Operational Research &
Management
By
Mohammad Shahid Khan
M.Eco., MBA, B.Cs., B.Ed
Lecturer in Economics and Business Administration
Department of Economics
Kardan Institute of Higher Education, Kabul
What is Operations?
 A function or system that transforms inputs
into outputs of greater value.
 An operation is a series of tasks that are
routine, repetitive and ongoing throughout
the life of an organization.
Industrial Sector
Agriculture Sector
Transport Sector
Banking Sector
Operations
Construction
Communication Sector
Computer Design and Working
Airlines Business
Army
Projects
Examples of Operations in Various Sectors
Industrial Manufacturing
Telecommunication
• Scheduling production
• Process control
• Network design
• Traffic routing
• Base station location
Logistics
• Distribution network
• Center location
• Transportation plan
Air Line Industry
• Plane scheduling
• Crew scheduling
Why Focusing on Operations?
 Maximize Production Capacity
 Minimize Cost of Production
 Increase the Speed of Operations
 Increase the efficiency of the operations
 Increase the Quality of the operations and product
 Bring Flexibility in the operations
 Gain greater Control over the operations
Operations Research & Management?
 World War II : British military leaders asked scientists and engineers
to analyze several military problems
Deployment of radar
Management of convoy,
bombing,
antisubmarine, and mining operations.
 The result was called Military Operations Research, later Operations
Research
6
Operations Research & Management?
 Today: Operations Research and Management
mean
“the use of mathematical models and statistical
techniques in providing guidelines to managers
for making effective decisions within the state of
the current information to reach a proper
decision.”
Operational Research:
"OR is a scientific method of providing executive
departments with a quantitative basis for decision regarding
the operations under their control "
"OR is concerned with scientifically deciding how to best
design and operate man-machine systems, usually under
conditions requiring the allocation of scarce resources".
Operational Research is the application of the methods of
science to complex problems arising in the direction and
management of large systems of men, machines, materials
and money in industry, business, government and defense.
The purpose is to help management determine its policies
and actions scientifically.
OR…continued
 "OR is the application of scientific methods, techniques and tools to
the problems involving the operations of systems so as to provide
those in control of the operations with optimum solutions to the
problem".
 Characteristics:
 Use of Scientific Methods
Provide quantitative basis for decision making
Requires Construction of Model
Interdisciplinary Team work
Require the use of Computer applications
Scope of
Operations Research
&Management
 Operations Research:
Linear programming:
Linear Programming is a mathematical techniques which is concerned with
the efficient allocation of limited resources to achieve the desired objectives.
max P  x1  2 x2
3 x1  2 x2  10
x1  2 x2  3
x1  0, x2  0
Decision Analysis:
Bringing efficiency in decision-making especially when uncertainty and risk
is involved is a major area of operational research. We will study Decision
Tree with EMV approach to arrive at an optimal decision in the case of risk
and uncertainty.
 Operations Management:
Inventory Management:
Managing the Raw Material Inventory as well as finished goods inventory
is a major decision of business operations. We will study some models and
mathematical techniques to effectively manage the inventory to increase
productivity and control cost.
Total Quality Management:
Total Quality Management is a concept introduced by Edward Deming in
Japan. We will discuss how quality control and quality assurance can
reduce the operations cost and can increase the efficiency and productivity
of the operations.
Statistical Process Control:
In this chapter we will discuss statistical charts that will help us in
controlling the operations and increasing their efficiency.