Operations Research (OR), or Operational Research, is a discipline that deals with the application of advanced analytical methods to help make better decisions. It is often considered to be a sub-field of mathematics. The terms management science and decision science are sometimes used as more modern-sounding synonyms.
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 maximum (of profit, performance, or yield) or minimum (of loss, risk, or cost) of some real-world objective. Many university engineering programs offers Operations Research as a major or field of study, often in conjunction with Industrial Engineering.
Operations Research is the discipline of applying advanced analytical methods to help make better decisions. By using techniques such as mathematical modeling to analyze complex situations, operations research gives executives the power to make more effective decisions and build more productive systems. It is the science of rational decision making and the study, design and integration of complex situations and systems with the goal of predicting system behavior and improving or optimizing system performance. It encompasses managerial decision-making, mathematical and computer modeling and the use of information technology for informed decision-making.
Originating in military efforts before World War II, its techniques have grown to concern problems in a variety of industries.
Typical Operations Research Methods
- Simulation. Giving you the ability to try out approaches and test ideas for improvement.
- Optimization. Narrowing your choices to the very best when there are virtually innumerable feasible options. And comparing them.
- Probability and statistics. Helping you measure risk, mine data to find valuable connections and insights, test conclusions, and make reliable forecasts.
- Mathematical models.
- (Complex) algorithms.
- Neural networks.
- Pattern recognition.
- Data mining, Data Warehousing.
OR can be used for supporting an indefinite number of business decisions.
Typical Applications of Operations Research
- Capital budgeting
- Asset allocation
- Portfolio selection
- Fraud prevention, Anti-Money Laundering
- Marketing channel optimization, Customer segmentation
- Direct marketing campaigns, Predicting customer response, Campaign optimization
- Supply Chain Planning
- Distribution, Routing, Scheduling, Traffic flow optimization
- Resource allocation, Staff allocation
- Inventory planning
- Retail planning, Merchandise optimization
- Product mix and blending, Industrial waste reduction