ST1202 - 01 - Overview of Operations Research-1

Operations Research I
ST 1202
Module 01:
Overview of Operations Research 1
OVERVIEW OF OR cont…
CONTENTS:
1. Learning Outcomes
2. Meaning of OR
3. Origin and Development of OR
4. Scientific Method in OR
5. OR and Decision-Making
6. Modelling in OR
7. Applications of Various OR Techniques
8. Advantages and Disadvantages of OR
9. Concluding Remarks
10.Review Questions 2
LEARNING OUTCOMES
After completing this module, you should be able to:
 Understand the meaning of OR.
 Understand the origin and development of OR.
 Understand the concept of scientific methods in OR.
 Understand the OR as a tool in the decision-making
process.
 Understand the concept of modeling in OR.
 Understand the applications of various OR techniques.
 Understand the advantages and disadvantages of OR.
3
MEANING OF OPERATIONS RESEARCH
Decisions:
 Common sense, judgement, experience, and expertise.
 However; complex and heavily responsible decisions

require mathematical or logical justifications.
 For example; in Product-Mix Analysis: The total amount

of resources and the maximum number of units that
each product can sell as well as the unit profit for each
product will require tools like OR. 4
CONSEQUENTLY; new tools of analysis have been and are
being devised.
 In which, such tools have brought a virtual revolution
and can be reckoned as controlling forces in various
fields.
 OR is an addition to a long list of scientific tools which

provide a new outlook on many problems.
• Its applications are very substantial in determining
the optimum course of action given limited scarce
resources. 5
What is Operations Research?
 Operations?
• Activities carried out in an organization.
 Research?
• The process of observation and testing characterized
by the scientific method.
 Thus, OR can be defined as the research of operations

(Gupta & Hira, 2014).
6
However; there are various definitions of OR:
 OR is a quantitative approach to decision-making that
uses mathematical modeling, statistical analysis, and
optimization techniques to solve complex problems in
various domains, such as manufacturing, logistics,
finance, healthcare, and engineering.
 OR is a scientific method that uses mathematical and or

logical means to provide a quantitative basis for
decisions regarding the operations confronting the
organizations. 7
– OR is defined as the use of quantitative methods to
assist analysts and decision-makers in designing,
analyzing, and improving the performance or operation
of systems (Carter et al., 2019).
– OR can be considered as being the application of the

scientific method by inter-disciplinary teams to
problems involving the control of organized (man-
machine) systems so as to provide solutions which best
serve the purposes of the organization as a whole
(Kothari, 1992).
8
OR is viewed as both a SCIENCE and an ART.
 SCIENCE:
• It involves mathematical techniques and algorithms
for solving decision-making problems.
 ART:
• It depends on the creativity and personal ability of
the decision-making analysts.
THUS, OR is a multidisciplinary tool that utilizes various

subjects including scientific methods for decision-making.
9
The Objective of OR:
 Its primary objective is to find the optimal solution that
achieves a specific goal, such as maximizing profits,
minimizing costs, improving efficiency, reducing waste,
optimizing resource allocation, improving quality, or
minimizing risk. This involves evaluating all available
alternatives and selecting the one that best maximizes or
minimizes an objective function while adhering to
predefined constraints.
 NOTE: Problems involve multiple conflicting objectives,

limited resources, and uncertain outcomes. 10
Characteristics Of OR
 Considering various definitions of OR, the significant
characteristics of OR include the following:
• Systems Approach:- OR seeks to understand complex

systems and processes by studying their components
and how they interact with each other to drive
organizational performance.
11
• Inter-disciplinary Teams Approach:- It involves
working in teams, with experts from different
disciplines such as mathematics, statistics, computer
science, economics, and engineering to address
complex problems.
• Scientific Method:- By following the scientific method,

OR is able to develop evidence-based solutions that
are grounded in empirical data and objective
analysis, rather than subjective opinion or intuition.
12
• Use of Models (Quantitative or Model-based):- It
relies heavily on mathematical models and
techniques to represent complex systems and
processes to analyze data and make predictions and
recommendations.
• Data-driven:- It uses data analysis to inform

decision-making, and often involves collecting and
analyzing large datasets.
13
• Goal-oriented:- Being goal-oriented is a core
objective of OR that helps organizations achieve their
objectives, optimize their performance, and make
better decisions.
• Improving the Quality of Solutions and Decisions:- It

is focused on solving problems and improving
outcomes, rather than simply describing or analyzing
them. Consequently, it provides insights and
recommendations that help organizations make
better decisions.
14
• Experimental:- OR often involves testing different
scenarios or strategies through simulation or other
experimental methods.
• Flexible:- It can be applied to a wide range of

problems and industries, from supply chain
management to healthcare to finance.
• Human Factors:-
• Use of computers:- 15
ORIGIN AND DEVELOPMENT OF OR
Pre-World War II:
 First industrial revolution contributed to the
development of OR.
 Frederick W. Taylor, an American mechanical engineer -

application of scientific analysis to methods of
production, 1885.
 Ford Whitman Harris, an American production engineer

