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Unit 1: Operations Management Basics




          The concept of Scientific Management led to the development of ‘time and motion study’. The  Notes
          first contribution in this direction was made by Taylor in the 1880s. Early in the 20th century,
          Frank and Lillian Gilbreth developed a more systematic and sophisticated method of ‘time and
          motion study’, taking into account the limits of human physical and mental capacity and the
          importance of a good physical environment.
          Time and motion study is an analysis of the operations required to manufacture an article in a
          factory, with the aim of increasing efficiency. Each operation is studied minutely and analyzed
          in order to eliminate unnecessary motions and thus reduce production time and raise output,
          which increases productivity.

          In the early 1900s, Alfred P. Sloan of General Motors introduced the concept of ‘organizational
          management’ and Henry Ford introduced ‘assembly-line manufacturing’. The Hawthorne Studies
          by Elton Mayo, in 1927, resulted in the Human Resources  Movement. These  developments
          changed the way operations were managed in many businesses, during this period.

          1.1.2  World War II to the 1960’s – Operations Research

          Before World War II the focus of ‘scientific management’ was based on the micro-environment
          in the manufacturing sector. During the War, the focus moved from the micro-environment to
          the macro-environment.
          A  new  multi-disciplinary approach  to problem  solving, called  Operations  Research, was
          developed. This was a quantitative approach basically concerned with the efficient allocation
          and control of resources. Multi-disciplinary operations research groups, largely initiated and
          founded by government and quasi-governmental organizations, were formed.
          These groups focused on  developing  algorithms and  methodologies  to solve  optimization
          problems that arose in a broad range of functional areas. They successfully developed models
          on  linear programming,  network flow problems, inventory theory, dynamic programming,
          machine maintenance, queuing and  game theory,  etc., to identify how operations could be
          improved.


                 Example: While Dantzig applied linear programming to the travelling salesman problem;
          Clark, Scarf, etc., developed models on inventory theory and so on.
          The Ford Harris Economic Order Quantity model, however, dates as far back as 1915. These
          early successes resulted in the birth of operations research groups at many business organizations
          which were formed with the objective of finding ways of improving performance.
          During the late 1960s, business schools began to take interest in the more scientific and rigorous
          approaches advocated by operations research groups for decision making and incorporated this
          discipline in business curricula.




             Notes  Mathematical Models in Operations Management
             At the centre of operations research, practice and theory is a diverse set of mathematical
             models that  are used to capture and explore a wide  range of real-world settings. An
             operations research model is a mathematical abstraction or simplification of reality. The
             degree of simplification is a function of  data availability, time and  resources, and the
             situational issues and decisions that the model is designed to address. Mathematics is,

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