Improving the Utility of the Bellcore Consortium

Bellcore, a research and development company owned by the seven regional telephone companies, aims to deliver research, engineering services, technical support, and software systems (R&D) that have maximum utility to its owners. They have different but overlapping R&D needs and different R&D budgets. We developed a 0-1 nonlinear integer programming algorithm that enables them to share costs optimally for different projects, get only the R&D that they need, and stay within their budgets. In 1991, each owner received on average 23 additional existing Bellcore projects at no additional cost. Over all owners, these projects were originally priced at $52.6 million. The algorithm is now part of the Bellcore budget process.