Maximum benefit can be acquired from the operations research technique when a decision maker knows the value of this extremely powerful tool. Some of these includes:
- It helps to analyse and ideally use the resources. Various efficient and effective procedures are suggested by linear programming for utilising production factors.
- When operations research techniques are the used not only quality decisions can be taken but with its help improvement in decisions can also be achieved. If representation of real life circumstances is formulated with the help of mathematical models, one can get clarity in computational tables. The happenings are usually associated with various components in the model. This can be a beneficial factor which a decision maker can use as per his or her requirement.
Apart from being a powerful tool which is used for extracting the best out of any finite resource, operations research also has few shortcomings. These limitations only show in the form of time and funds during the formulation of a satisfactory mathematical model. Therefore, the problematic area of its application is just its utility. Few of its highlighted limitations are described below.
- Complex computation
In case of complex computations of a large number of problems, it is very difficult for a mathematical model to consider every factor of real life problems and formulate solutions accordingly.Due to this reason, the help of computers is required to calculate the developing relationships between larger variables. This aspect is considered as a discouraging factor by small firm and corporations who wish to acquire the best operations research techniques.
- Quantity of issues
There are certain intangible factors like as human relationship, human emotions, adecision based on these and so on, which can affect the identification of problems. The perfect solution cannot be found out if these intangible components are removedfrom the problems. This is because few of these variables are more important than the tangible ones.
- Difficulty in conceptualization and utilisation by managers
The application of operations researchis stated as a job which can be executed only by skilled professionals. These experts may be statisticians or mathematicians who have adept understanding and knowledge to formulate models, search for aneffective solution and the correct suggestion for its execution.
Managers of an organisation do not have any concept of the application of operations research technique. If they suggest any OR technique themselves, the probability of lesser comprehension regarding the problem is maximum. This perception may also create an adverse situation for the management who may not recognise the ‘why’ of that suggestion. The result can lead to a gap which may not be ideal for any organisation.
Links of Previous Main Topic:-
- Introduction to accounting and branches of accounting
- Preparation of final accounts
- Introduction of fund flow statement
- Introduction cash flow statement
- Ratio analysis significance of ratio analysis
- Fixed assets and depreciation meaning causes objectives methods and basic factor
- Cost accounting concept objectives advantages limitations general principles and cost sheet
- Job costing
- Introduction process costing
- Activity based costing introduction concept and classification
- Introduction inventory pricing and valuation
- Standard costing introduction
- Management accounting
- Marginal costing
- Relevant cost for decision making
- Budget and budgetary control
- Limitations of historical accounting
- Introduction to responsibility accounting
- Introduction to financial management
- Introduction and types of dividend
- Concept of cost of capital
- Capitalization meaning
- Concepts of working capital
- Concept of capital expenditure
- Learning objectives and chapter outline
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