inventory control techniques in operations research

Thus, Operation Research offers alternative plans for a problem to the management for decisions. Its purpose is to give administration, a basis for predicting quantitatively the most effective results of an operation under given set of variable conditions and thereby to provide a sound basis for “decision-making”.

Observation and data collection for better understanding of the problem.

The study must also consider economical aspects. (b) The resources or facilities are limited, which do not allow each activity to be performed in best possible way. Operation research approach helps in operation management. Many financial decision making problems can be solved by using linear programming technique. Operational research ... are tackled by various Operation Research techniques. These models are used for determining the time of replacement or maintenance of item, which may either: (iii) Become beyond economical to repair or maintain. Changing relationship between variables i.e., considering them as linear or straight line. While evaluating any decision, the important interactions and their impact on the whole organisation against the functions originally involved are reviewed. It may also deal with the overall flow of goods and services from plants to consumers. Inputs for an operating system may be material, machine and human resource. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Whether to manufacture or to purchase i.e., make and buy decisions. Expected reactions of the competitors to the alternative must also be considered. The ultimate and full responsibility for analysing all factors and making decision will be of the manager. This team was very success­ful and greatly contributed to the meticulous handling of entire operation and related problems of the operation. Plagiarism Prevention 5. i. iii. is the application of modern methods of mathematical science to complex prob­lems involving management of large systems of men, machines, materials, and money in industry, business, government and defence. Report a Violation 11. iii. approach. A properly formulated and correctly manipulated model is useful in predicting the effect of changes in control variables on the overall system effectiveness. The major production oriented methods and techniques of inventory control for managing inventories efficiently are: the ABC analysis, the EOQ model, safety stocks, and the re-order point. Due to conventional thinking, changes face lot of resistance from workers and some­times even from employer. v. Exploitation of new material resources. Judgment and subjective decision-making are not good enough. The general form of a mathematical model is: Since model is only an approximation of the real situation, hence it may not include all the variables. It is the method of analysis by which management receives aid for their decisions. These techniques are used for solving operation problems having many variables subject to certain restrictions. In the more wide sense, operation research does not deal with the everyday problems such as output by the one worker or machine capacity; instead it is concerned with the overall aspect of business operation such as something as the relationship between inventory, sales, production and scheduling. Manufacturing: Production scheduling and sequencing stabilisation of produc­tion, employment, layoffs, and optimum product mix. i. i. Inventory Control:INVENTORY COSTS, INVENTORY MODELS (E.O.Q. The inventory control problem is the problem faced by a firm that …

These expressions consist of controllable and uncontrollable variables. Although it is very clear that operation research never make decisions for the man­agement, instead the method presents management with a careful scientific and quantitative analysis of problem so that the management will be in a better position to make sounder deci­sions. On the other hand, with the explosion of population and consequent shortage of food, every country is facing the problem of optimum allocation of land for various crops in accordance with climatic conditions and available facilities. In such problems, objectives are—profit, costs, quantities manufactured etc. iii. Such problems are generally faced by the managers of mutual funds, banks and insurance companies. It should be able to asscimilate the system environmental changes without change in its framework.

The O.R. is relatively new, but the method used for this is not a new one. Thus these models help to combine activities and available resources so as to optimise and get a solution to obtain an overall effectiveness. Examples of such strategies are game of cards or chess, fixing of prices in a competitive market where these strategies are termed as “theory”. (vii) It is the application of the scientific methods by scientists and subject specialists to the study of the given operation. Meaning and Definition of Operation Research 2. Though the name of this method, Operation Research (O.R.) First in, first out (FIFO) First-in, first-out (FIFO) is an important principle of inventory management. These are applicable to only specific categories of decision-making problems. Image Guidelines 4. Determination of time-cost trade off and control of development projects. are follows: This requires an inter-disciplinary team includ­ing individuals with skills in mathematics, statistics, economics, engineering, mate­rial sciences, computer etc. Simulation is an experimental method used to study behaviour over time. Problems dealing with production processing i.e., production control and material ship­ment. Account Disable 12.

Putting the solution to work: implementation. v. Project scheduling and allocation of resources. MODELS) Operations Research Formal sciences Mathematics Formal Sciences Statistics In other words, it is concerned with the satisfactory customer service and optimum resource utilisation.

Objective of the model is to provide a means for analysing the behaviour of the system for improving its performance. i. Analysis of available information and verification of hypothesis.

Determination of type of problem, its origin and causes. It is found that method used should consider the emotional and subjective factors also. ii.

Normative models for repetitive problems. While constructing the model, efforts should be made to simplify them, but only up to the extent so that there is no significant loss of accuracy. For example, for solving a problem related to the inventory management, O.R. Methodology 6. Operation Research, is a scientific approach for decision-making, and therefore must follow following steps: The problem must be first clearly defined. The most widely used method of inventory control is known as ABC analysis. ii. Phases in Operation Research Study 3. study determines as to which alternative course of action is most effective to achieve the desired objectives. Here only some of the common applications are being mentioned: In such problems, various centres with their demands are given and various warehouses with their stock positions are also known, then by using linear programming technique, we can find out most economical distribution of the products to various centres from various warehouses. These techniques can be applied to determine best mix of the products for a plant with available resources, so as to get maximum profit or minimum cost of produc­tion.

Formulation of relevant hypothesis and models. Such type of strategies are adopted where, efficiency of deci­sion of one agency is dependent on the decision of another agency. O.R. whereas restrictions may be e.g. Operation management can be defined as the management of systems for providing goods or services, and is concerned with the design and operation of systems for the manufacture, transport, supply or service. Operation Research is done by a team of scientists or experts from different related disciplines. The operating systems convert the inputs to the satisfaction of customers need. These are concerned with the selection of an appropriate sequence of performing a series of jobs to be done on a service facility or machine so as to optimise some efficiency measure of performance of the system.

The procedure for making decisions with the OR study generally involves the following phases: iii. … The most well-known use is in the form of Economic Order Quantity equation for finding economic lot size. Limitations.

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