Approaches and Phases of Operations Research (OR) in Decision Making
Introduction
Operations Research (OR) provides a logical and systematic approach to decision-making. The approaches, phases and process study must also be quite logical and systematic. Instead of making decisions based on guesswork or intuition, OR uses facts, data, mathematical models, and scientific analysis to find the best possible solution.
Different Operations Research textbooks describe the OR process in different ways. One commonly used approach explains the OR study through six important steps. These steps help decision-makers understand a problem, develop a suitable solution, test its effectiveness, and finally implement it successfully.
There are six important steps in the operation research study, but in all, each and every step does not necessarily follow the logical order as below:
Simple OR Process
Observe → Define → Develop Model → Collect Data → Test Solution → Implement Solution
Although these steps are presented in a logical sequence, in practice an OR team may move back and forth between them whenever necessary. For example, if new information becomes available, the model may need to be modified before the final solution is implemented.
Step 1: Observing the Problem Environment
The first step in an Operations Research study is to observe the environment in which the problem exists. Before trying to solve a problem, it is important to understand the current situation clearly. This step includes activities like conferences, site visits, research, observation etc. These activities give sufficient information and support to define the problem.
During this stage, the OR team gathers preliminary information through activities such as:
- Site visits
- Observation
- Meetings and discussions
- Interviews with managers and employees
- Studying reports and records
- Preliminary research
The purpose of this step is to understand the nature of the problem and collect enough information to define it correctly.
Example
A manufacturing company notices that its transportation cost has increased over the last six months. Before suggesting any solution, the OR team visits different warehouses, studies transportation routes, and discusses the issue with managers.
ЁЯТбExam Tip:
A problem should never be solved before it is properly understood.
Step 2: Analysing and Defining the Problem
After observing the situation, the next step is to analyse and define the problem clearly.
In this step, the problem is defined, and the objectives and limitations of the study are stated in its context. The end results of this step are a clear grasp of the need for a solution and an understanding of its nature.
A well-defined problem is the foundation of a successful OR study. If the problem is defined incorrectly, the final solution may also be incorrect.
During this step, the OR team identifies:
- The actual problem
- The objectives of the study
- The limitations and constraints
- The scope of the study
At the end of this phase, everyone should have a clear understanding of what the problem is, why it exists, and what needs to be achieved.
Example
Instead of saying, "Transportation is expensive," the problem is defined more clearly as:
"How can transportation costs be minimized without affecting delivery time and customer service?"
ЁЯТбExam Tip:
A clearly defined problem leads to a more accurate and reliable solution.
Step 3: Deriving a Model
Once the problem has been clearly defined, the next step is to develop a mathematical model that represents the real-life or abstract situation.
OR models are basically mathematical models representing systems, processes or environments in form of equations, relationships or formulae. A mathematical model is a simplified representation of the actual system. It expresses the relationships between different variables using mathematical equations, formulas, or expressions.
The activities in this step are to define interrelationships among variables, formulate equations, use known OR models or searching suitable alternate models. The proposed model may be field-tested and modified in order to work under stated environmental constraints.
A typical OR model includes:
- Decision Variables – the unknown values to be determined.
- Objective Function – what needs to be maximized or minimized (such as profit or cost).
- Constraints – the limitations under which the solution must be found.
Sometimes, an existing OR model can be used. In other situations, a new model must be developed to suit the problem. If the model does not represent the real situation accurately, it can be modified before proceeding further. A model may also be modified if the management is not satisfied with the answer that it gives.
Example
A company wants to determine the number of products to manufacture in order to maximize profit while considering limited labour, machine hours, and raw materials.
ЁЯТб Exam Tip:
A mathematical model converts a real-world problem into a form that can be analysed scientifically.
Step 4: Selecting Appropriate Data Input
After developing the mathematical model, the next step is to collect and select the appropriate data required for the model. It is an established fact that without appropriate data the results of the OR models cannot be trusted. Hence, using the right kind of data is vital in OR.
