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What Is Operation Research? - Importance and Application

Kumkum Tamang Oct 28, 2024 1K Reads

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During World War II (1939-1945), many resources were not available and scattered. For the allocation of insufficient resources, the British military brought together a group of scientists and they allocated the resources in the most effective way possible. It also started as a military operation in order to provide a sufficient amount of resources to the soldiers for better war results. The process of allocating resources can indeed be considered as a part of operations research.

After the World War was over, scientists who had been doing research on the allocation of resources made efforts to apply this new approach of operation research to civilian problems related to business, industry, research, development, etc. In this blog, we will understand operation research in modern life and its importance and applications as a whole. 

What is Operation Research?

In today's fast-paced and competitive business world, organizations are constantly seeking ways to optimize their operations maximize efficiency, and make informed decisions. Operation research basically works on solving complex issues and improving processes with the help of advanced analytical methods. 

Operation research is often known as the combination of mathematics, statistics, computer science, and decision-making techniques to tackle a wide range of organizational challenges. In operational research exploring different scenarios and knowing the potential impact of decisions on an organization's performance is crucial. The operational research team provides well-informed recommendations for an informed decision. 

In simple words, operation research is the application of a method of science to complex problems in the direction and management of a large system of men, machines, materials, and money in industry, business, and government. 

Nature of Operation Research 

Operation research (OR) is often concerned with finding the maximum or minimum of a real-world objective, such as profit, performance, yield, loss, risk, or cost. Here are a few natures of operation research;

Scientific Approach 

Operation research focuses on scientific and practical solutions for better results. The methods include mathematical analysis, scientific methods, analysis of models, etc. 

Problem-solving Outlook 

Operation research is all about making decisions, by solving complex problems, analytical thinking, and approaches altogether provide the correct decision. It also includes making decisions informed in all critical situations. 

Operation Management 

Management of systems and resources also comes under the nature of operation research. Allocating resources, tools, and services like transportation is crucial in the management of an organization in a professional manner.

Importance of Operations Research

Understanding the importance of operation research includes the understanding of the organizational way of working. Furthermore, we have thoroughly discussed the major importance of operation research.

OR Creates Implementable Solutions to Complex Business Challenges

Every business has multiple complex challenges that one can find impossible to solve. By applying operation research methods businesses can find a way of operating crucial assets and policies from the very start. 

Operational Research uses Data to Create Information

Operation research transforms normal data into valuable information that can help the company make informed decisions. Companies usually deal with a huge amount of data on a daily basis, and applying OR effectively will provide crucial information for growth. 

Improve Results/ Productivity 

The systematic implementation of work and tasks will automatically improve the quality and productivity of an organization. As the OR helps you manage time effectively without wasting it on unnecessary planning and work. 

Better Control

An organization generally includes different processes and operation research will help you in managing these various processes. With the help of operation research, you can control time investment according to the process needs and then utilize the remaining time in other important assets of the organization. 

Make Better Decisions for the Future of the Business

Operation research helps you find the best decision in your worst business conditions. The ways in which one can expand their businesses. It also provides you with the departmental needs and time distribution. 

Applications of Operations Research

Now let’s dig into the major applications of operation research:

Risk analysis

In operational research, risk management helps prevent, identify, and measure potential risks that can harm an organization in a negative way. It's better to develop a plan to reduce or mitigate the future risk. Risk analysis basically makes the organization prior of the losses or potential negative impact. 

Inventory analysis

Inventory analysis provides the exact data to the organization of how much business should be carried. In simple words, the term inventory refers to the physical stock of resources that need to be kept for a smooth and efficient process of the organization. It generally includes Mathematical programming, sustainability consideration, etc. 

Strategic planning

Strategic planning in operation research makes sure that the company never runs out of market trends, customer needs, and advanced technologies. Staying updated for continuous growth is crucial for any organization. Strategic planning mainly includes terms like technology, KPIs, Budget, projects, and tasks. 

Marketing research

Marketing research widely covers product management and operations research for business development and in making fine strategies.  

Operations Research Tools and Techniques

Operation research techniques include two methods that are thoroughly described below:

Mathematical techniques and Statistical techniques  

As the name itself shows the data will be given in numerical order only. Analyzing the data and then making an informed decision is certainly known as the mathematical technique in operation research. Some mathematical techniques for operation research are; linear programming, dynamic programming, network models, etc. 

On the other hand Statistical technique is most commonly used in probabilistic theories. As it usually helps organizations in great need of descriptive answers which may include probability. A few techniques of statistical techniques include regression, descriptive statistics, survey methodology, etc. 

Important Tools and Types of Operation Research

Linear Programming (LP)

It is a mathematical technique that will help you find the best and easy solutions to a complex problem. In any organization, it allocates resources with the help of linear programming.

Simulation

Simulation mainly focuses on finding solutions for decision-making problems. It is used for the improvement of safety, testing theories, and staff training. 

Inter Programming

This method involves the use of whole numbers. Inter programming method comes under mathematical technique. 

