workflow improvements, elimination of bottlenecks, inventory
control, business process re-engineering, site selection, or facility and general operational planning. Revenue
and supply chain management reflect two growing applications that are distinguished by their use of several OR
methods to cover several functions. Revenue management entails first to accurately forecasting the demand, and
secondly to adjust the price structure over time to more profitably allocate fixed capacity. Supply chain
decisions describe the who, what, when, and where abstractions from purchasing and transporting raw materials
and parts, through manufacturing actual products and goods, and finally distributing and delivering the items to
the customers. The power of utilizing OR methods allows examining this rather complex and convoluted chain
in a comprehensive manner, and to search among a vast number of combinations for the resource optimization
and allocation strategy that seem most effective, and hence beneficial to the operation.

Application of OR in Garment Industry

In garment industry the organization may need to design a sampling plan in order to meet specific quality
control objectives. In a garment manufacturing, operations that compete for the same resources must be

scheduled in a way that deadlines are not violated. Application of OR is useful in various department of garment
manufacturing organizations.In cutting department cut scheduling problem concerns finding a feasible cutting
schedule having the minimum number of lays. The availability of multiple solutions allows greater flexibility
and permits decision makers to apply additional criteria in selecting an appropriate cutting schedule. A hybrid
flowshop (HFS) problem on the pre-sewing operations and a master production scheduling (MPS) problem of
apparel manufacture are solved by a proposed two-tier scheduling model. OR helps to plan a MPS for the
factory so that the costs are minimized when the production orders are completed before and after the delivery
dates required by the customers and it also helps to minimize the completion time of the pre-sewing operations
in the cutting department while the production quantities required by the sewing department at several
predetermined times can be fulfilled by the cutting department.
OR projects focus on the industrial deployment of computer-based methods for assembly line balancing,
business process reengineering, capacity planning, pull scheduling, and setup reduction, primarily through the
integration of the philosophies of the Theory of Constraints and Lean Manufacturing. The main benefits are :
Defects and wastage - Reduce defects and unnecessary physical wastage, including excess use of raw
material (inputs), preventable defects, costs associated with reprocessing defective items, and unnecessary
product characteristics which are not required by customers
Cycle Times - Reduce manufacturing lead times and production cycle times by reducing waiting times
between processing stages, as well as process preparation times and product/model conversion times
Inventory levels - Minimize inventory levels at all stages of production, particularly works-in-progress
between production stages. Lower inventories also imply lower working capital requirements
Labor productivity - Improve labor productivity, both by reducing the idle time of workers and ensuring
that when workers are working, they are using their effort as productively as possible
Utilization of equipment and space - Use equipment and manufacturing space more efficiently by
eliminating bottlenecks and maximizing the rate of production though existing equipment, while minimizing
machine downtime
Flexibility - Have the ability to produce a more flexible range of products with minimum changeover costs
and changeover time
Output In regards to reduced cycle times, increased labor productivity and elimination of bottlenecks and
machine downtime can be achieved, companies can generally increase the output from their existing
facilities

Application of OR in Retail Industry

In the retail industry application of OR is as follows:

 ROI Maximization: The retailers try to know the number of units (retail stores) to build in a particular
DMA (designated marketing area) to maximize return on total investments within that DMA. In such
situation the optimization model would need to consider the variables like warehousing, distribution, and
supply chain costs, overhead, operating costs (labor, utilities, taxes, etc.), advertising efficiencies, media
advertising costs, positioning, marketing strategy, the breadth and depth of merchandise , real estate and
construction costs, employee training and sharing efficiencies among the stores etc. A nonlinear integer
programming optimization model with stochastic and dynamic components is used to solve such problems.
Optimal Distribution System: Transportation models, inventory models, and advertising response models
is used to get optimal distribution system
Optimal Product Line: Choice modeling would be used to measure consumers product line preferences
and elasticities, given different market conditions.
Optimal Positioning and Advertising Messaging: Survey research would be employed to provide a first
approximation of target-audience definition. The final optimization model would involve choice modeling
experiments among the broadly-defined target audience to identify a set of optimal solutions, which would

also precisely define corresponding optimal target audiences.

Route or delivery system optimization
Promotional optimization
Package design optimization
Product features optimization
Pricing optimization
Industry and category forecasting
Inventory optimization
Retail category optimization
Store design optimization

Application of Operation Research

in Fashion Industry

OR Assignment 1

Introduction
Operation Research represents the study of optimal resource allocation. The fashion industry is very
complicated. It is made up of the following industries:
Fibre and fabric industry,
Garments industry
Retail industry
OR

addresses

Submitted to
Prof. Kishlay Kashyap
FMS
Nift Patna

wide
variety of
issues of
above
industries

Submitted by
Ratnesh Kumar Mishra
MFM Sem-II
Nift Patna

in

transportation, inventory planning, production planning, communication operations, computer operations,

financial assets, risk management, revenue management, and many other fields where improving business

productivity is paramount. OR reflects an analytical method of problem solving and decision-making that is
useful in the management of organizations of fashion industry. OR improves the effectiveness and the efficiency
of an institution, hence some of the benefits offered by OR include:

Decrease Cost or Investment

Increase Revenue or Return on Investment
Increase Market Share
Manage and Reduce Risk
Improve Quality
Increase Throughput while Decreasing Delays
Achieve Improved Utilization form Limited Resources
Demonstrate Feasibility and Workability

