Definition of Operation Research

► Operation Research is a scientific approach to problem-solving for executive management.
- H.M. WAGNER

Techniques of O.R.

► Inventory Model
► Replacement Model
► Simulation Model
► Networking Model
► Queuing Model

Inventory Models

► The inventory models deal with the determination of optimum levels of different inventory items and ordering policies, optimizing a pre-specified standard of effectiveness. It is used in calculating various important decision variables such as :-

1. re-order quantity,
2. lead-time,
3. economic order quantity and
4. the minimum, maximum & the average
level of stock keeping.

Replacement Models

► These models are concerned with determining the optimal time required to replace equipment or machinery that deteriorates or fails. Hence it seeks to formulate the optimal replacement policy of an organization.

Simulation Models

By simulating the organizational problems, the various decisions can be evaluated and-the risks inherent in actually implementing them is cut-down or eliminated.
Simulation models are normally used for those kinds of problems or situations which can not be studied or understood by any other technique.

For example, to study the environment at the planet Jupiter or Venus, simulation-models are the only option available to a researcher.

Networking models

► Networking models are extensively used in planning, scheduling and controlling complex projects which can be represented in the form of a net-work of various activities & sub-activities.
Two of the most important and commonly used networking models are –

1. Critical Path Method (CPM) and
2. Programme Evaluation & Review Technique (PERT).

Queuing Models

► Any problem that involves waiting before the required service that could be provided is termed as a queuing or waiting line problem. These models seek to ascertain the various important characteristics of queuing systems such as :-

1. average time spent in line by a customer,
2. average length of queue etc.