Operations research, or operational research (OR) in British usage, is a discipline that deals with the application of advanced analytical methods to help make better decisions.Further, the term operational analysis is used in the British (and some British Commonwealth) military as an intrinsic part of capability development, management and assurance. In particular, operational analysis forms part of the Combined Operational Effectiveness and Investment Appraisals, which support British defense capability acquisition decision-making.
It is often considered to be a sub-field of applied mathematics.The terms management science and decision science are sometimes used as synonyms.
Applied mathematics is the application of mathematical methods by different fields such as science, engineering, business, computer science, and industry. Thus, applied mathematics is a combination of mathematical science and specialized knowledge. The term "applied mathematics" also describes the professional specialty in which mathematicians work on practical problems by formulating and studying mathematical models. In the past, practical applications have motivated the development of mathematical theories, which then became the subject of study in pure mathematics where abstract concepts are studied for their own sake. The activity of applied mathematics is thus intimately connected with research in pure mathematics.
Management science (MS) is the broad interdisciplinary study of problem solving and decision making in human organizations, with strong links to management, economics, business, engineering, management consulting, and other sciences. It uses various scientific research-based principles, strategies, and analytical methods including mathematical modeling, statistics and numerical algorithms to improve an organization's ability to enact rational and accurate management decisions by arriving at optimal or near optimal solutions to complex decision problems. Management science helps businesses to achieve goals using various scientific methods.
Employing techniques from other mathematical sciences, such as mathematical modeling, statistical analysis, and mathematical optimization, operations research arrives at optimal or near-optimal solutions to complex decision-making problems. Because of its emphasis on human-technology interaction and because of its focus on practical applications, operations research has overlap with other disciplines, notably industrial engineering and operations management, and draws on psychology and organization science. Operations research is often concerned with determining the extreme values of some real-world objective: the maximum (of profit, performance, or yield) or minimum (of loss, risk, or cost). Originating in military efforts before World War II, its techniques have grown to concern problems in a variety of industries.
A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling. Mathematical models are used in the natural sciences and engineering disciplines, as well as in the social sciences.
Statistics is a branch of mathematics dealing with data collection, organization, analysis, interpretation and presentation. In applying statistics to, for example, a scientific, industrial, or social problem, it is conventional to begin with a statistical population or a statistical model process to be studied. Populations can be diverse topics such as "all people living in a country" or "every atom composing a crystal". Statistics deals with all aspects of data, including the planning of data collection in terms of the design of surveys and experiments. See glossary of probability and statistics.
In mathematics, computer science and operations research, mathematical optimization or mathematical programming is the selection of a best element from some set of available alternatives.
Operational research (OR) encompasses a wide range of problem-solving techniques and methods applied in the pursuit of improved decision-making and efficiency, such as simulation, mathematical optimization, queueing theory and other stochastic-process models, Markov decision processes, econometric methods, data envelopment analysis, neural networks, expert systems, decision analysis, and the analytic hierarchy process.Nearly all of these techniques involve the construction of mathematical models that attempt to describe the system. Because of the computational and statistical nature of most of these fields, OR also has strong ties to computer science and analytics. Operational researchers faced with a new problem must determine which of these techniques are most appropriate given the nature of the system, the goals for improvement, and constraints on time and computing power.
A simulation is an approximate imitation of the operation of a process or system; the act of simulating first requires a model is developed. This model is a well-defined description of the simulated subject, and represents its key characteristics, such as its behaviour, functions and abstract or physical properties. The model represents the system itself, whereas the simulation represents its operation over time.
Queueing theory is the mathematical study of waiting lines, or queues. A queueing model is constructed so that queue lengths and waiting time can be predicted. Queueing theory is generally considered a branch of operations research because the results are often used when making business decisions about the resources needed to provide a service.
In probability theory and related fields, a stochastic or random process is a mathematical object usually defined as a collection of random variables. Historically, the random variables were associated with or indexed by a set of numbers, usually viewed as points in time, giving the interpretation of a stochastic process representing numerical values of some system randomly changing over time, such as the growth of a bacterial population, an electrical current fluctuating due to thermal noise, or the movement of a gas molecule. Stochastic processes are widely used as mathematical models of systems and phenomena that appear to vary in a random manner. They have applications in many disciplines including sciences such as biology, chemistry, ecology, neuroscience, and physics as well as technology and engineering fields such as image processing, signal processing, information theory, computer science, cryptography and telecommunications. Furthermore, seemingly random changes in financial markets have motivated the extensive use of stochastic processes in finance.
