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Uses of OR (operational research) inbusiness
The maincharacteristic of business has always been the combination of a series ofactions that can lead to the creation of a profit for its owner. On the otherhand, the volume and the complexity of the above actions have beendifferentiated because of the changes in the social and the science sectors.However, there is an element of the commercial activity that still remains thesame and which seems to define the productivity and the development of thebusiness. This element is the necessity for the presence of a person (orpersons) who will have the exclusive task of measuring the uncertainty(regarding the business activities), of allocating the resources, of planningprojects and organizing, generally, the administrative force of an enterprise(public or private) in a way that the latter can confront most of theunexpected situations that are related with the business activity.
II. Operational Research - Definition andTheories
The task ofdefining the Operational Research to its full meaning and purpose is not aneasy one. There have been some definitions, each one from a different point ofview but all of them are giving somehow a completed description for the role ofthe OR in the business environment. According to Duckworth, W. E., Gear, A. E.,Lockett (1977, 1) 'operational research is the study of administrative systemspursued in the same scientific manner in which systems in physics, chemistryand biology are studied in the natural sciences'. The above definition,although a distinctive one we can say, does not refer to the functions of theOR and its specific role in the business environment. Cohen S. S. (1985, 1)states that 'operational research is the science of planning and executing anoperation to make the most economical use of the resources available'. Thedefinition of Cohen seems to be much more completed as it refers to the roleand the aim of OR regarding the business development. On the other hand,Littlechild L.C. (1977) does not refer to a specific definition for the OR butproceed to the presentation of the ten stages that, according to his opinion,have to be followed when applying the OR in business. The stages areLittlechild L.C. (1977, 15-16): '1. describe problem in its context, 2. collectpreliminary information, 3. define problem explicitly, 4. set study objectives,5. formulate the OR problems, 6. construct model, 7. collect detailed data, 8.test model, 9. select solution from alternatives, 10. implement and monitorsolution'. The above 'stages' or steps refer to the methodology that has to befollowed during the application of OR in a business environment. These 'steps'seem to be a very detailed presentation of the whole functions of OR in abusiness, however we can notice the lack of the aim and the reasoning ofexistence of OR.
The OR, due toits extended flexibility, can be used in any business environment, bearing inmind that, in its case, we have to adapt the techniques used in OR to the needsof the specific enterprise.
III. Techniques and Applications of OR
The applicationof OR have met difficulties especially due to the constant changes of thescience and the technology. A theory that has been expressed in order to helpto the solution of problems related with the application of technology to theeveryday life is the 'Queueing theory' (Littlechild L.C. (1977, 160). The abovetheory, which is based to the existence of queues, is mainly concerned withproblems such as: congestion in telephone systems, airports and harbours,machines out of action waiting for repair and so on. Cohen S. S. (1985, 15)refers to 'Linear Programming' a technique used 'to find a combination ofdifferent types of activities which fully exploits the available resources -when the restrictions on the resources have a simple algebraic form'. Thistechnique is called 'Linear Programming' (Cohen S. S., 1985, 15). Anothermethod, the decision tree one is applied by 'laying out the availableinformation in a clear and convenient way, known as a decision tree, so thatthe manager can relatively easy trace out the implications of a particularpolicy, which corresponds to a particular branch of the tree' (Kidd J B inLittlechild S. C., 1977, 207). Operational research can also have many otherapplications in its pure form or in an non - so distinctive role, (see alsoDuckworth, W. E., Gear, A. E., Lockett 1977, 180-184), like the businessforecasting, the corporate planning, the discounted cash flow (DCF) methods,the cost-benefit analysis, the output budgeting and so on. Of course, thetechniques of OR used inside each business are in any case adapted to thespecific requirements and as a result they can present different formulationsand results even when referring to the same industry. Under thesecircumstances, the problems that may occur during their application are beenconfronted in a 'local' level (Samaddar, S., Rabinowitz, G., Zhang, G. P.,2005).
