Chapter 1
Introduction
Frederick
S. HillierEducation.
∎ Gerald J. Lieberman
© 2015 McGraw-Hill
All rights reserved.
© 2015 McGraw-Hill Education. All rights reserved.
1.1 The Origins of Operations Research
• Operations research (OR)
– Seeks solutions to problems that arise in
complex organizations
• First used in the military during WW II
– Managing allocation of scarce resources
• Early 1950s: OR introduced into business,
industry, and government
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The Origins of Operations Research
• Factors influencing growth of OR
– Improved techniques
• Simplex method
– Computer revolution
• Fast solution of complex computational problems
• Microsoft Excel
– Includes a Solver that can be used with
various OR problems
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1.2 The Nature of Operations Research
• Research on how to conduct and
coordinate an organization’s activities
• OR
– Is also called management science
• Utilizes the scientific method
– Must provide positive, understandable
conclusions to the decision maker
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The Nature of Operations Research
• Process
– Carefully observe and formulate the problem
– Gather data
– Construct a mathematical model
– Test whether the model represents the actual
situation
– Modify the model as appropriate and validate
again
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The Nature of Operations Research
• Broad viewpoint
– Considers what is best for organization as a
whole
– Attempts to identify best possible course of
action
• Team approach
– Consists of individuals with diverse
backgrounds and skills
– Necessary for considering ramifications of
problem throughout organization
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1.3 The Rise of Analytics Together with
Operations Research
• Analytics (business analytics)
– Introduced in 2006 by Thomas H. Davenport
– Similar in concept to operations research
– Transforms data into insight to make better
decisions
• Big data
– Refers to the massive amounts of data
available today
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The Rise of Analytics Together with
Operations Research
• Categories of analytics applications
– Descriptive analytics
• Identify interesting patterns to describe what is
currently happening
– Predictive analytics
• Using data to predict what will happen in the future
– Prescriptive analytics
• Using data to prescribe what should be done in the
future
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The Rise of Analytics Together with
Operations Research
• OR focuses on predictive and prescriptive
analytics
• Famous analytics applications
– 2012 U.S. presidential campaign
• The Obama team used data to target voters and
donors
– Moneyball (book and subsequent movie)
• The Oakland Athletics baseball team used
analytics to identify athletes to draft
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1.4 The Impact of Operations Research
• International Federation of Operational
Research Societies (IFORS)
– Consists of a few dozen member countries
– Each country has a national OR society
• Institute for Operations Research and the
Management Sciences (INFORMS)
– International society headquartered in U.S.
– Publishes leading journals
• Analytics, Interfaces
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1.5 Algorithms and OR Courseware
• Algorithms
– Systematic solution procedures for solving
certain types of problems
• OR Courseware
– Available at www.mhhe.com/hillier
• OR Tutor
– Part of OR Courseware
– Contains demonstration examples for learning
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Algorithms and OR Courseware
• Interactive Operations Research Tutorial
– Contained in OR Courseware
– Includes interactive procedures for executing
algorithms
– Computer performs computations
– Students focus on learning algorithmic logic
• OR Courseware introduces four popular
software packages
– Used for executing algorithms
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Algorithms and OR Courseware
• Microsoft Excel
– Solver add-in (Frontline Systems, Inc.)
• Analytic Software Platform for Education
(ASPE)
– From Frontline Systems
• LINDO and LINGO
– Student versions can be downloaded for free
• Modeling system MPL
– Contains solvers for complex problems
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Algorithms and OR Courseware
• Website contains:
– Learning aids for Chapters 3 and higher
– Solved Examples for each chapter (from
Chapter 3 onward)
• Supplementary examples
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