According to a recent article titled “Thomson Holidays automates online pricing adjustments” written by Ian Grant and published on ComputerWeekly.com, a new automated pricing system has been developed and is being used by Thomson Holidays, the UK’s biggest tour operator, to maximize their revenue.
This type of OR system is not new, especially to airline companies. However, according to Alan Sugarman, Thomson Holidays’ general manager of Operations Research, this system is the first one to combine travel (aircraft seats) and sleeping (hotel beds) arrangements.
Andrew Hines posted a new article titled “Key Terms and Players of Operations Research” on Bnet.com. The article is a guide to the major players in data analysis and mathematical engineering applied in solving key business problems. Companies such as Oracle, ILOG and Rockwell are mentioned and key OR terms such as business modeling and analysis are explained. Click here to read the full article.
INFORMS, the Institute for Operations Research and the Management Sciences, announced on Feb 7 the six finalists that will compete for the 2008 Franz Edelman Award for Achievement in Operations Research and the Management Sciences in Baltimore on Apr 14.
In his passionate talk, Dr. Hans Rosling tried to debunk the myths about economic and health issues in developing countries using state-of-the-art animation software developed by his foundation - Gapminder. The software, named Trendalyzer, converts boring data such as global income and health distribution into lively animations. Although the topic of his talk was not directly relevant to Operations Research (OR), it delivered a rather important message which sort of defines the values added by all the OR analysts to business organizations. What I learned from his talk is the importance of making arguments after doing thorough data analysis rather than relying only on common sense.
Abundant applications of Operations Research (OR) are found in logistics, the art of managing and controlling the flow of goods from the point where raw materials are collected to the point where finished products are delivered to the end consumers. In the case where a large number of customers reside in a large-scale region, it becomes inefficient to transfer finished products to all of them from a central warehouse. A better idea would be to build local distribution warehouses in the region to reduce transportation time and costs and improve customer service. However, costs associated with the construction, maintenance and operation of the warehouses increase as more warehouses are built. This is why determining the optimal number and locations of the warehouses in the region is important in ensuring that the overall result is a saving. This class of problems are known as location-allocation problems, which involve determining the optimal number and locations of facilities (such as warehouses, retail stores and gas stations) as well as the allocation of the customers to those facilities.
When tourists are having good times, they rarely wonder if there is a unique group of people who do scientific research day after day just to ensure that their trips go smoothly and are as hassle-free as possible. These people, known as Operations Research (OR) specialists, make hidden contributions to the world by making everyday operations more efficient and cost-effective. I think that the next time the rental cars we reserved are ready for us the moment we get off our flights, we shouldn’t take everything for granted and should appreciate the work done by the OR people who work behind the scenes to improve everyone’s daily life.
According to a recent article titled “Maths makes happy campers” which is published on Science Alert, the OR specialists at the Mathematical & Information Sciences division of Australia’s CSIRO (Commonwealth Scientific and Industrial Research Organisation) have developed a scheduling system for campervan rental companies that schedules bookings in real-time, reduces costs and helps ensure better customer service. The system helps make customers happier by getting them the campervan they want, when and where they need it.
With his love for hockey and the purpose of motivating his students, the Management Science (MS) professor Armann Ingolfsson at the University of Alberta School of Business developed a computer model to calculate the probability of which teams should make the NHL playoffs this year, and which should fail to do so.
His results indicate that Toronto Maple Leafs only have a chance of 3% of making the playoffs, while his favorite team, the Edmonton Oilers, have only 1% odds.
Dr. Ingolfsson’s simulation program works by running possible outcomes for each team in each game for 500 times with the inputs of the wins and losses of all the conference teams and the schedule of remaining games. In each run, the program simulates the results of all remaining games using the current winning percentages of each team. However, like all mathematical models, the program ignores certain factors. In this case, Fletcher’s hiring, injuries or player hot streaks are not taken into account.