IV. Problems arising when applying the OR ina business environment
The application ofthe OR inside a business has to be adapted to the needs and the requirements ofthe specific enterprise. First of all the management team that carries out theoperational research in order to take decisions for the firm's strategy, has totake into account the 'particular national elements' that characterize thecountry that this business operates (Pagell, M., Katz, J. P., Sheu, C., 2005,4, ReVelle, C. S., Eiselt, H. A., 2005). At a next level, there should be paida lot of attention regarding to the data gathered (i.e. examination ofequivalence and accuracy) especially those which were collected throughinternational markets surveys (see also Van Herk, H., Poortinga, Y. H.,Verhallen, 2005). When referring to the operational research of a business in general,the knowledge gained or gathered is in any case valuable. Under thesecircumstances we have to bear in mind when managing, exploiting or transferringit that every measure of safety has be taken in order to avoid its unwillingmodification or even its damage (Hall, R., Andriani, P., 2003, Nicolau, J. L.,2005, Guzman, G. A. C., Wilson, J., 2005).
We should noticethat, the data involved in the OR, cannot give a totally clear and specificimage for the firm's financial future (sometimes there is even uncertainty forthe current situation), and it's the management's role to handle this problemby relevant measures assuming there are always factors that remain unknown butcan have unexpected consequences under circumstances of pressure or of radicalchanges (see also Herroelen, W., Leus, R., 2004, Ozdemir, M. S., Saaty, T. L.,2004, Cao, Q., Patterson, W., Bai, X., 2005, Prajogo, D. I., Sohal, A. S.,2004).
V. Conclusion
The operationalresearch has a decisive role in a business operation, both to its dailyactivities and to its future strategy. However, in order to achieve its fullpotential (regarding the business development) it has to be adapted every timein the requirements of the specific enterprise and not to be limited tospecific rules and conditions. We should also mention the very important roleof the management team towards this direction. The operational research, likeevery other business activity, needs to be designed, formulated and executedapplying a specific methodology - the one that should be evaluated as the mostsuitable - and under a thorough examination and controlling of the data and theresources involved. In this way it will help directly to the businessdevelopment and it will not remain just another effort to enforce the productivityand - as a result - the profit.
References
Brignall, M., 'Rise: Set course:Operational research', The Guardian, 21/2/2004, 7
Cao, Q., Patterson, W., Bai, X., (2005),'Reexamination of processing time uncertainty', European Journal of OperationalResearch, 164, 185-194
Cohen, S. S., Operational Research, 1stedition, 1985
Duckworth, W. E., Gear, A. E., Lockett,A.G., A guide to Operational Research, 3rd edition, 1977
Guzman, G. A. C., Wilson, J., (2005) 'The'soft' dimension of organizational knowledge transfer', Journal of KnowledgeManagement, vol. 9, no 2, 59-74
Hall, R., Andriani, P., (2003), 'Managingknowledge associated with innovation, Journal of Business Research, vol. 56,145-152
Herroelen, W., Leus, R., (2004), 'Projectscheduling under uncertainty: Survey and research potentials, European Journalof Operational Research, 165, 289-306
Littlechild, S. C., Operational Researchfor Managers, 1st edition, 1977
Nicolau, J. L., (2005), 'Valuing thebusiness environment on a daily basis', European Journal of OperationalResearch, 164, 217-224
Ozdemir, M. S., Saaty, T. L., (2004),'The unknown in decision making - What to do about it', European Journal ofOperational Research (article in press)
Pagell, M., Katz, J. P., Sheu, C.,(2005), 'The importance of national culture in operations management research',International journal of Operations and Production Management, vol. 25, no 4,2005, 371-394
Prajogo, D. I., Sohal, A. S., (2004),'The relationship between organizational strategy, total quality management(TQM), and organization performance - the mediating role of TQM, EuropeanJournal of Operational Research, 168, p. 35-50
ReVelle, C. S., Eiselt, H. A., (2005),'Location analysis: A synthesis and survey', European Journal of OperationalResearch, 165, 1-19
Samaddar, S., Rabinowitz, G., Zhang, G. P., (2005), 'An experimentalanalysis of solution performance in a resource sharing and scheduling problem',European Journal of Operational Research, 165, 139-156
Van Herk, H., Poortinga, Y. H.,Verhallen, (2005), 'Equivalence of survey data: relevance for internationalmarketing', European Journal of Marketing, vol. 39, no 3/4, p. 351-364
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