By Dennis E. Blumenfeld, Debra A. Elkins, and Jeffrey M. Alden
Students majoring in mathematics might wonder whether they will ever use the mathematics they are learning, once they graduate and get a job. Is any of the analysis, calculus, algebra, numerical methods, combinatorics, math programming, etc. really going to be of value in the real world?
An exciting area of applied mathematics called Operations Research combines mathematics, statistics, computer science, physics, engineering, economics, and social sciences to solve real-world business problems. Numerous companies in industry require Operations Research professionals to apply mathematical techniques to a wide range of challenging questions.
Operations Research can be defined as the science of decision-making. It has been successful in providing a systematic and scientific approach to all kinds of government, military, manufacturing, and service operations. Operations Research is a splendid area for graduates of mathematics to use their knowledge and skills in creative ways to solve complex problems and have an impact on critical decisions.
The term ?Operations Research? is known as ?Operational Research? in Britain and other parts of Europe. Other terms used are ?Management Science,? ?Industrial Engineering,? and ?Decision Sciences.? The multiplicity of names comes primarily from the different academic departments that have hosted courses in this field. The subject is frequently referred to simply as ?OR?, and includes both the application of past research results and new research to develop improved solution methods.
Some key steps in OR that are needed for effective decision-making are:
Problem Formulation (motivation, short- and long-term objectives, decision variables, control parameters, constraints);
Mathematical Modeling (representation of complex systems by analytical or numerical models, relationships between variables, performance metrics);
Data Collection (model inputs, system observations, validation, tracking of performance metrics);
Solution Methods (optimization, stochastic processes, simulation, heuristics, and other mathematical techniques);
Validation and Analysis (model testing, calibration, sensitivity analysis, model robustness); and
Interpretation and Implementation (solution ranges, trade-offs, visual or graphical representation of results, decision support systems).
These steps all require a solid background in mathematics and familiarity with other disciplines (such as physics, economics, and engineering), as well as clear thinking and intuition. The mathematical sciences prepare students to apply tools and techniques and use a logical process to analyze and solve problems.
OR became an established discipline during World War II, when the British government recruited scientists to solve problems in critical military operations. Mathematical methods were developed to determine the most effective use of radar and other new defense technologies at the time. OR groups were later formed in the U.S. to meet needs of wartime operations, such as the optimal movement of troops, supplies, and equipment.
Following the end of World War II, interest in OR turned to peacetime applications. There are now many OR departments in industry, government, and academia throughout the world. Examples of where OR has been successful in recent years are the following:
Airline Industry (routing and flight plans, crew scheduling, revenue management);
Telecommunications (network routing, queue control);
Manufacturing Industry (system throughput and bottleneck analysis, inventory control, production scheduling, capacity planning);
Healthcare (hospital management, facility design); and
Transportation (traffic control, logistics, network flow, airport terminal layout, location planning).
There are many mathematical techniques that were developed specifically for OR applications. These techniques arose from basic mathematical ideas and became major areas of expertise for industrial operations.
One important area of such techniques is optimization. Many problems in industry require finding the maximum or minimum of an objective function of a set of decision variables, subject to a set of constraints on those variables. Typical objectives are maximum profit, minimum cost, or minimum delay. Frequently there are many decision variables and the solution is not obvious. Techniques of mathematical programming for optimization include linear programming (optimization where both the objective function and constraints depend linearly on the decision variables), non-linear programming (non-linear objective function or constraints), integer programming (decision variables restricted to integer solutions), stochastic programming (uncertainty in model parameter values) and dynamic programming (stage-wise, nested, and periodic decision-making).
Another area is the analysis of stochastic processes (i.e., processes with random variability), which relies on results from applied probability and statistical modeling. Many real-world problems involve uncertainty, and mathematics has been extremely useful in identifying ways to manage it. Modeling uncertainty is important in risk analysis for complex systems, such as space shuttle flights, large dam operations, or nuclear power generation.
Related to the topic of stochastic processes is queueing theory (i.e., the analysis of waiting lines). A common example is the single-server queue in which customer arrivals and service times are random. Figure 1 illustrates the queue, and the curve shows how sensitive the average queue length becomes under high traffic intensity conditions. Mathematical analysis has been essential in understanding queue behavior and quantifying impacts of decisions. Equations have been derived for the queue length, waiting times, and probability of no delay, and other measures. The results have applications in many types of queues, such as customers at a bank or supermarket checkout, orders waiting for production, ships docking at a harbor, users of the internet, and customers served at a restaurant. Examples of decisions in managing queues are how much space to allocate for waiting customers, what lead times to promise for production orders, and what server count to assign to ensure short waiting times.