in the 7th ed. OR book we will find that operations research has had an impressive impact on improving the efficiency of numerous organizations around the world. In the process, OR has made a significant contribution to increasing the productivity of the economies of various countries. There now are a few dozen member countries in the International Federation of operational Research Societies (IFORS), with each country having a national OR society. Both Europe and Asia have federations of OR societies to coordinate holding international conferences and publishing international journals in those continents. Or you may declare your own OR's group. :D
It appears that the impact of OR will continue to grow. For example, according to the U.S. Bureau of Labor Statistics, OR currently is one of the fastest-growing career areas for U.S. college graduates. To give you a better notion of the wide applicability of OR, we list some actual award winning applications in Table 1.1. Note the diversity of organizations and applications in the first two columns. The curious reader can find a complete article describing each application in the January-February issue of Interfaces for the year cited in the third column of the table. The fourth column lists the chapters in this book that describe the kinds of OR techniques that were used in the application. (Note that many of the applications combine a variety of techniques.) The last column indicates that these applications typically resulted in annual savings in the millions (or even tens of millions) of dollars. Furthermore, additional benefits not recorded in the table (e.g., improved service to customers and better managerial control) sometimes were considered to be even more important than these financial benefits. (You will have an opportunity to investigate these less tangible benefits further in Probs. 1.3-1 (/*wocoen bukune ning 7th eds) and 1.3-2.) Although most routine OR studies provide considerably more modest benefits than these award-winning applications, the figures in the rightmost column of Table 1.1 do accurately reflect the dramatic impact that large, well-designed OR studies occasionally can have. We will briefly describe some of these applications in the next chapter, and then we present two in greater detail as case studies in Sec. 3.5
It appears that the impact of OR will continue to grow. For example, according to the U.S. Bureau of Labor Statistics, OR currently is one of the fastest-growing career areas for U.S. college graduates. To give you a better notion of the wide applicability of OR, we list some actual award winning applications in Table 1.1. Note the diversity of organizations and applications in the first two columns. The curious reader can find a complete article describing each application in the January-February issue of Interfaces for the year cited in the third column of the table. The fourth column lists the chapters in this book that describe the kinds of OR techniques that were used in the application. (Note that many of the applications combine a variety of techniques.) The last column indicates that these applications typically resulted in annual savings in the millions (or even tens of millions) of dollars. Furthermore, additional benefits not recorded in the table (e.g., improved service to customers and better managerial control) sometimes were considered to be even more important than these financial benefits. (You will have an opportunity to investigate these less tangible benefits further in Probs. 1.3-1 (/*wocoen bukune ning 7th eds) and 1.3-2.) Although most routine OR studies provide considerably more modest benefits than these award-winning applications, the figures in the rightmost column of Table 1.1 do accurately reflect the dramatic impact that large, well-designed OR studies occasionally can have. We will briefly describe some of these applications in the next chapter, and then we present two in greater detail as case studies in Sec. 3.5
Label: masbeg impact
As its name implies, operations research involves "research on operations." Thus, operations research is applied to problems that concern how to conduct and coordinate the operations (i.e., the activities) within an organization. The nature of the organization is essentially immaterial, and, in fact, OR has been applied extensively in such diverse areas as manufacturing, transportation, construction, telecommunications, financial planning, health care, the military, and public services, to name just a few. Therefore, the breadth of application is unusually wide.
