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Learning objective
After completing this chapter, students should be able to :
 Understand operation research or management science

 Know the importance and advantages of OR

 Familiarize with model and how models used in

OR/managements science

 Identify decision making process

 Familiarize with operation research approaches to problem

solving.

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Course Introduction Chapter One : introduction to OR

OPERATIONS RESEARCH/ MANAGEMENT SCIENCE, HISTORY OF OPERATIONS RESEARCH
 in essence is a branch of especially applied mathematics, used to Operations Research is a ‘war baby’. It is because, the
provide a scientific base for management to take timely and first problem attempted to solve in a systematic way was
effective decisions to their problems.
concerned with how to set the time fuse bomb to be
 It tries to avoid the dangers from taking decisions merely by
dropped from an aircraft onto a submarine.
guessing or by using thumb rules.
 In fact the main origin of Operations Research was during the
 Management is the multidimensional and dynamic concept. It is
multidimensional, because management problems and their World War II
solutions have consequences in several dimensions, such as  At the time of World War II , the military management in
human, economic, social and political fields. England invited a team of scientists& engineers to study the
 Hence, any manager, while making decisions, considers all aspects strategic and tactical problems related to air and land defense of
in addition to economic aspect, so that his/her solution should be the country.
useful in all aspects - Deployment of radar
- Management of convoy, bombing, antisubmarine, and mining operations
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Chapter One: Introduction to OR

The problem attained importance because at that time • To make profitable decisions, managers have to integrate (within the
constraint of time and other resources):
the resources available with England was very limited
and the objective was to win the war with available
meager resources.

The resources such as food, medicines, ammunition,

manpower etc., were required to manage war and for
the use of the population of the country.

It was necessary to decide upon the most effective

utilization of the available resources to achieve the How? Using Quantitative Techniques
objective.
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Optimization is Everywhere
An optimization problem  Personal choices
Given a collection of numbers, partition them into two groups • best career choices,
such that the difference in the sums is as small as possible.
• best use of our time
• Example: 7, 10, 13, 17, 20, 22 • best strategies,
• These numbers sum to 89
• best value for the dollar
I can split them into {7, 10, 13, 17} sum is 47  Company choices
{20, 22} sum is 42
• maximize value to shareholders
Difference = 5. • determine optimal mix of products or services
• Can we do better?
• minimize production costs
• Then, what is optimization? • minimize cost of getting product to customers
Operations research deals wit optimization problems
• maximize value of advertising
Optimization- the action of making the best or most
effective use of a situation or resources. • hire the best workers

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Chapter One : Introduction to OR

 Operations Research is a systematic analysis of a problem through scientific methods,
carried out by appropriate specialists, working together as a team, constituted at the
instance of management for the purpose of finding an optimum and the most appropriate
solution, to meet the given objective under a given set of constraints.

 Key points
From the concept and definition given above, Operations Research is:
 The application of scientific methods, techniques and tools to find an optimal solution
to a problem.
 A management tool in the hands of a manager to take a decision
 A scientific approach to decision making process
 An “applied research” aims at finding a solution for an immediate problem facing a
society, industry or a business enterprise .This is not “fundamental research”
 A decision-oriented research, using scientific methods, for providing management a
quantitative basis for taking decision regarding operations under its control
 Applied decision theory uses scientific, mathematical and logical means to take
decisions.

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Chapter One: Introduction to OR

Why do we (managers) need operations research or
quantitative techniques? The Five functions of Operations Research
Managers need to use quantitative techniques:  Objective: helps managers to make objective decision
 To make meaningful management decisions.  Scientific approach: helps decision makers to follow scientific
 To distil alternatives/different approaches/methods to choose the best one.
approach to solve managerial problems
 To arrive at optimal or nearly optimal solutions for a problem or problems.
 To optimization (maximizing profit or minimizing costs).  Inter disciplinary team work: it allows for team work
 In a modern business organization, to make scientifically supported and  Digital computers: over reliance on scientific calculators and
reliable decisions.
other computing machines
 To simplify the reality of an increasingly complex business environment and
make decisions easily, faster and more accurately.
 Decision making: helps decision makers to solve managerial
problems
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Chapter One: Introduction to OR Chapter One: Introduction to OR

Decision Making Problem is any variation between what was planned and
Making appropriate decision is the most vital aspect in management. what is actually have/produced.
Problem solving can be defined as the process of
Every one of us takes a number of decisions every day. identifying a difference between some actual and some
Some are important; some are trivial.
desired states of affairs and then taking action to
Some decisions initiate a set of activities;
some put an end to a certain activities.
resolve the difference.
Decision making defined as the process of selecting or
In business environment right decisions at the right times ensure choosing based on some criteria, the best alternative
success.This shows the importance of decision making. among alternatives. It requires for all human being
because each of us make decision every day in our life.
Decision making is necessary when there is a problem. Thus, decision making is universal. Decision making is a
rational selection among alternatives.
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Chapter One: Introduction to OR Chapter One: Introduction to OR

The Decision Making Process: Steps in rational decision making process: Model
1. Identify and define the problem: Problem is a necessary condition for  Model is an abstraction of a reality. It is a simplified and often an
a decision. i.e.:There would be no need for decisions if problems did not exist.
idealized representation of real objects/situations.
2. Determine the set of alternative solutions.
3. Determine the criteria to evaluate alternatives: (Identifying those
characteristics that are important for making the decision)
 By its very nature a model is incomplete.
4. Analyze the alternatives: (The advantages and disadvantages of each
alternative)  A good model will capture the important details of reality without
5. Select the best alternative: (Select the best alternative that suits to including innumerable minor details that would obscure rather
solve our decision problem. In selecting the best alternative, factors such as than illuminate
risk, timing and limiting factors should be considered adequately)
6. Implement the solution: (Putting the decision into action)  Models can be classified in the following ways:
7. Establishing a control and evaluation system: ( Ongoing actions
need to be monitored, following the decision, evaluate the results and
determine if a satisfactory solution
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Chapter One: Introduction to OR Chapter One: Introduction to OR

A. Physical (iconic) Model B. Analogue Models:
 Iconic models are the least abstract; they are physical models that  They are also physical models but they are more abstract than
look like the reality. iconic models.
 Instead of replicating physical appearance as iconic models do, these
 It is also called Static Model. It is given in two or three models substitute some physical analogy for important aspects of
dimensions. It is a representation of the real object as it is. the reality.
 It may show the relationship between an independent variable
(input) with that of a dependent variable (output). It is two
Example:
dimensional
Model of an airplane
Example:
Photograph of a machine
Histogram
Layout drawing of a factory
Frequency table
Glob
Cause-effect diagram
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Unit One: Introduction to OR Unit One: Introduction to OR

C. Mathematical Models (Symbolic Models)
 These are the most abstract models. The approach in OR is quite similar to the
scientific approach commonly used in the
 They incorporate numbers, letters and algebraic symbols to represent physical sciences.
important aspects of a problem often in equation form.

 Here a set of relations is represented in the form of mathematical equations, Both involve a logical sequence that includes
using symbols to represent various parameters. careful definition of the problem use of models
and analysis leading to solution of the problem.
Example:
Max Z=3000x1 +2500x2
Subject to:
2x1+x2 < 40 Diagrammatically
x1+3x2 < 45
x1 < 12
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….. The End…..

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