CPMS, The Practice Section of INFORMS

Annonuncements

• Daniel H. Wagner Prize for Excellence in O.R. Practice - 2003 Competition (Deadline is March 1, 2003)
  • MS-Word file
  • pdf file
• Franz Edelman 2002 Competition

• Area of Interest
• Contact Information
• Practitioner News
• Membership
• Activities
• Officers
• Announcements

First CPMS Practice Dinner

CPMS held its first annual CPMS Practice Dinner on Saturday night in San Jose at the November INFORMS meeting. We designed this event to appeal to practitioners from all corners of INFORMS who travel early to the National Meeting. The evening started out with wine & cheese and informal greetings, followed by a delicious dinner.

We had an excellent after-dinner keynote address "Adventures in Policy Modeling" by Ed Kaplan of Yale University. Ed let us in on the secrets of getting involved in important policy issues and how applying OR techniques to these problems and addressing the key issues led him to give influential briefings at the highest level of government. Ed told of many adventures, beginning with his sometimes unpopular analysis in support of needle exchange programs in New Haven and including analysis and modeling for the critical and timely issue of a national smallpox immunization policy.

In all it was a wonderful evening and well worth attending.

Isolated Practitioner Workshop

This one-hour, evening session is usually held at each INFORMS National Meeting. We usually have a panel discussion or presentation on a topic of interest to the isolated practitioner. Jack Theurer of the NY Chapter sponsors this popular event."

Area of Interest

CPMS is concerned with the practice of operations research and the management sciences.

Rather than any specific technical methods or areas of study, CPMS is concerned with how all methodologies are applied in evironments where customers seek the help of practitioners to solve problems, reduce costs, or otherwise improve results.

Contact

Communications regarding CPMS should be sent to:

Russell Labe (Chair)
Merrill Lynch
Section 3D
P.O. Box 9065
Princeton, NJ 08543-9065
(609) 282-5149

Email: RLabe@NA2.US.ML.com

Practitioner News

Membership

The major purpose of CPMS, the Practice Section of INFORMS, is to promote practice by focusing on the great value of management science and operations research and on the problems and applications that impact managerial decision making.

Dues are $20 for INFORMS members, $30 for non-members and $10 for students. Call 800-446-3676; e-mail member.services@informs.org; or write to INFORMS, 901 Elkridge Landing Road, Suite 400, Linthicum, MD, 21090.

CPMS Activities:

FRANZ EDELMAN AWARD For Achievement in Operations Research and the Management Sciences

CPMS runs this competition and shares expenses and revenue with INFORMS.

• 2002 Competition Results. The winner of the 2002 Edelman Award for Management Science Achievement is Continental Airlines for the project, "A New Era for Crew Recovery at Continental Airlines."

  Airlines face schedule disruptions every day due to unexpected events including inclement weather, air traffic control, mechanical problems, and crew unavailability. These disruptions impact the flight schedule and lead to delays and cancellations. As a result, flight crews may not be in position to service their remaining scheduled flights. Airlines must be able to quickly reassign crews to cover open flights and return crews to their original schedules in the most cost-effective manner, while honoring all government regulations, contractual obligations, and business rules. The CrewSolverTM decision support system, developed by CALEB Technologies Corp. for Continental Airlines, uses operations research to generate globally optimal, or near optimal, crew recovery solutions while satisfying multiple complex constraints.

  Since implementation, the system has dealt successfully with several high profile events such as the December 2000 and March 2001 Nor'easter snowstorms, the June 2001 Houston flood, and most dramatically, the September 11th terrorist attack. Throughout, Continental recovered from each event in record time and generated overall benefits worth tens of millions of dollars.

  The authors are Anna C. White, Janet Wejman; CALEB Technologies Corp.: Gang Yu, Michael Arguello, Mark Gao Song, Sandra M. McCowan; The University of Texas at Austin: Gang Yu.

