Operational Research is a systematic and analytical approach
to decision making and problem solving.
O.R. is an Branch of applied mathematics that uses
techniques and statistics to arrive at Optimal solutions to solve
It is typically concerned with determining the maximum
profit, sale, output, crops yield and efficiency And minimum losses,
risks, cost, and time of some objective function.
Some of the PRIMARY TOOLS used by operation
STATISTICS GAME THEORY
PROBABILITY THEORY, etc.
What is Operations Research
Operations Research is the application of analytical
methods designed to help the decision makers choose
between various courses of action available to accomplish
• Thus, the nature of operations research is purely scientific as it aims at
determining the systematic behaviour and hence optimizing the results.
• The scope and applications of operations research empower decision-
making in those business aspects where there is a larger concern of
allocation of scarce resources especially like capital, investment, labour,
Characteristics of Operations Research
Optimization : The objective of Operations Research is to provide
better performance in any given situation. The process of doing this
involves a lot of data collection and analysis of possible outcomes. The
process of optimization involves a critical analysis of all the available
options and selecting the highly relevant ones.
Simulation: Before you move on with selected options or methods to
improve the overall result, you must be sure that the selected method
is going to be beneficial. This part is ensured by the process of
Probability and Statistics: Mathematical algorithms are the best way
to evaluate potential risks and predict the possible outcomes
beforehand. Thus, Operation Research involves intensive use of
statistical and mathematical approach to cover all the circumstances.
Phases of Operation Research
There are three phases in an operation research study –
1. Judgement phase:
1. Determining the operation and objectives
2. It also includes determining the effectiveness of different steps, the type of problem, its origin and the
causes behind it.
2. Research phase:
1. Formulating the hypothesis and models
2. Next step is analyzing the information collected and verifying the hypothesis.
3. The last step in this phase is the production and generation of results and considering all the other
3. Action phase:
1. Giving recommendations for the solution to the problem including the assumptions, scope, limitations
and other alternatives.
2. Lastly, the solution has to be put to work.
Where is Operation Research Used?
Research and Development i. Areas of concentration for R&D
ii. Reliability and alternate decisions
iii. Determination of time-cost trade-off and control of development projects
Personnel Management i. Mixes of age and skills
ii. Recruiting policies
iii. Job assignments
Production Management i. Physical distribution: Location and size of warehouses, distribution centers and retail outlets,
ii. ii. Facilities Planning: Number and location of factories, warehouses etc. Loading and unloading
iii. Manufacturing: Production scheduling and sequencing stabilization of production, employment,
layoffs, and optimum product mix
iv. Maintenance policies, crew size
v. Project scheduling and allocation of resources
Purchasing i. Buying policies, varying prices,
ii. Determination of quantities and timing of purchases,
iii. Bidding policies
iv. Replacement policies
v. Exploitation of new material resources
Finance and Banking i. Product selection, competitive actions,
ii. Number of salesmen, frequencies of calling on
iii. Advertising strategies with respect to cost and time