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    Introduction To Operations Research

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    Siegfred Laborte
    This document provides an introduction to operations research (OR). It discusses the history and origins of OR, defining it as a systematic approach to decision-making and problem-solving. The document outlines the features of OR, including its use of scientific methods, interdisciplinary teams, systems approach, and computer modeling. It also describes the scope, methodologies, tools/techniques, and application areas of OR across fields like national planning, defense, industry, and engineering. Examples of successful OR applications that achieved significant cost savings are also provided.

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    Introduction To Operations Research

    Uploaded by

    Siegfred Laborte
    281 views37 pages
    This document provides an introduction to operations research (OR). It discusses the history and origins of OR, defining it as a systematic approach to decision-making and problem-solving. The document outlines the features of OR, including its use of scientific methods, interdisciplinary teams, systems approach, and computer modeling. It also describes the scope, methodologies, tools/techniques, and application areas of OR across fields like national planning, defense, industry, and engineering. Examples of successful OR applications that achieved significant cost savings are also provided.

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    OR 1 Intro

    Original Title

    Introduction to Operations Research

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    This document provides an introduction to operations research (OR). It discusses the history and origins of OR, defining it as a systematic approach to decision-making and problem-solving. The document outlines the features of OR, including its use of scientific methods, interdisciplinary teams, systems approach, and computer modeling. It also describes the scope, methodologies, tools/techniques, and application areas of OR across fields like national planning, defense, industry, and engineering. Examples of successful OR applications that achieved significant cost savings are also provided.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    281 views37 pages

    Introduction To Operations Research

    Uploaded by

    Siegfred Laborte
    This document provides an introduction to operations research (OR). It discusses the history and origins of OR, defining it as a systematic approach to decision-making and problem-solving. The document outlines the features of OR, including its use of scientific methods, interdisciplinary teams, systems approach, and computer modeling. It also describes the scope, methodologies, tools/techniques, and application areas of OR across fields like national planning, defense, industry, and engineering. Examples of successful OR applications that achieved significant cost savings are also provided.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 37
    At a glance
    Powered by AI
    Some key takeaways from the document are that operational research is a systematic approach to decision making and problem solving using techniques like applied mathematics, statistics, and modeling. It aims to find optimal solutions to complex problems related to areas like profit, costs, efficiency, and more.

    Some examples provided include UPS using OR to redesign its delivery network for $87 million in savings, USPS using OR for scheduling to save $500 million, and various companies in industries like airlines, railways, manufacturing applying OR techniques.

    Some major developments highlighted are the origins of OR in the UK during WWII, its systematic emergence in the late 1930s, and contributions from figures and areas like Frederick Taylor, Henry Gantt, Markov processes, queuing theory, linear programming, and game theory starting in the late 19th century.

    OPERATIONS RESEARCH: An Introduction

    Arriane Alhambra Palisoc

    Outline
    Introduction to Operational Research
    History of Operational Research
    Definition of Operational Research
    Features of Operational Research
    Scope of Operational Research
    Methodology/Approaches of Operational Research
    Tools/Techniques of Operational Research
    Operational Research and Management Decision-Making
    Limitations of Operational Research
    Steps in OR Study
    Application Areas of OR
    Short List of Successful Stories

    Introduction to Operations Research


    Operational Research is a systematic and
    analytical approach to decision making and
    problem solving.
    O.R. as termed in USA, Canada, Africa, Australia
    and Operational Research as termed in Europe,
    is an Branch of applied mathematics that uses
    techniques and statistics to arrive at Optimal
    solutions to solve complex problems.
    It is typically concerned with determining the
    maximum profit, sale, output, and efficiency
    And minimum losses, risks, cost, and time of
    some objective function. It have also become an
    important part of INDUSTRIAL ENGINEERING
    PROFESSION.

    History of Operations Research


    There is no clear history that marks the Birth if
    O.R., it is generally accepted that the field
    originated in England during the World War II.
    Some say that Charles Babbage (1791-1871) is
    the Father of O.R because his research into the
    cost of transportation and sorting of mail led to
    Englands University Penny Post in 1840.
    Modern Operations Research originated at the
    Bowdsey Research Station in U.K. in 1937 to
    analyse and improve the working of the UKs
    Early Warning Rador System.

    History of Operations Research


    During the Second World War about 1000
    Men and Women were engaged to work for
    British Army.
    After World War II, Military Operational
    Research in U.K. became Operational
    Analysis (OA) within the U.K. Ministry of
    Defense with expanded techniques and
    graving awareness.

    History of Operations Research


    OR is a relatively new discipline.
    70 years ago it would have been
    possible to study mathematics, physics
    or engineering at university it would not
    have been possible to study OR.
    It was really only in the late 1930's that
    operationas research began in a
    systematic way.

