Meaning and Definition of Operation Research:: Definitions

Meaning and Definition of Operation Research:
It is the method of analysis by which management receives aid for their decisions. Though
the name of this method, Operation Research (O.R.) is relatively new, but the method used
for this is not a new one. Operation Research is concerned with the application of the
principles and the methods of science to the problems of strategy.
Definitions:
(i) It is the application of scientific methods, techniques and tools to problems involving
the operations of a system so as to provide those in the control of the system with
optimum solutions to the problems.
(ii) Operation Research is a tool for taking decisions which searches for the optimum
results in parity with the overall objectives and constraints of the organisation.
(iii) O.R. is a scientific method of providing executive department with a quantitative basis
of decisions regarding the operations under their control.
(iv) O.R. is a scientific approach to problem solving for management.
Scope of Operation Research:
In its recent years of organised development, O.R. has solved successfully many cases of
research for military, the government and industry. The basic problem in most of the
developing countries in Asia and Africa is to remove poverty and hunger as quickly as
possible. So there is a great scope for economist, statisticians, administrators, politicians
and technicians working in a team to solve this problem by an O.R. approach.
On the other hand, with the explosion of population and consequent shortage of food,
every country is facing the problem of optimum allocation of land for various crops in
accordance with climatic conditions and available facilities. Operation research approach
helps in operation management. Operation
management can be defined as the management of systems for providing goods or
services, and is concerned with the design and operation of systems for the manufacture,
transport, supply or service. The operating systems convert the inputs to the satisfaction of
customers need.
Thus the operation management is concerned with the optimum utilisation of resources
i.e. effective utilisation of resources with minimum loss, under utilisation or waste. In
other words, it is concerned with the satisfactory customer service and optimum resource
utilisation. Inputs for an operating system may be material, machine and human resource.
Operation Research Models:
Operation Research model is an idealised representation of the real life situation and
represents one or more aspects of reality. Examples of operation research models are: a
map, activity charts balance sheets, PERT network, break-even equation, economic
ordering quantity equation etc. Objective of the model is to provide a means for analysing
the behaviour of the system for improving its performance.
Classification of Models:
Models can be classified on the basis of following factors:
1. By degree of Abstraction:
[1]
i. Mathematical models.
ii. Language models.
2. By Function:
i. Descriptive models.
ii. Predictive models.
iii. Normative models for repetitive problems.
3. By Structure:
i. Physical models.
ii. Analogue (graphical) models.
iii. Symbolic or mathematical models.
4. By Nature of Environment:
i. Deterministic models.
ii. Probabilistic models.
5. By the Time Horizon:
i. Static models.
ii. Dynamic models.
Characteristics of a Good Model:
i. Assumptions should be simple and few.
ii. Variables should be as less as possible.
iii. It should be able to asscimilate the system environmental changes without change in its
framework.
iv. It should be easy to construct.
Constructing the Model:
A mathematical model is a set of equations in which the system or problem is described.
The equations represent objective function and constraints. Objective function is a
mathematical expressions of objectives (cost or profit of the operation), while constraints
are mathematical expressions of the limitations on the fulfillment of the objectives.
These expressions consist of controllable and uncontrollable variables.
The general form of a mathematical model is:
O = f (xi, yi)
where O = Objective function
xi = Controllable variables
yi = Uncontrollable variables
f = Relationship between O, and xi, yi.
Since model is only an approximation of the real situation, hence it may not include all the
variables.
Simplification in Operation Research Models:
While constructing the model, efforts should be made to simplify them, but only up to the
extent so that there is no significant loss of accuracy.
Some of the common simplifications are:
i. Omitting certain variables.
[2]
ii. Aggregating (or grouping) variables.
iii. Changing the nature of variables e.g., considering variables as constant or continuous.
iv. Changing relationship between variables i.e., considering them as linear or straight
line.
v. Modify constraints.
Techniques of Operation Research:

