Operations research is an applied science based on advanced analytics methods that permit to address quantitative decision problems and to find optimal or near-optimal solutions. It is based on three main concepts:
- The variables, that is the numerical decisions that we control and need to determine (e.g. how many parts of a product to produce on a machine tomorrow)
- The constraints, i.e. the limitations that restrict our choices for decision variables (e.g. the daily production capacity of the machine, the possible lot sizes, the available raw materials, etc…)
- The objective function (or functions), which is the criterion (criteria) that describes our preference (e.g. minimize the production costs or maximize the expected profit).
Generally speaking, the approach followed by operations research specialists consists of the following steps:
- Identify the requirements and the optimization boundaries.
- Construct a model by breaking down the problem into basic components and mathematical formulas.
- Use the model to develop a general framework for applying existing methods or new specialized algorithms.
- Manually or automatically collect the parameters associated the particular instance to solve, run the optimization engine (considering computational issues), and retrieve the solutions.
The outcome is a mathematically proven result able to address human decision-making or to directly prescribe actions.
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