The accuracy of an Operations Research study depends largely on the quality of the data used. Even the best mathematical model cannot produce reliable results if the input data are incorrect or incomplete. Therefore, selecting accurate and relevant data is one of the most important steps in OR.
Important activities in this step are analysing internal-external data and facts, collecting opinions and using computer data banks. The OR team collects information from various sources, such as:
- Company records and reports
- Internal and external databases
- Market surveys
- Expert opinions
- Historical data
- Computer information systems
The collected data are then carefully analysed and used to operate and test the mathematical model.
The purpose of this step is to have sufficient input to operate and test the models.
Example
Suppose a company wants to determine the best transportation route. The OR team collects data on transportation costs, travel distance, delivery time, fuel consumption, and customer demand before solving the model.
ЁЯТбExam Tip:
Reliable data produce reliable solutions. Incorrect data can lead to incorrect decisions.
Step 5: Providing a Solution and Testing Its Reasonableness
After collecting the required data, the mathematical model is solved to obtain the best (optimum) solution.
In this step, the solution to the problems is obtained with the help of the model and data input. Such a solution is not implemented immediately and this solution is used to test the model and to find its limitations if any.
However, the solution is not implemented immediately. First, it is tested to determine whether it is practical, realistic, and suitable for the actual situation.
If the solution is not reasonable or if the model is not behaving properly, updating and modification of the model are considered at this stage. The end result is that the solution that supports the current organization is objectives.
During this stage, the OR team checks:
- Whether the solution satisfies the objectives.
- Whether all constraints have been considered.
- Whether the solution is practical in real-life conditions.
- Whether the model accurately represents the actual system.
If the solution is found to be unreasonable or the model does not behave properly, the model is modified, additional data may be collected, and the problem is solved again.
The testing process continues until a satisfactory solution is obtained.
Example
A mathematical model suggests using only three delivery vehicles to reduce transportation costs. After testing, the company finds that customer deliveries become delayed. Therefore, the model is modified and solved again to obtain a more practical solution.
ЁЯТбExam Tip:
An OR solution should be both optimal and practical before implementation.
Step 6: Implementing the Solution
The final step in an Operations Research study is to implement the recommended solution. This is the last phase of the OR study.
After successful testing, the solution is put into practice within the organization.
Although OR provides a scientific solution, successful implementation often depends on people rather than mathematics.
In OR the decision-making is scientific but the implementation of decision involves many behavioural issues. Therefore, the implementation authority has to resolve the behavioural issues, involving the workers and supervisors to avoid further conflicts. The gap between management and OR scientist may offer some resistance but must be eliminated before the solution is accepted in totality. Both parties should play a positive role since the implementation will help the organization as a whole.
Managers, supervisors, and employees must cooperate to ensure that the recommended solution is accepted and applied effectively.
A properly implemented solution obtained through OR techniques results in improved working conditions and wins management support.
Sometimes, employees may resist changes because they are accustomed to existing methods. Therefore, management should clearly explain the benefits of the new system, provide necessary training, and encourage cooperation among all members of the organization.
When the solution is implemented successfully, it can lead to:
- Better decision-making
- Reduced costs
- Improved efficiency
- Better utilization of resources
- Higher organizational performance
Example
After testing a new production schedule developed through OR, the company trains its employees and implements the new schedule. As a result, production increases and operating costs decrease.
ЁЯТбExam Tip:
A scientifically correct solution is valuable only when it is successfully implemented.
ЁЯУМ Key Points to Remember
- Operations Research follows a logical and systematic process for solving decision-making problems.
- Every step in the OR study is important and contributes to finding the optimum solution.
- The steps generally follow a logical order, but in practice they may be repeated or modified whenever necessary.
- A successful OR study depends on a properly defined problem, a suitable mathematical model, accurate data, careful testing, and effective implementation.
