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Topics
• What is OR?
• Modeling and the problem solving process
• Deterministic vs. stochastic models
• OR techniques
• Using the Excel add-ins to find solutions
• Solving real problems
What is Operations Research?
Operations
The activities carried out in an organization.
Research
The process of observation and testing characterized
by the scientific method. Situation, problem
statement, model construction, validation,
experimentation, candidate solutions.
Model
An abstract representation of reality. Mathematical,
physical, narrative, set of rules in computer program.
Systems Approach
Include broad implications of decisions for the
organization at each stage in analysis. Both quantitative
and qualitative factors are considered.
Optimal Solution
A solution to the model that optimizes (maximizes or
minimizes) some measure of merit(highly deserve) over
all feasible solutions.
Team
A group of individuals bringing various skills and
viewpoints to a problem.
Operations Research Techniques
A collection of general mathematical models, analytical
procedures, and algorithms.
Definition of OR
OR professionals aim to provide a rational
basis for decision making by seeking to
understand and structure complex situations
and to use this understanding to predict
system behavior and improve system
performance.
Much of this work is done using analytical
and numerical techniques to develop and
manipulate mathematical and computer
models of organizational systems composed
of people, machines, and procedures.
Problem Solving Process
Formulate the
Problem
Situation Problem
Implement a Solution Statement
Goal: solve a problem
• Model must be valid
Data
• Model must be Construct
a Model
tractable
Implement
• Solution must be the Solution
useful Model
Procedure
Find
a Solution
Establish
a Procedure
Data
Weekly scheduling
– Vacations, leave
– Overtime
– Part-timers, casuals
– Task assignments
Real-time control
– Emergencies
– Daily adjustments
– Sick leave
– Overtime
Constructing a Model
Situation Problem
• Problem must be translated Formulate the
statement
Real World
Real World
Situation
Situation
Problems TP LP DS
Problems
Models
Models LP NFP TP
Methods
Methods interior
simplex
Operations Research Models
Deterministic models
assume all data are known with certainty
Stochastic models
explicitly represent uncertain data via
random variables or stochastic processes
Steps in OR 2
Study Model building
3
Data collection
4
Data analysis
5
Coding
Model No
6 Fine-tune
verification and model
validation
Yes
7
Experimental design
8
Analysis of results
Activate Excel Add-ins
Tools Menu:
Add ORMM
or
Individual Add-ins
Available OR_MM Add-ins
What You Should Know About
Operations Research
• Components of the decision-making process
• OR terminology
• What a model is and how to assess its value
• How to go from a conceptual problem to a
quantitative solution
• How to load or locate the Excel add-ins