Congratulations to 2011 Wagner Prize Winner, An Intel-ligent Application of Operations Research by Belleh Fontem

Selected out of six finalists to win the 2011 Daniel H. Wagner Prize, the Decision and Engineering team at Intel, represented by members Evan Rash and Karl Kempf, explained the nature of the problem they attacked and how their solution approach expanded the body of operations research knowledge. Since Intel's founding in 1968, the chip design and manufacturing company has expanded to become a multinational corporation with over $129 billion in market capitalization, serving multiple geographic markets around the world.
Over the years, this explosion in size had created a complex profitability problem along the dimensions of time, markets, and product features.

Because individual markets had unique product feature requirements, Intel's engineers had to find the sweet spot between designing a universal chip for all possible markets (which would be too cumbersome a chip) or customizing the properties of each chip to fit each market (thereby running into an engineering capacity bottleneck).

Reaching an optimal trade-off implied fine-tuning the engineering design process so as to know whether or not to produce a specific chip, which features to include on that chip, what time to introduce the chip, and for what markets. Moreover, there were complicating restrictions such as that product development had to be synchronized with market windows and that product features needed to meet or exceed the needs of their target markets while satisfying relatively inflexible financial resource budgets.

To solve this problem, the team combined different solution techniques from the standard literature with newer heuristic methods. Their approach was to decompose the problem into multiple stages, use an outer genetic algorithm to search the space, and then subsequently pass information to an inner set of tactical heuristics. They also made a couple of enhancements to the model in order to incorporate strategic goals.

Their new approach has already generated business benefits for Intel in terms of better decision making, increased revenue, and the ability to explore several what-if scenarios. The use of the tool has risen exponentially within the organization, and the feedback from users regarding transparency and ease of use has been favorable.