Operations Research- Introduction

What is Operations
•Research?
Enterprises typically consist of various units whose operations need to be
coordinated
– A typical problem: how to distribute resources across units so as to maximize
efficiency
• OR is the discipline of applying advanced analytical tools based on
mathematical models to help take better decisions in managing these
operations (thehttp://www.scienceofbetter.org
“science of better”)
Operations
The activities carried out in an organization.
Research
The process of observation and testing characterized by the scientific
method.
“Operations Research is a discipline that deals with the application
of analytical methods (optimization, statistics, algorithm) to help
make better decisions.” ----- INFORMS
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 Operations Research - History
OR is a relatively new discipline
Origins of OR in World War II
Radar control system: effective deployment
and operation of the new invention
Originally a detection range only 16 km, difficult
for effective use in air defense;
Using quantitative analysis of various data, the
British military OR team designed the effective
implementation of the man-machine radar control
system. Efficient deployment of the radar
(Today the maximum range of Air-Defense
Radar can exceed 300 miles )
Similarly O.R. was used for management of convoy and submarine operations
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 Operations Research - History
Post-war development of Operations Research
In UK: most of war time OR experts (physicists, engineers) returned to their
original lab, while some remained in particular industries (coal, steel) who continue
to advocate/promote the potential industrial applications of OR.
In US: OR spread to the universities/research institutes so that systematic training
in OR for future workers began,
Later, OR spread to commercial use.
• Industrial boom led to rapid increase in size of corporations – growing need for
systematic decision-making tools
• Managers began to realize both, the modeling power of LPs and OR tools, and
their potency in improving efficiency even under existing technology;
applications increased manifold
• Serendipitously, great advances were made in computational technology, which
allowed one to solve problems of ever-increasing size via OR tools 3
 Operations Research - Applications
• Today OR has is flourishing in business and industry particularly with
the aid of computer O.R. studied as a full or
• A half-century of research in OR has led to: part of some subject in
– very good theoretical understanding  Engineering
– Immense computing power available  Management (M.B.A.)
readily at low cost - Computers  Mathematics
– various software packages, being  Economics
available.
OR is everywhere – Areas of applications
 Military ICWA/CA (In old course)
 Facility planning  Some universities offer
 Finance
 Production Planning Master’s degree program
 Marketing
 Transportation Planning in I.E.O.R.
 E-business  Games
Some universities in U.S.
 System Design has I.E.O.R. department
 Telecommunications/Internet Princeton Uni. – O.R.F.E.
 Operations Management 4
 Operations Research - Definations
 Operations Research is “the use of mathematical models in providing guidelines
to managers for making effective decisions within the state of the current
information, or in seeking further information if current knowledge is
insufficient to reach a proper decision.”
• Operations research is a branch of mathematics concerned with the
application of scientific methods and techniques to decision making
problems and with establishing the best or optimal solutions.
• Operations Research (management science) is a scientific approach to decision making that
seeks to best design and operate a system, usually under conditions requiring the allocation
of scarce resources
• OR is the application of scientific methods, techniques and tools to problems involving the
operations of systems so as to provide those in control of the operations with optimum solutions to
the problems.
• OR is the application of the scientific method to the study of the operations
of large, complex organizations or activities.
• OR is the application of the scientific method to the analysis and solution of managerial
decision problems. 5
 Operations Research - Societies and Institutes
UK: The Operational Research Society https://www.theorsociety.com/
U.S.A. :  The Institute for OR and MS (INFORMS) https://www.informs.org
1. The largest and most influential institute in OR
2. Publisher of 14 academic journals including OR, MS, Interfaces..
3. Organizer of influential conferences for academics + professionals
4. Interfaces: many real-word cases with successful application of OR
5. The Franz Edelman Prize: outstanding examples of innovative use of OR/MS in
practice.
6. Various resources on OR education
https://www.youtube.com/user/INFORMSonline/playlists
O.R. Society of India: https://orsihq.org/
International: The International Federation of OR Societies https://www.ifors.org/
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Outstanding Personalities related to Operations research
Nobel Laureates related to Operations research ( Won Nobel prize in Economics )
The complete list with details on INFORMS web site
https://pubsonline.informs.org/authorportal/recognizing-excellence
https://www.informs.org/Recognizing-Excellence/Nobel-Laureates2
Few personalities - Outstanding contributions in O.R.

Richard E. Bellman John F. Nash

Andrey Markov Harold W. Kuhn Albert W. Tucker (1920 –1984) (1928 – 2015)
(1856 – 1922) George B. Dantzig (1925 – 2014) (1905 – 1995) Dynamic Nobel Laureates
Markov chains (1914–2005) Hungarian Method Game theory Programming Game theory
Queuing Theory N-L programming Book and Movie
Simplex
stochastic Karush–Kuhn–Tucker conditions based on his real life story
algorithm
processes Watch Movie“A Beautiful Mind”
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 Operations Research – Software Tools
Optimization and Operations Research Sites
https://homepages.rpi.edu/~mitchj/sites_or.html
List of optimization software
https://en.wikipedia.org/wiki/List_of_optimization_software
Free and open-source software for Operations Research and Industrial Engineering
http://www.rosemaryroad.org/brady/oss_ieor.html
The NEOS Server is a project to make the latest techniques in optimization widely available. You can
submit a problem in an appropriate framework, and request that a particular algorithm be used to solve the
problem. This is a service of the Optimization Technology Center at Argonne National Lab.
https://neos-server.org/neos/
AMPL – modelling language for large-scale linear, mixed integer and nonlinear optimization.
GAMS – General Algebraic Modeling System.
LINDO - (Linear, Interactive, and Discrete Optimizer) https://www.lindo.com/
Maple – linear, quadratic, and nonlinear, continuous and integer optimization. Constrained and unconstrained.
MATLAB – linear, integer, quadratic, and nonlinear problems with Optimization Toolbox;
Mathematica – large-scale multivariate constrained and unconstrained optimization.
CPLEX Gurobi TORA – by Hamdy A. Taha Book
Many specialized software e.g. Simulation, Inventory, Network analysis etc.
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 Operations Research – O.R. Methodology
Finding a proper balance between the level of
simplification of the model and the good
representation of reality.

Real-World • Recognition
• Definition of Formulation Mathematical
Problem
the Problem Model

Appropriate Analytical Solution Technique

(optimization algorithm)

• Results Interpretation
• Implementation • Model Verification Solution of the
• Model Validation
Supplying the results
•
Model
Sensitivity Analysis
to management 9
 Operation Research Process- Mathematical Modeling
• Mathematical Modeling
– A process that translates observed phenomena into mathematical ions
Models
• Deterministic – all parameters are
known with certainty.
• Probabilistic – some parameters
are values of random variables.

• Static – all data is known in

advance (before solution process).
• Dynamic – data can be changed
after solution is obtained.

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 Operations Research- Models
Deterministic Models Stochastic Models
• Deterministic – all parameters • Probabilistic – some parameters
are known with certainty. are values of random variables.

• Linear Programming • Discrete-Time Markov Chains

• Network Optimization • Continuous-Time Markov Chains
• Integer Programming • Queuing Theory (waiting lines)
• Nonlinear Programming
• Decision Analysis
• Inventory Models
• Game Theory
• Dynamic Programming
• Inventory Models
Etc.
• Dynamic Programming
• Simulation
Etc. 11