Page 7 - DCOM303_DMGT504_OPERATION_RESEARCH

Operations Research

Notes 1.1 Meaning of Operations Research

OR can be defined as:
OR is the application of the methods of science to complex problem arising in the direction and
management of large system of men, machines, materials and money in industry, business,
government of defense. The distinctive approach is to develop a scientific model of the system,
incorporating measurements of factors such as chance & risk, with which to predict and compare
the outcome of alternative decisions strategies and controls. The purpose is to help management
determine its policies and actions scientifically.
— Journal of OR Society of UK
“OR is an experimental and applied science devoted to observing, understanding and predicting
the behaviour of purposeful man-machine systems; and OR workers are actively engaged in
applying this knowledge to practical problems in business, government and society”
— OR Society of America
This definition is not widely accepted and often criticized as it emphasizes on complex problems
and large systems indicating that OR can be used in highly technical and sophisticated
environment of large organizations.
In operations research, problems are broken down into basic components and then solved in
defined steps by mathematical analysis. Analytical methods used in OR include mathematical
logic, simulation, network analysis, queuing theory, and game theory.

1.2 Significance of Operations Research

The basic question that comes to the mind is what is the importance of OR. Is knowledge of OR
techniques really required? Can’t we do away with the OR techniques in our decision making
process?
The answer to all these questions is quite simple and lies in the understanding of the significance
of OR. We have to know about different OR techniques because of the following reasons.
 The problem may be complex for which normal guess does not work. Or techniques help
in arriving at a feasible solution to the problem that too with full analysis and research.
 The problem is very important and no lethargy on part of the decision-maker can be
entertained. In such a situation also, OR comes to rescue. OR methodologies are so detailed
and meticulous that even a little scope for leaving a point unattended is unaffordable.

 The problem is new and no precedence exists to facilitate logical and intelligent decision
making of the problem. In this situation, OR comes to the rescue of analysts and the reason
for this is that OR has a large pool of techniques that aid to solve even new and unthought-
of problems.
 The problem is repetitive and a model may be developed to enhance faster and better
decisions. Again OR helps like nothing else to aid the analysts in such a situation by
offering either a readymade model, or a readymade process to develop such a model and
pacify the decision making process.

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