Question

Applications of operational research in organisation

Answer 1

Applications of Operation Research:

Operation research is a problem solving and decision taking technique. It is considered a kit of scientific and programmable rules which provides the management a “quantitative basis” for decisions.

Some areas of management where Operation research techniques have been successfully utilized are as following

1. Allocation and Distribution in Projects:

Optimal allocation of resources such as men materials machines, time and money to projects.

Determination and deployment of proper workforce.

Project scheduling, monitoring and control.

2. Production and Facilities Planning:

Factory size and location decision.

Estimation of number of facilities required.

Preparation of forecasts for the various inventory items and computation of economic order quantities and reorder levels.

Scheduling and sequencing of production runs by proper allocation of machines.

Transportation loading and unloading,

Warehouse location decision.

Maintenance policy decisions.

Programmes Decisions:

What, when and how to purchase to minimize procurement cost.

Bidding and replacement policies.

4. Marketing:

Advertising budget allocation.

Product introduction timing.

Selection of advertising media.

Selection of product mix.

Customer’s preference of size, colour and packaging of various products.

5. Organization Behaviour:

Selection of personnel, determination of retirement age and skills.

Recruitment policies and assignment of jobs.

Scheduling of training programs.

6. Finance:

Capital requirements, cash flow analysis.

Credit policies, credit risks etc.

Investment decision.

Profit plan for the company.

7. Research and Development:

Product introduction planning.

Control of R&D projects.

Determination of areas for research and development.

Selection of projects and preparation of their budgets.

Reliability and control of development projects thus it may be concluded that operation research can be widely utilized in management decisions and can also be used as corrective measure.

Operation research technique “unique applications” are used in our day-to-day decision makings. However when the data is numerically driven / sampled , most optimal decisions are made.