Operations Research Management Science - Teaching Operations Research

<BODY bgcolor="#ffffff" link="cc0000" vlink="cc0000" text="#000000"> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br>   <table border=0 cellspacing=0 cellpadding=0 width=480><tr valign=top> <td width=10><img src="../cleardot.gif" width=1 height=1 hspace=4 border=0></td> <td width=470> <FONT face="verdana, arial, helvetica" SIZE=2><B><I><A HREF="../../ORMS.shtml" TARGET="_top">OR/MS Today</A> - April 2002</I></B></font><BR> <hr size="1"> <img src="cleardot.gif" width=1 height=1 vspace=4 border=0><br> <font face="times new roman, times"> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=2><B>Teaching OR</B></FONT><br> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <FONT SIZE="+2"><B>Practical Project</B></FONT><BR> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> <FONT SIZE="+1"><I>Teaching applied OR at the 'Harvard Business School of India'</I></FONT><BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=2><B>by Goutam Dutta</B></FONT><br> <hr size="1"> <img src="../cleardot.gif" width=1 height=1 vspace=12 border=0><br>    During the latter part of the 19th century in British India, a young man named Narendranath Dutta was looking for the ultimate meaning of life. He was in search of a master. He traveled throughout Calcutta and asked the question, "Have you seen God?" Everyone he talked to replied in the negative. The young man became restless until he met his master and guru, Ramakrishna, who replied in the affirmative. Ramakrishna said that not only had he seen God, but Narendranath Dutta could see Him as well. Once enlightened, Narendranath Dutta became known as Swami Vivekananda and went on to deliver a historic address ("Sisters and Brothers of America") at the Art Institute of Chicago on Sept. 11, 1893. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> The objective of this article is not to preach the teachings of Ramakrishna or Vivekananda, but to show that the question asked by young Narendranath is similar to questions posed by students to their teachers at management schools where quantitative methods are taught: Have you seen OR/MS used? Who is using it? Can I use it?<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> For many instructors, it is difficult to say, "Yes, I have used it, and if you use it in your company, you would get benefit out of it." Thanks to my experience at Tata Steel (which won the 1994 Franz Edelman Award for Management Science Achievement) and my knowledge of articles in journals like Interfaces, I can easily convince my students that OR/MS does, indeed, work. This article describes a humble attempt to launch a course called "Modelling for Management Decision Making" at Indian Institute of Management-Ahmedabad, widely considered to be the "Harvard Business School of India."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=12 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=3><B>Quantitative Course at IIM-Ahmedabad</B></FONT><BR> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> While the number and concentration of OR/OM courses in business schools in United States are on the decline, the Indian Institute of Management boasts a high concentration of quantitative methods courses. The first-year course package, for example, includes five courses in Quantitative Methods/Operations Management. They are as follows:<BR> <OL> <LI>Quantitative Methods I (23 sessions), first term <LI>Quantitative Methods II (30 sessions), second term <LI>Quantitative Methods III (15 sessions), third term <LI>Operations Management I (23 sessions), first term <LI>Operations Management II (23 sessions), third term </OL> This means that four of the 15 units of a compulsory package every first-year MBA student takes should be from Quantitative Methods/Operations Management. In Quantitative Methods I, students are exposed to linear programming problems through real-life business cases in an Indian context. Although a number of American cases (like Sherman Motors) are also taught, the majority of the cases are Indian. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> In Quantitative Methods II, probability models are introduced with emphasis on distributions and decision-making under uncertainty. In this class, students read the Interfaces article on yield management at American Airlines (Smith, et al) [6]. In Quantitative Methods III, students are exposed to various statistical tests like the Chi-square test. In Operations Management I & II, students are exposed to basic inventory theory, project management, quality management, services sector management and concepts like "just-in-time."<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> (When I was a visiting faculty member at the University of Illinois-Chicago in 2001, I was surprised to find that students take only one OM course and no quantitative methods courses in the entire MBA program. While it is difficult to conclude anything about MBA programs in the United States based on one university, it is well known that many OR courses have not been well received in U.S. business schools, perhaps because the modeling techniques have limitations. However, such limitations exist in all types of solution techniques to management problems.)<BR> <img src="../cleardot.gif" width=1 height=1 vspace=12 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=3><B>Course Outline</B></FONT><BR> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> With the type of heavy concentration of quantitative courses at IIM-Ahmedabad, it was difficult to position the new course at the current setting. I found that no course in the second year provided input in the area of Markov decision process, queueing theory and large-scale mathematical programming. In order to understand the applied OR work, the students must have some background on these areas. The course has five modules (see box).