Operations Research Important
for Businesses, Lasdon Says

By Ashley Warren

Leon Lasdon, a professor in the Information, Risk, and Operations Management Department at McCombs, discussed the importance of operations research (OR) as an element of corporate decision making Oct. 16 during his Faculty Research Presentation Series lecture.
 
Operations Research, Lasdon said, is “the discipline of applying advanced analytical methods to help make better decisions. The core of it is really building mathematical models.”
 
Lasdon, speaking before a lecture hall full of undergraduate business students, said he was part of a team that developed Microsoft Excel Solver, a general-purpose optimization modeling system that Microsoft bought and bundled with Microsoft Excel and Microsoft Office.
 
“We were at the right place at the right time,” he said. “We developed the Excel Solver, and it’s been inside Excel ever since 1992.”

The Solver formulates optimal shipping routes, staff schedules and maximized income based on information entered into the spreadsheet’s boxes.  
 
The overall idea is optimization, which means identifying constraints and finding the best business solution, Lasdon said.

 
The history of OR dates back to World War II, when physicists and engineers analyzed how to search for German submarines with limited money. These research methods spread to business in the 1950s, and with the advent of computers, “OR started to blossom,” Lasdon said.  
 
Today, it is constantly accelerating due to advanced technology and plentiful data, and many well-known companies employ OR to solve business problems.  
 
UPS, for example, redesigned its overnight delivery network, relying on optimization models to determine vehicle routing patterns and delivery schedules.
 
NBC used OR to improve its advertising sales plans, Lasdon said, which increased revenues by more than $200 million. 
 
Before Sept. 11, 2001, OR models enabled airline companies to recover from flight disturbances, including storms and mechanical failures.
 
The system “helped them reallocate their crews when flights were delayed,” Lasdon said.
 
After Sept. 11, OR solutions became increasingly important, particularly for Continental Airlines. “On 9/11, a huge disruption occurred when all flights had to land wherever they happened to be,” he said. “Given the availability of the system, Continental was able to reschedule their crews and reallocate their planes.”
 
At that time, flight cancellations were prevalent and flight crews were unavailable. Lasdon pointed out that OR solutions helped Continental return to their schedule two to three days earlier than other airlines.
 
“That meant tens of millions of dollars,” he said.
 
Lasdon’s current projects involve setting up optimization models that evaluate risk analysis in the oil industry and coordinating call center scheduling for Dell.
 
“Seeing it used is a great thing,” he said.  

Lasdon encouraged students interested in OR to visit the Web site for INFORMS, the main association for OR and the management sciences.
 
Many students were impressed with Lasdon’s current plans and his role in creating Microsoft Excel Solver.
 
“That’s a pretty complicated task. I can only imagine being able to organize that many people,” said finance and economics freshman Andrew Tello. “I use Excel a lot, and to know that he had an integral role in developing it is fascinating.”