MB0048-Unit-01

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Program : MBA

Semester : II

Subject Code : MB0048

Subject Name :Operation Research

Unit number : 1

Unit Title :Introduction to Operation Research

Lecture Number : 1

Lecture Title : Uses of Operation Research

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Operation Research

Objectives :

• Identify the scope of Operation Research• List the significant features of Operation Research• Analyze the different Phases of Operation Research• Describe the methodology of Operations Research• Define the structure of a mathematical model in Operations Research• Describe the significance of the function of Operations Research

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Unit-1 Introduction to OR

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Lecture Outline

• Introduction

• Scope to Operation Research

• Features of OR

• Phases of OR

• Types of OR models

• OR methodology

• OR techniques & tools

• Structure of Mathematical model

• Limitations of OR

• Summary

• Check Your Learning

• Activity

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Introduction

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In simple situations, you use your common sense and judgment to take decisions. For Example,“I had to wait all morning in hospital"Great pressure on consultant time coupled with some patients who don't always keep their appointment times can cause real problems for hospitals. But by using OR, appointment systems have been designed that substantially reduce waiting times whilst keeping highly qualified medical staff fully occupied.

Historical Background:

After World War II, Operations Research techniques were developed and deployed in the decision making process in complicated situations in various fields, such as industrial, academic and government organizations.

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Definitions of operations research

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The application of scientific methods, techniques and tools to operation of a system with optimum solutions to the problems”, where 'optimum' refers to the best possible alternative-Churchman, Aackoff and Aruoff The most comprehensive and modern definition of operation research can be summarized below:

OR is the application of modern methods of mathematical science to complex problems involving management of large system men, machines, material & money in industry, business, government & defence. The distinctive approach is to develop a scientific model of the system incorporating measurement of factors such as chance & Risk to predict & compare the outcomes of alternate decisions, strategies or controls.

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Scope of Operation Research

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Any problem, simple or complicated, can use OR techniques to find the best possible solution. This section will explain the scope of OR by seeing its application in various fields of everyday life.

i)In defence: In defence analysis, operations research uses statistics and mathematics to optimize the use of a weaponii)In industry: The business environment is always changing and any decision useful at one time may not be so good some time later. There is always a need to check the validity of decisions continuously against the situations.iii)In planning: In modern times, it has become necessary for every government to have careful planning, for economic development of the country. OR techniques can be fruitfully applied to maximize the per capita income, with minimum sacrifice and time. iv)In Agriculture: With increase in population, there is a need to increase agriculture output. But this cannot be done arbitrarily. There are several restrictions. Hence the need to determine a course of action serving the best under the given restrictions. You can solve this problem by applying OR techniques.

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Scope of Operation Research

v) In Hospitals: OR methods can solve waiting problems in out-patient department of big hospitals and administrative problems of the hospital organizations.

vi) In Transport: You can apply different OR methods to regulate the arrival of trains and processing times minimize the passengers waiting time and reduce congestion, formulate suitable transportation policy, thereby reducing the costs and time of trans-shipment.

vii) In Research & Development: You can apply OR methodologies in the field of R&D for several purposes, such as to control and plan product introductions.

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Features of Operation Research

• OR is system oriented. OR scrutinizes the problem from an

organization’s perspective. The results can be optimal for one part of

the system, while the same can be unfavourable for another part of the

system.

• OR imbibes an inter–disciplinary team approach. Since no single

individual can have a thorough knowledge of all fast developing

scientific know-how, personalities from different scientific and

managerial cadre form a team to solve the problem.

• OR makes use of scientific methods to solve problems.

• OR increases effectiveness of the management’s decision-making

ability.

• OR makes use of computers to solve large and complex problems.

• OR offers a quantitative solution.

• OR also takes into account the human factors.

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Phases of OR

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Types of OR models

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OR methodology

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OR techniques & Tools

The different techniques and tools used in OR are as follows:

Linear programming

Inventory control methods

Goal programming

Queuing model

Transportation model

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Structure of Mathematical Model

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Limitations of OR

• Magnitude of computation: Modern problems involve a large number of variables. The magnitude of computation makes it difficult to find the interrelationship.

• Intangible factors: Non – quantitative factors and human emotional factor cannot be taken into account.

• Communication gap: There is a wide gap between the expectations of managers and the aim of research professionals.

• Time and Money factors: When you subject the basic data to frequent changes then incorporation of them into OR models becomes a costly affair.

• Human Factor: Implementation of decisions involves human relations and behaviour.

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Summary

•The driving idea behind OR is to collaborate with clients to design and improve operations, make better decisions, solve problems, and advance managerial functions including policy formulation, planning, forecasting, and performance measurement. The goal of OR is to develop information to provide valuable insight and guidance.

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Check Your Learning

1. What is Iconic model?

Ans: Iconic models are primarily images of objects or systems,

represented on a smaller scale.

2. Give some examples for mathematical model?

Ans: Allocation, sequencing, and replacement models.

3. What are decision variables?

Ans: Decision variables are the unknowns, which you need to determine

from the solution of the model.

4. What do you know about objective function?

Ans: The objective function defines the measure of effectiveness of the

system as a mathematical function of its decision variables.

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Activity

1. Analyze how OR is useful in Hospitals & Industries with some

examples.

2. Check for the video to know about how exactly OR tools are useful in

the real life.

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http://www.bnet.com/2422-13950_23-178846.html)

Unit-1 Introduction to OR