Operational Research and Production Management: The Case of “OPT”

Abstract

In 1979 E Goldratt, an Israeli physicist, founded Creative Output Inc. to market Optimized Production Timetable (OPT), a production control package. In 1980 Goldratt outlined the principles behind this package to the annual conference of the American Production & Inventory Control Society (Goldratt, 1980). He claimed, “this breakthrough encompasses a reformulation of certain of the fundamental bases used in production planning; a mathematical solution to the newly formulated and enormously difficult, multivariate mathematical problem; a computer program package called OPT which enables a user to obtain an optimized, realistic production schedule”. The references to “mathematical solution”, “mutivariate mathematical problem” and “optimized schedule” suggest that Goldratt’s approach was based around a mathematical programming algorithm and could be regarded as being within the operational research discipline. In naming the algorithm “OPT”, Goldratt gave it an easily remembered name which suggested its claimed “optimality”, in contrast to most operational research algorithms.