Chapter 1

Introduction to
Operations Research
 Meaning of Operations Research
Operations
The activities carried out in an organization.
Research
The process of observation and testing characterized by the
scientific method.
Operations Research is a quantitative approach to
decision making based on the scientific method of problem
solving.
Definitions of Operations Research
Operations research is the application of the methods
of science to complex problems in the direction and
management of large systems of men, machines,
materials and money in industry, business,
government and defence. The distinctive approach is
to develop a scientific model of the system
incorporating measurements of factors such as chance
and risk, with which to predict and compare the
outcomes of alternative decisions, strategies or
controls. The purpose is to help management in
determining its policy and actions scientifically.
Operational Research Society, UK
 Operations research is concerned with scientifically
deciding how to best design and operate manmachine
systems usually requiring the allocation of scarce
resources.
Operations Research Society, America
It is the use of scientific knowledge through
interdisciplinary team effort for the purpose of
determining the best utilization of limited
resources.
Hamdy A Taha
The application of scientific method to study of
operations of large complex organizations or activities.
It provides top level administrators with a quantitative
basis for decisions that will increase the effectiveness of
such organizations in carrying out their basic purpose.
Committee on OR of National Research Council
 History of Operations Research
Strategic and tactical problems World war-II
The term operations research was coined as a result of
research on military operations during World War II.
Since expecting adequate solutions from individuals or
specialists in a single discipline was unrealistic, groups of
individuals who collectively were considered specialists
in mathematics, economics, statistics and probability
theory, engineering, behavioural, and physical science
were formed. In Britain, Col. P. M. S. Blackett was
assigned the problem of analysing the coordination of
radar equipment at gun sites
 Adoption in other fields
After the war, scientists who had been active in
the military operations research (OR) groups
made efforts to apply operations research
approach to civilian problems, related to
business, industry, research and development,
etc.
 Economic and industrial boom
After World War II, economic and industrial
boom resulted in continuous mechanization,
automation, decentralization of operations and
division of management functions. Therefore
application of operations research to
managerial decision-making became popular.
 Characteristics of Operations Research
Use of Scientific Methods

Use of Models to represent the complex relationship

Interdisciplinary approach

Provision of a quantitative basis for decision making

Methodological Approach

Decision-making

Operations Economy
 Applications/Scope of Operations
Research
Areas
Techniques
Finance
Linear Programming
Production
Decision Models
Marketing
Network Theory
Personnel
Inventory Control

Queuing Theory

Sequencing

Game Theory

Simulation
Process of Operations Research
Example
A manufacturing company with two main product lines (G &
H) is planning production for the upcoming month. Each
product requires varying amounts of raw materials A, B & C.
The resources are limited in their availability. Additionally,
there are other complicating factors such as uncertainty in the
demand for the products, random machine breakdowns, and
union agreements that restrict how the labor force can be
used. Given this complex operating environment, the overall
objective is to plan next month's production so that the
company can realize the maximum profit possible while
simultaneously ending up in a good position for the
following month(s).
 Steps
1. Formulation & Definition of the problem
The objective might be to maximize profits from the
sales of the two products. The alternative courses of
action would be the quantities of each product to
produce next month, and the alternatives might be
constrained by the fact that the amounts of each of
the three resources required to meet the planned
production must not exceed the expected availability
of these resources. An assumption that might be
made here is that all of the units produced can be
sold.
2. Data Collection
To relate data collection to our hypothetical production example,
based upon variable costs of production and the selling price of each
of the products, it might be determined that the profit from selling
one G is Rs.10 and one H is Rs.9. It might be determined based on
time and work measurements that each G and each H respectively
requires 2 units and 1 unit of resource A, 1 unit and 3 units of
resource B and 1 unit and 4 units of resource C. Finally, based upon
prior commitments and historical data on resource availability, it
might be determined that in the next month there will be 630 units of
resource A, 708 units of resource B and 135 units of resource C
available for use in producing the two products.
3. Model Formulation
In our hypothetical example, two decision variables X and Y to
represent respectively the number of units of G & H to be made
and sold next month.
Then the objective is to maximize total profits given by 10X+9Y.
There is a constraint corresponding to each of the three limited
resources, which should ensure that the production of G and H
does not use up more of the corresponding resource than is
available.
The completely mathematical model is:
Maximize {Profit = 10X+9Y}, subject to
2X+1Y 630
1X+3Y 708
1X+4Y 135
X, Y 0.
.
4. Validation and Analysis
Validation of the model verifying the solution
obtained, post optimality analysis
5. Implementation and Monitoring
Constitution of a team responsible for the development

of operating procedures or manuals and a time-table for

putting the plan into effect.
Advantages of Operations Research
Better Decision-making
Better control
Better Co-ordination
Helpful in complex situations
Resolve conflicts
Improves Productivity

Limitations of Operations Research

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