OR Functions and Methods: OR supports the key decision making process, allows to solve urgent problems,
can be utilized to design improved multistep operations (processes), setup policies, supports the planning and
forecasting steps, and measures actual results. The following three methods are used to solve the problems of
fashion industry:
Simulation methods: where the goal is to develop simulators that provide the decision-maker with the
ability to conduct sensitivity studies to (1) search for improvements, and (2) to test and benchmark the
improvement ideas that are being made.
Optimization methods: where the goal is to enable the decision maker to search among possible choices in
an efficient and effective manner, in environments where thousands or millions of choices may actually be
feasible, or where some of the comparing choices are rather complex. The ultimate goal is to identify and
locate the very best choice based on certain criterias.
Data-analysis methods: where the goal is to aid the decision-maker in detecting actual patterns and interconnections in the data set. This method is rather useful in numerous applications including forecasting and
data mining based business environments.

Application of OR in Fibre and Fabric Industry

OR applications include scheduling, routing, workflow improvements, elimination of bottlenecks, inventory
control, business process re-engineering, site selection, or facility and general operational planning. Revenue
and supply chain management reflect two growing applications that are distinguished by their use of several OR
methods to cover several functions. Revenue management entails first to accurately forecasting the demand, and
secondly to adjust the price structure over time to more profitably allocate fixed capacity. Supply chain
decisions describe the who, what, when, and where abstractions from purchasing and transporting raw materials
and parts, through manufacturing actual products and goods, and finally distributing and delivering the items to
the customers. The power of utilizing OR methods allows examining this rather complex and convoluted chain

in a comprehensive manner, and to search among a vast number of combinations for the resource optimization
and allocation strategy that seem most effective, and hence beneficial to the operation.

Application of OR in Garment Industry

In garment industry the organization may need to design a sampling plan in order to meet specific quality
control objectives. In a garment manufacturing, operations that compete for the same resources must be
scheduled in a way that deadlines are not violated. Application of OR is useful in various department of garment
manufacturing organizations.In cutting department cut scheduling problem concerns finding a feasible cutting
schedule having the minimum number of lays. The availability of multiple solutions allows greater flexibility
and permits decision makers to apply additional criteria in selecting an appropriate cutting schedule. A hybrid
flowshop (HFS) problem on the pre-sewing operations and a master production scheduling (MPS) problem of
apparel manufacture are solved by a proposed two-tier scheduling model. OR helps to plan a MPS for the
factory so that the costs are minimized when the production orders are completed before and after the delivery
dates required by the customers and it also helps to minimize the completion time of the pre-sewing operations
in the cutting department while the production quantities required by the sewing department at several
predetermined times can be fulfilled by the cutting department.
OR projects focus on the industrial deployment of computer-based methods for assembly line balancing,
business process reengineering, capacity planning, pull scheduling, and setup reduction, primarily through the
integration of the philosophies of the Theory of Constraints and Lean Manufacturing. The main benefits are :
Defects and wastage - Reduce defects and unnecessary physical wastage, including excess use of raw
material (inputs), preventable defects, costs associated with reprocessing defective items, and unnecessary
product characteristics which are not required by customers
Cycle Times - Reduce manufacturing lead times and production cycle times by reducing waiting times
between processing stages, as well as process preparation times and product/model conversion times
Inventory levels - Minimize inventory levels at all stages of production, particularly works-in-progress
between production stages. Lower inventories also imply lower working capital requirements
Labor productivity - Improve labor productivity, both by reducing the idle time of workers and ensuring
that when workers are working, they are using their effort as productively as possible

 Utilization of equipment and space - Use equipment and manufacturing space more efficiently by
eliminating bottlenecks and maximizing the rate of production though existing equipment, while minimizing
machine downtime
Flexibility - Have the ability to produce a more flexible range of products with minimum changeover costs
and changeover time
Output In regards to reduced cycle times, increased labor productivity and elimination of bottlenecks and
machine downtime can be achieved, companies can generally increase the output from their existing
facilities

Application of OR in Retail Industry

In the retail industry application of OR is as follows:
ROI Maximization: The retailers try to know the number of units (retail stores) to build in a particular
DMA (designated marketing area) to maximize return on total investments within that DMA. In such
situation the optimization model would need to consider the variables like warehousing, distribution, and
supply chain costs, overhead, operating costs (labor, utilities, taxes, etc.), advertising efficiencies, media
advertising costs, positioning, marketing strategy, the breadth and depth of merchandise , real estate and
construction costs, employee training and sharing efficiencies among the stores etc. A nonlinear integer
programming optimization model with stochastic and dynamic components is used to solve such problems.
Optimal Distribution System: Transportation models, inventory models, and advertising response models
is used to get optimal distribution system
Optimal Product Line: Choice modeling would be used to measure consumers product line preferences
and elasticities, given different market conditions.
Optimal Positioning and Advertising Messaging: Survey research would be employed to provide a first
approximation of target-audience definition. The final optimization model would involve choice modeling
experiments among the broadly-defined target audience to identify a set of optimal solutions, which would

also precisely define corresponding optimal target audiences.

Route or delivery system optimization
Promotional optimization
Package design optimization
Product features optimization
Pricing optimization
Industry and category forecasting
Inventory optimization
Retail category optimization
Store design optimization

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