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The first stage of OR application after collecting data/information through observation is the formulation of the problem. It is the most important and most difficult task in OR application. Have the OR team been able to identify the right problem for finding the solution? Has the problem been accurately defined in unambiguous manner? Selecting and developing a suitable model is not an easy task. The model must represent the real life situation as far as possible. Collection of data needs a lot of time by a number of people. It is time consuming and expensive process. Collection of data is done either by observation or from the previous recorded data. When a system is being observed by the OR team, it effects the behaviour of the persons performing the task. The very fact that the workers know that they are being observed is likely to change their work behaviour. The second method of data collection, the records, are never reliable and do not provide sufficient information which is required.

As OR problem-solving techniques is very time consuming, the quality of decision-making may become a causality. The management has to make a decision either way. Decision based on insufficient or incomplete information will not be the best decision. A reasonably good solution without the use of OR may be preferred by the management as compared to a slightly better solution provided by the use of OR which is very expensive in time and money.

Due to the above reasons, many OR specialists try and fit the solution they have, to the problem. This is dangerous and unethical and organizations must guard against this.