Conclusion
The Approaches and Phases of Operations Research in Decision Making provide a structured framework for solving complex organizational problems scientifically. The six-step process—observing the problem, defining it, developing a mathematical model, selecting appropriate data, testing the solution, and implementing the final solution—helps decision-makers reach reliable and effective decisions.
Although different authors may describe the OR process using different terms, the basic objective remains the same: to solve real-life problems scientifically and determine the optimum solution through the best use of available resources.
Understanding these six phases helps students build a strong foundation in Operations Research and prepares them to apply OR techniques in business, industry, engineering, healthcare, transportation, and many other fields.
Frequently Asked Questions (FAQs)
1. What are the approaches and phases of Operations Research?
The approaches and phases of Operations Research refer to the systematic steps followed to study a problem, develop a suitable model, obtain the optimum solution, and implement it effectively.
The approaches and phases of Operations Research are the systematic steps used to solve decision-making problems scientifically. They include:
- Observing the Problem Environment
- Analysing and Defining the Problem
- Deriving a Mathematical Model
- Selecting Appropriate Data Input
- Providing a Solution and Testing Its Reasonableness
- Implementing the Solution
2. Why are the approaches and phases of Operations Research important?
The approaches and phases of Operations Research help decision-makers solve problems in a logical and scientific manner. They ensure that decisions are based on facts, mathematical models, and data rather than guesswork.
3. What is the first step in the Operations Research process?
The first step is Observing the Problem Environment. In this step, the OR team studies the existing situation, gathers preliminary information, and understands the nature of the problem before attempting to solve it.
4. Why is problem definition important in Operations Research?
Problem definition is one of the most important steps in an OR study. A clearly defined problem helps in developing an appropriate mathematical model and obtaining the correct solution.
A clearly defined problem is the foundation of a successful OR study. If the problem is defined incorrectly, the mathematical model and the final solution may also be incorrect.
5. Why is a mathematical model used in Operations Research?
A mathematical model represents a real-life problem using mathematical equations and relationships. It helps analyse different alternatives and determine the optimum solution scientifically.
6. Why is data collection important in Operations Research?
The accuracy of an OR solution depends on the quality of the data used. Operations Research depends on accurate and reliable data. Good-quality data help produce accurate results, while incorrect or incomplete data can lead to poor decisions.
Therefore, only accurate, relevant, and reliable data should be collected before solving the mathematical model.
7. Why is the solution tested before implementation?
The solution is tested to ensure that it is practical, reliable, and suitable for real-life conditions. If necessary, the model is modified before the solution is implemented.
8. What is the final step in the Operations Research process?
The final step is Implementing the Solution. After the proposed solution has been tested and found satisfactory, it is implemented in the organization. In this stage, the recommended solution is put into practice, monitored, and supported by managers and employees to achieve the desired objectives.
9. Do all Operations Research studies follow these six steps in the same order?
Not always. Although the six steps are arranged in a logical sequence, an OR team may return to an earlier step whenever new information becomes available or changes are required in the model or solution.
10. What is the main objective of the approaches and phases of Operations Research?
The main objective is to solve complex decision-making problems scientifically and determine the optimum solution by making the best use of available resources.
References
Kanti Swarup, P. K. Gupta & Man Mohan, Operations Research, Sultan Chand & Sons.
J. K. Sharma, Operations Research: Theory and Applications, Macmillan India.
Hamdy A. Taha, Operations Research: An Introduction, Pearson Education.
Frederick S. Hillier & Gerald J. Lieberman, Introduction to Operations Research, McGraw-Hill Education.
H. M. Wagner, Principles of Operations Research, Prentice Hall.
Kanti Swarup, P. K. Gupta & Man Mohan, Operations Research, Sultan Chand & Sons.
J. K. Sharma, Operations Research: Theory and Applications, Macmillan India.
Hamdy A. Taha, Operations Research: An Introduction, Pearson Education.
Frederick S. Hillier & Gerald J. Lieberman, Introduction to Operations Research, McGraw-Hill Education.
H. M. Wagner, Principles of Operations Research, Prentice Hall.
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