1. About Operational Research
An introduction for the third sector 1 1

2. Why use an OR approach?
OR : “The application of appropriate analytical
methods to help make better decisions”
Is a unique combination of:
tools
skills and experience
Can help management determine
policies & actions scientifically
“what if we do this?”
Better than using gut feelings
“let’s do this - it seems like a good idea!”
reduces risk to operations 2

3. Common problems where OR is used
Facilities (eg hospitals, shops, warehouses, call centres)
How many? Where? How big?
How should they be staffed?
Logistics
What is expected future demand?
What supplies should be kept and where?
How can deliveries/calls be scheduled most efficiently?
Service operations
How best to deal with queues?

4. Further examples of OR for charities
Financial management
Modelling and forecasting funding requirements and business cases
Financial options appraisal
Design of performance measures
and set-up of monitoring systems
Design of systems for managing grants or loan schemes 4

5. Characteristics of difficult decisions - where OR can help
Typical in government and 3rd sector
Complex
Messy
Multiple stakeholders
Multiple objectives
Uncertainty – changing environment
Complex – everything interconnects
Messy – things are hard to define, aims are unclear, circumstances change…
Multiple stakeholders – with different agendas
Multiple objectives – which conflict with each other
Uncertainty – about the environment, about other people’s decisions, about stakeholders’ values

6. OR Tools ‘Soft’ tools: Decision support tools: Mathematical models:
Framework for involving different stakeholders
Help identify goals, objectives and issues
Decision support tools:
Identify and explore issues and options
‘What-if’ analysis in the face of uncertainty
Mathematical models:
Keep track of multiple factors and how they interact
Quantify – consistently and accurately
Powerful algorithms to calculate optimum solutions

7. A simulation model: how to staff surgery?

8. A forecasting model: monthly sales next year?

9. A logistics model: how many depots and where?

10. A ‘what-if’model: to assess different ways of operating

11. A Flu pandemic model – basic model
For each business activity (e.g. IB claims processing) and time period (e.g. weeks)
Assumptions about
‘crisis scenario’ impact
(for flu pandemic – from DoH)
Absenteeism
Demand for work
(assumptions from policy group)
Contingency measures
(from businesses)
Staff available
Staff Required
Performance
Staff loss/work to clear
Clearance Times

12. Flu pandemic model: Jobcentre Plus processing
High contingency appears to show sufficient staff available
- But significant risks to delivery of key benefits
Peak staff required
Schools closed
Base
staff
Least staff available

13. OR Society Founded 1948 Charitable status 2700 members
in academia, government, private sector
Special interest groups include:
Agriculture
Criminal justice
Financial services
Health and social services
The community
Developing countries