Category: Applications

Mark Cuban on Operations Research

Mark CubanMark Cuban is the owner of the Dallas Mavericks basketball team (and billionaire, having timed the dot-com boom and bust pretty well). He is certainly outspoken, amassing hundreds of thousands of dollars of fines for complaining about referees, opposition, and the league. But he also wants to bring a bit of analysis to the game. In a recent blog entry, he is practically begging for more operations research (as always, Steven Baker of BusinessWeek got to this before me in his Blogspotting blog):

The easiest thing in the world for anyone to do is Tivo a game and then break it down. What any of the 13 participants on the court did and how they did it is pretty easy to document for 99.9 pct of the time on the clock. The other .01 can be grey. It doesnt really matter. Aggregate data from a lot of games over a lot of seasons, and all of the sudden you have a database with value.

Once you have information, then you can add brainpower and try to do things better.

Once you have information, then you can start to define excellence and strive for it, measuring your progress along the way.

This certainly isnt a new concept. There are untold number of QC , Process Improvement and Optimization techniques out there. Pick one, pick them all.

Wayne Winston is one of the people working with Cuban, as I wrote in a previous entry.

Logistics in the Economist

Brian Borchers of New Mexico Tech sent me an alert that the Economist magazine of June 15, 2006 has a number of articles on the changing face of logistics. One article is on eCourier, a London based courier service. The heart of the system is operations research in the form of algorithms for courier scheduling:

The key to the service is picking the right courier, says Mr Allason[one of the founders of eCourier]. The one whom the GPS system shows to be nearest to the job may not necessarily be the most appropriate. For instance, a courier in London may be only a few hundred yards away from a collection address, but if he is on the other side of the Thames it could take him 15 minutes just to cross the river. Other information, such as traffic problems and the performance of individual couriers, also needs to be taken into account.

This is a mathematical problem, and eCourier spent some time hunting around for someone able to solve it. Eventually it found a team led by Cynthia Barnhard [sic], a logistics expert at America’s Massachusetts Institute of Technology, which devised an elaborate algorithm that is now at the heart of eCourier’s business, in much the same way that a mathematical formula drives Google’s search engine. What Mr Allason particularly likes about his internet-based courier system is that it is easily “scaleable”: more couriers and markets can be added without having to hire many more dispatchers or people to run a call-centre.

The “Cynthia Barnhard” referred to is Cynthia Barnhart of MIT who among about 40 other jobs is co-director of their Center for Transportation and Logistics. Perhaps when the magazine corrects her name, they might also mention the phrase “operations (or operational) research” to describe her field!

This is a good example of one of the growth areas in operations research: OR applied to “smaller” problems. While 10 or 20 years ago, OR needed an airline or other huge organization to justify its use, the easier accessibility to software and more routine use of models allows it to be used in smaller organizations. This is also a great example of how an entrepreneurial company can use OR to gain tremendous competitive advantage.

Update June 29, 2006

There is an interesting article from eCourier about how “Cynthia Barnhard” helped out in this project.  It does appear an “italian team” did most of the implementation. I hope some day some company tries to woo me with fruit baskets!

Emergency care at breaking point

The Institute of Medicine, one of the National Academies, has a series of reports out about the state of emergency medical care in the United States. The report is scathing in its assessment:

Despite the lifesaving feats performed every day by emergency departments and ambulance services, the nation’s emergency medical system as a whole is overburdened, underfunded, and highly fragmented, says this series of three reports from the Institute of Medicine.

As a result, ambulances are turned away from emergency departments once every minute on average and patients in many areas may wait hours or even days for a hospital bed. Moreover, the system is ill-prepared to handle surges from disasters such as hurricanes, terrorist attacks, or disease outbreaks.

The full reports are available for purchase, but there is a report brief that summarizes the main conclusions. The number one recommendation for fixing these problems? Use operations research, of course:

Tools developed from engineering and operations research have been successfully applied to a variety of businesses, from banking and airlines to manufacturing companies. These same tools have been shown to improve the flow of patients through hospitals, increasing the number of patients that can be treated while minimizing delays in their treatment and improving the quality of their care. One such tool is queuing theory, which by smoothing the peaks and valleys of patient admissions has the potential to eliminate bottlenecks, reduce crowding, improve patient care, and reduce cost. Another promising tool is the clinical decision unit, or 23-hour observation unit, which helps ED [Emergency Department] staff determine whether certain ED patients require admission. Hospitals should use these tools as a way of improving hospital efficiency and, in particular, reducing ED crowding.

This is exactly the sort of problem where a bit of OR can go a long way.

Applications of Optimization with Xpress-MP

Applications of Optimization with Xpress-MP coverThere are very few books out about how to model problems in linear and integer programming. Hugh Williams book “Model Building in Mathematical Programming” is one. The documentation that comes with commercial software is another resource. Dash Optimization has made their “Applications of Optimization with Xpress-MP” available for free download. This book goes beyond the standard “3 variable 2 constraint” models found in so many textbooks.

