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Applications Of Operations Research in the field of Information and Communication Technologies


School of Management Studies CUSAT, KOCHI-22 E-mail:

Abstract: Traditionally, Operations Research is the scientific study of logistic networks to provide for decision support at all levels in order to optimize production and distribution of the commodity flows. Nowadays, these logistic networks have become very large and may range over several countries, while the demands for quality of service have grown similarly to ever higher standards. Generally one agrees that to maintain such large networks successfully, one needs the control of all the information flows through the network, that is, continuous information on the status of the resources. In this sense one could say that Operations Research and Information Technology has joined together. This journal aims to analyze several aspects and problems that arise in such modern logistic and communication networks. Key Words: Simulation, Optimization, Game Theory, Pattern Recognition, Queuing, Network Routing, Stochastic network, stochastic simulation, Transportation, Data Mining.

1. INTRODUCTION 1.0.Operations Research- an overview

Management science, or operations research, is a specialized discipline for business decision-making. The term Operations Research (OR) describes the discipline that is focused on the application of information technology for informed decision-making. In other words, OR represents the study of optimal resource allocation. The goal of OR is to provide rational bases for decision making by seeking to understand and structure complex situations, and to utilize this understanding to predict system behavior and improve system performance. Much of the actual work is conducted by using analytical and numerical techniques to develop and manipulate mathematical models of organizational systems that are composed of people, machines, and procedures. OR involves solving problems that have complex structural, operational and investment dimensions, involving the allocation and scheduling of resources. A typical approach might include:

Defining the problem, including identifying the absolute requirements and the objectives to be achieved, identifying what information is required and/or available, and what form the answer should take; Breaking the problem down into logical elements that can be analyzed or solved; Solving the problem using the most appropriate analytical technique; and Offering insights into the problem, such as determining the sensitivity of the outcomes to inputs and determining the value of additional information.


PREHISTORY Some say that Charles Babbage (17911871) who is arguably the father of computers is also the father of operations research because his research into the cost of transportation and sorting of mail led to Englands universal Penny Post in 1840 OR DURING WORLD WAR II The modern field of OR arose during World War II. Scientists in the United Kingdom including Patrick Blackett, Cecil Gordon, C. H. Waddington, Owen Wansbrough-Jones and Frank Yates, and in the United States with George Dantzig looked for ways to make better decisions in such areas as logistics and training schedules. Here are examples of OR studies done during World War II: Britain introduced the convoy system to reduce shipping losses, but whilethe principle of using warships to accompany merchant ships was generally accepted, it was unclear whether it was better for convoys to be small or large. Convoys travel at the speed of the slowest member, so small convoys can travel faster. It was also argued that small convoys would be harder for German U-boats to detect. On the other hand large convoys could deploy more warships against an attacker. It turned out in OR analysis that the losses suffered by convoys depended largely on the number of escort vessels present, rather than on the overall size of the convoy. The conclusion, therefore, was that a few large convoys are more defensible than many small ones. In another OR study a survey carried out by RAF Bomber Command as analyzed. For the survey, Bomber Command inspected all bombers returning from bombing raids over Germany over a particular period. All damage inflicted by German air defenses was noted and the recommendation was given that armor be added in the most heavily damaged areas. OR team instead made the surprising and counter-intuitive recommendation that the armor be placed in the areas which were completely untouched by damage. They reasoned that the survey was biased, since it only included aircraft that successfully came back from Germany. The untouched areas were probably vital areas, which, if hit, would result in the loss of the aircraft When the Germans organized their air defenses into the Kammhuber Line, it was realized that if the RAF bombers were to fly in a bomber stream they could overwhelm the night fighters who flew in individual cells directed to their targets by ground controllers. It was then a matter of calculating the statistical loss from collisions against the statistical loss from night fighters to calculate how close the bombers should fly to minimize RAF losses.

Phases of Operations Research Study Seven Steps of OR Study An OR project can be split in the following seven steps: Step 1: Formulate the problem The OR analyst first defines the organizations problem. This includes specifying the organizations objectives and the parts of the organization (or system) that must be studied before the problem can be solved.

