Operations research (OR) is an interdisciplinary mathematical science. It uses technology for managerial decision making. In operations research, management formulates a problem and then finds optimal or near-optimal solutions to the problem.
Operations research makes extensive use of computers. The most popular OR techniques include simulation, linear programming, data mining, game theory and decision tree analysis. Although OR is immensely useful, it does have some flaws.
Involves Time and Cost
Operations research is very costly. A company needs to invest time and effort into OR in order to make it effective. The company must hire a team of professionals to conduct constant research. Business scenarios change very rapidly and employees must keep reviewing all the scenarios that are under the purview of OR.
Analysis of Only Quantifiable Factors
OR can evaluate only the effects of numeric and quantifiable factors. It does not consider the complexities involved with humans and their behaviors. For example, OR may compute a time by which the ultimate product should be ready. However, because it does not allow room for employee absenteeism, the production schedule may suffer tremendously if there is a lot of absenteeism from work.
Disconnected From the Real Business Conditions
The results of OR are often academic in nature. Their application and integration in real life situations may not be feasible or practical. The analyst conducting the research is usually a mathematician who is not well versed in actual business scenarios, i.e., he may compute results that are idealistic in nature. Because the real world business situation is very different, the OR results may lose their charm and importance.
Overdependence on Computers
Operations research depends heavily on systems and computing techniques. It does not account for the intangible elements involved in running a business. For example, OR may compute the optimum solution for inventory control. However, there is a transporter's strike and the company does not get its supplies on time. This disturbs the inventory storage mechanism but OR does not allow room for these kinds of problems.