Or ch1

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Operations Research by

FUAD MUSTEFA

INTRODUCTION to OPERATIONS RESEARCH

CHAPTER I

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INTRODUCTION

The difficulty in life is the choice. Good decision-making brings about a better life. A bad decision may force you to make another one. A good decision is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives. One must appreciate the difference between a decision and an objective. A good decision is the process of optimally achieving a given objective.

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INTRODUCTION CONT…

Business Science focuses on the formal model-driven decision support techniques such as mathematical programs for optimization, and decision tree analysis for risky decisions.Critical decisions are those that cannot and must not be wrong. Decision-making is a complicated process. This complication arises from the fact that your present goal (including wants, resources, and abilities) dictates your choices; however, your choices will change your goals. This influential-cycle keeps the decision-maker busy all the time.

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Historical development of OR

1903:- development of the concept of scientific management by F.W. Taylor.

1913:- Time and motion study by F.B. Gilbrteth

1914:- EOQ/EPQ concepts/formula by Hans

1919:- queuing theory by Erlang

1931:- statistic sampling by Dr.Walter Shewhart

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Historical development of OR cont…

1935:- work sampling technique by Tipper

1940-1945:- world war II development like formation of OR teams

1945:- Post war period: Development of PERT/CPM

1950:- OR society was formed for the first time in USA

1957:- international federation of OR society

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Historical development of OR

Factors behind the rapid development in the use and development of operations research approach.

The economic and industrial boom after World War II Resulted in continuous mechanization, Automation, Decentralization of operations and decisions of management functions.

Many operations researchers continued their research after war. Analytic power was made available by high-speed computers.

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DEFINITION of OR"Operational Research is the application of the methods of science to complex problems arising in the direction and management of large systems of men, machines, materials and money in industry, business, government and defense. OR Society of U.K. defines"OR is concerned with scientifically deciding how to best design and operate man-machine systems, usually under conditions requiring the allocation of scarce resources“ OR Society of America

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Nature and significance of operations research

The operation research approach is particularly useful in balancing conflicting objectives where there are many alternative courses of action available to the decision maker. In a theoretical sense, the optimum decision (global optimum) must be one that is best for the organization as a whole.OR is concerned with providing the decision maker with decision aids (or rules) derived from:

A total system orientationScientific methods of investigation, andModels of reality, generally based on quantitative measurement and techniques

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Feature of operations research

Interdisciplinary Approach

Methodological approach

Holistic Approach

Objectivistic Approach

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Models and modeling in OR

The approximation or abstraction, maintaining only

the essential elements of the system, which may be

constructed with various forms by establishing

relationships among specified variables and

parameters of the system, is called a model.

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Models CONT…

Models attempt to describe the essence of a solution or activity by abstracting from reality so the decision maker can study the relationship among relevant variables in isolation.A model is constructed to analyze and understand the given system for the purpose of improving its performance.

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There are many ways to classify models.

•Descriptive

•Predictive

•Normative /prescriptive models

Function •I

conic

•Analog

•Symbolic

Structure

•Certainty

•Conflict Risk

•Uncertainty

Degree of certainty

•Static

•Dynamic

Time reference

•Statistical

•Heuristic

•Simulation

Quantitative

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Classification based on structure:

Physical (icon) model

Analogue Models:

Symbolic

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What is operations research?What are the Factors behind the rapid development in the use and development of operations research approach? What is the reason to say optimization model prescriptive model?

Question

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1. What is the need of learning or for you?2. What is operations research?3. What are the Factors behind the rapid

development in the use and development of operations research approach.

Question