Operations Research | Operational Research

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Applying analytical methods to decision-making. Explanation of Operations Research (Eng) | Operational Research (Am).


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What is Operations Research? Definition

The terminology "Operations Research" is somewhat unfortunate or even funny, since it is not any more concerned with operations, nor does its application involve any research in the traditional sense. Some good Operations Research definitions are:

  • Operations Research is the discipline of applying advanced analytical methods to help make better decisions. By using techniques such as mathematical modeling to analyze complex situations, operations research gives executives the power to make more effective decisions and build more productive systems.

  • O.R. is the professional discipline that deals with the application of information technology for informed decision-making. It aims to provide a rational bases for decision making by seeking to understand and structure complex situations and to use this understanding to predict system behavior and improve system performance. Much of this work is done using analytical and numerical techniques to develop and manipulate mathematical and computer models of organizational systems composed of people, machines, and procedures.

  • O.R. draws upon ideas from engineering, management, mathematics, and psychology to contribute to a wide variety of application domains; the field is closely related to several other fields in the "decision sciences" - applied mathematics, computer science, economics, industrial engineering, and systems engineering.

  • O.R. is the science of rational decision making and the study, design and integration of complex situations and systems with the goal of predicting system behavior and improving or optimizing system performance. It encompasses managerial decision-making, mathematical and computer modeling and the use of information technology for informed decision-making.

As a science, O.R. traces its roots back to World War II, when military planners such as Frederick Lanchester and Patrick Blackett looked for ways to bring scientific calculations to Allied warfare against Nazi Germany. Compare also: Scientific Management.

Typical Operations Research methods and techniques

  • Simulation. Giving you the ability to try out approaches and test ideas for improvement.

  • Optimization. Narrowing your choices to the very best when there are virtually innumerable feasible options. And comparing them.

  • Probability and statistics. Helping you measure risk, mine data to find valuable connections and insights, test conclusions, and make reliable forecasts.

  • Mathematical models.

  • (Complex) algorithms.

  • Visualization.

  • Neural networks.

  • Pattern recognition.

  • Data mining, Data Warehousing.

O.R. can be used for supporting an indefinite number of business decisions.

Typical applications of Operations Research

  • Capital budgeting.

  • Asset allocation.

  • Portfolio selection.

  • Fraud prevention, Anti-Money Laundering.

  • Benchmarking.

  • Marketing channel optimization, Customer segmentation.

  • Direct marketing campaigns, Predicting customer response, Campaign optimization.

  • Supply Chain Planning.

  • Distribution, Routing, Scheduling, Traffic flow optimization.

  • Resource allocation, Staff allocation.

  • Inventory planning.

  • Retail planning, Merchandize optimization.

  • Product mix and blending, Industrial waste reduction.


The Americans use "Operations Research', the British/Europeans use: "Operational Research". Sometimes you can also the following terms: "Management Science", "Industrial Engineering" and "Decision Science" being used to indicate the same discipline.

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Compare with Operations Research:  Business Intelligence  |  Simulation  |  Benchmarking  |  Regression Analysis  |  Exponential Smoothing  |  CAPM  |  Real Options  |  Game Theory  |  Data Warehousing

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