OPERATION RESEARCH

MERVE GUL2010503028

CONTEXT:

• What is O.R. ?

• History of Operation Research

• Necessity of O.R.

• The Basic Tools Used in O.R.

• The Seven Steps To A Good OR Analysis

• Applications of O.R.

• First Establisment of O.R.

What is O.R. ?

Operations research (O.R.) is the discipline of applying advanced analytical methods to help make better desicions.

HISTORY of O.R.

Scientific approach to management principles was put forward by Frederick Taylor in the early 1900s.

Necessity of O.R.

After The Industrial Revolution, different sections like manufacture, marketing, financing occured in industrial enterprises. Approaches of problems between these sections and finding better solutions caused the evolution of OR.

BASIC PROPERTIES OF O.R.

• USE THE SYSTEM APPROACH

• IS AN INTERDISCIPLINARY APPROACH

• USE OF SCIENTIFIC METHODS

THE SEVEN STEPS TO A GOOD OR ANALYSIS :

OR ANALYSIS

1) IDENTIFY THE PROBLEM OR OPPORTUNITY

2) UNDERSTAND THE SYSTEM

3) FORMULATE A MATHEMATICAL MODEL

4) VERIFY THE PROBLEM

5) SELECT THE BEST ALTERNATIVE

7) IMPLEMENT AND EVALUATE

6) PRESENT THE RESULTSOF THE ANALYSIS

1) IDENTIFY THE PROBLEM OR OPPORTUNITY

• WHAT ARE THE OBJECTIVES ?

• IS THE PROPOSED PROBLEM TOO NARROW ?

• IS IT TOO BROAD ?

2) UNDERSTAND THE SYSTEM

• WHAT DATA SHOULD BE COLLECTED ?

• HOW WILL DATA BE COLLECTED ?

• HOW DO DIFFERENT COMPONENTS OF THE SYSTEM INTERACT WITH EACH OTHER ?

3) FORMULATE A MATHEMATICAL MODEL

• WHAT KIND OF MODELS SHOULD BE USED ?

• IS THE MODEL ACCURATE ?

• IS THE MODEL TOO COMPLEX ?

4) VERIFY THE PROBLEM

• DO OUTPUTS MATCH CURRENT OBSERVATIONS FOR CURRENT INPUTS ?

• ARE OUTPUTS REASONABLE ?

• COULD THE MODEL BE ERRONEOUS ?

5) SELECT THE BEST ALTERNATIVES

• WHAT IF THERE ARE CONFLICTING OBJECTIVES ?

• INHERENTLY THE MOST DIFFICULT STEP.

• THIS IS WHERE SOFTWARE TOOLS WILL HELP US !!

6) PRESENT THE RESULTS OF THE ANALYSIS

• THE OUTPUTS OF THE MODEL DO FIT WITHIN THE OUTPUT FROM THE SYSTEM ITSELF ?

• ARE THE OUTPUTS OF THE MODEL REASONABLE ?

• THE MODEL MAY BE WRONG ?

7) IMPLEMENTATION AND EVALUATE

• Users must be trained on the new system.

• System must be observed over time to ensure it works properly.

APPLICATIONS OF O.R.

•TRANSPORTATION and TRAVEL

OR techniques are used by airlines and rail companies to offer varying fares and make higher revenues by filling more seats at different prices - an OR technique known as Yield Management. All airlines depend on the effective use of OR techniques to make them operate at a profit.

•RETAILING

In supermarkets, data from store loyalty card schemes is analyzed by OR groups to advise on merchandising policies and profitability improvement. OR methods are also used to decide when and where new store developments should be made.

•HEALTH

Hospital managers use OR to make decisions such as determining the optimal utilization of operating rooms and personnel, assessing the risks posed by patients with various medical conditions, and deciding necessary levels of perishable medicine in stock.

•FINANCIAL SERVICES

OR practitioners address issues such as portfolio and risk management, planning and analysis of customer service. They are widely employed in Credit Risk Management—a vital area for lenders needing to ensure that they find the optimum balance of risk and revenue.

•GOVERNMENT

OR is a key contributor in modernizing government services and making them more efficient. Some OR applications include modeling the impact of performance related paying for teachers, evaluating government call-centers, projecting the size of the prison population, and national defense.

THE FIRST ESTABLISMENT OF O.R.

• The first operations research organization founded in 1952 in the United States has been ORSSA(The Operational Research Society of America).

• The first team of operation research in our country was founded in 1965, TUBITAK.

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