Operation Research

Application Of Operation Research in Fashion Industry

What is Operational Research?

Operational Research (OR) is the use of advanced analytical techniques to improve decision making. It is sometimes known as Operations Research, Management Science or Industrial Engineering. People with skills in OR hold jobs in decision support, business analytics, marketing analysis and logistics planning as well as jobs with OR in the title.

Use of Operation Research

Todays global markets and instant communications mean that customers expect high-quality products and services when they need them, where they need them. Organisations, whether public or private, need to provide these products and services as effectively and efficiently as possible. This requires careful planning and analysis the hallmarks of good OR. This is usually based on process modelling, analysis of options or business analytics.

Types Of Operation Research in today`s world

Scheduling: of aircrews and the fleet for airlines, of vehicles in supply chains, of orders in a factory and of operating theatres in a hospital. Facility planning: computer simulations of airports for the rapid and safe processing of travellers, improving appointments systems for medical practice. Planning and forecasting: identifying possible future developments in telecommunications, deciding how much capacity is needed in a holiday business. Yield management: setting the prices of airline seats and hotel rooms to reflect changing demand and the risk of no shows. Credit scoring: deciding which customers offer the best prospects for credit companies. Marketing: evaluating the value of sale promotions, developing customer profiles and computing the life-time value of a customer. Defence and peace keeping: finding ways to deploy troops rapidly.

Operation Research methods and techniques

Computer simulation: allowing you to try out approaches and test ideas for improvement. Optimisation: narrowing your choices to the very best when there are so many feasible options that comparing them one by one is difficult. Probability and statistics: helping you measure risk, mine data to find valuable connections and insights in business analytics, test conclusions, and make reliable forecasts. Problem structuring: helpful when complex decisions are needed in situations with many stakeholders and competing interests.

Operation Research in Fashion Industry

Operation Research represents the study of optimal resource allocation. The fashion industry is very complicated. It is made up of the following industries:

1. Fiber and fabric industry, 2. Garments industry 3. Retail industry

OR addresses a wide variety of issues of above industries in transportation, inventory planning, production planning, communication operations, computer operations, financial assets, risk management, revenue management, and many other fields where improving business productivity is paramount.

OR reflects an analytical method of problem solving and decision-making that is useful in the management of organizations of fashion industry. OR improves the effectiveness and the efficiency of an institution, hence some of the benefits offered by OR include: Decrease Cost or Investment Increase Revenue or Return on Investment Increase Market Share Manage and Reduce Risk Improve Quality Increase Throughput while Decreasing Delays Achieve Improved Utilization form Limited Resources Demonstrate Feasibility and Workability

Application of OR in Fibre and Fabric Industry

OR applications include scheduling, routing, workflow improvements, elimination of bottlenecks, inventory control, business process re-engineering, site selection, or facility and general operational planning.

Revenue and supply chain management reflect two growing applications that are distinguished by their use of several OR methods to cover several functions. Revenue management entails first to accurately forecasting the demand, and secondly to adjust the price structure over time to more profitably allocate fixed capacity. Supply chain decisions describe the who, what, when, and where abstractions from purchasing and transporting raw materials and parts, through manufacturing actual products and goods, and finally distributing and delivering the items to the customers.

The power of utilizing OR methods allows examining this rather complex and convoluted chain in a comprehensive manner, and to search among a vast number of combinations for the resource optimization and allocation strategy that seem most effective, and hence beneficial to the operation.

Application of OR in Garment Industry In garment industry the organization may need to design a sampling plan in order to meet specific quality control objectives. In a garment manufacturing, operations that compete for the same resources must be scheduled in a way that deadlines are not violated. Application of OR is useful in various department of garment manufacturing organizations. In cutting department cut scheduling problem concerns finding a feasible cutting schedule having the minimum number of lays. The availability of multiple solutions allows greater flexibility and permits decision makers to apply additional criteria in selecting an appropriate cutting schedule. A hybrid flow shop (HFS) problem on the pre-sewing operations and a master production scheduling (MPS) problem of apparel manufacture are solved by a proposed two-tier scheduling model. OR helps to plan a MPS for the factory so that the costs are minimized when the production orders are completed before and after the delivery dates required by the customers and it also helps to minimize the completion time of the pre-sewing operations in the cutting department while the production quantities required by the sewing department at several predetermined times can be fulfilled by the cutting department.

OR projects focus on the industrial deployment of computer-based methods for assembly line balancing, business process reengineering, capacity planning, pull scheduling, and setup reduction, primarily through the integration of the philosophies of the Theory of Constraints and Lean Manufacturing. The main benefits are:

Defects and wastage - Reduce defects and unnecessary physical wastage, including excess use of raw material (inputs), preventable defects, costs associated with reprocessing defective items, and unnecessary product characteristics which are not required by customers Cycle Times - Reduce manufacturing lead times and production cycle times by reducing waiting times between processing stages, as well as process preparation times and product/model conversion times Inventory levels - Minimize inventory levels at all stages of production, particularly works-in-progress between production stages. Lower inventories also imply lower working capital requirements

Labor productivity - Improve labor productivity, both by reducing the idle time of workers and ensuring that when workers are working, they are using their effort as productively as possible

Utilization of equipment and space - Use equipment and manufacturing space more efficiently by eliminating bottlenecks and maximizing the rate of production though existing equipment, while minimizing machine downtime

Flexibility - Have the ability to produce a more flexible range of products with minimum changeover costs and changeover time

Output In regards to reduced cycle times, increased labor productivity and elimination of bottlenecks and machine downtime can be achieved, companies can generally increase the output from their existing facilities

Application of OR in Retail Industry

ROI Maximization: The retailers try to know the number of units (retail stores) to build in a particular DMA (designated marketing area) to maximize return on total investments within that DMA. In such situation the optimization model would need to consider the variables like warehousing, distribution, and supply chain costs, overhead, operating costs (labor, utilities, taxes, etc.), advertising efficiencies, media advertising costs, positioning, marketing strategy, the breadth and depth of merchandise , real estate and construction costs, employee training and sharing efficiencies among the stores etc. A nonlinear integer programming optimization model with stochastic and dynamic components is used to solve such problems.

Optimal Distribution System: Transportation models, inventory models, and advertising response models is used to get optimal distribution system.

Optimal Product Line: Choice modeling would be used to measure consumers product line preferences and elasticity, given different market conditions.
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Optimal Positioning and Advertising Messaging: Survey research would be employed to provide a first approximation of target-audience definition. The final optimization model would involve choice modelling experiments among the broadly-defined target audience to identify a set of optimal solutions, which would also precisely define corresponding optimal target audiences.

Route or delivery system optimization Promotional optimization Package design optimization Product features optimization Pricing optimization Industry and category forecasting Inventory optimization Retail category optimization Store design optimization