Scientific Method for Making Decisions in Operations Research
Introduction
Since the main objective of operation research is to provide better quantitative information for making decisions, now our aim is to learn how we can have better decisions. Instead of relying on intuition or guesswork, OR uses a systematic scientific method to analyze problems and recommend the most appropriate solution.
In simple words,
The main objective of Operations Research is to provide managers with accurate and scientific information so that they can make better decisions.
In other words, OR does not make decisions itself. It only assists the decision-maker by providing the best possible solution based on scientific analysis.
What is the Scientific Method for Making Decisions in Operations Research?
The Scientific Method in Operations Research is a systematic approach used to make better decisions through careful analysis, observation, mathematical modelling, and implementation of solutions.
Rather than making decisions based on personal opinions or assumptions, OR follows a structured process that collects facts, analyzes data, evaluates alternatives, and recommends the most suitable solution.
Phases of the Scientific Method for Making Decisions in Operations Research
The scientific method in Operations Research for making decisions generally involves the following three main phases:
- Judgment Phase,
- Research Phase, and
- Action Phase.
Each phase plays an important role in solving decision-making problems logically and effectively. Each phase is explained below.
Phase I: Judgment Phase
The Judgment Phase is the planning and problem-identification stage. Before applying mathematical techniques, managers must clearly understand the problem and define what they want to achieve.
This phase includes the following activities:
(i) Determination of Operation
The first step is to identify the operation or activity that requires improvement.
For example:
- Production
- Transportation
- Inventory Control
- Marketing
- Finance
Real-Life Example
A manufacturing company finds that its production cost has increased. Therefore, it decides to study its production operation.
(ii) Determination of Objectives
After identifying the operation, the organization defines its objective.
The objective may be:
- Maximize profit
- Minimize cost
- Reduce waiting time
- Increase production
- Improve customer service
Real-Life Example
A company decides that its objective is to maximize profit without increasing production costs.
(iii) Determination of the Effectiveness of Measures
The next step is to decide how success will be measured.
Some common measures are:
- Maximum profit
- Minimum cost
- Minimum delivery time
- Maximum production
- Highest customer satisfaction
These measures help determine whether the final solution is effective.
Real-Life Example
If the objective is to reduce transportation expenses, then minimum transportation cost becomes the measure of effectiveness.
(iv) Formulation of the problems relative to the objectives
Finally, the problem is clearly defined so that it can be studied scientifically.
A properly formulated problem makes it easier to collect data and develop an appropriate mathematical model.
Real-Life Example
A factory formulates the problem as:
"How many units of Product A and Product B should be produced to maximize profit using the available labour and raw materials?"
ЁЯТб Exam Tip
The Judgment Phase focuses on understanding the problem before attempting to solve it. This phase includes (i) Determination of operation (ii) Determination of objectives (iii) Determination of the effectiveness of measures (iv) Lastly, the formulation of the problems relative to the objectives.
Phase II: Research Phase
Once the problem has been clearly defined, the next step is to conduct research and analyze the problem scientifically.
This phase involves collecting data, developing mathematical models, testing assumptions, and predicting possible outcomes.
(i) Observation and Data Collection for a better understanding of the problem.
Relevant information is collected to understand the problem accurately.
The data may include:
- Production records
- Sales reports
- Labour availability
- Machine capacity
- Transportation cost
- Customer demand
Real-Life Example
A logistics company collects data on delivery routes, fuel costs, travel time, and customer locations before planning an optimized delivery schedule.
(ii) Formulation of relevant Hypotheses and Models.
Based on the collected information, assumptions (hypotheses) are made, and a mathematical model is developed to represent the real-life problem.
The model includes:
- Decision Variables
- Objective Function
- Constraints
Real-Life Example
A company develops a Linear Programming model to determine the best production plan.
(iii) Analysis of available information and verification of hypothesis.
The mathematical model is analyzed using suitable OR techniques.
The assumptions and results are carefully verified to ensure that they correctly represent the real-world situation.
Real-Life Example
The company checks whether the proposed production plan satisfies all labour and machine capacity constraints.
(iv) Predictions of various results from the hypothesis, generalization of the result and consideration of alternative methods.
The final step in this phase is to predict the possible outcomes of different alternatives.
Managers compare the available options and select the one that provides the greatest overall benefit.
Real-Life Example
The company compares three production plans and chooses the one that provides the highest profit with the lowest production cost.
ЁЯТб Exam Tip
The Research Phase converts the problem into a scientific and mathematical form to identify the best possible solution. Research Phase utilizes (i) Observation and data collection for a better understanding of the problem (ii) Formulation of relevant hypotheses and models (iii) Analysis of available information and verification of hypothesis (iv) Predictions of various results from the hypothesis, generalization of the result and consideration of alternative methods.
Phase III: Action Phase
The final phase is to put the research findings into practice. A scientifically developed solution becomes useful only when it is implemented successfully.