<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> <TABLE BORDER=1 CELLSPACING="0" CELLPADDING="3"> <TR valign=top> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Module</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Sessions</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Coverage</B></TD> </TR> <TR valign=top> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>1</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>1</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Introduction to Modeling</FONT></B></TD> </TR> <TR valign=top> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>2</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>10</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Markov Decision Process, Queueing Theory, Large Scale Mathematical Programming</FONT></B></TD> </TR> <TR valign=top> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>3</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>6</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Airlines Application</B><BR>(Revenue Management, Fleet Assignment Model)<BR><BR> <B>Manufacturing Application</B><BR>(Tata Steel, Armco Steel)</FONT></TD> </TR> <TR valign=top> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>4</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>6</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><Students select cases from Interfaces and present Edelman Video Tapes are shown</FONT></B></TD> </TR> <TR valign=top> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>5</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>2</B></TD> <TD><FONT face="verdana, arial, helvetica" SIZE=2><B>Implementation, Modeling in Indian context</FONT></B></TD> </TABLE> <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> In Introduction to Modeling, we discuss mistakes students make while modeling. In the first class students are told about the misapplications of the model. Barnett and Tress [1] describe four interesting misapplications of OR/MS. They clearly demonstrate how modeling assumptions can be entirely wrong. Gass [2] explains that modeling is not just mathematics and computer implementation, but a complex process that involves behavioral, psychological, political and bureaucratic overtones. Another article by Gass [3] describes the international dimension of modeling. A model that is successful in a developed country may not be successful in a developing country, and vice versa. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> In the second module, students are exposed to the fundamentals of stochastic processes that they did not learn in the first year. After three sessions on Poisson process and Markov process, students learn M/M/I and M/M/s queueing systems. While the students learn the mathematics of the process, they are also told that queueing process needs psychological considerations as well. Articles by Larson [5] and Katz, et al [4] on Bank of Boston discuss this in detail. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> During this phase, students are exposed to important applications in airlines and manufacturing, including revenue management. I also discuss the application at Tata Steel that won the Edelman Prize in 1994. Since I was personally involved in developing a decision-support system for a steel company in North America, I discuss this case with a demonstration of the DSS software. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> After this, the students select one of the cases from Interfaces and present them in groups. This year, students discussed the following cases: 1. Asset Liability Management at Russell, Yasuda and Kasai, 2. Supply Chain at Digital, 3. Supply Chain at IBM, 4. AT&T Site Selection Model, and 5. New Haven Department of Public Health. After the presentations, I discuss with the students the relevance of the case in an Indian context. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> The last and the most important part of this course is a group project on applied OR work. The students get the project either on their own or through my contacts. Students have to take their own initiative to find a project that suits the client as well as the objective of the course. The objective is to demonstrate that applied work is different from writing an algorithm or discussing the solutions from a linear programming model. My goal is to do something similar to what Gene Woolsey does with his students at the Colorado School of Mines [7]. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> Typical projects included:<BR> <UL> <LI>Simulation model for Pizza Hut in Ahmedabad <LI>Pricing of seats in an airlines company <LI>Waiting line model for patients in a fertility clinic <LI>Using revenue management concepts in an Internet service provider <LI>Term-structure modeling in Indian Bond Market <LI>Credit rating and credit risk modeling </UL> Some of the students' projects were outstanding. One student worked on term-structure modeling. The work was promptly implemented at the company and the student was offered a job based on his project. The student turned down the job in order to accept another position with Chase Manhattan in Hong Kong. He now has his eye on Wall Street. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> Student registration figures indicate a continued demand for applied OR modeling courses. In the 1999-2000 school year, the course attracted four MBA students and two Ph.D. students. In 2001-2002, the course drew a total of 33 students (30 MBAs).<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> In addition to teaching at the University of Illinois, I have taught in the Department of Operational Research at the London School of Economics. At LSE, a student project is required for receiving a master's degree in operational research. I think it is necessary in any graduate-level program to have a project component that emphasizes that OR is not just a set of mathematical tools but a productive way of looking into problems.<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> Lessons learned while teaching this course at IIM-Ahmedabad: <BR> <OL> <LI>There is a growing demand for applied OR courses in Indian business schools. <LI>Since our students get higher inputs in quantitative modeling, they are better equipped to take the challenges of the job market. Currently, about 40 percent of our students get international placements. I think this course, along with other courses, gives our students a competitive advantage. Our MBA program is the most difficult program in the world (Economist Survey, 2002) to get into, and our brand image is quite good. We should not reduce the quantitative modeling courses in the MBA program. <LI>Although the quantitative modeling courses are on the decline in the United States, it may not be appropriate for business schools in other countries to follow the U.S. trend. <LI>There is a need of quantitatively trained persons in business and industry. The top management of the corporate houses in India is gradually realizing that a Ph.D. in operations