Operations Research Essay Example for Free

Operations Research Essay Operations are directly affected by changes in the factors of production and by other circumstantial changes which directly affect the costs of these factors. One of these changes is the demand changes that occur within the market. Operations are directly affected by production since the level of production coincides with the supply and demand levels of market. Demand has a direct effect in this case since a lower rate of demand necessarily means that production has to be reduced in response to the decreasing demand and thus operations are affected as well. Another factor to consider is the implementation of new pollution control laws which drives up the costs of production and operating expenses due to the taxes that may be imposed and compliance regulations that will be enforced. Carbon trading, which is an example of a pollution control law, requires industries to purchase carbon credits which in the end affect the price of the goods and operating expenses. Other items such as the fluctuation in the value of the dollar and price changes are also critical because they determine the end cost of not only the factor inputs required for operations and by doing so affect the expenditures of companies but also determine the willingness of the market to consume the item or service that is being sold. A stronger dollar for example will mean that exports are affected because it will necessarily drive up the cost of a commodity vis-a-vis the exchange rate. Price changes are also important to consider because they affect the willingness of the customer to purchase a certain commodity and principles such as substitution and competition now take effect.