The Operations Research Syste.ms Approach And the Manager

The trend toward increasing complexity is a fundamental characteristic of society. Increasingly, the executive must take into account an ever-widening scope of considerations when planning and making decisions. Operations research and the systems approach provide the means to effectively cope with this increasing complexity. To be effective, however, the O-R function needs understanding from management and staff, but above all it needs access to the sources of information within the organization -hence the importance of information systems. The most commonly used O-R technique is the simulation on computers of real-life situations, processes, organizations and, in general, man-machine systems. Provided that the model is representative, the simulation may be very useful to study the effect of certain decisions and factors in complex situations. It is, however, not sufficient to know how a system works - we must know how it should ideally work. This is recognized as the normative side of O-R and it requires special skills and training which go beyond a scientific background. Mathematical programming and optimization techniques, which are the main instruments of normative studies, are desirable not only in view of their implementation but also because of their information value. Even if they cannot be" implemented, optimal solutions provide the decision-maker with Ear more information content than ordinary solutions – hence, they help the decision-making process. The systems approach recognizes that "each system is an integrated whole" even though composed of diverse specialized structures and sub functions. The methods seek to optimize the over-all system according to the weighted objectives and to achieve maximum compatibility of its parts. The development of O-R and systems skills is a real challenge to the educators. The problem lies in providing experience to the students. To this effect, the Interdisciplinary Institute has been devised to provide the students of the Faculty of Management Sciences at the University of Ottawa with a "laboratory" where practical and relevant experience can be acquired in the management sciences. INTRODUCTION As AN INTRODUCTION to this paper on Operations Research, it may be appropriate to recall a story that happened to me in the mid-fifties, shortly after the oil company I, was working for installed the first computer in Western Canada. As 1 was responsible for this decision and also in charge of applied science programming(1), I was eager to introduce the use of computers in various domains, notably in that of decision-making. The company was at the time frequently engaged in evaluating prospective oil exploration leases in order to determine the amount of cash bonuses to bid at public auctions of mineral rights. I developed, therefore, a computer procedure to estimate the amount to bid, given the reservoir engineer's estimate of recoverable oil and gas reserves and the projection of oil and gas production, an estimate of risk from the geologist and geophysicist, and so forth ..., including the rate of return expected by management. Some time was devoted to acquaint the company's evaluation engineer with this procedure.