The major sub-disciplines in modern operational research, as identified by the journal Operations Research,are:
Financial engineering is a multidisciplinary field involving financial theory, methods of engineering, tools of mathematics and the practice of programming. It has also been defined as the application of technical methods, especially from mathematical finance and computational finance, in the practice of finance. Despite its name, financial engineering does not belong to any of the fields in traditional professional engineering even though many financial engineers have studied engineering beforehand and many universities offering a postgraduate degree in this field require applicants to have a background in engineering as well. In the United States, the Accreditation Board for Engineering and Technology (ABET) does not accredit financial engineering degrees. In the United States, financial engineering programs are accredited by the International Association of Quantitative Finance.
Manufacturing is the production of products for use or sale using labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial design, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be sold to other manufacturers for the production of other, more complex products, such as aircraft, household appliances, furniture, sports equipment or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users and consumers.
In the decades after the two world wars, the tools of operations research were more widely applied to problems in business, industry and society. Since that time, operational research has expanded into a field widely used in industries ranging from petrochemicals to airlines, finance, logistics, and government, moving to a focus on the development of mathematical models that can be used to analyse and optimize complex systems, and has become an area of active academic and industrial research.
In the 17th century, mathematicians like Christiaan Huygens and Blaise Pascal (problem of points) tried to solve problems involving complex decisions with probability. Others in the 18th and 19th centuries solved these types of problems with combinatorics. Charles Babbage's research into the cost of transportation and sorting of mail led to England's universal "Penny Post" in 1840, and studies into the dynamical behaviour of railway vehicles in defence of the GWR's broad gauge.Beginning in the 20th century, study of inventory management could be considered the origin of modern operations research with economic order quantity developed by Ford W. Harris in 1913. Operational research may have originated in the efforts of military planners during World War I (convoy theory and Lanchester's laws). Percy Bridgman brought operational research to bear on problems in physics in the 1920s and would later attempt to extend these to the social sciences.
Modern operational research originated at the Bawdsey Research Station in the UK in 1937 and was the result of an initiative of the station's superintendent, A. P. Rowe. Rowe conceived the idea as a means to analyse and improve the working of the UK's early warning radar system, Chain Home (CH). Initially, he analysed the operating of the radar equipment and its communication networks, expanding later to include the operating personnel's behaviour. This revealed unappreciated limitations of the CH network and allowed remedial action to be taken.
Scientists in the United Kingdom including Patrick Blackett (later Lord Blackett OM PRS), Cecil Gordon, Solly Zuckerman, (later Baron Zuckerman OM, KCB, FRS), C. H. Waddington, Owen Wansbrough-Jones, Frank Yates, Jacob Bronowski and Freeman Dyson, and in the United States with George Dantzig looked for ways to make better decisions in such areas as logistics and training schedules
The modern field of operational research arose during World War II.[ dubious ] In the World War II era, operational research was defined as "a scientific method of providing executive departments with a quantitative basis for decisions regarding the operations under their control". Other names for it included operational analysis (UK Ministry of Defence from 1962) and quantitative management.
During the Second World War close to 1,000 men and women in Britain were engaged in operational research. About 200 operational research scientists worked for the British Army.
Patrick Blackett worked for several different organizations during the war. Early in the war while working for the Royal Aircraft Establishment (RAE) he set up a team known as the "Circus" which helped to reduce the number of anti-aircraft artillery rounds needed to shoot down an enemy aircraft from an average of over 20,000 at the start of the Battle of Britain to 4,000 in 1941.
