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Best answer of smu mba assignment mba205 Q1. Explain the process of OR

AnswerOperations Research is “the use of mathematical models, statistics and algorithms to aid in decision-making. It is most often used to analyze complex real-world systems, typically with the goal of improving or optimizing performance. It is one form of applied mathematics.”

The quest for improvement has been a continual one and operations research has been one of the areas that has been traditionally focused on improving operations across the company, particularly in production, operation, scheduling and physical systems.  As such, there is a wide body of knowledge upon which can draw to improve procurement and sourcing operations when properly applied and modified.  Even Six Sigma’s (Strategic Sourcing) toolbox makes extensive use of techniques and processes that have their foundations in operations research.

Basic Operations Research Process
(1) Recognize the Problem

(2) Formulate the Problem

(3) Construct a Model
(4) Find a Solution
(5) Define the Process
(6) Implement the Solution
(7) Repeat and Refine

Essentially, the operations research process is your basic problem solving process, like the introductory problem solving process you might encounter if you were studying (cognitive) psychology, the art of mathematics, or (classical) engineering.  Furthermore, it neatly captures the key steps you will have to work through as you attempt to improve and evolutionize your sourcing process.

(1) You first have to define what your primary problem is and what your key goals are.  Are you spending too much money?  If so, where.  Are you spending too much time on the process?  If so, why?  Etc.
(2) Then you have to formulate and frame the key problem.  For example, you believe you’re spending too much on your high volume direct materials or you are spending too much time in your data collection process.
(3) Once you have precisely formulated the problem to solve, you need to model what you believe the solution should look like.  Many individuals and organizations skip this step and go straight to the solution identification step.  However, if you don’t know what the solution should look like, you risk selecting the wrong solution.  For example, if you believe you are spending too much, you might select a (reverse) e-Auction platform.  However, if current raw commodity prices are high, this might not save you any money.  Conversely, if you instead sought out a strategic supplier who would work with you to improve processes and component reusability, you might save a bundle.  Always understand what the solution should look like and what it should accomplish before selecting a solution.


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