Step 2: Observe the system Next, the OR analyst collects data to estimate the values of the parameters that affect the organizations problem. These estimates are used to develop (in Step 3) and to evaluate (in Step 4) a mathematical model of the organizations problem. Step 3: Formulate a mathematical model of the problem The OR analyst develops an idealized representation i.e. a mathematical model of the problem. Step 4: Verify the model and use it for prediction The OR analys tries to determine if the mathematical model developed in Step 3 is an accurate representation of the reality. The verification typically includes observing the system to check if the parameters are correct. If the model does not represent the reality well enough then the OR analyst go back either to Step 3 or Step 2. Step 5: Select a suitable alternative Given a model and a set of alternatives,the analyst now chooses the alternative that best meets the organizations objectives. Sometimes there are many best alternatives, in which case the OR analyst should present them all to the organizations decision-makers, or ask for more objectives or restrictions Step 6: Present the results and conclusions The OR analyst presents the model and recommendations from Step 5 to the organizations decision-makers. At this point the OR analyst may find that the decisionmaker do not approve of the recommendations. This may result from incorrect definition of the organizations problems or decision-maker may disagree with the parameters or the mathematical model. The OR analyst goes back to Step 1, Step 2, or Step 3, depending on where thedisagreement lies. Step 7: Implement and evaluate recommendation Finally, when the organization has accepted the study, the OR analyst helps in implementing the recommendations. The system must be constantly monitored and updated dynamically as the environment changes. This means going back to Step 1, Step 2, or Step 3, from time to time. In this course we shall concentrate on Step 3 and Step 5, i.e., we shall concentrate on mathematical modeling and finding the optimum of a mathematical model. We will completely omit the in-between Step 4. That step belongs to the realm of statistics. The reason for this omission is obvious: The statistics needed in OR is way too important to be included as side notes in this course! So, any ORist worth her/his salt should study statistics, at least up-to the level of parameter estimization. Problems addressed with operational research Critical path analysis or project planning: identifying those processes in a complex project which affect the overall duration of the project Floor planning: designing the layout of equipment in a factory or components on a computer chip to reduce manufacturing time (therefore reducing cost) Network optimization: for instance, setup of telecommunications networks to maintain quality of service during outages Allocation problems Facility location Assignment Problems: Assignment problem Generalized assignment problem

Quadratic assignment problem Weapon target assignment problem Bayesian search theory : looking for a target Optimal search Routing, such as determining the routes of buses so that as few buses are needed as possible Supply chain management: managing the flow of raw materials and products based on uncertain demand for the finished products Efficient messaging and customer response tactics Automation: automating or integrating robotic systems in human-driven operations processes Globalization: globalizing operations processes in order to take advantage of cheaper materials, labor, land or other productivity inputs Transportation: managing freight transportation and delivery systems (Examples: LTL Shipping, intermodal freight transport) Scheduling: Personnel staffing Manufacturing steps Project tasks Network data traffic: these are known as queueing models or queueing systems. Sports events and their television coverage Blending of raw materials in oil refineries Determining optimal prices, in many retail and B2B settings, within the disciplines of pricing science Operational research is also used extensively in government where evidence-based policy is used.


The operations research modeling has been a very difficult task. But by the arrival of information technology and the usage of computers in modeling the job has become much easier. The practice of OR involves a major activity in problem formalization and model construction and validation; other activities include a computational part, analysis of solutions, arriving at conclusions, and implementation of the decision. The increased computing power has stimulated large-scale use of mathematical programming models for planning and on line control. Databases and computer networks make reliable up-to-date data available for more effective decision making. TORA and SIMNET II are examples of software packages in OR. Some problems are one-off; others require an on-going solution. Where an on-going solution is required, we are able to deliver a framework for solving the problem in the future and, if necessary, a computerized solution integrated into an organizations existing information infrastructure

Some of the possible solution techniques include: simulation, data mining etc

2.1 Simulation
A computer simulation, a computer model, or a computational model is a computer program, or network of computers, that attempts to simulate an abstract model of a particular system. Computer simulations have become a useful part of mathematical modeling of many natural systems in physics (computational physics), astrophysics, chemistry and biology, human systems in economics, psychology, and social science and in the process of engineering new technology, to gain insight into the operation of those. Computer simulations are used in a wide variety of practical contexts, such as: analysis of air pollutant dispersion using atmospheric dispersion modeling design of complex systems such as aircraft and also logistics systems. design of Noise barriers to effect roadway noise mitigation flight simulators to train pilots weather forecasting forecasting of prices on financial markets (for example Adaptive Modeler) behavior of structures (such as buildings and industrial parts) under stress and other conditions design of industrial processes, such as chemical processing plants strategic Management and Organizational Studies reservoir simulation for the petroleum engineering to model the subsurface reservoir

2.2 Network Flow Programming

The term network flow program describes a type of model that is a special case of the more general linear program. The class of network flow programs includes such problems as the transportation problem, the assignment problem, the shortest path problem, the maximum flow problem, the pure minimum cost flow problem, and the generalized minimum cost flow problem. It is an important class because many aspects of actual situations are readily recognized as networks and the representation of the model is much more compact than the general linear program. When a situation can be entirely modeled as a network, very efficient algorithms exist for the solution of the optimization problem, many times more efficient than linear programming in the utilization of computer time and space resources. Network models are constructed by the Math Programming add-in and may be solved by either by the Excel Solver, Jensen LP/IP Solver or the Jensen Network Solver.