In 1941, Blackett moved from the RAE to the Navy, after first working with RAF Coastal Command, in 1941 and then early in 1942 to the Admiralty.Blackett's team at Coastal Command's Operational Research Section (CC-ORS) included two future Nobel prize winners and many other people who went on to be pre-eminent in their fields. They undertook a number of crucial analyses that aided the war effort. Britain introduced the convoy system to reduce shipping losses, but while the principle of using warships to accompany merchant ships was generally accepted, it was unclear whether it was better for convoys to be small or large. Convoys travel at the speed of the slowest member, so small convoys can travel faster. It was also argued that small convoys would be harder for German U-boats to detect. On the other hand, large convoys could deploy more warships against an attacker. Blackett's staff showed that the losses suffered by convoys depended largely on the number of escort vessels present, rather than the size of the convoy. Their conclusion was that a few large convoys are more defensible than many small ones.
While performing an analysis of the methods used by RAF Coastal Command to hunt and destroy submarines, one of the analysts asked what colour the aircraft were. As most of them were from Bomber Command they were painted black for night-time operations. At the suggestion of CC-ORS a test was run to see if that was the best colour to camouflage the aircraft for daytime operations in the grey North Atlantic skies. Tests showed that aircraft painted white were on average not spotted until they were 20% closer than those painted black. This change indicated that 30% more submarines would be attacked and sunk for the same number of sightings.As a result of these findings Coastal Command changed their aircraft to using white undersurfaces.
Other work by the CC-ORS indicated that on average if the trigger depth of aerial-delivered depth charges (DCs) were changed from 100 feet to 25 feet, the kill ratios would go up. The reason was that if a U-boat saw an aircraft only shortly before it arrived over the target then at 100 feet the charges would do no damage (because the U-boat wouldn't have had time to descend as far as 100 feet), and if it saw the aircraft a long way from the target it had time to alter course under water so the chances of it being within the 20-foot kill zone of the charges was small. It was more efficient to attack those submarines close to the surface when the targets' locations were better known than to attempt their destruction at greater depths when their positions could only be guessed. Before the change of settings from 100 feet to 25 feet, 1% of submerged U-boats were sunk and 14% damaged. After the change, 7% were sunk and 11% damaged. (If submarines were caught on the surface, even if attacked shortly after submerging, the numbers rose to 11% sunk and 15% damaged). Blackett observed "there can be few cases where such a great operational gain had been obtained by such a small and simple change of tactics".
Bomber Command's Operational Research Section (BC-ORS), analyzed a report of a survey carried out by RAF Bomber Command.[ citation needed ] For the survey, Bomber Command inspected all bombers returning from bombing raids over Germany over a particular period. All damage inflicted by German air defences was noted and the recommendation was given that armour be added in the most heavily damaged areas. This recommendation was not adopted because the fact that the aircraft returned with these areas damaged indicated these areas were not vital, and adding armour to non-vital areas where damage is acceptable negatively affects aircraft performance. Their suggestion to remove some of the crew so that an aircraft loss would result in fewer personnel losses, was also rejected by RAF command. Blackett's team made the logical recommendation that the armour be placed in the areas which were completely untouched by damage in the bombers which returned. They reasoned that the survey was biased, since it only included aircraft that returned to Britain. The untouched areas of returning aircraft were probably vital areas, which, if hit, would result in the loss of the aircraft. This story has been disputed, with a similar damage assessment study completed in the US by the Statistical Research Group at Columbia University and was the result of work done by Abraham Wald .
When Germany organized its air defences into the Kammhuber Line, it was realized by the British that if the RAF bombers were to fly in a bomber stream they could overwhelm the night fighters who flew in individual cells directed to their targets by ground controllers. It was then a matter of calculating the statistical loss from collisions against the statistical loss from night fighters to calculate how close the bombers should fly to minimize RAF losses.
The "exchange rate" ratio of output to input was a characteristic feature of operational research. By comparing the number of flying hours put in by Allied aircraft to the number of U-boat sightings in a given area, it was possible to redistribute aircraft to more productive patrol areas. Comparison of exchange rates established "effectiveness ratios" useful in planning. The ratio of 60 mines laid per ship sunk was common to several campaigns: German mines in British ports, British mines on German routes, and United States mines in Japanese routes.
Operational research doubled the on-target bomb rate of B-29s bombing Japan from the Marianas Islands by increasing the training ratio from 4 to 10 percent of flying hours; revealed that wolf-packs of three United States submarines were the most effective number to enable all members of the pack to engage targets discovered on their individual patrol stations; revealed that glossy enamel paint was more effective camouflage for night fighters than traditional dull camouflage paint finish, and the smooth paint finish increased airspeed by reducing skin friction.