This phase consists of two activities.
(i) Recommendations for remedial action to those who first posed the problem, this includes the assumptions made, scope and limitations, alternative courses of action and their effect.
The Operations Research team presents its findings and recommendations to management.
The report generally includes:
- Recommended solution
- Assumptions
- Scope
- Limitations
- Alternative solutions
- Expected results
Real-Life Example
The OR team recommends a new production schedule that is expected to reduce production costs by 15%.
(ii) Implementation of the Solution or Putting the solution to work
After management approves the recommendation, the solution is implemented in the organization.
The implementation process should be monitored to ensure that the expected results are achieved.
Real-Life Example
A transport company adopts the optimized delivery routes suggested by the OR team and successfully reduces fuel expenses and delivery time.
ЁЯТб Exam Tip
Even the best mathematical solution is ineffective unless it is properly implemented.
Real-Life Summary
Suppose a company wants to reduce transportation costs.
- Judgment Phase: Identify the transportation problem, define the objective, decide how success will be measured, and formulate the problem.
- Research Phase: Collect transportation data, develop a mathematical model, analyze alternatives, and identify the optimum solution.
- Action Phase: Recommend the best transportation plan and implement it in daily operations.
ЁЯУМ Remember This
- The scientific method in Operations Research consists of three phases: Judgment, Research, and Action.
- The Judgment Phase identifies and defines the problem.
- The Research Phase analyzes the problem using scientific techniques and mathematical models.
- The Action Phase recommends and implements the best solution.
- OR supports managers by providing scientific information for effective decision-making.
How Operations Research Makes Decisions - Let’s understand it in a simple way.
In other words, OR does not make decisions itself. It only assists the decision-maker by providing the best possible solution based on scientific analysis.
The Scientific Method Works in Three Phases:
Phase I — Judgment Phase (The Thinking and Understanding Stage)
At this stage, no mathematics is involved. It is simply the stage of understanding the problem.
The manager first asks:
What is the real problem?
The following steps are performed:
1. Determination of Operation
Which operation needs to be studied? For example:
- Production
- Transportation
- Inventory
- Marketing
2. Determination of Objectives
Now the question is: What do we want to achieve? For example:
- Increase profit
- Reduce cost
- Save time
- Reduce waiting time
3. Measures of Effectiveness
Next, it is decided: How will we know whether the solution is good?
For example:
If the objective is to reduce cost, the measure of effectiveness will be: Minimum Cost
If the objective is to increase profit, the measure of effectiveness will be: Maximum Profit
4. Problem Formulation
Now the problem is clearly defined. In simple words, What exactly are we trying to solve?
Simple Example
Suppose there is a factory. The problem is:
Profit is low.
During the Judgment Phase:
✔ Which department has the problem?
Production
✔ What is the objective?
Maximum Profit
✔ How will success be measured?
Increase in Profit
✔ Final Problem Statement
How many units of Product A and Product B should be produced?
This completes the Judgment Phase.
Phase II — Research Phase
Now the actual Operations Research begins. At this stage, it is no longer just thinking — research is carried out.
1. Observation
The factory is carefully observed.
2. Data Collection
Relevant data is collected, such as:
- Machine Hours
- Labour Hours
- Raw Material
- Demand
- Profit
- Cost
3. Hypothesis and Model
A mathematical model is developed. In other words, the real-world problem is converted into mathematical form.
4. Analysis
The mathematical model is solved using appropriate OR techniques, such as:
- Simplex Method
- Transportation Method
- Assignment Method
- PERT
- CPM
The technique used depends on the nature of the problem.
5. Prediction
Now the expected results are evaluated.
Questions like:
- What will happen if this solution is implemented?
- How much will profit increase?
- How much will cost decrease?
are answered.
Simple Example
For the factory:
After collecting the data, a mathematical model is developed.
The Simplex Method is applied.
The solution obtained is:
Product A = 120 units
Product B = 80 units
Expected Profit = ₹2,50,000
Phase III — Action Phase
Now the research is complete. It is time to take action.
1. Recommendation
The OR team presents the best solution to the manager. It also explains:
- Assumptions
- Limitations
- Alternative Solutions
2. Implementation
Finally, the company implements the recommended solution. For example, the factory starts production according to the proposed plan.
The Simplest Summary of the Entire Article
Think
↓
Study
↓
Do
or
Judgment
↓
Research
↓
Action
A Very Simple Example to understand easily
Suppose you have to go to school.
Judgment Phase
- Where do you have to go?
- Why do you have to go?
- Which route should you take?
Research Phase
- Check Google Maps.
- Check the traffic.
- Check the distance.
- Find the shortest route.
Action Phase
Now, simply follow that route and go to school.
This is the Scientific Method for Making Decisions in Operations Research.
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.
Comments
Post a Comment