MBA-H2040 Quantitative Techniques for Managers

primarily concerned with O.R. analysis for the possible alternative actions. The business and industry
befitted from O.R. in the areas of inventory, reorder policies, optimum location and size of warehouses,
advertising policies, etc.
As stated earlier defining O.R. is a difficult task. The definitions stressed by various experts and
Societies on the subject together enable us to know what O.R. is, and what it does. They are as follows:
1. According to the Operational Research Society of Great Britain (OPERATIONAL RESEARCH
QUARTERLY, l3(3):282, l962), Operational Research is the attack of modern science on
complex problems arising in the direction and management of large systems of men, machines,
materials and money in industry, business, government and defense. Its distinctive approach is to
develop a scientific model of the system, incorporating measurements of factors such as change
and risk, with which to predict and compare the outcomes of alternative decisions, strategies or
controls. The purpose is to help management determine its policy and actions scientifically.

2. Randy Robinson stresses that Operations Research is the application of scientific methods to
improve the effectiveness of operations, decisions and management. By means such as analyzing
data, creating mathematical models and proposing innovative approaches, Operations Research
professionals develop scientifically based information that gives insight and guides decision-
making. They also develop related software, systems, services and products.

3. Morse and Kimball have stressed O.R. is a quantitative approach and described it as “ a scientific
method of providing executive departments with a quantitative basis for decisions regarding the
operations under their control”.

4. Saaty considers O.R. as tool of improving quality of answers. He says, “O.R. is the art of giving
bad answers to problems which otherwise have worse answers”.

5. Miller and Starr state, “O.R. is applied decision theory, which uses any scientific, mathematical
or logical means to attempt to cope with the problems that confront the executive, when he tries
to achieve a thorough-going rationality in dealing with his decision problem”.

6. Pocock stresses that O.R. is an applied Science. He states “O.R. is scientific methodology
(analytical, mathematical, and quantitative) which by assessing the overall implication of various
alternative courses of action in a management system provides an improved basis for
management decisions”.

1.2 History of Operations Research

Operation Research is a relatively new discipline. Whereas 70 years ago it would have been possible to
study mathematics, physics or engineering (for example) at university it would not have been possible to
study Operation Research, indeed the term O.R. did not exist then. It was really only in the late 1930's
that operational research began in a systematic fashion, and it started in the UK. As such it would be
interesting to give a short history of O.R.

1936
MBA-H2040 Quantitative Techniques for Managers
Early in 1936 the British Air Ministry established Bawdsey Research Station, on the east coast, near
Felixstowe, Suffolk, as the centre where all pre-war radar experiments for both the Air Force and the
Army would be carried out. Experimental radar equipment was brought up to a high state of reliability
and ranges of over 100 miles on aircraft were obtained.

It was also in 1936 that Royal Air Force (RAF) Fighter Command, charged specifically with the
air defense of Britain, was first created. It lacked however any effective fighter aircraft - no Hurricanes
or Spitfires had come into service - and no radar data was yet fed into its very elementary warning and
control system.

It had become clear that radar would create a whole new series of problems in fighter direction
and control so in late 1936 some experiments started at Biggin Hill in Kent into the effective use of such
data. This early work, attempting to integrate radar data with ground based observer data for fighter
interception, was the start of OR.

1937
The first of three major pre-war air-defence exercises was carried out in the summer of 1937. The
experimental radar station at Bawdsey Research Station was brought into operation and the information
derived from it was fed into the general air-defense warning and control system. From the early warning
point of view this exercise was encouraging, but the tracking information obtained from radar, after
filtering and transmission through the control and display network, was not very satisfactory.

1938
In July 1938 a second major air-defense exercise was carried out. Four additional radar stations had been
installed along the coast and it was hoped that Britain now had an aircraft location and control system
greatly improved both in coverage and effectiveness. Not so! The exercise revealed, rather, that a new
and serious problem had arisen. This was the need to coordinate and correlate the additional, and often
conflicting, information received from the additional radar stations. With the outbreak of war apparently
imminent, it was obvious that something new - drastic if necessary - had to be attempted. Some new
approach was needed.

