Overview:

Operations research often shortened to the initialism OR, is a discipline that deals with the
development and application of analytical methods to improve decision-making. The term
management science is occasionally used as a synonym.

Employing techniques from other mathematical sciences, such as modeling, statistics, and
optimization, operations research arrives at optimal or near-optimal solutions to decision-making
problems. Because of its emphasis on practical applications, operations research has
overlapped with many other disciplines, notably industrial engineering. Operations research is
often concerned with determining the extreme values of some real-world objective: the
maximum (of profit, performance, or yield) or minimum (of loss, risk, or cost). Originating in
military efforts before World War II, its techniques have grown to concern problems in a variety
of industries.
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History of Operations Research:

In the decades after the two world wars, the tools of operations research were more
widely applied to problems in business, industry, and society. Since that time,
operational research has expanded into a field widely used in industries ranging from
petrochemicals to airlines, finance, logistics, and government, moving to a focus on the
development of mathematical models that can be used to analyse and optimize
sometimes complex systems, and has become an area of active academic and
industrial research.
Operation Research is a relatively new discipline. Whereas 70 years ago it would
have been possible to study mathematics, physics or engineering (for example) at
university it would not have been possible to study Operation Research, indeed the term
O.R. did not exist then. It was really only in the late 1930's that operational research
began in a systematic fashion, and it started in the UK.
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Defination :
Operations research is a scientific discipline that involves using mathematics and
analytical principles to aid problem-solving and decision-making for organizations.

Stages of Development of Operations Research:

The operations research process involves considering the different aspects of a

specific problem individually and solving them using a defined set of steps. These steps
may include:

1. Identifying a problem that needs solving: The first step involves determining the
problem that requires solving, whether it's an internal or external problem.
 2. Determining the constraints: After identifying the problem, it's necessary to
determine the constraints or limitations that are necessary for the solution to
include.
3. Constructing a model based on the problem: After identifying the variables
involved, it's possible to develop a cohesive mathematical model based on that
specific problem that also accounts for the constraints.
4. Incorporating data into the model: To create solutions, it's useful to incorporate
each additional piece of relevant data into the model.
5. Testing each potential solution: After developing a set of solutions, it's
beneficial to use the model to analyze the success of each solution and
determine which is the most effective.
6. Implementing the solution: The final step in the process involves implementing
the solution within the organization and reevaluating it to ensure that it solves the
problem adequately.

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Operations Research Tools and Techniques:

Operations Research uses any suitable tools or techniques available. The

common frequently used tools/techniques are mathematical procedures, cost analysis,
electronic computation. However, operations researchers given special importance to
the development and the use of techniques like linear programming, game theory,
decision theory, queuing theory, inventory models and simulation. In addition to the
above techniques, some other common tools are non-linear programming, integer
programming, dynamic programming, sequencing theory, Markov process, network
scheduling (PERT/CPM), symbolic Model, information theory, and value theory.

Application of Operations Research:

Today, almost all fields of business and government utilizing the benefits of
Operations Research. There are voluminous of applications of Operations Research.
Although it is not feasible to cover all applications of O.R. in brief. The following are the
abbreviated set of typical operations research applications to show how widely these
techniques are used today:

Accounting:

Assigning audit teams effectively

Credit policy analysis
Cash flow planning
Developing standard costs
Establishing costs for byproducts
Planning of delinquent account strategy

Construction:
Project scheduling, monitoring and control
Determination of proper work force
Deployment of work force
Allocation of resources to projects
Facilities Planning:
Factory location and size decision
Estimation of number of facilities required
Hospital planning
International logistic system design
Transportation loading and unloading
Warehouse location decision

Finance:
Building cash management models
Allocating capital among various alternatives
Building financial planning models
Investment analysis
Portfolio analysis
Dividend policy making

Manufacturing:
Inventory control
Marketing balance projection
Production scheduling
Production smoothing

Marketing:
Advertising budget allocation
Product introduction timing
Selection of Product mix
Deciding most effective packaging alternative
Organizational Behavior / Human Resources:
Personnel planning
Recruitment of employees
Skill balancing
Training program scheduling
Designing organizational structure more effectively

Purchasing:
Optimal buying
Optimal reordering
Materials transfer
Research and Development:
R & D Projects control
R & D Budget allocation
Planning of Product introduction

Limitations of Operations Research:

Operations Research has number of applications; similarly it also has certain limitations.
These limitations are mostly related to the model building and money and time factors
problems involved in its application. Some of them are as given below:

i) Distance between O.R. specialist and Manager:

Operations Researchers job needs a mathematician or statistician, who might not be
aware of the business problems. Similarly, a manager is unable to understand
thecomplex nature of Operations Research. Thus there is a big gap between the two
personnel.

ii) Magnitude of Calculations:

The aim of the O.R. is to find out optimal solution taking into consideration all the
factors. In this modern world these factors are enormous and expressing them in
quantitative model and establishing relationships among these require voluminous
calculations, which can be handled only by machines.

iii) Money and Time Costs

The basic data are subjected to frequent changes, incorporating these changes into the
operations research models is very expensive. However, a fairly good solution at
present may be more desirable than a perfect operations research solution available in
future or after some time.

iv) Non-quantifiable Factors

When all the factors related to a problem can be quantifiable only then operations
research provides solution otherwise not. The non-quantifiable factors are not
incorporated in O.R. models. Importantly O.R. models do not take into account
emotional factors or qualitative factors.

v) Implementation
Once the decision has been taken it should be implemented. The implementation of
decisions is a delicate task. This task must take into account the complexities of human
relations and behavior and in some times only the psychological factors.