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June 29, 2004
Special Ops
Posted by Britton
You may never have heard of "operations research." But it matters a whole lot in the world of customer intelligence. It is a discipline -- based on applied mathematics -- that is enabling companies to precisely match customer demand, optimally configure their supply chains and perpetually produce more from less.
"Since its origins in World War II to its recent resurgence fueled by the explosion in raw computing power, O.R. has developed analytical models of the tradeoffs and uncertainties involved in problems ranging from inventory management to police deployment, from scheduling sports leagues to determining how many people to call for jury duty," explains Virginia Postrel in an insightful piece in the Boston Globe.
She even explains how this sophisticated discipline is enhancing your summer trip to Disney World: "Operations research will be your invisible companion, scheduling the crews and aircraft, pricing the plane tickets and hotel rooms, even helping to design capacities on the theme park rides. If you use Orbitz to book your flights, an O.R. engine sifts among millions of options to find the cheapest fares. If you get directions to the hotel from MapQuest, another O.R. engine spits out the most direct route. If you ship souvenirs home, O.R. tells UPS which truck to put the packages on, exactly where on the truck the packages should go to make them fastest to load and unload, and what route the driver should follow to make his deliveries most efficiently."
Ops research draws on the variables supplied by the customer to devise an intricate and valued solution. It is contributing to extraordinary innovations in logistics, supply chain and pricing. And marketers draw on its power to build predictive models and ensure the movement of product at retail outlets. Indeed, it is contributing to a continuing explosion of productivity -- and will almost certainly become even more embedded in our lives over time.
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