On land, the operational research sections of the Army Operational Research Group (AORG) of the Ministry of Supply (MoS) were landed in Normandy in 1944, and they followed British forces in the advance across Europe. They analyzed, among other topics, the effectiveness of artillery, aerial bombing and anti-tank shooting.
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With expanded techniques and growing awareness of the field at the close of the war, operational research was no longer limited to only operational, but was extended to encompass equipment procurement, training, logistics and infrastructure. Operations Research also grew in many areas other than the military once scientists learned to apply its principles to the civilian sector. With the development of the simplex algorithm for linear programming in 1947and the development of computers over the next three decades, Operations Research can now "solve problems with hundreds of thousands of variables and constraints. Moreover, the large volumes of data required for such problems can be stored and manipulated very efficiently."
Operational research is also used extensively in government where evidence-based policy is used.
In 1967 Stafford Beer characterized the field of management science as "the business use of operations research". [ citation needed ] Like operational research itself, management science (MS) is an interdisciplinary branch of applied mathematics devoted to optimal decision planning, with strong links with economics, business, engineering, and other sciences. It uses various scientific research-based principles, strategies, and analytical methods including mathematical modeling, statistics and numerical algorithms to improve an organization's ability to enact rational and meaningful management decisions by arriving at optimal or near optimal solutions to complex decision problems. Management scientists help businesses to achieve their goals using the scientific methods of operational research.However, in modern times the term management science may also be used to refer to the separate fields of organizational studies or corporate strategy.
The management scientist's mandate is to use rational, systematic, science-based techniques to inform and improve decisions of all kinds. Of course, the techniques of management science are not restricted to business applications but may be applied to military, medical, public administration, charitable groups, political groups or community groups.
Management science is concerned with developing and applying models and concepts that may prove useful in helping to illuminate management issues and solve managerial problems, as well as designing and developing new and better models of organizational excellence.
The application of these models within the corporate sector became known as management science.
Some of the fields that have considerable overlap with Operations Research and Management Science include:
Applications are abundant such as in airlines, manufacturing companies, service organizations, military branches, and government. The range of problems and issues to which it has contributed insights and solutions is vast. It includes:
Management is also concerned with so-called 'soft-operational analysis' which concerns methods for strategic planning, strategic decision support, problem structuring methods. In dealing with these sorts of challenges, mathematical modeling and simulation may not be appropriate or may not suffice. Therefore, during the past 30 years[ vague ], a number of non-quantified modeling methods have been developed. These include:[ citation needed ]
The International Federation of Operational Research Societies (IFORS)is an umbrella organization for operational research societies worldwide, representing approximately 50 national societies including those in the US, UK, France, Germany, Italy, Canada, Australia, New Zealand, Philippines, India, Japan and South Africa. The constituent members of IFORS form regional groups, such as that in Europe, the Association of European Operational Research Societies (EURO). Other important operational research organizations are Simulation Interoperability Standards Organization (SISO) and Interservice/Industry Training, Simulation and Education Conference (I/ITSEC)
In 2004 the US-based organization INFORMS began an initiative to market the OR profession better, including a website entitled The Science of Betterwhich provides an introduction to OR and examples of successful applications of OR to industrial problems. This initiative has been adopted by the Operational Research Society in the UK, including a website entitled Learn about OR.
The Institute for Operations Research and the Management Sciences (INFORMS) publishes thirteen scholarly journals about operations research, including the top two journals in their class, according to 2005 Journal Citation Reports.They are:
These are listed in alphabetical order of their titles.
Systems engineering is an interdisciplinary field of engineering and engineering management that focuses on how to design and manage complex systems over their life cycles. At its core, systems engineering utilizes systems thinking principles to organize this body of knowledge. The individual outcome of such efforts, an engineered system, can be defined as a combination of components that work in synergy to collectively perform a useful function.