• Past Competitions - Videotape Library - 27 years of success stories, told by the researchers, implementers, and executives. Strong testimony to the power of OR applied to real business problems. A great teaching or marketing resource, with vivid stories of success at ABB Electric, Inc., Air Products and Chemicals, Inc., American Airlines Decision Technologies, AT&T, AT&T Capital, Austin, Texas, Emergency Medical Services Department, Bellcore, Bethlehem Steel Corporation, Blue Bell, Inc., British National Health Service, Canadian National Railways, Chinese State Planning Commission and the World Bank, CITGO Petroleum Corporation, City of New York, City of San Francisco Police Department, Columbus-America Discovery Group, Courtyard by Marriott, Delta Airlines, Digital Equipment Corp., Electric Power Research Institute, Eletrobras and CEPEL, Brazil, Federal Highway Administration/California Department of Transportation, Frank Russell Company & The Yasuda Fire and Marine Insurance Co. Ltd., Gas Research Institute, General Electric Capital, General Motors Research Laboratories, George Darling and Associates, Government of Egypt, GTE Laboratories Inc., Hanshin Expressway Public Corporation, Harris Corporation/Semiconductor Sector, Health Care Financing Administration, Hewlett Packard, Hidroelectrica Espanola S.A., IBM, Israeli Air Force, Istanbul Chamber of Industry, KeyCorp, Kodak (Australasia) Pty. Ltd., L.L. Bean, Inc., LTV Steel Company - Cleveland Works, Management Decision Systems, Inc., Merit Brass Company, Military Airlift Command, Mobil Oil Corporation, Monsanto Corporation, MPT Associates, Inc., National Aeronautic and Space Administration (NASA), National Car Rental System, Inc., New Haven Fire Department, New Haven Health Dept., AIDS Division, New York, NY, Department of Sanitation, Norfolk Southern Corporation, NORTEL, Wireless Networks, North American Van Lines, North Carolina Department of Public Instruction, NYNEX, Pacific Gas & Electric Company, Pacific Gas and Electric Company, Pfizer, Inc., Procter and Gamble, Prudential-Bache Capital Funding, Reynolds Metals Co., S.T.C.U.M., SADIA, Sainsbury's, Santos Ltd., SNCF, The French National Railroad, South African National Defense Force, Southern Company Services, Inc., Syntex Laboratories, Inc., Taco Bell Corporation, Tata Iron and Steel Co.,Ltd., Texaco, Inc., The Finance Ministry of Kuwait, The Netherlands Rijkswaterstaat, Tinker Air Force Base, U.S. Air Force, U.S. Army, U.S. Department of Energy, United Airlines, United States Postal Service, Vilpac Corporativo, S.A., Weyerhaeuser Company, and Yellow Freight System, Inc.

The Daniel H. Wagner Prize for Excellence in Operations Research Practice

CPMS has established this prize in memory of the late Dr. Daniel H. Wagner. The cost is supported by endowments from Metron, Inc., Daniel H. Wagner, Associates, Inc., and Applied Mathematics, Inc. The results of the 1998 competition are available on-line.

2002 Competition:

Margaret S. Trench, Shane P. Pederson, Edward T. Lau, Lizhi Ma, Hui Wang , Bank One Card Services, Inc. and Suresh K. Nair , School of Business, University of Connecticut

Credit Line and Price Management for Bank One Credit Cards

This paper describes a methodology developed and implemented to manage characteristics of the cardholder portfolio in an optimal manner. The annual percentage rate (APR) and credit line of an account are critical factors that influence card usage and bank profitability. Lower APRs and higher credit lines are more attractive to consumers. However, APRs that are too low may reduce bank profitability, while indiscriminate line increases may dramatically increase credit loss exposure. The PORTICO (Portfolio Control and Optimization) system is designed to pick the price points (APRs) and credit limits for each cardholder that maximize Net Present Value (NPV) for the portfolio, given constraints on quantities such as risk of default. Portico was developed using Markov Decision Process (MDP) methodology. This model applies account level historical information on purchases, payments, profitability and delinquency risk to determine pricing and credit limit changes. In competitive benchmark tests over more than a year, our model outperforms both the current methodology and a competing approach.

Section Officers

Chair:

Russell Labe

Director and VP, Management Science

Merrill Lynch

(RLabe@NA2.US.ML.com )

Vice Chair:

Steven A. Strauss

Consulting Manager

AT&T Labs

(sstrauss@att.com)

Secretary:

Anna Olecka

Juniper Bank

(AOlecka@Juniper.com)

Treasurer:

Donald R. (Bob) Smith

Monmouth University

732-571-7536 (work)

(dsmith@monmouth.edu)

(Please send information to be included to Joe Discenza)

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