Operations research analysts: improving the system.

Operations Research Analysts: Improving the System

Each organization has its own system of doing things. But is it the best? Operations research analysts seek more efficient ways for organizations to perform their essential tasks. They accomplish this by applying mathematical principles to organizational problems and by helping managers evaluate policy alternatives. They apply these mathematical techniques to controlling inventory, scheduling personnel, forecasting, allocating resources, and perfecting distribution systems.

Nature of the Work

Operations research analysts create mathematical models and develop theories to explain organizational systems. Models are statistical tools that enable the analyst to isolate the components of a system, assign numerical values to each, and examine the mathematical relationships between them. In effect, they convert a management problem into a mathematical equation; values of different items in the equations can be altered to determine what will happen to the system under different sets of circumstances. Different types of models include simulation models, linear programming, and game theory. Because these techniques have been computerized, analysts need the ability to write computer programs.

Managers begin the operations research process by assigning a problem to the analyst. Sometimes, the problem is general in nature; at other times, it is very specific. For example, an operations research analyst for an auto manufacturer may be asked to determine the optimal inventory for every part or ingredient in new production process or, more specifically, how much steel should be stocked. Analysts who work for retailers might design store layouts or determine the best location for a new outlet.

Operations research analysts begin by defining the problem and learning everything they can about it. They typically begin by breaking down the problem into its component parts. They may create flow charts to diagram the problem and to pinpoint possible bottlenecks. After this is done, they gather information about each part of the process. Usually this involves talking to a wide variety of personnel. For example, to determine the amount of steel to keep on hand, operations research analysts may talk about production levels with engineers; discuss purchasing arrangements with industrial buyers; and consult with the accounting department concerning storage costs.

With this information in hand, the operations research analyst is ready to select the most appropriate method of quantitative analysis to use or to construct from scratch a computerized model by which to examine and explain the system. If using a standard model, the analyst must, in almost all cases, modify it to reflect the specific circumstances of the situation.

A model for the inventory of steel, for example, may take into account all of the following and more: Production and quality requirements; effects of substituting other metals; turnover rates; reliability of delivery; and costs associated with varying quantities, storage, trying up capital in inventory, delivery, and running out of the raw material. The analyst enters the assumed values for each variable into the model and runs the program on a computer, which will then solve the equations and indicate the amount of inventory that should be kept under the given assumptions. The analyst may make several runs of the model, determining the optimal inventories under different sets of assumptions.

At this point, the operations research analyst presents the work to management and often makes a recommendation. However, the manager is given the results of all of the runs and may request additional ones based on different assumptions. Once a decision has been reached, the analyst works with the staff to ensure successful implementation.

Some organizations centralize operations research functions in one department; others disperse operations research personnel throughout all divisions of the firm. Some operations research analysts specialize in one type of application; others are generalists.

Working Conditions and Earnings

Operations research analysts generally work regular hours in an office. The work is sedentary in nature, and very little physical strength or stamina is required. They sometimes are under pressure to meet deadlines and may work overtime.

Median annual earnings for operations research analysts were about \$32,000 a year in 1985; the middle 50 percent earned between \$25,700 and \$41,400 annually. The top 10 percent earned over \$51,700; the bottom 10 percent earned less than \$20,800 a year.

In the Federal Government, the starting annual salary for operations research analysts was about \$14,400 in 1986. Candidates with a superior academic record could begin at \$17,800. Operations research analysts employed by the Federal Government averaged \$37,400 a year in 1986.

Employers look for people who have a strong background in quantitative methods and computer programming. The preferred credential is a graduate degree in operations research, management science, business administration, computer science, or another quantitative discipline. But those with a bachelor's degree in operations research, mathematics, statistics, or other major that emphasizes quantitative methods are considered fully qualified for entry level positions. Operations research analysts also need programming experience in the scientific computer languages--Pascal and Fortran --and the ability to think logically, communicate clearly, and work well with people.

Regardless of educational background or experience, the employer usually provides considerable training. New workers typically participate in on-the-job training programs--working closely with experienced workers until they become proficient; generally, they help senior analysts gather information and run computer programs. The organization also sponsors skill improvement training for experienced workers--helping them keep up with new developments in operations research techniques as well as advances in computer science. Some analysts take college and university classes on these subjects.

After a few years of experience, operations research analysts may be promoted to senior analysts. Those who demonstrate professional competence and leadership ability may advance to supervisory positions, and some move into administrative positions.

Employment and Outlook

Operations research analysts held an estimated 36,000 jobs in 1986. Most analysts work full time and very few are self-employed.

Operations research analysts are employed im most industries. Some of the major employers include manufacturers of chemicals, machinery, and transportation equipment; firms providing transportation and telephone communications services; public utilities; banks; insurance agencies; organizations that provide business services; and government agencies at all levels. Most of the analysts in the Federal Government work for the Armed Forces.

Employment of operations research analysts is expected to grow faster than the average for all occupations through the year 2000 due to the increasing importance of quantitative analysis in decisionmaking. In addition to jobs arising from the increased demand for these workers, many openings will occur each year as workers transfer to other occupations or leave the labor force to retire or for some other reason.

More and more organizations are using operations research techniques in order to improve productivity and reduce costs. This reflects both a greater awareness of the benefits of operations research and more affordable computers that give even small firms access to operations research applications. The interplay of these two trends should greatly stimulate demand for these workers.

Most new jobs are expected to be created in the trade and the services sectors, where firms have been slow to adopt operations research methods. A growing number of firms are realizing that quantitative analysis can achieve dramatic improvements in operating efficiency and profitability. Firms in industries that do not now employ large numbers of analysts are beginning to see their value. Motel chains, for example, are beginning to employ operations research analysts to analyze automobile traffic patterns and customer attitudes to determine location, size, and style of new motels. Firms in other service industries also are beginning to hire operations research analysts, and this should continue as more small firms computerize their operations. Like other management support functions, operations research is spread by its own success. When one firm in an industry increases productivity by adopting a new procedure, its competitors usually follow. This competitive pressure will assure strong demand for operations research analysts.

Demand also should be strong in manufacturing as firms expand existing operations research staffs in the face of growing foreign competition. More and more manufacturers are using mathematical models to study parts of their organization for the first time. For example, more analysts will be needed to determine the best way to distribute finished products and to find out where sales offices should be based. In addition, increasing factory automation will require more operations research analysts to alter existing moedels or develop new ones for production layout, work schedules, and inventory control.

Little change is expected in the number of operations research analysts working for the Federal Government due to spending constraints imposed by Congress as part of an effort to balance the Federal budget.

Related Occupations

Operations research analysts apply mathematical principles to industrial problems. Other occupations that stress quantitative analysis include computer scientists, applied mathematicians, statisticians, and economists.

Information on training and career opportunities for operations research analysts is available from:

The Operations Research Society of America Mount Royal and Guilford Avenues Baltimore, Maryland 21202.

Military Operations Research Society 101 South Whiting Street Suite 202 Alexandria, Virginia 22304.
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