MIE 379 Deterministic Operations Research Todays Goals

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MIE 379 Deterministic Operations ResearchTodays
Goals

• Introductions
• Prof. Baker
• Students
• Operations research
• Understand course requirements
• Hand out case study Learn Steps of Modeling
  process
• Differentiate between objectives, alternatives,
  and information.
• Note Office hours are by appointment (or drop
  in), 330 430 on Monday and Wed. preferred.
• Homework will usually be due on Thursdays.

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Who am I?

• Professor Erin Baker
• 120 Marston
• 5-0670
• Decision Making under Uncertainy Economics
  Climate change policy Technology policy.

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What I did with OR this summer
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Introduce Yourselves
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What Operations Research Is

• In a nutshell, operations research (O.R.) is the
  discipline of applying advanced analytical
  methods to help make better decisions.
• By using techniques such as mathematical modeling
  to analyze complex situations, operations
  research gives decision makers, such as
  executives, the power to make more effective
  decisions and build more productive systems based
  on
• More complete data
• Consideration of all available options
• Careful predictions of outcomes and estimates of
  risk
• The latest decision tools and techniques

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A uniquely powerful approach to decision making

• Youve probably seen dozens of articles and ads
  about solutions that claim to enhance your
  decision-making capabilities.
• To achieve these results, O.R. professionals draw
  upon the latest analytical technologies,
  including
• Simulation Giving you the ability to try out
  approaches and test ideas for improvement
• Optimization Narrowing your choices to the very
  best when there are virtually innumerable
  feasible options and comparing them is difficult
• Probability and Statistics Helping you measure
  risk, mine data to find valuable connections and
  insights, test conclusions, and make reliable
  forecasts

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A uniquely powerful approach to decision making

• Youve probably seen dozens of articles and ads
  about solutions that claim to enhance your
  decision-making capabilities.
• To achieve these results, O.R. professionals draw
  upon the latest analytical technologies,
  including
• Simulation Giving you the ability to try out
  approaches and test ideas for improvement
• Optimization Narrowing your choices to the very
  best when there are virtually innumerable
  feasible options and comparing them is difficult
• Probability and Statistics Helping you measure
  risk, mine data to find valuable connections and
  insights, test conclusions, and make reliable
  forecasts

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Examples

• Ford used O.R. to optimize the way it designs and
  tests vehicle prototypes, saving 250 million.
• UPS used O.R. to redesign its overnight delivery
  network, saving 87 million plus an additional
  189 million over the following decade.
• The U.S. Army used O.R. to increase recruiting
  17.5 while saving 20.
• NBC used O.R. to improve advertising sales plans,
  increasing revenues by over 200 million.
• The City of New Haven used O.R. to determine
  definitively that its needle exchange program was
  reducing HIV infection rates.

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What you can do with OR

• Sports
• 2004 Olympics Achieving and Systematizing
  Operational Efficiency at the 2004 Olympics
• Portfolio management
• Bank Hapoalim Bank Hapoalim Offers Investment
  Decision Support for Individual Customers
• Save lives
• Eli Lily Co. Identifying and Neutralizing the
  Cause of Deadly Side Effects of Eli Lilly Co.
  Anticancer Drug ALIMTA

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80 of life is showing up!
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Term Projects

• Case Study
• You are consultants helping the school district
  with new school assignments.

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The Modeling Process

• Define the problem
• Framing
• Alternatives, Objectives, and information
• Create Mathematical model
• Decision variables
• Objective function
• Constraints
• parameters
• Solve the model
• Test the model
• Outside opinions
• Past data
• Communicate and Implement the model
• Reliable easy to use computer model

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Define the Problem/Opportunity

• Consider the frame of the problem you are
  attacking should you be thinking bigger? Should
  you focus at a more detailed level?
• Objectives What are you trying to achieve? How
  will you evaluate your alternatives? Do you have
  any constraints?
• Alternatives What you are choosing between.
  Something you can control. Try to generate
  alternatives that best match objectives.
• Information Data and uncertainties. Facts.
  Things that you cant control (or you dont want
  to consider within this problem).

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The elements of a decision

• Alternatives
• Information
• Preferences/Objectives

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The elements of a decision

• Alternatives
• Possible actions that you can choose.
• Information
• Preferences/Objectives

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The elements of a decision

• Alternatives
• Possible actions that you can choose.
• Information
• Preferences
• An ordering over outcomes or consequences.
• Preferences reflect values

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The elements of a decision

• Alternatives
• Possible actions that you can choose.
• Information
• Information ties Alternatives to
  Outcomes/Consequences
• If there is uncertainty, the information will be
  in the form of probabilities.
• Preferences
• An ordering over outcomes.
• Preferences reflect values

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Examples

• Values
• Human Health
• Ecological Health
• Economic stability

• Alternatives
• Improve bikeways
• Encourage solar
• Encourage local agriculture

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Examples

• Values
• Human Health
• Ecological Health
• Economic stability

• Alternatives
• Improve bikeways
• Encourage solar
• Encourage local agriculture

• Information
• What is the impact of a bikeways improvement plan
  on obesity?
• What are the ecological impacts of installing
  silicon-based solar cells?

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Structuring Objectives

• A value or evaluation consideration are the
  things we care about, the things that should be
  taken into account when evaluating alternatives.
• Costs
• Profits
• Health
• An objective indicates a direction in which we
  strive to do better.
• minimize costs
• maximize profits
• minimize traffic deaths
• A goal is something that we either achieve or
  not.
• reduce costs to below 1M/year
• No more than 100 traffic deaths per year.

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Teamwork

• Read handout on school busing.
• What are the values (evaluation criteria) that
  are being expressed by stakeholders in the
  article?
• Are there other values they should be
  considering?
• Give at least one possible objective
• Maximize or Minimize
• What alternatives are mentioned in article?
• What constraints are mentioned?
• Generate some creative alternatives.

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Next Time

• Formulating Creating Mathematical Models