Introduction to Operations Research
Operations research (OR) is a managerial science companies use to find answers for often-difficult problems. It makes extensive use of math and science for building models. On the basis of these models, managers devise schemes to make the most possible profits and sales, and allay risks and losses.
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Significance
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Operations research is significantly used in the oil, energy, manufacturing and telecommunication industries. There are two main components to the operations research--the maxima and the minima functions. Companies are concerned with maximizing their sales, profits and turnovers, and minimizing risks, costs and losses.
History
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Operations research was first used and developed during the 1940s, around and after World War II.
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Benefits
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Using operations research, companies are able to decide on what products to make, the quantities thereof, the production methods to employ, the employees to use and marketing schemes for the produced goods. In addition, companies are able to evaluate all the possible options for production, marketing and sales, and fix on the best one(s).
Methods
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There are several OR methods that companies deploy. Commonly used methods include linear programming and simulation techniques. Using linear programming, managers construct a number of mathematical equations. These are used for planning, scheduling and routing the production functions. Simulation techniques construct models that replicate real business environments, as it is not always possible to test products and schemes in the real markets. Companies use simulation for testing purposes.
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