Patrick Maynard Stuart Blackett, Baron Blackett was a British experimental physicist known for his work on cloud chambers, cosmic rays, and paleomagnetism, winning the Nobel Prize for Physics in 1948. In 1925 he became the first person to prove that radioactivity could cause the nuclear transmutation of one chemical element to another. He also made a major contribution in World War II advising on military strategy and developing operational research. His left-wing views saw an outlet in third world development and in influencing policy in the Labour Government of the 1960s.
Engineering management is the application of the practice of management to the practice of engineering.
An agent-based model (ABM) is a class of computational models for simulating the actions and interactions of autonomous agents with a view to assessing their effects on the system as a whole. It combines elements of game theory, complex systems, emergence, computational sociology, multi-agent systems, and evolutionary programming. Monte Carlo methods are used to introduce randomness. Particularly within ecology, ABMs are also called individual-based models (IBMs), and individuals within IBMs may be simpler than fully autonomous agents within ABMs. A review of recent literature on individual-based models, agent-based models, and multiagent systems shows that ABMs are used on non-computing related scientific domains including biology, ecology and social science. Agent-based modeling is related to, but distinct from, the concept of multi-agent systems or multi-agent simulation in that the goal of ABM is to search for explanatory insight into the collective behavior of agents obeying simple rules, typically in natural systems, rather than in designing agents or solving specific practical or engineering problems.
Multiple-criteria decision-making (MCDM) or multiple-criteria decision analysis (MCDA) is a sub-discipline of operations research that explicitly evaluates multiple conflicting criteria in decision making. Conflicting criteria are typical in evaluating options: cost or price is usually one of the main criteria, and some measure of quality is typically another criterion, easily in conflict with the cost. In purchasing a car, cost, comfort, safety, and fuel economy may be some of the main criteria we consider – it is unusual that the cheapest car is the most comfortable and the safest one. In portfolio management, we are interested in getting high returns but at the same time reducing our risks, but the stocks that have the potential of bringing high returns typically also carry high risks of losing money. In a service industry, customer satisfaction and the cost of providing service are fundamental conflicting criteria.
The Institute for Operations Research and the Management Sciences (INFORMS) is an international society for practitioners in the fields of operations research (O.R.), management science, and analytics. It was established in 1995 with the merger of the Operations Research Society of America (ORSA) and The Institute of Management Sciences (TIMS). The 2018 president of the institute is Professor Nicholas G. Hall of Ohio State University.
David Bendel Hertz was an operations research practitioner and academic, known for various contributions to the discipline, and specifically, and more widely, for pioneering the use of Monte Carlo methods in finance. He developed innovative modeling approaches for the solution of complex management issues. His earliest publications added insights to the industrial process of research and development.
Modeling and simulation (M&S) at simple terms is a substitute for physical experimentation, in which computers are used to calculate the results of some physical phenomenon. As it is apparent from its name "Modeling and simulation" firstly a computer is used to build a mathematical model which contains all the parameters of physical model and represent physical model in virtual form then conditions are applied which we want to experiment on physical model, then simulation starts i.e, we leave on computer to calculate the results of those conditions on mathematical model. In this way, actual experimentation can be avoided which is costly and time-consuming instead of using mathematical knowledge and computer's computation power to solve real-world problems cheaply and in a time efficient manner. As such, M&S can facilitate understanding a system's behavior without actually testing the system in the real world. For instance, to determine which type of spoiler would improve traction the most while designing a race car, a computer simulation of the car could be used to estimate the effect of different spoiler shapes on the coefficient of friction in a turn. Useful insights about different decisions in the design could be gleaned without actually building the car. In addition, simulation can support experimentation that occurs totally in software, or in human-in-the-loop environments where simulation represents systems or generates data needed to meet experiment objectives. Furthermore, simulation can be used to train persons using a virtual environment that would otherwise be difficult or expensive to produce.
Dr. Ravindra K. Ahuja is an Indian-born American computer scientist and entrepreneur. He is currently Professor of Industrial and Systems Engineering at the University of Florida in Gainesville, Florida, and CEO of the automation and optimization solutions provider Optym, which he founded in 2000 as Innovative Scheduling, Inc.
