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Businesses utilize Operations Research (OR) in various sectors to enhance decision-making, such as optimizing supply chains, improving healthcare resource allocation, and managing financial portfolios. Optimization is essential for reducing costs, increasing productivity, and enhancing competitiveness. For instance, a retail company can apply forecasting, scheduling, and inventory management during the holiday season to effectively meet customer demand and manage resources.

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5 views2 pages

Document 5

Businesses utilize Operations Research (OR) in various sectors to enhance decision-making, such as optimizing supply chains, improving healthcare resource allocation, and managing financial portfolios. Optimization is essential for reducing costs, increasing productivity, and enhancing competitiveness. For instance, a retail company can apply forecasting, scheduling, and inventory management during the holiday season to effectively meet customer demand and manage resources.

Uploaded by

tnnlaatnbkj
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Three real-world examples where businesses use OR to improve decision-making:

* Supply Chain Management:

* OR is used to optimize the flow of goods, from raw materials to finished products. This
includes determining the most efficient routes for transportation, managing inventory
levels, and optimizing warehouse locations.

* Healthcare:

* Hospitals use OR to improve patient flow, optimize staff scheduling, and allocate
resources effectively. This can lead to reduced wait times, improved patient care, and
lower costs.

* Finance:

* Financial institutions use OR for portfolio optimization, risk assessment, and


investment strategies. This helps them to maximize returns and minimize risks.

Why is optimization important in business operations?

* Optimization is crucial because it allows businesses to make the most efficient use of
their resources. This can lead to:

* Reduced costs.

* Increased productivity.

* Improved customer satisfaction.

* Enhanced competitiveness.

* Essentially, in todays competitive market, businesses must do more with less, and
optimization is a key tool in accomplishing those goals.

Can you think of a situation where a company might use forecasting, scheduling, or
inventory management to make better decisions?

* Yes, consider a retail company during the holiday season:

* Forecasting: The company would use forecasting to predict the demand for specific
products. This would help them to determine how much inventory to order and how many
staff members to schedule.

* Scheduling: They would use scheduling to ensure that they have enough staff on hand
to handle the increased customer traffic. This might involve creating detailed schedules for
cashiers, stockroom workers, and other employees.
* Inventory Management: They would use inventory management to ensure that they have
enough popular products in stock to meet customer demand, while also minimizing the
risk of having excess inventory after the holiday season.

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