Accordingly, on the termination of the exercise, the Superintendent of Bawdsey Research Station, A.P.
Rowe, announced that although the exercise had again demonstrated the technical feasibility of the radar
system for detecting aircraft, its operational achievements still fell far short of requirements. He
therefore proposed that a crash program of research into the operational - as opposed to the technical -
aspects of the system should begin immediately. The term "operational research" [RESEARCH into
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(military) OPERATIONS] was coined as a suitable description of this new branch of applied science.
The first team was selected from amongst the scientists of the radar research group the same day.

1939
In the summer of 1939 Britain held what was to be its last pre-war air defence exercise. It involved some
33,000 men, 1,300 aircraft, 110 antiaircraft guns, 700 searchlights, and 100 barrage balloons. This
exercise showed a great improvement in the operation of the air defence warning and control system.
The contribution made by the OR team was so apparent that the Air Officer Commander-in-Chief RAF
Fighter Command (Air Chief Marshal Sir Hugh Dowding) requested that, on the outbreak of war, they
should be attached to his headquarters at Stanmore in north London.

Initially, they were designated the "Stanmore Research Section". In 1941 they were redesignated
the "Operational Research Section" when the term was formalised and officially accepted, and similar
sections set up at other RAF commands.

1940
On May 15th 1940, with German forces advancing rapidly in France, Stanmore Research Section was
asked to analyses a French request for ten additional fighter squadrons (12 aircraft a squadron - so 120
aircraft in all) when losses were running at some three squadrons every two days (i.e. 36 aircraft every 2
days). They prepared graphs for Winston Churchill (the British Prime Minister of the time), based upon
a study of current daily losses and replacement rates, indicating how rapidly such a move would deplete
fighter strength. No aircraft were sent and most of those currently in France were recalled.

This is held by some to be the most strategic contribution to the course of the war made by OR
(as the aircraft and pilots saved were consequently available for the successful air defense of Britain, the
Battle of Britain).

1941 onward
In 1941, an Operational Research Section (ORS) was established in Coastal Command which was to
carry out some of the most well-known OR work in World War II.

The responsibility of Coastal Command was, to a large extent, the flying of long-range sorties by
single aircraft with the object of sighting and attacking surfaced U-boats (German submarines). The
technology of the time meant that (unlike modern day submarines) surfacing was necessary to recharge
batteries, vent the boat of fumes and recharge air tanks. Moreover U-boats were much faster on the
surface than underwater as well as being less easily detected by sonar.
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Thus the Operation Research started just before World War II in Britain with the establishment
of teams of scientists to study the strategic and tactical problems involved in military operations. The
objective was to find the most effective utilization of limited military resources by the use of quantitative
techniques. Following the end of the war OR spread, although it spread in different ways in the UK and
USA.

In 1951 a committee on Operations Research formed by the National Research Council of USA,
and the first book on “Methods of Operations Research”, by Morse and Kimball, was published. In 1952
the Operations Research Society of America came into being.

Success of Operations Research in army attracted the attention of the industrial mangers who
were seeking solutions to their complex business problems. Now a days, almost every organization in all
countries has staff applying operations research, and the use of operations research in government has
spread from military to wide variety of departments at all levels. The growth of operations research has
not limited to the U.S.A. and U.K., it has reached many countries of the world.

India was one the few first countries who started using operations research. In India, Regional
Research Laboratory located at Hyderabad was the first Operations Research unit established during
1949. At the same time another unit was set up in Defense Science Laboratory to solve the Stores,
Purchase and Planning Problems. In 1953, Operations Research unit was established in Indian Statistical
Institute, Calcutta, with the objective of using Operations Research methods in National Planning and
Survey. In 1955, Operations Research Society of India was formed, which is one of the first members of
International Federation of Operations Research societies. Today Operations Research is a popular
subject in management institutes and schools of mathematics.

1.3 Stages of Development of Operations Research

The stages of development of O.R. are also known as phases and process of O.R, which has six
important steps. These six steps are arranged in the following order:

Step I: Observe the problem environment

Step II: Analyze and define the problem
Step III: Develop a model
Step IV: Select appropriate data input
Step V: Provide a solution and test its reasonableness
Step VI: Implement the solution