Application of Operation Research

7/28/2019 Application of Operation Research

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OPERATION

RESEARCH

SUBMITTED BY-

Pryash Singh

MASTERS OF FASHION

MANAGEMENT

SEMISTER-II

NATIONAL INSTITUTE OF FASHION

TECHNOLOGY

NEW DELHI

APPLICATIONS,

ADVANTAGES

& LIMITATIONS OF

O.R



theory. In addition to this, game theory and simulation can also be used

to find solutions .

APPLICATIONS OF OPERATIONS RESEARCH

The optimization techniques of Operations Research can be used to solve

various real life problems.

1. Defence application:

Defence requires precision and accuracy. Hence it requires scientific

decision making techniques.

Techniques like shortest path problems, scheduling algorithms,

allocation techniques can be used in defence forces.

Basically formulation of OR started from USA army, so it has wideapplication in the areas such as:

development of new technology, optimization of cost and time, tender

evaluation, setting and layouts of defence projects, assessment of “Threat

analysis”, strategy of battle, effective maintenance and replacement of

equipment, inventory control, transportation and supply depots etc.

2. Industrial applications:

An industry or an organization has to manage four areas:Production, marketing, personnel and finance.

Let us see various operational problems that can be applied to these

four areas:

a) Production:

Linear programming for overall production planning

Integer programming for in-depth scheduling

Network based techniques for event management

Inventory control techniques for organizing material arrival and

departure

Replacement analysis for equipment condition study

Queuing theory for deciding on buffer units

b) Marketing:



Linear programming for product mix problems

For EXAMPLE- advertisement planning

Game theory for tender decisions

Distance network related techniques for transportation of items

c) Personnel:

Linear programming for manpower allocation

Queuing theory for scale of maintenance team required

Scheduling techniques for planning workers

For Example-

Stitching of different parts in sequence to make up a garment

d) Finance:

Integer programming for budgetary planning

Linear programming for break-even analysis

Integer programming for investment options selection

3. Applications in public system:

Operations research can also be employed in public services for more

efficient and scientific approach to the system. Techniques like goal

programming for management policy making and integer

programming for funding can be used. Public enterprises like postal

services can use techniques like vehicle scheduling & manpower planning. Banks need queuing theory for finalizing the number of

counters required. The also need goal programming for banking policy

formulation.

Maintenance or construction works like managing highways requires

integer programming for zeroing in on the optimum project and

finalizing the best contractor for the same, who could implement the

project in the optimum way adhering to all standards. The also need

integer programming for preparing traffic system. Similarly railwaysalso need integer/linear programming but for different requirements



like cargo loading. The need scheduling techniques for traffic plan,

queuing theory for number of platforms required. The same applies for

airways too. It needs various techniques for simulating the air traffic

and runway design.

Scope of OR is not only confined to any specific agency like defence services

but today it is widely used in all industrial organizations. It can be used to

find the best solution to any problem be it simple or complex. It is useful in

every field of human activities, where optimization of resources is required in

the best way. Thus, it attempts to resolve the conflicts of interest among the

components of organization in a way that is best for the organization as a

whole. The main fields where OR is extensively used are given below, however,

this list is not exhaustive but only illustrative.

(i) National Planning and Budgeting

OR is used for the preparation of Five Year Plans, annual budgets, forecasting

of income and expenditure, scheduling of major projects of national

importance, estimation of GNP, GDP, population, employment and generation

of agriculture yields etc.

(ii) Services & Government

Operation Research (OR) applications can bring benefits in many areas inServices & Government, such as:

Employee Training

The personnel manager of an airline company must decide how many new

flight attendants to hire and train during a certain period. Each flight

attendant can only work up to a certain number of hours a month. Trainees

require a training before they can be put on a flight as regular flight

attendants. During this time a trainee is available for a limited number of

hours a month. Due to limited training capacity, there is a maximum number

of new trainees each month. Throughout the year, flight attendants quit their jobs for a variety of reasons.

(iii) Industrial Establishment and Private Sector Units

OR can be effectively used in plant location and setting finance planning,

product and process planning, facility planning and construction, production

planning and control, purchasing, maintenance management

and personnel management etc. to name a few.

(iv) R & D and Engineering



Research and development being the heart of technological growth, OR has

wide scope for and can be applied in technology forecasting and evaluation,

technology and project management, preparation of tender and negotiation,

value engineering, work/method study and so on.

(v) Business Management and Competition

OR can help in taking business decisions under risk and uncertainty, capital

investment and returns, business strategy formation, optimum advertisement

outlay, optimum sales force and their distribution, market survey and

analysis and market research techniques etc.

(vi) Agriculture and Irrigation

In the area of agriculture and irrigation also OR can be useful for project

management, construction of major dams at minimum cost, optimumallocation of supply and collection points for fertilizer/seeds and agriculture

outputs and optimum mix of fertilizers for better yield.

(vii) Education and Training

OR can be used for obtaining optimum number of schools with their locations,

optimum mix of students/teacher student ratio, optimum financial outlay

and other relevant information in training of graduates to meet out the

national requirements.