    History of Operations Research


    1890: Frederick Taylor - Scientific Management [Industrial
    Engineering]
    1900: Henry Gannt - [Project Scheduling], and Andrey A.
    Markov - [Markov Processes], Assignment [Networks]
    1910: F. W. Harris - [Inventory Theory], and E. K. Erlang [Queuing Theory]
    1950: H.Kuhn - A.Tucker - [Non-Linear Prog.], Ralph Gomory [Integer Prog.] & PERT/CP, and Richard Bellman - [Dynamic
    Prog.]
    1940: World War 2, George Dantzig - [Linear Programming],
    First Computer
    1930: Jon Von Neuman Oscar Morgenstern - [Game
    Theory]

    Definitions of Operations Research


    It is an Act of winning wars without actually
    fighting.
    -Aurther Clark
    It is a Scientific Approach to problem solving for
    executive management.
    -H.M. Wagner
    It is Art of giving bad answers to problem which
    otherwise have worse answers.
    -T.L. Saaty

    Features of Operations Research


    Decision-Making
    Scientific Approach
    Inter-Disciplinary Team Approach
    System Approach
    Use of Computers
    Objectives
    Human Factors

    Decision Making
    Every industrial organization faces multi-facet
    problems to identify best possible solution to their
    problems.
    OR aims to help the executives to obtain optimal
    solution with the use of OR techniques.
    It also helps the decision maker to improve his
    creative and judicious capabilities, analyze and
    understand the problem situation leading to
    better control, better co-ordination, better
    systems and finally better decisions.

    Scientific Approach
    OR applies scientific methods, techniques and
    tools for the purpose of analysis and solution of
    the complex problems.
    In this approach there is no place for guesswork
    and the person bias of the decision maker.

    Inter-Disciplinary Approach
    Basically the industrial problems are of complex
    nature and therefore require a team effort to
    handle it.
    This team comprises of scientist, mathematician
    and other professionals. Who jointly use the OR
    tools to obtain a optimal solution of the problem.
    They tries to analyze the cause and effect
    relationship between various parameters of the
    problem and evaluates the outcome of various
    alternative strategies.

    System Approach
    The main aim of the system approach is to trace
    out all significant and indirect effects for each
    proposal on all sub-system on a system and to
    evaluate each action in terms of effects for the
    system as a whole.
    The inter-relationship and interaction of each
    sub-system can be handled with the help of
    mathematical/analytical models of OR to obtain
    acceptable solution.

    Use of Computers
    The models of OR need lot of computation and
    therefore, the use of computers becomes
    necessary.
    With the use of computers it is possible to handle
    complex problems requiring large amount of
    calculations.
    The objective of the operations research models
    is to attempt and to locate Best or Optimal
    Solution.

    Objective
    Operational Research always try to find the best
    and optimal solution to the problem.
    For this purpose objectives of the organization
    are defined and analyzed. These objectives are
    then used as the basis to compare the alternative
    courses of action.

    Human Factors
    In deriving, Quantitative Solutions we do not
    consider human factors, which doubtlessly play a
    great role in the problems.
    So, study of O.R. is incomplete without study of
    human factors.

    Scope of Operations Research


    The scope of OR is not only confined to any
    specific agency like defence services but today it
    is widely used in all industrial organizations.
    It can be used to find the best solution to any
    problem be it simple or complex. It is useful in
    every field of human activities. Thus, it attempts
    to resolve the conflicts of interest among the
    components of organization in a way that is best
    for the organization as a whole.
    The main fields where OR is extensively used are
    given in next slide.

    Fields of OR
    National Planning and Budgeting
    Defense Services
    Industrial Establishment and Private Sector
    Units
    R & D and Engineering

    National Planning and Budgeting


    OR is used for the Preparation of Five Year Plans
    Annual Budgets
    Forecasting of Income and Expenditure
    Scheduling of Major Projects of National Importance
    Estimation of GNP
    GDP
    Population
    Employment and Generation of Agriculture Yields,
    etc.

    Defense Services
    Basically formulation of OR started from USA Army, so it
    has wide application in the areas such as:
    Development of New Technology
    Optimization of Cost and Time
    Setting and Layouts of Defense Projects
    Assessment of Threat Analysis
    Strategy of Battle
    Effective Maintenance and Replacement of Equipment
    Inventory Control,
    Transportation
    Supply Depots, etc.

    Industrial Establishment and


    Private Sector Units
    OR can be effectively used in Plant Location and Setting Finance Planning
    Product and Process Planning
    Facility Planning and Construction
    Production Planning and Control
    Purchasing
    Maintenance Management
    Personnel Management, etc.

    R&D and Engineering


    Research and development being the heart of
    technological growth, OR has wide scope and
    can be applied in Technology Forecasting and Evaluation,
    Technology and Project Management,
    Preparation of Tender and Negotiation,
    Value Engineering,
    Work/Method Study and so on.