research/management science who is willing to work on real problems is a valuable asset to the company. The National Stock Exchange in Mumbai, for example, has created a small group that works on applied financial modeling. <LI>The experience of teaching this course has been extremely rewarding, and students who have joined industry confirm the benefits of it. <LI>Since IIM-Ahmedabad is considered the "Harvard Business School of India," there are some concerns that this course may not work in this Institute. However, the growing number of students in the course contradicts this assumption. <LI>The students should be taught that OR is not a set of mathematical tools and solution algorithms. The non-technical part of the process is equally important as the technical part. In fact, in my opinion, the non-technical part is more important for the applied OR courses. <LI>The only way of teaching a course based on OR implementation is to give an applied project to the students. </OL><img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=3><B>Motivation & Inspiration</B></FONT><BR> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> My motivation and inspiration for teaching this course came from three other courses. Dick Larson at MIT started a course on OR practice where Ph.D. students do real-world projects. Peter Bell at the Ivey School at the University of Western Ontario (Canada) has launched the concept of strategic operations research in which OR is viewed and taught as a competitive advantage to organizations. Last but not least, Gene Woolsey's hands-on approach to student projects at the Colorado School of Mines has had a profound impact on the design of this course. With his "guild system of education," Woolsey has demonstrated to the world how OR can be successfully taught and applied.<BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> I am not the first professor in India to emphasize real-world projects in a modeling course. Professor N. Ravichandran has run a system analysis and simulation course for several years where students do an applied project. Professor Ishwar Murthy at the Indian Institute of Management-Bangalore and Professor Rahul Roy at the Indian Institute of Management-Calcutta started similar courses on modeling. Despite these efforts, the awareness of OR among the top management at Indian companies remains negligible. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> In a developing country like India, the opportunities to apply OR modeling techniques in the real world are boundless. In December 2000 at the annual conference of ORSI, I organized a seminar on the topic "OR Education in India." India has a vast talent of people trained in mathematical modeling techniques. I have suggested that every place where a modeling course or an OR degree is offered, operations research should be taught with a practical project. For example, a large number of mathematicians in India are writing technical papers related to inventory control of perishable products. At the same time, the two national airlines in India are looking for solutions for their revenue management problems. Regrettably, the two groups do not talk to each other. An applied OR course is a step to bridge this gap. <BR> <img src="../cleardot.gif" width=1 height=1 vspace=6 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=3><B>References</B></FONT><BR> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> <OL> <FONT SIZE=1> <LI>Barnett A. and Tress H., 1990, "Misapplications Reviews: Rain Men," <I>Interfaces,</I> March-April, pp. 42-47. <LI>Gass, S.I. 1990, "Model World: Have Model, Will Travel," <I>Interfaces,</I> March-April, pp. 67-71. <LI>Gass, S.I. 1990, "Model World: Danger, Beware the User as Modeler," <I>Interfaces,</I> May-June, pp. 60-64. <LI>Katz, K.L., B.M. Larson and R.C. Larson, 1991, "Prescription for the Waiting-in-Line Blues: Entertain, Enlighten, and Engage," <I>Sloan Management Review,</I> Vol. 32, No. 2, pp. 44-53. <LI>Larson, Richard C., 1987. "Perspectives on Queues: Social Justice and the Psychology of Queuing" <I>Operations Research,</I> Vol. 35, No. 6 (November-December), pp. 895-905. <LI>Smith, B.C. , Leimkuhler, John F., Darrow, Ross M., 1992, "Yield Management at American Airlines," <I>Interfaces,</I> January-February, pp. 8-31. <LI>Woolsey, G., 1993, "Where Were We, Where Are We, Where Are We Going, and Who Cares?" <I>Interfaces,</I> September-October, pp. 40-46.</FONT> </OL> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br> <IMG SRC="../barbluehook.gif" WIDTH="468" HEIGHT="4"><br> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> <FONT face="verdana, arial, helvetica" SIZE=2><I>Goutam Dutta is on the faculty at the Indian Institute of Management-Ahmedabad. He was a member of the team that helped Tata Steel win the 1994 Edelman Prize.</i><BR>  <img src="../cleardot.gif" width=1 height=1 vspace=5 border=0><br>  <img src="../barblue.gif" width=468 height=1 border=0 alt=" "><br> <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <font face="verdana, arial, helvetica" size="1"> <CENTER><script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script></CENTER><br> <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <LI> <A HREF="tocfr.html" Target="_top"><I>Table of Contents</I></A><br> <img src="../cleardot.gif" width=1 height=1 vspace=4 border=0><br> <LI> <A HREF="../../ORMS.shtml" TARGET="_top"><I>OR/MS Today</I> Home Page</A><br>  <img src="../cleardot.gif" width=1 height=1 vspace=8 border=0><br> <img src="../barblue.gif" width=468 height=1 border=0 alt=" "><br> <b><i>OR/MS Today</i></b> copyright � 2002 by <A HREF="http://www.informs.org/" target="_new">the Institute for Operations Research and the Management Sciences</a>. All rights reserved.<br> <img src="../cleardot.gif" width=1 height=1 vspace=3 border=0><br> <img src="../bargrey.gif" width=468 height=1 border=0 alt=" "><br> <b>Lionheart Publishing, Inc.</b><br> 506 Roswell Rd., Suite 220, Marietta, GA 30060 USA<br> Phone: 770-431-0867 | Fax: 770-432-6969<br> E-mail: <a href="mailto:lpi@lionhrtpub.com">lpi@lionhrtpub.com</a><br> URL: <A HREF="http://www.lionhrtpub.com" target="_top">http://www.lionhrtpub.com</A><br> <img src="../cleardot.gif" width=1 height=1 vspace=3 border=0><br> <img src="../bargrey.gif" width=468 height=1 border=0 alt=" "><br> Web Site � Copyright 2002 by Lionheart Publishing, Inc. All rights reserved. </td></tr></table> <img src="../cleardot.gif" width=1 height=1 vspace=2 border=0><br> </BODY>