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Business Analytics: The Past, Present and Future of Operations ResearchBCSI 2013
Michael TrickTepper School of Business, Carnegie Mellon University
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The Past
Package Delivery
Internet Search
Mail Delivery
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The Past
Package Delivery
Internet Search
Mail Delivery
FAILED
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The Past
Package Delivery
Internet Search
Mail Delivery
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The Past
Package Delivery
Internet Search
Mail Delivery
Salvagible?
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Key Idea
Operations ResearchBusiness Analytics!
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Operations Research
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Business Analytics is a Hot Topic
“Business analytics”
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…. Maybe
Operations research
Management science
Businessanalytics
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Business Analytics
Using data to make better decisions
(what the best operations research has always been)
Change in emphasis: more about data
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The Past
Package Delivery
Internet Search
Mail Delivery
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The Past
Package Delivery
Internet Search
Mail Delivery
Google: Treat web pages as data; treat search as optimization
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The Past
Package Delivery
Internet Search
Mail Delivery
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The Present
Data
Computer Speed
Algorithms
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The Present
Data
Computer Speed
Algorithms 2013: $587From BestBuy
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The Present
Data
Computer Speed
Algorithms
Total speedup of OR Methods in 15 years: 1 billion times
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Illustration: TSP with 2392 nodes
2011: Bill Cook and Concordewith iPhone1987: Padberg and Rinaldi
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Future: The OR Process
Identify aProblem
Formulate a ModelDetermine Decisions Objectives Constraints
Get DataEstimate Missing Data
Find Solution to Modelusing Mathematical Tools
Validate Solution Is it reasonable? Sensitivity
ImplementSolution
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The Business Analytics Process
Identify aProblem
Formulate a ModelDetermine Decisions Objectives Constraints
Get DataEstimate Missing Data
Find Solution to Modelusing Mathematical Tools
Validate Solution Is it reasonable? Sensitivity
ImplementSolution
Get DataEstimate Missing Data
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Future is bright!
IBM 2010 Annual report; contrast “cloud” at $7 b and smarter planet $10 b
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The FutureLinking Predictive and Prescriptive
Handling Uncertainty
Parallelism
Adversaries
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The FutureLinking Predictive and Prescriptive
Handling Uncertainty
Parallelism
Adversaries
OR World ViewBA World View
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The FutureLinking Predictive and Prescriptive
Handling Uncertainty
Parallelism
Adversaries
How is data helping the organization make better
decisions?
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The FutureLinking Predictive and Prescriptive
Handling Uncertainty
Parallelism
Adversaries
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The FutureLinking Predictive and Prescriptive
Handling Uncertainty
Parallelism
Adversaries
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The FutureLinking Predictive and Prescriptive
Handling Uncertainty
Parallelism
Adversaries
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Summarize: Business Analytics and… OR Past
Fedex Google USPSAll examples of key role of
data OR Present
More Data Faster computers Better algorithms Lower fixed Costs
OR Future Predictive Analytics Robustness Parallelism Adversaries
More athttp://mat.tepper.cmu.edu/blog