Job Report Operations Research Analysts

Job Report Operations Research Analysts

Published 1994

MASCOR Publishing Co.

P.O. Box 8308

Silver Spring, MD 20907

Nature of the Work

Organizations develop their own ways of making and carrying out plans. Unfortunately, these processes are not always the best way in light of the organization's overall goals. Operations research analysts help organizations plan and operate in the most efficient and effective manner. They accomplish this by applying the scientific method and mathematical principles to organizational problems so that managers can evaluate alternatives and choose the course of action that best suits the organization.

Operations research analysts are problem solvers. The problems they tackle are for the most part those encountered in large business organizations: Business strategy, forecasting, resource allocation, facilities layout, inventory control, personnel schedules, and distribution systems.

The method they use generally revolves about a mathematical model or set of equations that explains how things happen within the organization. Models are simplified representations that enable the analyst to break down systems into their component parts, assign numerical values to each component, and examine the mathematical relationships between them. These values can be altered to determine what will happen to the system under different sets of circumstances. Different types of models include simulation, linear programming, and game theory models. Because many of these techniques have been computerized, analysts need to be able to writer computer programs or use existing ones.

The type of problem they usually handle varies by industry. For example, an analyst in a bank might deal with branch location, check processing, and personnel schedules, while an analyst employed by a hospital would concentrate on a different set of problems - - scheduling admissions, managing patient flow, assigning shifts, monitoring use of pharmacy and laboratory services, or forecasting demand for new hospital services.

The role of the operations research analyst varies according to the structure and management philosophy of the firm. Some firms centralize operations research in one department; others disperse operations research personnel throughout all divisions of the firm. Moreover, some operations research analysts specialize in one type of application; others are generalists.

The degree of supervision also varies by organizational structure. In some organizations, analysts have a great deal of professional autonomy; in others, analysts are more closely supervised. Operations research analysts work closely with managers, who have a wide variety of support needs. Analysts must adapt their work to reflect these requirements.

Regardless of the industry or structure of the organization, operations research entails a similar set of procedures. Managers begin the process by describing the symptoms of a problem to the analyst. The analyst then defines the problem, which sometimes is general in nature and at other times specific. For example, an operations research analyst for an auto manufacturer may want to determine the best inventory level for each of the materials for a new production process or, more specifically, to determine just how much steel should be stocked.

After analysts define the problem, they learn everything they can about it. They research the problem, then break it into its component parts. Then they gather information about each of these parts. Usually this involves consulting a wide variety of personnel. To determine the most efficient amount of steel to be kept on hand, for example, operations research analysts might talk with engineers about production levels; discuss purchasing arrangements with industrial buyers; and examine data on storage costs provided by the accounting department.

With this information in hand, the operations research analyst is ready to select the most appropriate analytical technique. There may be several techniques that could be used, or there may be one standard model or technique that is used in all instances. In a few cases, the analyst must construct an original model to examine and explain the system. In almost all cases, the selected model must be modified to reflect the specific circumstances of the situation.

A model for the inventory of steel, for example, might take into account the amount of steel required to produce a unit of output, several projected levels of output, varying costs of steel, and storage costs. The analyst chooses the values for these variables, enters them into the computer, which has already been programmed to make the calculations required, and runs the program to produce the best inventory level consistent with several sets of assumptions. The analyst would probably design a model that would take into account wide variations in the different variables.

At this point, the operations research analyst presents the final work to management along with recommendations based on the results of the analysis. The manager, who is the decisionmaker, may request additional runs based on different assumptions to help in making the final decision. Managers assume responsibility for the final decision, but once a decision has been reached, the analyst works with the staff to ensure its successful implementation.

Working Conditions

Operations research analysts generally work regular hours in an office environment. Usually they work on projects that are of immediate interest to management. In these circumstances, analysts often are under pressure to meet deadlines and may work more than a 40-hour week. The work is sedentary in nature, and very little physical strength or stamina is required.

Employment

Operations research analysts held about 57,000 jobs in 1990. They are employed in most industries. Major employers include manufacturers of chemicals, machinery, and transportation equipment; firms providing transportation and telecommunications services; public utilities; banks; insurance agencies; and government agencies at all levels. Some analysts work for management consulting agencies that develop operations research applications for firms that do not have an in-house operations research staff.

Most analysts in the Federal government work for the Armed Forces.

Training, Other Qualifications, and Advancement

Employers look for college graduates who have a strong background in quantitative methods with exposure to computer programming. Employers prefer applicants with a graduate degree in operations research or management science, mathematics, statistics, business administration, computer science, or other quantitative disciplines.

Regardless of education background or prior work experience, the employer usually plays a large role in the training process. 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 attend college and university classes on these subjects.

Operations research analysts must be able to think logically and work well with people. Thus, employers prefer workers with good oral and written communications skills. The computer is an increasingly important tool for quantitative analysis, and programming experience is a must.

Beginning analysts usually do routine work under the close supervision of experienced analysts. As they gain knowledge and experience, they are assigned more complex tasks, with greater autonomy to design models and solve problems. Operations research analysts advance by assuming positions as technical specialists or supervisors. The skills acquired by operations research analysts are useful for upper level jobs in an organization, and experienced analysts with leadership potential often leave the field altogether to assume nontechnical managerial or administrative positions.

Job Outlook

Employment of operations research analysts is expected to grow much 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 altogether.

More and more organizations are using operations research techniques to improve productivity and reduce costs. This reflects growing acceptance of a systematic approach to decisionmaking as well as more affordable computers, which give even small firms access to operations research applications. The interplay of these two trends should greatly stimulate demand for these workers in the years ahead.

Much of the job growth is expected to occur in the trade and services sectors. Firms in these sectors recognize that quantitative analysis can achieve dramatic improvements in operation efficiency and profitability. More retailers, for example, are using operations research to design store layouts, select the best store location, analyze customer characteristics, and control inventory, among other things. Motel chains are beginning to utilize operations research analysis to improve their efficiency. For example, they analyze automobile traffic patterns and customer attitudes to determine location, size, and style of new motels. Lie 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 contribute to demand for operations research analysts.

Demand also should be strong in the manufacturing sector as firms expand existing operations research staff in the face of growing foreign competition. More and more manufacturers are suing mathematical models to study parts of the organization for the first time. For example, 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 models or develop new ones for production layout, robotics installation, work schedules, and inventory control.

Little change is expected in the number of operations research analysts working for the Federal Government.

Earnings

Median annual earnings for operations research analysts were about $35,000 a year in 1990; the middle 50 percent earned between $26,000 and $43,600 annually. The top 10 percent earned over $53,000; 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 $16,600 in 1990. Candidates with a superior academic record could begin at $19,700. Operations research analysts employed by the Federal Government averaged about $46,800 a year in 1990.

Related Occupations

Operations research analysts apply mathematical principles to organizational problems. Workers in other occupations that stress quantitative analysis include computer scientists, applied mathematicians, statisticians, and economists.

Sources of Additional Information

Information on career opportunities for operations research analysts are available form:

The Operations Research Society of America, 428 East Preston St., Baltimore, MD 21202.

The Institute for Management Science, 290 Westminster St., Providence, RI 02903.

For information on careers in the Armed Forces and Department of Defense, contact:

Military Operations Research Society, 101 South Whiting St., Suite 202, Alexandria, VA 22304.