(viii) Transportation

Transportation models of OR can be applied to real life problems to forecast

public transport requirements, optimum routing, forecasting of income and

expenses, project management for railways, railway network distribution, etc.

In the same way it can be useful in the field of communication.

For EXAMPLE-

• School bus routing problem: The objective of the scheduling is to

obtain a bus loading pattern such that the number of routes isminimized, the total distance travelled by all buses is kept at minimum,

no bus is overloaded and the time required to traverse any route does

not exceed a maximum allowed policy.

(ix) Home Management and Budgeting

OR can be effectively used for control of expenses to maximize savings, time

management, work study methods for all related works. Investment of

surplus budget, appropriate insurance of life and properties and estimate of

depreciation and optimum premium of insurance etc.



DAILY LIFE APPLICATIONS

• In our daily life problems, operations research can be used to arrive at solutions. Let us take the case of determining the best possible option to

reach office. With the help of network optimization we can easily arrive

at the best solution out of the available options.

• Now let us consider the packing of a bag before a trip. We can use

heuristics method, where the big clothes are placed first and then small

things are used to fill the gaps. This will help us to reduce the size of the

bag that we need to carry.

• In the case of preparing for a marriage function, we can make use of

Gantt charts to schedule the various activities to be completed. We candivide the days remaining and allocate time to complete specific

activities such as inviting relatives, purchase, reserving the auditorium,

making arrangements for the reception etc. The Gantt chart can be

used in many other occasions such as preparing for examinations,

interviews etc.

• Another instance when operations research can be used is the buffet

event. We can make use of the queuing theory and arrange the table in

such a way that guests can take food from both the sides. This will

reduce the waiting time by half.• Thus different methods associated with operations research can be

used in our daily life situations to find the optimal solution without

incurring much expense. It reduces cost, effort, time and energy in

finding solutions with conventional methods.

PRACTICAL APPLICATION OF O.R



LIMITATIONS OF OPERATIONS RESEARCH

OR has some limitations however, these are related to the problem of model

building and the time and money factors involved in application rather then

its practical utility.Some of them are as follows:

(i) Magnitude of Computation. Operations research models try to find out

optimal solution taking into account all the factors. These factors are

enormous and expressing them in quantity and establishing relationships

among these require voluminous calculations which can be handled by

computers.

(ii) Non-Quantifiable Factors. OR provides solution only when all elementsrelated to a problem can be quantified. All relevant variables do not lend

themselves to quantification. Factors which cannot be quantified, find no

place in OR study. Models in OR do not take into account qualititative factors

or emotional factors which may be quite important.

(iii) Distance between User and Analyst. OR being specialist’s job requires

a mathematician or statistician, who might not be aware of the business

problems. Similarly, a manager fails to understand the complex working of

OR. Thus there is a gap between the two. Management itself may offer a lot of resistance due to conventional thinking.

(iv) Time and Money Costs. When basic data are subjected to frequent

changes, incorporating them into the OR models is a costly proposition.

Moreover, a fairly good solution at present may be more desirable than a

perfect OR solution available after sometime. The computational time

increases depending upon the size of the problem and accuracy of results

desired.

(v) Implementation. Implementation of any decision is a delicate task. It

must take into account the complexities of human relations and behaviour.

Sometimes, resistance is offered due to psychological factors which may not

have any bearing on the problem as well as its solution.



THE ADVANTAGES OF OPERATIONS RESEARCH

The role, importance or advantages of Operations Research (OR) are:-

Picture or Image depicting the Advantages of Operations Research (OR).

1. EFFECTIVE DECISIONS

Operations Research (OR) helps the managers to take better and quicker

decisions. It increases the number of alternatives. It helps the managers to

evaluate the risk and results of all the alternative decisions. So, OR makes the

decisions more effective.

2. BETTER COORDINATION

Operations Research (OR) helps to coordinate all the decisions of the

organization. It coordinates all the decisions taken by the different levels of

management and the various departments of the organisation. For e.g. It

coordinates the decisions taken by the production department with thedecisions taken by the marketing department.



3. FACILITATES CONTROL

Operations Research (OR) helps the manager to control his subordinates. It

helps the manager to decide which work is most important. The manager

does the most important work himself, and he delegates the less important

work to his subordinates.

Operations Research (OR) helps a manager to fix standards for all the work.

It helps him to measure the performance of the subordinates. It helps the

manager to find out and correct the deviations (difference) in the performance. So, OR facilitates control.

4. IMPROVES PRODUCTIVITY

Operations Research (OR) helps to improve the productivity of the

organisation. It helps to decide about the selection, location and size of the

factories, warehouses, etc. It helps in inventory control. It helps in production

planning and control. It also helps in manpower planning. OR is used in

expansion, modernisation, installation of technology, etc. OR uses many

different mathematical and statistical techniques to improve productivity.

Simulation is used by many organisations to improve their productivity. That is, they try out many productions improvement techniques on a small scale. If

these techniques are successful then they are used on a large scale.

Application of Operation Research

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