Operations_Research

OPERATIONS RESEARCH INTRODUCTION Operations research also referred to as decision science, or management science is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations. In contrast, many other science and engineering disciplines focus on technology giving secondary considerations to its use. Operations research is a branch of applied mathematics that finds optimal solutions to complex problems using an interdisciplinary approach. Such problems include profit maximization, manufacturing optimization or minimum (of loss, risk, or cost) of some real-world objective. Operations research is closely related to industrial engineering. Originating in military efforts before World War II, its techniques have grown to concern problems in a variety of industries. ORIGINS It is said that in 1832, English mathematician Charles Babbage published his book “On the Economy of Machinery and Manufacture,” which was the first work known as operations research. The work was rooted on his travels to many industrial facilities in order to understand the manufacturing process. He observed that high skilled workers often the work often performed by lower skilled workers. He suggested that low skilled laborers be available to perform those tasks to reduce labor costs. British experimental physicist Patrick Blackett was another founder of operations research. During WWII he served as the Director of Operations Research under the British naval command. His team made recommendations on armor placement on RAF aircraft. Blackett and his team also determined that the size of warship convoys could be optimized to protect merchant ships. His team eventually found that the probability of detection did not vary significantly with convoy size therefore making large convoys more efficient. During WWII, close to one thousand men and women in Britain were engaged in operational research. About two hundred operational research scientists worked for the British Army. After WWII, operational research was no longer limited to only operational, but was extended to encompass equipment procurement, training, logistics and infrastructure. APPLICATIONS In the decades after the war, the techniques began to be applied more widely to problems in business, industry and society. Since that time, operational research has expanded into a field widely used in industries ranging from petrochemicals to airlines, finance, logistics, and government, moving to a focus on the development of mathematical models that can be used to analyze and optimize complex systems, and has become an area of active academic and industrial research. One example of Operations Research applied was at Proctor and Gamble (P&G). Proctor and Gamble used predictive modeling to help human resources managers understand the impact of a rapid increase in the number of mid-level managers in the research and development business unit. The model revealed that P&G would have to slow down the promotion rate of managers promoted into the mid-level management ranks in order to keep everything in balance. Besides its use of operations research in traditional operations areas such as inventory control, P&G is using operations research in the non-traditional areas such as human resources and marketing. Proctor and Gamble won the Informs Award in 2004 for its integration of operations research principles into the decision making structure of the company. STRENGTHS AND WEAKNESSES Operations research has some advantages in that it allows for better control, better systems, better decisions and better coordination for a company or organization. In terms of better control, an operations research approach provides managers of a company to have analytical and quantitative basis to identify problem areas. An example in this area deals with production scheduling and inventory replenishment. In terms of better systems, an operations research approach can be initiated to analyze a particular problem of decision making such as best location for factories, whether to open a new warehouse, etc. It also helps in selecting economical means of transportation, jobs sequencing, production scheduling, and replacement of old machinery. In terms of making better decisions, operations research helps to improve decision making and reduce the risk of making erroneous decisions. Operations research gives the manager an improved insight into how he or she makes decisions. In terms of better coordination for a company, operations research planning models help in coordinating different divisions of a company for example. There are limitations to operations research however. Operations research is dependent on the computer. Finding the optimal solution taking into account all the factors and expressing them in quantity and establishing relationships takes enormous calculations that can only be performed by a computer. Another limitation to operations research is that operations research techniques only give a solution when all the elements to the problem can be quantified. Not all relevant variables lend themselves to quantification. Another limitation of operations research is the existing gap between the manager and the research analyst. Because the two skills are very different, each is usually unaware of the intricacies the other person’s job. Additionally it costs money and time to make changes to an operations research model. It’s often better to obtain a more desirable solution than to obtain a perfect solution. Lastly, a weakness of operations research is the delicate task of implementing the results. It must take into account the complexities of human relations and behaviors. FUTURE When Professor Lee Schruben, former chair of Industrial Engineering and Operations Research at UC Berkeley was asked how he saw the role of operations research in business changing over the next ten years, he responded “I’m hoping that managers become much more knowledgeable about analytics and operations research. I see the educations of new MBAs focusing much more on business analysis. MBAs need to be able to ask the right questions and develop a systematic way of thinking about problems.” According to David Boland, the new trend in management philosophy has to consider implementing operations research at the start of an innovation, before management has learned to grapple with the complexities. The challenge would be to decide how operational research would be involved, and what the practitioners need to do to prepare themselves. In a contrasting opinion, Russell Ackoff, Silberberg Professor of Systems Sciences, University of Pennsylvania believes that American Operations Research is dead even though it has yet to be buried. He also thought that there was little chance for its resurrection because of the little understanding of the reason for its demise. This view was from a 1979 article. AS A CAREER According to the Bureau of Labor and Statistics, anyone interested in a career as an Operations Research Analyst should have strong quantitative skills and computer skills. Individuals with a Masters Degree or PhD in Operations Research or Management Science should have excellent employment opportunities. Employment in the occupation of Operations Research Analysts is projected to increase approximately 22% from 63,000 in 2008 to 76,900 by 2018. The job outlook is projected to grow much faster than average and the prospects exist in almost every industry because of the diversity of applications for the work. The best opportunities exist in management, scientific, and technical consulting firms. Median annual wages of operations research analysts were $69K in 2008 with the highest salary at more than $118K. The average annual salary of an Operations Research Analyst for the US Government is approximately $107K.