Game theory

Finding ways and making decisions in competitive situations comes under game theory. 

Challenges and Limitations of Operations Research

Challenges and limitations in operation research are as follows:

Data Quality and Availability

It helps in the success of analytical projects of an organization. It's required to have proper data quality and availability to make a project a great success. The way data is presented with all the accuracy available in teh system helps in the analysis and decision-making. 

Computational Limitations

It mainly includes limitations related to algorithm efficiency, computing resources, algorithm limits, and many more. There are a set of things that can be solved with teh help of machines and algorithms. 

Assumption Limitations

Incomplete information affects the most in operation research, as it is required to have complete information before making any crucial decisions. This may include prohibition of the information that is needed by an individual for better performance and suggestions for different decisions.

Assumptions of Rationality 

Humans make decisions mostly in two ways, emotionally and practically. It depends on the person's thought process, sometimes it may affect the decision process. It is well-proven that humans may be influenced by emotions, thinking, and behavior. That is why assumptions in operation research sometimes differ from each individual's point of view. 

Future of Operations Research 

If you're an individual wanting to have a dynamic future in the field of operation research, It also includes the wider range of opportunities operation research provides. One of the main reasons for the great future of operation research is the tendency of the subject to develop further in the field, for individuals of mathematical background they may invent some simpler or effective ways for the development of techniques other than existing ones.  

As you are already aware of the fact that how AI is taking over the jobs of many professionals but on the contrary it will help operate research to process large databases, identify patterns, and make assumptions for the failure or success of any analytical projects of an organization, that will eventually help with the decision-making process. 

Top Books on Operation Research

Operation research as a subject is a vast area to cover, and understanding it in a way that will boost your career is crucial. It is always considered a smart move to cover the basics first in order to master the whole concept. 

Here are some best books for operation research that thoroughly cover all the topics from basics to advanced levels. You will get to be aware of crucial terms such as near programming, transportation and assignment problems, game theory, inventory control, queuing theory, and many more. 

Top Books on Operation Research 

Book Name

Author 

Operations Research: An Introduction

Hamdy A. Taha (1976)

Introduction to Operations Research

Gerald J. Lieberman (1974)

Operations Research: Applications and Algorithms

Wayne L. Winston (1987)

Operations Research

Hamdy A. Taha (1971)

Approximate Dynamic Programming: Solving the Curses of Dimensionality

Powell Warren (2007)

Introduction to Management Science

Bernard W. Taylor (1977)

Scheduling: Theory, Algorithms, and Systems

Michael Pinedo (2002)

Introduction to Management Science

Bernard W. Taylor (1977)

Nonlinear Programming

Dimitri Bertsekas (1995)

Principles of Operations Research: With Applications to Managerial Decisions

Harvey M. Wagner (1967)

Conclusion 

Operation research is a perfect example of "Even in modern times, traditional remedies offer valuable solutions." Making a single team of scientists during World War II, now helping individuals and organizations solve complex issues and improve processes with the help of advanced analytical methods. This blog covers all the crucial topics of operation research for you to have a thorough knowledge of the concept.  

 

FAQs (Frequently Asked Questions)

Operation research is a method of working, that works in problem-solving and decision-making. It mostly covers areas like management, critical analysis, mathematical sciences, statistics, etc. It all started when the British army asked some scientists who knew about science to help them. These people worked together to find the best way to use the things they had (resources). 
 

One can use operation research in numerous ways, it can be used in many ways; 

  • In real-life situations
  • Solutions to complex business challenges
  • Creation of data for information
  • Increment of productivity  
  • Managing the management of an organization. 
     

Operation research is mainly known for solving complex problems in an organization. It generally depends on the technology, which also means that OR doesn't use any human element while solving issues. This sometimes ends up creating wrong decisions as well. The other two limitations are as follows; 

  • Data Quality and Availability
  • Computational Limitations
     

The research approach works in total 3 ways:

  • Quantitative- Numerical form of explaining the project includes prediction and management. 
  • Qualitative- Mainly work on data in the form of visuals, and inductive reasoning for the understanding of human behavior 
  • Mixed methods- Perfect mix of both quantitative and qualitative approaches.

Model in operation research simply represents the involvement of symbols and numeric digits that help in the representation of any situation. Models like this help in the solutions of complex problems related to science. 

Network analysis is a technique where it works mainly for:

  • Social interaction 
  • Spatial ecology 
  • Movement patterns 
  • Habitat use 
  • Intelligence analysis 
  • Fraud detection 

In operation research, network analysis is a branch of techniques related to analyzing tasks, resources, information, and many more. It mainly utilizes resources for the organizations in an organized manner
 

The term operation research was coined by MC Closky and Trefthen in 1940, he was from a small town, Bowdesy United Kingdom. It originated in the time of World War II when scientists, engineers, and military officers were organized into teams to solve strategic and complex problems related to resources and management. 

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By Kumkum Tamang

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