Operations research
Operations Research or Management Science is an interdisciplinary branch of applied mathematics and formal science that uses methods like mathematical modeling,and algorithms to arrive at optimal or near optimal solutions to complex problems. It is typically concerned with optimizing the maxima (profit, assembly line performance, crop yield, bandwidth, etc) or minima (loss, risk, etc) of some objective function. Operations research helps management achieve its goals using the scientific process. Literally it is the science of managing, governing, and deciding. How to make a decision? Why this decision instead of another and this for scientific reasons.
Example: a refinery processes two kinds of crude oil into two kinds of petrol. It has only limited amounts of the crude (limited supply, limited capital…), whereas the market demands rapid and ample deliveries of petrol. The production of one kind of petrol requires a specific amount of both crudes, a different mixture for each kind of petrol. The two kinds of crude have different purchase prices and the two kinds of petrol have different selling prices.
The definition of this problem, provided with the necessary figures leads to an analysis, a mathematical modus, to which an arithmetical technique is applied. The calculations will show how much petrol of each kind should be produced to minimise costs and maximise profits. This method thus allows the manager to make a scientific decision.
Prerequisites
Microsoft Excel or OpenOffice Calc and regular algebra
Approach
The first lessons consist of an introduction and demonstrates how a problem can be solved. As soon as the group mastered the basic technique, creating a model and implementing this model into Excel in order to find a solution to the problem, the lessons change into hands on workshop sessions and other typical problem settings are studied.
Subjects
- What, why, and how: introduction.
Linear programming: definition of the technique using decision variables, objective function, model constraints in order to maximize or minimize the objective function.. Defining a mathematical model. - Spreadsheet: translating the mathematical in a synoptic spreadsheet and using the solver function to generate a calculation.
- Linear programming: continuing the technique in order to solve irregular types, balanced and unbalanced problems, working with continuous or integer values.
- Specific types of Linear Programming Models: network flows, transportation and transhipment problems, blending and assigns problems.
This schedule and or subjects can be altered depending on students' needs.
Study material
Digital and interactive course (online available)
Bernard W. Taylor; Introduction to Management Science, 7th ed., Prentice Hall
