Page 9 - DCOM303_DMGT504_OPERATION_RESEARCH

Operations Research

Notes 3. Supply Chain Management: In the area of Supply Chain Management, OR helps in taking
decisions that include the who, what, when, and where abstractions from purchasing and
transporting raw materials and parts, through manufacturing actual products and goods,
and finally distributing and delivering the items to the customers.
The primary objective here is to reduce overall cost while processing customer orders
more efficiently than before. The power of utilizing OR methods allows examining a
rather complex and convoluted chain in a comprehensive manner, and to search among a
vast number of combinations for the resource optimization and allocation strategy that
seem most effective, and hence beneficial to the operation.

4. Retailing: In supermarkets, data from store loyalty card schemes is analyzed by OR groups
to advice on merchandising policies and profitability improvement.

OR methods are also used to decide when and where new store developments should be
made.

5. Financial Services: In financial markets, OR practitioners address issues such as portfolio
and risk management and planning and analysis of customer service. They are widely
employed in Credit Risk Management—a vital area for lenders needing to ensure that
they find the optimum balance of risk and revenue.

OR techniques are also applied in cash flow analysis and capital budgeting.
6. Marketing Management: OR helps marketing manager in making the apt selection of
product mix. It helps them in making optimum sales resource allocation and assignments.

7. Human Resource Management: OR techniques are being applied widely in the functional
area of Human Resource Management by helping the human resource managers in activities
like manpower planning, resource allocation, staffing and scheduling of training programs.
8. General Management: OR helps in designing Decision Support System and management
of information systems, organizational design and control, software process management
and Knowledge Management.
9. Production systems: The area of operations research that concentrates on real-world
operational problems is known as production systems. Production systems problems
may arise in settings that include, but are not limited to, manufacturing,
telecommunications, health-care delivery, facility location and layout, and staffing.
The area of production systems presents special challenges for operations researchers. Production
problems are operations research problems, hence solving them requires a solid foundation in
operations research fundamentals. Additionally, the solution of production systems problems
frequently draws on expertise in more than one of the primary areas of operations research,
implying that the successful production researcher cannot be one-dimensional.

Production systems problems cannot be solved without an in-depth understanding of the real
problem, since invoking assumptions that simplify the mathematical structure of the problem
may lead to an elegant solution for the wrong problem. Common sense and practical insight are
common attributes of successful production planners.

At the current time, the field of OR is extremely dynamic and ever evolving. To name a few of
the contemporary (primary) research projects, current work in, primarily through the integration
of the philosophies of the Theory of Constraints and Lean Manufacturing.

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