- economic order quantity model, 1915. 16
 Horace Clifford Levinson, an American mathematician,
and astronomer – applied scientific analysis to the
problems of merchandising, in the 1930s.
17
World War II
 Pioneered by British scientists as the first OR team.
• OR was developed in a military context during World
War II to deal with the strategic and tactical
problems related to air and land defense given very
limited military resources.
 The term “operations research” was invented because

the team of scientists was dealing with research on
military operations.
• Another common term is Management Science 18
 The remarkable success motivated United States
military management to start similar activities.
• Later on similar OR teams also started functioning in

Canada and France.
19
Post-World War II
 At the end of WW-II, the success of military OR teams
attracted UK industrial managers who were seeking
solutions to their own complex managerial problems.
• Sought assistance from the released military OR

teams.
• It was in the early 1950s USA started absorbing OR

workers.
20
 Later in 1953 “The Operations Research Society of
America” was formed. While “The International Federation
of Operational Research Societies” was established in
1957.
 USA academic institutions started teaching courses related

to OR.
• Other countries rapidly followed the same.
 After the late 1950s OR came to be applied for solving

business and industrial problems as an integrated
decision-making tool. 21
SCIENTIFIC METHOD IN OR
The scientific method is a fundamental approach used in
OR to solve problems systematically and efficiently
considering well-defined phases.
That is, the scientific method provides a structured

approach to problem-solving in OR, enabling practitioners
to develop and implement effective solutions to complex
problems.
22
Phases Of OR Study
 Methodology of OR generally involves the following
steps:-
• Formulating the problem
–Nature of the problem, objectives, limitations, and
the need for a solution.
• Constructing the model

–Mathematical models: Known OR models or
suitable alternate models.
23
• Devising the solution
–Data input.
• Testing the validity

–If the solution is not ideal, revise the model.
• Implementing the results

–Based on the organizational objectives involving all
parties, say, user and OR specialist.
24
–The relationship between the user and OR
Specialist is:
»User (say, Manager):- Responsible for decision
making. May not be aware of OR tools and or
unable to understand the complexities of OR.
»OR Specialist:- Helps the manager to make

better decisions. May not be aware of the
organization's problems (say, business
problems).
25
 ILLUSTRATION:
• Considering the scientific method in OR, we have:-
–Identifying the problem.
»User
–Stating the problem in a quantitative relationship.

»User and OR Specialist
–Quantitative tools to be used.

»OR Specialist 26
– Finding and testing solutions.
» OR Specialist
– Determining the most effective solution.

» User and OR specialist
– Selecting the solution to be used.

» User
– Selling the decision to the management.

» User and OR Specialist 27
OR AND DECISION MAKING
Decision-Making: Refers to the process of selecting the
best course of action from among a set of alternatives.
It can be either rational (involves identifying and
evaluating alternatives based on a set of criteria) or
irrational (driven by emotions, biases, or intuition).
As a quantitative and analytical approach to decision-

making, OR helps organizations make better decisions,
reduce costs, increase efficiency, and ultimately improve
their overall performance. 28
Note; the characteristics of decisions are:
(1) Objectives
(2) Alternatives, and
(3) Constraints (or influencing factors).
 To improve the decision we have to improve these

characteristics using scientific quantification.
29
MODELLING IN OR
 Models
 A model is a simplified representation of an actual
phenomenon (i.e. a real-world system or process) in
the form of an equation or set of equations i.e.
algebraic models.
• Other forms:
–Verbal/logical models:- use of analogies/paradigms
e.g.: the concept of division of labor as a model.
–Geometric models:- use of diagrams
–Physical models:- use of physical entities. 30
 NOTE: Sometimes, the term model and theory can be
used interchangeably. However; a theory is a more
abstract representation, while a model is a more
applied or empirical representation.
 Models play the role of explaining, predicting, and

controlling the actual phenomenon.
 Effective modeling, requires a solid understanding of
the underlying system being modeled, as well as
expertise in mathematical modeling and data analysis
techniques. 31
Types of OR models include:
 Linear programming models
 Transportation models
 Assignment models
 Non-linear programming models
 Dynamic programming models
 Integer programming models
 Goal programming models
 Quadratic programming models
 Inventory models 32
 Queuing models
 Sequencing models
 Allocation models
 Routing models
 Game theory
 Simulation techniques
 Replacement models, etc.
How to formulate/construct such models?

