RICHA KOTHARI

OPERATIONS RESEARCH MANAGEMENT

ESSAY ON NATURE OF OPERATIONS RESEARCH

Definations
OR is a scientific method of providing executive departments with a quantitative basis for decisions regarding the operations under their control. Morse & Kimball Operations research is a scientific approach to problem solving for executive management. H.M. Wagner Operations research is an aid for the executive in making this decisions by providing him with the needed quantitative information based on the scientific method of analysis. C. Kittel

Nature of OR
Inter-disciplinary team approach Systems approach Helpful in improving the quality of solution Scientific method Goal oriented optimum solution Use of models Require willing executives Reduces complexity Renders great help in optimum resource allocation Facilitates the process of decision making Management can know the reactions of the integrated business systems Helps a lot in the preparation of future managers

Some problems that can be analyzed by operations research approach are classified as follows:
1. Finance, Budgeting and Investments: Credit policy analysis

Cash flow analysis Dividend policies Investment portfolios 2. Marketing: Product selection, timing, etc. Advertising media, budget allocation Number of salesman required Selection of product mix 3. Purchasing, Procurement and Exploration: Optimal buying and reordering Replacement policies 4. Production Management: Location and size of warehouses, factories, retail outlets, etc. Distribution policy Loading and unloading facilities for trucks, etc. Production scheduling Optimum product mix Project scheduling and allocation of resources 5. Personnel Management: Selection of suitable personnel Recruitment of employees Assignment of jobs Skills balancing 6. Research and Development: Project selection Control of R&D projects Reliability and alternative design

Summary
O.R. is a relatively new academic discipline. It has its origin in World War II and soon became very popular throughout the world. Developing appropriate mathematical models for situations, processes, and systems is the basic essence of O.R. study. Linear programming, dynamic programming, game theory, simulation, etc. are some of the models & techniques that are used in O.R. There is role for O.R.in almost all areas of business decisions.