Edelman Competition


This year’s Edelman Competition will take place in a few days at the INFORMS Practice Conference. The Edelman Competition presents projects in practical operations research that have a significant impact on an organization. This year’s finalists include work from Travelocity, the TSA, Warner Robbins Air Logistics, Center and more. I really like the Edelman: the finalists put papers into Interfaces, and those papers are a tremendous resource for my MBA classes.

Of course, every competition could be improved. I was mulling on the thought of turning this competition into a reality show. Lock a bunch of ORers in a plant for six weeks with cameras everywhere, and watch them try to out-optimize each other to be the last one standing. Probably wouldn’t compete with American Idol, but I certainly would watch it!

IBM’s Center for Business Optimization

I am in New York to give a talk to IBM’s Center for Business Optimization. Bill Pulleyblank is heading this activity. Bill has had a really interesting career: he started in academia, and did really fundamental work in combinatorial optimization. He then moved to IBM, starting at Watson Research and moving on to doing things like heading the Blue Gene Project, which created the world’s fastest supercomputer. CBO is a startup with IBM that tries to merge the assets of IBM (software packages, etc.) with the consulting skills of IBM Business Consultants (formerly PriceWaterhouseCooper’s consulting arm).

It is exciting to see a company like IBM take optimization seriously. The projects I have chatted with people about look like “real” optimization and business analytics: data mining and modeling approaches to fraud dectection (both tax fraud and Medicare fraud), supply chain optimization, marketing design, and so on. They have a number of case studies that outline their various projects.

Operations Research Job Prospects

Money Magazine and salary.com have a ranking of 166 job titles, based on salary and job prospects. I was happy to see “College Professor” as the second best job (good salary, good growth, lots of freedom). Having Operations Research Analyst mired in roughly 120th place (out of 166) was less fun to see. The salary for the field is good, but job growth was relatively low. Still, OR Analyst beat out mathematician, economist, physicist, librarian and many other seemingly appealing fields.

Descriptive versus Prescriptive

Working in a business school (the Tepper School at Carnegie Mellon), many of my colleagues are economists (or “financial economists” as many of my finance colleagues are titled). One of the big hurdles we have in communicating is a differing view of the purpose of models. For many economists, models are used to describe behavior. For instance, a model of certain types of incentives may lead to particular outcome behavior. If we see the outcome behavior, this suggests the model is a good one. If an economist does not see the outcome behavior, then there is a puzzle at best, and a bad model at worst.

For an ORer (a word I just made up, because OR person sound stilted), models are almost always prescriptive: they tell you what to do. For that same model, an ORer will, if happy with the model, not worry about whether the outcome behavior is happening. If not, then people are doing things wrong, and should smarten up and follow the OR prescription.

Articles like the one today in the New York Times (subscription required) make me feel happier about the OR approach. People, even reasonably sophisticated people, just don’t seem to make good decisions. The example is drawn from finance, but examples abound:

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