MBA-H2040 Quantitative Techniques for Managers
QT for Managers Operation
Research Test Bank Notes
,MBA-H2040 Quantitative Techniques for Managers
UNIT I
1 INTRODUCTION TO OPERATIONS RESEARCH
1.1 Introduction
1.2 History of Operations
Research
1.3 Stages of Development of
LESSON STRUCTURE
Operations
Research
1.4 Relationship Between
Manager and
OR Specialist
1.5 OR Tools and Techniques
1.6 Applications of Operations
Research
1.7 Limitations of Operations
Research
1.8 Summary
1.9 Key Terms
1.10 Self Assessment Questions
1.11 Further References
,MBA-H2040 Quantitative Techniques for Managers
After Studying this lesson, you should be able to:
❖ Understand the meaning, purpose, and
tools of Operations Research
❖ Describe the history of Operations
Research
❖ Describe the Stages of O.R
❖ Explain the Applications of Operations
Research
❖ Describe the Limitations of Operation
Research
❖ Understand the OR specialist and
Manager relationship
Objectives
1.1 Introduction
The British/Europeans refer to "operational research", the Americans to "operations research" - but both
are often shortened to just "OR" - which is the term we will use.
Another term which is used for this field is "management science" ("MS"). The Americans
sometimes combine the terms OR and MS together and say "OR/MS" or "ORMS". Yet other terms
sometimes used are "industrial engineering" ("IE") and "decision science" ("DS"). In recent years there
has been a move towards a standardization upon a single term for the field, namely the term "OR".
Operation Research is a relatively new discipline. The contents and the boundaries of the OR are
not yet fixed. Therefore, to give a formal definition of the term Operations Research is a difficult task.
The OR starts when mathematical and quantitative techniques are used to substantiate the decision being
taken. The main activity of a manager is the decision making. In our daily life we make the decisions even
without noticing them. The decisions are taken simply by common sense, judgment and expertise without
using any mathematical or any other model in simple situations. But the decision we are concerned here
with are complex and heavily responsible. Examples are public transportation network planning in a city
having its own layout of factories, residential blocks or finding the appropriate product mix when there
exists a large number of products with different profit contributions and production requirement etc.
, MBA-H2040 Quantitative Techniques for Managers
Operations Research tools are not from any one discipline. Operations Research takes tools from
different discipline such as mathematics, statistics, economics, psychology, engineering etc. and combines
these tools to make a new set of knowledge for decision making. Today, O.R. became a professional
discipline which deals with the application of scientific methods for making decision, and especially to
the allocation of scarce resources. The main purpose of O.R. is to provide a rational basis for decisions
making in the absence of complete information, because the systems composed of human, machine, and
procedures may do not have complete information.
Operations Research can also be treated as science in the sense it describing, understanding and
predicting the systems behaviour, especially man-machine system. Thus O.R. specialists are involved in
three classical aspect of science, they are as follows:
i) Determining the systems behaviour ii) Analyzing the systems
behaviour by developing appropriate models iii) Predict the future
behaviour using these models
The emphasis on analysis of operations as a whole distinguishes the O.R. from other research and
engineering. O.R. is an interdisciplinary discipline which provided solutions to problems of military
operations during World War II, and also successful in other operations. Today business applications are
primarily concerned with O.R. analysis for the possible alternative actions. The business and industry
befitted from O.R. in the areas of inventory, reorder policies, optimum location and size of warehouses,
advertising policies, etc.
As stated earlier defining O.R. is a difficult task. The definitions stressed by various experts and
Societies on the subject together enable us to know what O.R. is, and what it does. They are as follows:
1. According to the Operational Research Society of Great Britain (OPERATIONAL RESEARCH
QUARTERLY, l3(3):282, l962), Operational Research is the attack of modern science on complex
problems arising in the direction and management of large systems of men, machines, materials
and money in industry, business, government and defense. Its distinctive approach is to develop a
scientific model of the system, incorporating measurements of factors such as change and risk,
with which to predict and compare the outcomes of alternative decisions, strategies or controls.
The purpose is to help management determine its policy and actions scientifically.
2. Randy Robinson stresses that Operations Research is the application of scientific methods to
improve the effectiveness of operations, decisions and management. By means such as analyzing
data, creating mathematical models and proposing innovative approaches, Operations Research
professionals develop scientifically based information that gives insight and guides
decisionmaking. They also develop related software, systems, services and products.
3. Morse and Kimball have stressed O.R. is a quantitative approach and described it as “ a scientific
method of providing executive departments with a quantitative basis for decisions regarding the
operations under their control”.