A special issue of Interfaces named “Operations Research in the E-Business Era” published several years ago included a number of journal articles on the applications of Operations Research (OR) in e-business. The issue delivered a simple but important message: OR plays a critical role in the digital economy. I have always been interested in the applications of OR in e-business, which mainly refers to internet-enabled electronic commerce. I have read some of the articles in this special issue and found that some of the examples of OR applied in e-business mentioned are really interesting. In addition, I realized that not only does OR make e-business operations more efficient and effective, but e-business also imposes new challenges on OR research, provides new opportunities for OR applications and stimulates advancement that will take OR to a whole new level, so the impacts between OR and e-business are mutual.
We may be living through the business equivalent of the Cambrian explosion when, after 3.5 billion years of sluggish evolution, a vast array of life forms suddenly appeared in only 10 million years. New business models and ways of organizing and operating businesses are appearing in comparably rapid profusion, driven by stunning advances in the information technologies.
As managers pursue organizational change on a massive scale, they have focused to the point of preoccupation on the opportunities presented by modern information technology. The need for more decision technology has been growing all the while, but only recently have competitive pressures begun to build for more applications.
Fortunately, new data sources, operational business software, intermediaries, and data-exchange standards are emerging that are very conducive to decision technology. Thus the digital economy is entering a phase in which decision technology seems poised to rise and join information technology as a vital engine of further development.
What kinds of opportunities does the dawning e-business era offer OR, and how has OR fared in taking them up? We have inquired widely in academia and in industry over an extended period. We find that, after a slow start perhaps obscured somewhat by secret projects (we encountered more than a dozen), OR practitioners are now beginning to capture some of their abundant opportunities.
According to Innovations Report, four British universities, Lancaster, Nottingham, Cardiff and Southampton, are brought together by a £12 million initiative named LANCS to boost Operational Research (OR) in the UK. The LANCS initiative is supported with a Science and Innovation Award from the Engineering and Physical Sciences Research Council (EPSRC), which is the main UK government agency for funding research and training in engineering and the physical sciences.
OR was born in the UK. Therefore, it makes sense that the UK government is willing to spend money and effort to support OR research and to ensure that UK maintains its status as one of the leaders in this field. This requires increasing the number of research activities going on by increasing the number of researchers developing the underpinning theories of OR. The four members of LANCS will be collaborating on expanding their research capacity on the development of theoretical OR. This is something that I am really happy about because British researchers have always been particularly strong at studying OR theories and that an increasingly solid theoretical foundation is very important for the health and prosperity of OR. Although OR is applied problem-solving by nature, more innovative applications are only possible with advanced theories.
I found this video on the iTunes store. It is a recording of Dr. Tuell Green’s talk on the applications of Operations Research (OR) in the airline industry. Dr. Green earned a Ph.D. in OR from University of North Carolina and worked with American Airlines in Texas. He specializes in Applied Probability in Queuing Theory. This talk was given during the ACU Math & Science Conference in Jan 2006.
Please note that there are some audio problems with this video file. During several parts of the video there were sudden noises, so keep your volume at a relatively low level while watching it.
During his talk, Dr. Green mentioned that the objectives of the OR department at American Airlines include:
Enhance revenues
Reduce costs
Improve productivity
Improve customer service
all of which are achieved by applying OR, quantitative techniques and analytical skills to business tactical problems.
Some of the typical applications of OR he mentioned include:
Assignment problem: Which airplanes to be assigned to which markets? Which airplanes are going to fly which routes?
Crew and manpower planning: How to plan ahead so that you will have the number of pilots you will need after their training is finished?
Pricing issues: How to set the optimal prices for the flight tickets taking into consideration that flights are perishable commodities?
Airport operations: How to schedule regular checks and maintenances of the planes?
Irregular operations: How to deal with unexpected events, such as severe weather and crew unavailability, and keep your schedules going?
With his love for hockey and the purpose of motivating his students, the Management Science (MS) professor