Module 1 By Babasab Patil

Operations research is the application of the

methods of science to complex problems in the direction and management of large systems of men, machines, materials and money in industry, business, government and defence. The distinctive approach is to develop a scientific model of the system incorporating measurements of factors such as chance and risk, With which to predict and compare the outcomes of alternatives decisions, strategies or controls. The purpose is to help management in determining its policy and actions scientifically

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 Used by statisticians, administrators, politicians,

and the technicians working in team to solve the problem In agriculture-optimum allocation of land and water from the available resources In finance-to maximise per capita income with min resources, profitable planning for the country, to determine the best replacement policies In industry-optimum allocation of resources like 4m

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 In marketing-to decide the products for sale in which

place ,to select the best advertising, what to purchase and when and from whom In personnel management-to appoint most suitable person on minimum salary, to determine the base age for retirement In production management-to find out number and size of the items to be produced, in scheduling and sequencing, to select, locate, and design the sites for production In LIC-to decide the premium rates, to distribute the profits among the polices
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 Too expensive to create a complex model based on the

model Some times data are subject to frequent changes and thus modification of model is very costly Some times OR specialist become too much enamored with the model they have built and forget that their model does not represent the real world problem Many OR models are complex in nature which can not be solved with out using the computer Also solutions obtained from theses models are difficult to explain to the managers Magnitude of computation involved, and psychological issues in implementation are some of the short comings of operations research
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 Interdisciplinary approach-team work through having

individuals having different specialisations to analyse the problem in that particular field to get an appropriate solution Scientific approach-scientific methods, techniques, and tools to solve the problem. Holistic approach-while arriving at a decision an operations research team examines the relative importance of conflicting and multiple objectives and the validity of claims of various depts of the organisation from the perspective of the whole org Objective oriented approach-optimal solution is sought under analysis.a measure of desirability or effectiveness is defined , based on the objective of the org and then compared with the alternative course of action with respect to their outcomes
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 There are 3 phases of the scientific method on which OR approach is based a) Judgment phase-the phase includes 1. Identification of the real life problem 2. Selection of appropriate objective and the values of various variables related to this obj 3. Application of the appropriate scale of measurement i.e. deciding the measure of

effectiveness 4. Formulation of an appropriate model of the problem, abstracting the essential information, so that the solution can be obtained
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b.

Research phase-largest and longest among two phases. the phase includes Observation and data collection for the better understanding of the problem Formulation of hypothesis and model Observation and experimentation to test the hypothesis on the basis of additional data Analysis of the available information and verification of the hypothesis using pre-established measures of desirability Prediction of various results from the hypothesis Generalisation of the result and consideration of Alternative methods

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c.

Action phase-the phase consisting of making recommendations for implementing the decision by an individual who is in the position to implement results. The individual must be aware of the envt in which the problem occurred, objective, assumptions, and omissions of the model of the problem

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 Formulation of the problem Construction of the model Deriving the solution from the model Validity of the model Establishing the control over the solution Implementation of the final result

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