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There are many steps involved in application of OR. The methodology to be adopted involves the following :-

1.   Observations of the operating environment

OR is a problem-solving technique. First step in solving the problem is the formulation of the problem. This is done through observation of the system and its environment. As much of lnforn1ation regarding the problem as possible is generated by using the researchers, observers etc.

2.   Formulation of the Problem

Any problem has many inter-connected factors related to the situation. The factors.mayor may not be in the control of the management. The factors which are relevant to the situation of the problem and are under the control of management must be identified. Once the problem area is known, different variables considered responsible for the problem are listed. Now it is possible to define the problem in terms of the variables and their relationship.

3.Selecting and developing a suitable model

At this stage, a suitable model which best represents the real life solution has to be selected. The model is developed to show the relations and inter-relation between a cause and effect. Normally the model is fully tested and modified to ensure that OR technique applied is able to solve the problem.

4.   Collecting the data

Next step is to collect the date required by the selected model. The process of the OR model in finding the solution depends to a large extent on the quantity and quality of data. More the data and lesser the errors in data, the quality of managerial decisions will be better. The required information can be obtained through observations or from recorded data or even based on experience and maturity of the OR team.

5.   Finding the solution

Onte the model has been developed, it is possible to find the solution. OR solutions are under a particular situation and under certain assumptions. Many assumptions have to be made by the OR team to simplify the model. The solution is valid only under these assumptions. Once the solution by the OR techniques is found, certain input variables’ are changed to see the output. By this method the best possible solution can be found.

6.   Presenting the solution to the management

The OR team has to present the solution to the management in a proper manner. The conditions under which the solution can be used and the conditions under which solution cannot work must be explained to the management. The assumptions made at arriving the solution and the weakness of the solutions should also be explained to the management.

7.   Implementing the solution

This is the last step in the OR application methodology. The solution provided by the OR technique is scientific but the application of this technique involves many behavioral aspects. This is the ‘art’ part of OR and is of utmost importance. Any gap between the perception of the management and the approach of OR team must be removed.