2.3 Data Mining

Generally, data mining (sometimes called data or knowledge discovery) is the process of analyzing data from different perspectives and summarizing it into useful information information that can be used to increase revenue, cuts costs, or both. Data mining software is one of a number of analytical tools for analyzing data. It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified. Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases. Data mining is primarily used today by companies with a strong consumer focus retail, financial, communication, and marketing organizations. It enables these companies to determine relationships among internal factors such as price, product positioning, or staff skills, and external factors such as economic indicators, competition, and customer

demographics. And, it enables them to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to drill down into summary information to view detail transactional data Data mining consists of five major elements: Extract, transform, and load transaction data onto the data warehouse system. Store and manage the data in a multidimensional database system. Provide data access to business analysts and information technology professionals. Analyze the data by application software. Present the data in a useful format, such as a graph or table.

Different levels of analysis are available: Artificial neural networks: Non-linear predictive models that learn through training and resemble biological neural networks in structure. Genetic algorithms: Optimization techniques that use processes such as genetic combination, mutation, and natural selection in a design based on the concepts of natural evolution. Decision trees: Tree-shaped structures that represent sets of decisions. These decisions generate rules for the classification of a dataset. Specific decision tree methods include Classification and Regression Trees (CART) and Chi Square Automatic Interaction Detection (CHAID) . CART and CHAID are decision tree techniques used for classification of a dataset. They provide a set of rules that you can apply to a new (unclassified) dataset to predict which records will have a given outcome. CART segments a dataset by creating 2-way splits while CHAID segments using chi square tests to create multi-way splits. CART typically requires less data preparation than CHAID. Nearest neighbor method: A technique that classifies each record in a dataset based on a combination of the classes of the k record(s) most similar to it in a historical dataset (where k 1). Sometimes called the knearest neighbor technique. Rule induction: The extraction of useful if-then rules from data based on statistical significance. Data visualization: The visual interpretation of complex relationships in multidimensional data. Graphics tools are used to illustrate data relationships

2.4 Pattern Recognition

A complete pattern recognition system consists of a sensor that gathers the observations to be classified or described, a feature extraction mechanism that computes numeric or symbolic information from the observations, and a classification or description scheme that does the actual job of classifying or describing observations, relying on the extracted features. The classification or description scheme is usually based on the availability of a set of patterns that have already been classified or described. This set of patterns is termed the training set, and the resulting learning strategy is characterized as supervised learning. Learning can also be unsupervised, in the sense that the system is not given an a priori labeling of patterns, instead it itself establishes the classes based on the statistical regularities of the patterns. The classification or description scheme usually uses one of the following approaches: statistical (or decision theoretic) or syntactic (or structural). Statistical pattern recognition is based on statistical

characterizations of patterns, assuming that the patterns are generated by a probabilistic system. Syntactical (or structural) pattern recognition is based on the structural interrelationships of features. A wide range of algorithms can be applied for pattern recognition, from simple naive Bayes classifiers and neural networks to the powerful KNN decision rules.

2.5 Stochastic simulation

Stochastic simulation algorithms and methods were initially developed to analyze chemical reactions involving large numbers of species with complex reaction kinetics. stochastic networks. These are networks of entities, with particles residing in and moving between these entities according to stochastic processes. A key example is a queuing network, where the entities are service facilities and the particles customers. In the design of computer, communication, and manufacturing systems, the most important criterion presently is quality of service, in relation to the costs of the system. The quality of service is expressed in terms of performance and reliability of the systems in relation to their applications. Stochastic networks provide the mathematical models for the description and analysis of these systems. Technological developments have in recent years led to new forms of the processing, storage and transmission of information, and have changed considerably the way companies are organized. In its turn, this has given rise to a plethora of new and challenging problems in the analysis and control of stochasticnetworks.

