This is how you make better decisions
There is an endless list of issues that business managers face daily. They need to make decisions about financing, the location of the next plant to build, how much product to manufacture, the number of people to hire and so on.
There is an endless list of issues that business managers face daily. They need to make decisions about financing, the location of the next plant to build, how much product to manufacture, the number of people to hire and so on. To make the right decisions for the multitude of complex issues, managers utilize statistics and operation research.
Operation research is an analytical problem-solving method based in science that helps managers make strategic decisions. The best time to use operation research is when you’re trying to make decisions under uncertain conditions or conflicting objectives. Here is a list of advantages of operation research in organizations:
1. Improved coordination
Operation research (OR) integrates the various objectives of every department to allow the organization run as smoothly as possible. For instance, operation research analytics harmonizes the aims of the marketing department with the agenda of the production department. Coordinating on a departmental level prevents confusions that can cost an organization millions.
2. Better control
Providing constant executive supervision is not only time consuming, it is also equally expensive. This is the reason management encourages the use of operation research techniques to maintain control over subordinates. OR lets managers establish standards of performance and provides methods to measure productivity. Statistics and operation research also allows managers to note discrepancies in standards and helps them in taking the required actions.
3. Enhanced decision making
Since operational research is based on mathematics and science, it allows managers to make quicker and better decisions. Operation research provides a higher than normal number of alternative decisions that managers can make. It also evaluates the risks associated with every alternate decision. Utilising operation research arms managers with greater confidence when it comes to making the optimal choice.
Overall, operation research analysis increases an organization's productivity in every aspect including inventory, machine utilization, factory size, recruitment, and implementing new technologies. It is, therefore, easy to understand why an organization's management utilizes operation research. If you are looking to be a manager in the near future then undertaking degree programs like MSC applied statistics can push you in the right direction. These courses will give you an in-depth understanding of the workings of OR analysis.