 See our subsequent modules. 33
APPLICATIONS OF VARIOUS OR TECHNIQUES
OR involves the use of a wide range of tools and
techniques to analyze and optimize systems, processes,
and decisions.
Some of the key tools used in OR include:

 For OR I, we have linear programming, transportation
models, and assignment models.
 For OR II, we have network optimization problems,
PERT/CPM in project management, Dynamic
programming, Game theory, Sequencing problems. 34
OR has numerous applications in various areas or
industries, including supply chain management, inventory
control, production planning, project management,
transportation and logistics, healthcare management,
financial planning, telecommunications, construction,
public services, agriculture, mining, and marketing
research, to name a few.
35
ADVANTAGES OF OR
OR as a problem-solving and decision-making tool
improves the effectiveness and efficiency of an
organization.
 How?
• It provides better strategies.
–For example; growth – it will be through market
penetration, market development, product
development, or diversification.
36
• It renders great help in optimum resource allocation.
–It enables proper deployment of resources.
• Improves yields of business and least costs.

–For example; it helps in improving organizational
services while minimizing waiting and servicing
costs.
• It facilitates the process of decision-making.

–For example; it enables management to decide
when to buy and how much to buy. 37
• It helps a lot in the preparation of future (or would-
be) managers.
• Better control of business operations

–For example; understand anomalies in business
operations.
• It can be applied to various fields of operations, like:

–Operations and production management, etc.
38
DISADVANTAGES OF OR
Despite its usefulness, there are limitations to be
considered:
 OR is only a tool of analysis and not the complete
decision-making process.
 The inherent limitations concerning interdisciplinary of

mathematical science.
 Analysis is only based on quantifiable factors.

• It does not consider human behavioral issues. 39
 The gap between users and analysts.
• Coordination issues.
 Management internal resistance.
 High costs are involved in the use of OR tools.
 Time-consuming process.
 OR makes extensive use of computers. 40

CONCLUDING REMARKS
Why OR?
State of OR in Tanzania.
 Areas of application in Tanzania.
Is it the panacea to any problems?

41
REVIEW QUESTIONS
1. What is operations research?
2. What is the relationship between user and operations
research specialist?
3. Why is operation research important? Discuss fully.
4. Describe various characteristics of operations research.
5. Discuss the origin and development of operations research.
6. What are the tools/techniques involved in operations
research?
7. Explain the various phases in solving an operations research
problem.
42
8. With suitable examples, write down the merits of operations
research.
9. Explain the limitations of operations research.
10.Why scientific method in operations research?
11.Explain how scientific decision-making affects operations
research decisions.
12.Discuss the role of OR in decision-making process.
13.Comment on the statement: “OR is viewed as both a science
and an art”.
14.Define a model and OR model.
15.Discuss in detail various OR models.
43
16.Is there any difference between a theory and a model?
Justify your answer.
44
Overview of Operations
Research
Any Questions?
CLASS ACTIVITY_01_01
Work in groups of about 10 members.
What do you understand by the term “linear

programming?”
Feedback to the class (5-10 minutes).

Operations Research I
ST 1202
End of Module 01:

Overview of Operations Research
Thank you! 47

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Operations Research I

 However; complex and heavily responsible decisions

 For example; in Product-Mix Analysis: The total amount

 OR is an addition to a long list of scientific tools which

 Thus, OR can be defined as the research of operations

 OR is a scientific method that uses mathematical and or

– OR can be considered as being the application of the

THUS, OR is a multidisciplinary tool that utilizes various

 NOTE: Problems involve multiple conflicting objectives,

• Systems Approach:- OR seeks to understand complex

• Scientific Method:- By following the scientific method,

• Data-driven:- It uses data analysis to inform

• Improving the Quality of Solutions and Decisions:- It

• Flexible:- It can be applied to a wide range of

 Frederick W. Taylor, an American mechanical engineer -

 Ford Whitman Harris, an American production engineer

 The term “operations research” was invented because

• Later on similar OR teams also started functioning in

• Sought assistance from the released military OR

• It was in the early 1950s USA started absorbing OR

 USA academic institutions started teaching courses related

 After the late 1950s OR came to be applied for solving

That is, the scientific method provides a structured

• Constructing the model

• Testing the validity

• Implementing the results

»OR Specialist:- Helps the manager to make

–Stating the problem in a quantitative relationship.

–Quantitative tools to be used.

– Determining the most effective solution.

– Selecting the solution to be used.

– Selling the decision to the management.

As a quantitative and analytical approach to decision-

(2) Alternatives, and

(3) Constraints (or influencing factors).

 To improve the decision we have to improve these

 Models play the role of explaining, predicting, and

How to formulate/construct such models?

Some of the key tools used in OR include:

• Improves yields of business and least costs.

• It facilitates the process of decision-making.

• Better control of business operations

• It can be applied to various fields of operations, like:

 The inherent limitations concerning interdisciplinary of

 Analysis is only based on quantifiable factors.

 Management internal resistance.

 High costs are involved in the use of OR tools.

 OR makes extensive use of computers. 40

 Areas of application in Tanzania.

Is it the panacea to any problems?

Work in groups of about 10 members.

What do you understand by the term “linear

Feedback to the class (5-10 minutes).

End of Module 01:

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