Important techniques of Operation Research are being described hereunder:
(i) Inventory Control Models:
Operation Research study involves balancing inventory costs against one or
more of the following costs:
i. Shortage costs.
ii. Ordering costs.
iii. Storage costs.
iv. Interest costs.
This study helps in taking decisions about:
i. How much to purchase.
ii. When to order.
iii. Whether to manufacture or to purchase i.e., make and buy decisions.
The most well-known use is in the form of Economic Order Quantity equation for finding
economic lot size.
(ii) Waiting Line Models:
These models are used for minimising the waiting time and idle time together with the
costs associated therewith.
Waiting line models are of two types:
(a) Queuing theory, which is applicable for determining the number of service facilities
and/or the timing of arrivals for servicing.
(b) Sequencing theory which is applicable for determining the sequence of the servicing.
(iii) Replacement Models:
These models are used for determining the time of replacement or
maintenance of item, which may either:
(i) Become obsolete, or
(ii) Become inefficient for use, and
(iii) Become beyond economical to repair or maintain.
(iv) Allocation Models:
These models are used to solve the problems arising when:
(a) There are number of activities which are to be performed and there are number of
alternative ways of doing them,
(b) The resources or facilities are limited, which do not allow each activity to be performed
in best possible way. Thus these models help to combine activities and available resources
so as to optimise and get a solution to obtain an overall effectiveness.
[3]
(v) Competitive Strategies:
Such type of strategies are adopted where, efficiency of decision of one agency is
dependent on the decision of another agency. Examples of such strategies are game of
cards or chess, fixing of prices in a competitive market where these strategies are termed
as “theory”.
(vi) Linear Programming Technique:
These techniques are used for solving operation problems having many variables subject
to certain restrictions. In such problems, objectives are—profit, costs, quantities
manufactured etc. whereas restrictions may be e.g. policies of government, capacity of the
plant, demand of the product, availability of raw materials, water or power and storage
capacity etc.
(vii) Sequencing Models:
These are concerned with the selection of an appropriate sequence of performing a series
of jobs to be done on a service facility or machine so as to optimise some efficiency
measure of performance of the system.
(viii) Simulation Models:
Simulation is an experimental method used to study behaviour over time.
(ix) Network Models:
This is an approach to planning, scheduling and controlling complex projects.
Applications of Operation Research:
These techniques are applied to a very wide range of problems.
Here only some of the common applications are being mentioned:
(i) Distribution or Transportation Problems:
In such problems, various centres with their demands are given and various warehouses
with their stock positions are also known, then by using linear programming technique, we
can find out most economical distribution of the products to various centres from various
warehouses.
(ii) Product Mix:
These techniques can be applied to determine best mix of the products for a plant with
available resources, so as to get maximum profit or minimum cost of production.
(iii) Production Planning:
These techniques can also be applied to allocate various jobs to different machines so as to
get maximum profit or to maximise production or to minimise total production time.
(iv) Assignment of Personnel:
Similarly, this technique can be applied for assignment of different personnel with
different aptitude to different jobs so as to complete the task within a minimum time.
(v) Agricultural Production:
We can also apply this technique to maximise cultivator’s profit, involving cultivation of
number of items with different returns and cropping time in different type of lands having
variable fertility.
[4]
(vi) Financial Applications:
Many financial decision making problems can be solved by using linear programming
technique.
Some of them are:
(i) To select best portfolio in order to maximise return on investment out of alternative
investment opportunities like bonds, stocks etc. Such problems are generally faced by the
managers of mutual funds, banks and insurance companies.
(ii) In deciding financial mix strategies, involving the selection of means for financing
firm, projects, inventories etc.
Limitations of Operations Research:
i. These do not take into account qualitative and emotional factors.
ii. These are applicable to only specific categories of decision-making problems.
iii. These are required to be interpreted correctly.
iv. Due to conventional thinking, changes face lot of resistance from workers and some-
times even from employer.
v. Models are only idealised representation of reality and not be regarded as absolute.
[5]

Meaning and Definition of Operation Research:: Definitions

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Meaning and Definition of Operation Research:: Definitions

Uploaded by

Copyright:

Available Formats

Meaning and Definition of Operation Research:

Techniques of Operation Research:

You might also like