Lee W. Schruben is an American educator, engineer and serves as the Professor and Past Chair, Department of Industrial Engineering and Operations Research College of Engineering, University of California at Berkeley. He is the former Andrew Schultz, Jr. Professor (1976–1998), Sibley College of Engineering, Cornell University, Department of Operations Research. Professor Schruben took his Bachelor of Science at Cornell’s engineering college in 1968, his Master of Science at the University of North Carolina in 1973 and his doctorate at Yale University in 1974.
The Operational Research Society (ORS), also known as The OR Society, is an international learned society in the field of operational research (OR), with more than 2,500 members (2011). It has its headquarters in Birmingham, England.
Kathleen M. Carley is an American social scientist specializing in dynamic network analysis. She is a professor in the School of Computer Science in the Institute for Software Research International at Carnegie Mellon University and also holds appointments in the Tepper School of Business, the Heinz College, the Department of Engineering and Public Policy, and the Department of Social and Decision Sciences.
AIMMS is a prescriptive analytics software company with offices in the Netherlands, United States, China and Singapore. AIMMS has two main product offerings that provide modeling and optimization capabilities across a variety of industries. The AIMMS Prescriptive Analytics Platform is a tool for those with an Operations Research or Analytics background. It offers unlimited flexibility to develop optimization-based applications and deploy them to business users. AIMMS SC Navigator, launched in 2017, is built on the AIMMS Prescriptive Analytics Platform and provides configurable Apps for supply chain teams. SC Navigator provides supply chain analytics to individuals without a technical or analytics background so they can get the same benefits from sophisticated analytics without needing to code or model.
Kaisa Miettinen is a Finnish mathematician and the Vice Rector of the University of Jyväskylä in Finland. She is a Professor of Industrial Optimization with the Department of Mathematical Information Technology, University of Jyväskylä, Finland. In addition, she heads the Industrial Optimization Group.
William Wager Cooper was an American operations researcher, known as a father of management science and as "Mr. Linear Programming". He was the founding president of The Institute of Management Sciences, founding editor-in-chief of Auditing: A Journal of Practice and Theory, a founding faculty member of the Graduate School of Industrial Administration at the Carnegie Institute of Technology, founding dean of the School of Urban and Public Affairs at CMU, the former Arthur Lowes Dickinson Professor of Accounting at Harvard University, and the Foster Parker Professor Emeritus of Management, Finance and Accounting at the University of Texas at Austin.
Michel Louis Balinski was an applied mathematician, economist, operations research analyst and political scientist. As an American, educated in the United States, he lived and worked primarily in the United States and France. He was known for his work in optimization, convex polyhedra, stable matching, and the theory and practice of electoral systems, jury decision, and social choice. He was Directeur de Recherche de classe exceptionnelle (emeritus) of the C.N.R.S. at the Ecole Polytechnique (Paris). He was awarded the John von Neumann Theory Prize by INFORMS in 2013.
The European Journal of Operational Research (EJOR) is a peer-reviewed academic journal in operations research. It was founded in 1977 by the Association of European Operational Research Societies, and is published by Elsevier, with Roman Słowiński as its Co-ordinating Editor. Currently, it publishes at a rate of 24 issues per annual volume, with approximately 250 pages per issue.
Problem structuring methods (PSMs) are a group of techniques used to model or to map the nature or structure of a situation or state of affairs that some people want to change. PSMs are usually used by a group of people in collaboration to create a consensus about, or at least to facilitate negotiations about, what needs to change. Some widely adopted PSMs include soft systems methodology, the strategic choice approach, and strategic options development and analysis (SODA).
The Sociedad de Estadística e Investigación Operativa is the professional non-profit society for the scientific fields of Statistics and Operations Research in Spain. It was founded in 1962 and it is dedicated to the development, improvement and promotion of the methods and applications of Statistics and Operations Research in its widest possible sense. The society has an ultimate goal of putting Statistics and Operations Research to the service of science and society. The society is recognized by the International Federation of Operational Research Societies and its subgrouping, the Association of European Operational Research Societies, as the main national society for Operations Research in its country. SEIO is also member of CIMPA, Centre International de Mathématiques Pures et Appliquées, Confederación de Sociedades Científicas de España (COSCE), and of the European Mathematical Society (EMS).
A systems analyst who contributes in the area of DSS must be skilled in such areas as management science (synonymous with decision science and operation research), modeling, simulation, and advanced statistics.
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