    Methodologies/Approaches of OR
    1. ORIENTATION
    2. PROBLEM DEFINITION
    3. DATA COLLECTION
    4. MODEL FORMULATION
    5. SOLUTION
    6. ANALYSES AND INFORMATION
    7. IMPLEMENTATION AND MONITORING

    Tools and Techniques of OR


    Linear Programming
    Queuing Theory
    Sequencing
    Transportation Problems
    Integer Problems
    Assignment Problems
    Decision Theory and Games Theory
    Symbolic Logic

    Operations Research and


    Management Decision Making
    Operation Research increases the creative capabilities of a
    decision maker.
    It increases the effectiveness of mgt. decisions.
    Management is most of the time making decisions. It is thus
    a decision science which helps mgt. to take better decisions.
    Nowadays, business problems have become so complex
    that it is almost impossible for a human being to
    comprehend all important factors, OR Techniques can be
    helpful in such situations.
    It also helps in ascertaining best locations for factories and
    warehouses, project scheduling as well as most economic
    means of transportation.
    OR study approach in business decisions leads to better
    control, better co-ordination, better system and at the end
    better decision.

    Limitations of Operations Research


    Magnitude of Computation
    Non-Quantifiable Factors
    Distance between User and Analyst
    Time and Money Costs
    Implementation

    Problemformulation

    Steps in OR Study

    Modelbuilding

    Datacollection

    Dataanalysis

    Coding

    Model
    verificationand
    validation

    No

    Finetune
    model

    Yes
    7

    Experimentaldesign

    Analysisofresults

    27

    Success Stories of OR

    28

    Application Areas

    Strategic planning
    Supply chain management
    Pricing and revenue management
    Logistics and site location
    Optimization
    Marketing research
    29

    Applications Areas (cont.)

    Scheduling
    Portfolio management
    Inventory analysis
    Forecasting
    Sales analysis
    Auctioning
    Risk analysis
    30

    Examples
    British Telecom used OR to schedule workforce
    for more than 40,000filed engineers. The
    system was saving $150 million a year from
    1997~ 2000. The workforce is projected to
    save $250 million.
    Sears Uses OR to create a Vehicle Routing
    and Scheduling System which to run its
    delivery and home service fleet more efficiently
    -- $42 million in annual savings
    31

    Examples
    UPS use O.R. to redesign its overnight
    delivery network, $87 million in savings
    obtained from 2000 ~ 2002; Another $189
    million anticipated over the following decade.
    USPS uses OR to schedule the equipment
    and workforce in its mail processing and
    distribution centers. Estimated saving in $500
    millions can be achieve.

    A Short List of Successful Stories (1)

    Air New Zealand


    Air New Zealand Masters the Art of Crew Scheduling
    AT&T Network
    Delivering Rapid Restoration Capacity for the AT&T Network
    Bank Hapoalim
    Bank Hapoalim Offers Investment Decision Support for Individual C
    ustomers
    British Telecommunications
    Dynamic Workforce Scheduling for British Telecommunications
    Canadian Pacific Railway
    Perfecting the Scheduled Railroad at Canadian Pacific Railway
    Continental Airlines
    Faster Crew Recovery at Continental Airlines
    FAA
    Collaborative Decision Making Improves the FAA Ground-Delay Pr
    33
    ogram

    A Short List of Successful Stories (2)

    Ford Motor Company


    Optimizing Prototype Vehicle Testing at Ford Motor Company
    General Motors
    Creating a New Business Model for OnStar at General Motors
    IBM Microelectronics
    Matching Assets to Supply Chain Demand at IBM Microelectronic
    s
    IBM Personal Systems Group
    Extending Enterprise Supply Chain Management at IBM Persona
    l Systems Group
    Jan de Wit Company
    Optimizing Production Planning and Trade at Jan de Wit Compan
    y
    Jeppesen Sanderson
    Improving Performance and Flexibility at Jeppesen Sanderson
    34

    A Short List of Successful Stories (3)

    Mars
    Online Procurement Auctions Benefit Mars and Its Suppliers
    Menlo Worldwide Forwarding
    Turning Network Routing into Advantage for Menlo Forwarding
    Merrill Lynch
    Seizing Marketplace Initiative with Merrill Lynch Integrated Choice
    NBC
    Increasing Advertising Revenues and Productivity at NBC
    PSA Peugeot Citroen
    Speeding Car Body Production at PSA Peugeot Citroen
    Rhenania
    Rhenania Optimizes Its Mail-Order Business with Dynamic
    Multilevel Modeling
    Samsung
    Samsung Cuts Manufacturing Cycle Time and Inventory to
    35
    Compete

    A Short List of Successful Stories (4)

    Spicer
    Spicer Improves Its Lead-Time and Scheduling Performance
    Syngenta
    Managing the Seed-Corn Supply Chain at Syngenta
    Towers Perrin
    Towers Perrin Improves Investment Decision Making
    U.S. Army
    Reinventing U.S. Army Recruiting
    U.S. Department of Energy
    Handling Nuclear Weapons for the U.S. Department of Energy
    UPS
    More Efficient Planning and Delivery at UPS
    Visteon
    Decision Support Wins Visteon More Production for Less
    36

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