Operational research, or management science (OR/MS), is a discipline that deals with the application of advanced analytical methods to help make better decisions.

In this talk, 2 examples of the operational research in the area of production management will be introduced.

The first one is to simulate the collaborative inventory management policy, called Vender Managed Inventory (VMI), so as to find the effect of the lead time on its efficiency. System dynamics approach is used to simulate the VMI and the traditional stand-alone type inventory management policy.

The second one is to formulate the parcel delivery network design problem as a hub-and-spoke type integer programming. In this problem, customer demand is assumed to be dynamically changed and the Lagrangean relaxation based solution approach is being developed.