1. INTRODUCTION
1.1 TERMINOLOGY
The British/Europeans refer to “operational research”, thne Americans to “operations research” – but both are often shortened to just “OR” (which is the term we will use). Another term which is used for this field is “management science” (“MS”). The Americans sometimes combine the terms OR and MS together and say “OR/MS” or “ORMS”.
Yet other terms sometimes used are “industrial engineering” (“IE”), “decision
science” (“DS”), and “problem solving”.In recent years there has been a move towards a standardization upon a single term for the field, namely the term “OR”.
“Operations Research (Management Science) is a scientific approach to decision making that seeks to best design and operate a system, usually under conditions requiring the allocation of scarce resources.”A system is an organization of interdependent components that work together to accomplish the goal of the system.
1.2 THE METHODOLOGY OF OR
When OR is used to solve a problem of an organization, the following seven step procedure should be followed:
Step 1. Formulate the ProblemOR analyst first defines the organization’s problem. Defining the problem includes
specifying the organization’s objectives and the parts of the organization (or system) that must be studied before the problem can be solved.
Step 2. Observe the SystemNext, the analyst collects data to estimate the values of parameters that affect the organization’s problem. These estimates are used to develop (in Step 3) and evaluate (in Step 4) a mathematical model of the organization’s problem.
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