The research part of the name means that operations research uses an approach that resembles the way research is conducted in established scientific fields. To a considerable extent, the scientific method is used to investigate the problem of concern. (In fact, the term management science sometimes is used as a synonym for operations research.) In particular, the process begins by carefully observing and formulating the problem, including gathering all relevant data. The next step is to construct a scientific (typically mathematical) model that attempts to abstract the essence of the real problem. It is then hypothesized that this model is a sufficiently precise representation of the essential features of the situation that the conclusions (solutions) obtained from the model are also valid for the real problem. Next, suitable experiments are conducted to test this hypothesis, modify it as needed, and eventually verify some form of the hypothesis. (This step is frequently referred to as model validation.) Thus, in a certain sense, operations research involves creative scientific research into the fundamental properties of operations. However, there is more to it than this. Specifically, OR is also concerned with the practical management of the organization. Therefore, to be successful, OR must also provide positive, understandable conclusions to the decision maker(s) when they are needed. Still another characteristic of OR is its broad viewpoint. As implied in the preceding section, OR adopts an organizational point of view. Thus, it attempts to resolve the conflicts of interest among the components of the organization in a way that is best for the organization as a whole. This does not imply that the study of each problem must give explicit consideration to all aspects of the organization; rather, the objectives being sought must be consistent with those of the overall organization.
An additional characteristic is that OR frequently attempts to find a best solution (referred to as an optimal solution) for the problem under consideration. (We say a best instead of the best solution because there may be multiple solutions tied as best.) Rather than simply improving the status quo, the goal is to identify a best possible course of action. Although it must be interpreted carefully in terms of the practical needs of management, this "search for optimality" is an important theme in OR. All these characteristics lead quite naturally to still another one. It is evident that no single individual should be expected to be an expert on all the many aspects of OR work or the problems typically considered; this would require a group of individuals having diverse backgrounds and skills. Therefore, when a full-fledged OR study of a new problem is undertaken, it is usually necessary to use a team approach. Such an OR team typically needs to include individuals who collectively are highly trained in mathematics, statistics and probability theory, economics, business administration, computer science, engineering and the physical sciences, the behavioral sciences, and the special techniques of OR. The team also needs to have the necessary experience and variety of skills to give appropriate consideration to the many ramifications of the problem throughout the organization.
The research part of the name means that operations research uses an approach that resembles the way research is conducted in established scientific fields. To a considerable extent, the scientific method is used to investigate the problem of concern. (In fact, the term management science sometimes is used as a synonym for operations research.) In particular, the process begins by carefully observing and formulating the problem, including gathering all relevant data. The next step is to construct a scientific (typically mathematical) model that attempts to abstract the essence of the real problem. It is then hypothesized that this model is a sufficiently precise representation of the essential features of the situation that the conclusions (solutions) obtained from the model are also valid for the real problem. Next, suitable experiments are conducted to test this hypothesis, modify it as needed, and eventually verify some form of the hypothesis. (This step is frequently referred to as model validation.) Thus, in a certain sense, operations research involves creative scientific research into the fundamental properties of operations. However, there is more to it than this. Specifically, OR is also concerned with the practical management of the organization. Therefore, to be successful, OR must also provide positive, understandable conclusions to the decision maker(s) when they are needed. Still another characteristic of OR is its broad viewpoint. As implied in the preceding section, OR adopts an organizational point of view. Thus, it attempts to resolve the conflicts of interest among the components of the organization in a way that is best for the organization as a whole. This does not imply that the study of each problem must give explicit consideration to all aspects of the organization; rather, the objectives being sought must be consistent with those of the overall organization.
An additional characteristic is that OR frequently attempts to find a best solution (referred to as an optimal solution) for the problem under consideration. (We say a best instead of the best solution because there may be multiple solutions tied as best.) Rather than simply improving the status quo, the goal is to identify a best possible course of action. Although it must be interpreted carefully in terms of the practical needs of management, this "search for optimality" is an important theme in OR. All these characteristics lead quite naturally to still another one. It is evident that no single individual should be expected to be an expert on all the many aspects of OR work or the problems typically considered; this would require a group of individuals having diverse backgrounds and skills. Therefore, when a full-fledged OR study of a new problem is undertaken, it is usually necessary to use a team approach. Such an OR team typically needs to include individuals who collectively are highly trained in mathematics, statistics and probability theory, economics, business administration, computer science, engineering and the physical sciences, the behavioral sciences, and the special techniques of OR. The team also needs to have the necessary experience and variety of skills to give appropriate consideration to the many ramifications of the problem throughout the organization.
Label: tribute to pak Pratik
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