Operations Research, or OR as it is commonly referred to, is a management science. It makes extensive use of mathematical and scientific fields. Operations research is concerned with finding solutions to complex problems and scenarios. Modeling techniques and algorithms are expansively used. Operations research primarily is all about the maxima and the minima functions. Using these, an organization attempts to maximize its output, turnover and profits and minimize its losses and risks.

Linear Programming

Organizations use Linear Programming (LP) techniques for finding the best and most profitable solutions. The organization might be either looking for solutions to maximize its profits or curtail its costs. Linear programming is a function of using a number of linear equations for the construction of mathematical models. A number of graphs are drawn, and algebra is extensively used. The main aim is to deploy the limited resources in the most optimum manner. This is in relation to the constraint and restraints present in each function. Linear programming was developed in the 1940s during the World War II. Countries used this for optimally planning out their budgets. Costs and risks were totally mitigated and the enemy suffered mammoth losses. Today, LP techniques are used in all organizations irrespective of their size and nature. These techniques are used for planning, routing, scheduling and designing functions in the organizations. LP techniques are extensively used in the manufacturing, energy and telecommunications industries.


This is a very important OR tool. Here the economist constructs a model that replicates a real business scenario. Scenarios where real market testing is impossible necessitate the need of a simulation model. Real market testing involves risks and expenditure. Organizations use this for asset and resource allocation, selecting their portfolio and capital budgeting purposes. A number of available alternatives are evaluated and contrasted and the best one is chosen. Simulation models were first used as early 5,000 years back--the Chinese used it for their military operations.


Using statistics, the organization is able to measure risks present in all the realms of the business. The organization forecasts future trends and make informed business decisions. The various trade-offs are scrutinized and the best method is zeroed on.