2.6 Network routing

Network routing, a critical element of network management, consists of the decision rules to connect the pairs of origins and destinations in order to communicate at a given rate on a given topology with fixed link capacities. In the hierarchy of decision problems that dominate network management, routing stands between network design (where topology, facility location and capacity assignment are considered under long-term strategic objectives) and flow control (where traffic is dynamically organized under short-term operational objectives at each switch and router along the routes specified by the routing module). These decision levels are strongly interconnected, giving rise to integrated optimization models at each interface, such as capacity and flow assignment or routing under quality of service constraints

2.7 Stochastic Optimization

Stochastic optimization algorithms have been growing rapidly in popularity over the last decade or two, with a number of methods now becoming industry standard approaches for solving challenging optimization problems. In short, while classical deterministic optimization methods (linear and nonlinear programming) are effective for a range of problems, stochastic methods are able to handle many of the problems for which deterministic methods are inappropriate. Stochastic optimization refers to the minimization (or maximization) of a function in the presence of randomness in the optimization process. The randomness may be present as either noise in measurements or Monte Carlo randomness in the search procedure, or both

2.8 Queuing Theory

Queuing Theory tries to answer questions like e.g. the mean waiting time in the queue, the mean system response time (waiting time in the queue plus service times), mean utilization of the service facility, distribution of the number of customers in the queue, distribution of the number of customers in the system and so forth. These questions are mainly investigated in a stochastic scenario, where e.g. the inter-arrival times of the customers or the service times are assumed to be random.

3.0 Conclusion
Operations research, or Operational Research in British usage is a discipline that deals with the application of advanced analytical methods to help make better decisions[1]. It is often considered to be a sub-field of Mathematics. The terms management science and decision science are sometimes used as more modernsounding synonyms

Employing techniques from other mathematical sciences, such as mathematical modeling, statistical analysis, and mathematical optimization, operations research arrives at optimal or near-optimal solutions to complex decision-making problems. Because of its emphasis on human-technology interaction and because of its focus on practical applications, operations research has overlap with other disciplines, notably industrial engineering and operations management, and draws on psychology and organization science. Operations Research is often concerned with determining the maximum (of profit, performance, or yield) or minimum (of loss, risk, or cost) of some real-world objective. Originating in military efforts before World War II, its techniques have grown to concern problems in a variety of industries. Operational research (OR) encompasses a wide range of problem-solving techniques and methods applied in the pursuit of improved decision-making and efficiency. Some of the tools used by operational researchers are statistics, optimization, probability theory, queuing theory, game theory, graph theory, decision analysis, mathematical modeling and simulation. Because of the computational nature of these fields, OR also has strong ties to computer science and analytics. Operational researchers faced with a new problem must determine which of these techniques are most appropriate given the nature of the system, the goals for improvement, and constraints on time and computing power. Work in operational research and management science may be characterized as one of three categories: Fundamental or foundational work takes place in three mathematical disciplines: probability theory, mathematical optimization, and dynamical systems theory. Modeling work is concerned with the construction of models, analyzing them mathematically, implementing them on computers, solving them using software tools, and assessing their effectiveness with data. This level is mainly instrumental, and driven mainly by statistics and econometrics. Application work in operational research, like other engineering and economics disciplines, attempts to use models to make a practical impact on real-world problems. The major sub disciplines in modern operational research, as identified by the journal Operations Research are: Computing and information technologies Decision analysis Environment, energy, and natural resources Financial engineering Manufacturing, service sciences, and supply chain management Marketing Engineering Policy modeling and public sector work Revenue management Simulation Stochastic models Transportation

The management scientist's mandate is to use rational, systematic, science-based techniques to inform and improve decisions of all kinds. Of course, the techniques of management science are not restricted to

business applications but may be applied to military, medical, public administration, charitable groups, political groups or community groups. Management science is concerned with developing and applying models and concepts that may prove useful in helping to illuminate management issues and solve managerial problems, as well as designing and developing new and better models of organizational excellence.[25] The application of these models within the corporate sector became known as Management science Some of the fields that have considerable overlap with Management Science include: Data mining Decision analysis Engineering Forecasting Game theory Industrial engineering Logistics Mathematical modeling Mathematical optimization Probability and statistics Project management Simulation Social network/Transportation forecasting models Supply chain management Financial engineering

Management science is also concerned with so-called soft-operational analysis, which concerns methods for strategic planning, strategic decision support, and Problem Structuring Methods (PSM). In dealing with these sorts of challenges mathematical modeling and simulation are not appropriate or will not suffice. Therefore, during the past 30 years, a number of non-quantified modeling methods have been developed. These include : :stakeholder based approaches including met game analysis and drama theory morphological analysis and various forms of influence diagrams, approaches using cognitive mapping


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