CHARNES, COOPER MADE AN ‘IMPACT’ ON O.R.

Abraham Charnes and William W. Cooper received the INFORMS Impact Award for their seminal work on data envelopment analysis (DEA). Prize committee chair Daniel Adelman presented the award at the INFORMS annual meeting in Pittsburgh. The INFORMS Impact Prize, presented every other year, recognizes contributions that have had a broad impact on the field of O.R. The award recognizes innovators of valuable ideas or techniques that are widely used, or implementers who play a major role in bringing significant methodology into widespread use.

DEA was first described in the article “Measuring the efficiency of decisionmaking units,” European Journal of Operational Research, by A. Charnes, W. Cooper and E. Rhodes (1978). It was selected as one of the 30 most influential papers published in the first 30 years of that journal.

Researchers and practitioners in many fields have recognized DEA’s power and ease of use as a method for evaluating the performance of operational processes. DEA has been successfully applied in many organizations worldwide, including hospitals, HMO’s, military units, universities, cities, courts, investment portfolio managers, and logistics and manufacturing firms. DEA helps identify peak performers in these organizations and suggests ways for the others to improve.

DEA’s novel mathematical programming-based, data-oriented approach has also been helpful in comparing the economies of nations and regions, due to its particularly effective means of accounting for the conversion of multiple inputs to multiple outputs.

Charnes and Cooper required very few assumptions in the development of DEA, so it has opened up possibilities for use in cases that were resistant to other O.R. approaches. For example, DEA helped improve pupil transportation in North Carolina, saving $50 million. This application was a finalist for the 1993 Edelman Prize.

The bibliography in Cooper, Seiford and Tone’s “Data Envelopment Analysis: A Comprehensive Text with Models, Applications and References” (2000), lists more than 2,800 articles on applications and extensions of DEA. Cooper continues to advance the DEA method and extend its monumental impact.

Charnes and Cooper’s decades-long friendship and collaboration ended with Dr. Charnes’ death in 1992. Both have been inducted into the IFORS’ Operational Research Hall of Fame.

Cooper, addressing the audience via videotape, noted that DEA “invented a new chapter in the use of operations research and the management sciences.”