More Operations Research in Business Week

Business Week coverOperations research is on a roll. The May 29th issue of Business Week has a cover story on the use of simulation and other methods to take the guesswork out of medical care. The key person for this article is Dr. David Eddy, described as a “heart surgeon turned mathemetician and health-care economist”, who was the 1980 recipient of the INFORMS-awarded Lanchester Prize. This prize is given for the “awarded for the best contribution to operations research and the management sciences published in English”. The award citation to Dr. Eddy included the following:

The rapidly growing cost of health care is of great concern to many citizens. Our health care system and policies in the U.S. might be described as the product of many good intentions but only modest analysis. This year’s Lanchester Prize goes to a book: Screening for Cancer: Theory, Analysis and Design by Dr. David M. Eddy, published by Prentice-Hall, Inc., Englewood Cliffs, 1980, which is a significant and welcome contribution to the quality of analysis in the health care field.

In its general form, the problem studied by Dr. Eddy is an old one in the operations research literature, namely, the monitoring and repair of a probabilistic deteriorating system. This dry sounding phrase takes on special meaning when the system is the human body and the deterioration is cancer.

The principal concerns of Dr. Eddy’s work are: which screening tests should be used and with what frequency for various classes of people. The notable feature of Dr. Eddy’s analysis is the thoroughness with which account is taken of such things as the cost of administering a test, the cost of processing false positives from a test, the fact that a test may cause the disease it is attempting to detect, the fact that more frequent testing detects disease earlier and gives the illusion of prolonged life expectancy even in the absence of a cure, and the fact that if the disease may sometimes go into remission naturally, then more frequent testing gives the illusion of a higher cure rate. Also, Dr. Eddy’s analysis was one of the first to make the useful distinction between modeling the state of a patient as his cancer screening history to date, which is observable, as opposed to the state of the disease, which is only partially observable.

The style of Dr. Eddy’s work is in the best operations research tradition of interdisciplinary analysis. The remarkable feature is that in this case the varied disciplines are all embodied in one person.

From the Business Week article, it seems that 26 years later, Dr. Eddy continues this path:

Continue reading “More Operations Research in Business Week”

Operations Research and Lego

Lego symbolThe blog Deviant Abstraction points out that Lego’s (you know: building blocks that can be put into lots of different shapes) new Lego Factory has an interesting OR problem to solve: how can they put together packets of pieces so as to minimize waste when customers can order from more than 500,000 different pieces? Of course, OR needs to be used here. If anyone has a technical reference, I would love to see it! As someone who has a little more Lego than any mid-40s guy should have (and my two year old is not allowed to touch it! He can get his own!), the combining of two of my passions is appealing.

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.

Rothkopf’s Rankings of University Contributions to the Practice Literature

Mike Rothkopf has just published his sixth ranking of universities in publishing in the practice of operations research in the journal Interfaces (subscription required to access full paper). The definition of “practice” is naturally a complicated thing: most OR people (myself included) claim relevance to practice on pretty slim connections. For this ranking, “practice” means publishing either in Interfaces or in the OR Practice area of Operations Research. My own school, Carnegie Mellon, came out on top with 10 such publications (1998-2004). The next part of the rankings are
2. University of Pennsylvania
3 (tie). Georgia Institute of Technology and Naval Postgraduate School
5. Cornell, Stanford, University of Texas at Austin, and University of Virginia

Non-US schools are ranked separately. Top is Erasmus University with 7 papers (same as Cornell, etc. on the US list).

OR in Africa

There have been a couple of things I have seen recently highlighting OR in Africa. The first was a presentation by Luk Van Wassenhove on humanitarian logistics (here is an article Luk, David Kaatrud and Ramina Samii wrote about the UN Logistics Centre). While not limited to Africa, that region is certainly a key area. Humanitarian logistics offers a tremendous mix of organizational and technical challenges, not the least of which is coping with the sheer number of governments, NGOs, and other organizations, all with different objectives and requirements.

An article in the October OR/MS Today by Jonathan P. Caulkins, Emily Eelman, Minoli Ratnatunga and David Schaarsmith talked about a conference in Africa, the Operations Research Practice in Africa conference. Held in Ouagadougou, Burkina Faso, this conference looked at opportunities for real-world problem solving using OR to address Africa’s issues. The summary brings up some interesting ethical issues (should OR be used to help repressive regimes?) and some area-specific OR issues (particularly the non-routine, non-replicable nature of crisis handling).

IFORS is holding its 2008 international conference in Africa: Sandton, South Africa to be specific. I’m traveling there in February to check out sites and speak with the local organizers. It turns out to be easier to get there than I thought, with direct (one stop for fueling) flights from JFK, Dulles, and Atlanta. I am also going to spend a few days in Capetown.

The issues brought up in these papers do make me wonder if working at scheduling professional sports leagues (my own current research) is the most valuable thing I can do with my life!