Some evidence is building that quantitative, probabilistic decision models – in particular Monte Carlo methods – do appear to improve forecasts and decisions (Hubbard 2009). Unfortunately, the current financial crisis has led to much criticism of quantitative models and methods. Some commentators, presuming that most actual decisions are based on models that reflect best practices, claim that the crisis resulted from a failure of quantitative analyses and that this experience casts serious doubt on the value of models. (Scientific American 2008) or calls for a major change in their use (Lo 2009).
Volume 36, Number 5, October 2009
FEATURE ARTICLES
DIGITAL EDITION
DEPARTMENTS 
Inside Story
For Practitioners (and some Academics) Only
The last (August) issue of OR/MS Today was devoted almost entirely to academia, with articles on assessing the value of teaching, securing NSF grants, a spreadsheet modeling course for MBAs and a profile of a soldier/Rhodes Scholar/operations researcher.
President's Desk
Making Innovation Routine
Soon, INFORMS will complete the kickoff year of a new organizational process. At the end of 2008, the Board issued a Call for New Initiatives, originally announced by then-President Cindy Barnhart in her final President’s Desk column. The idea came from the INFORMS Strategic Planning Committee (SPC), which had identified a long list of critical strategic needs. One of the needs was “Develop a process to systematically evaluate and prioritize plans and proposals for new products, programs and initiatives.” The New Initiatives Process was established to encourage efforts to do this and to translate other strategic objectives into operational plans.
Issues in Education
Quantitative Literacy
At the June 2009 CORS-INFORMS International Meeting, Professor Peter Bell explained why OR/MS enrollments increased at the University of Western Ontario’s Ivey School. Replacing the traditional course title “Management Science” with “Analytics,” immersing students in case-based spreadsheet modeling and replacing topic headings like “simulation” and “linear programming” with sexier words such as “risk analysis,” “multiple decision problems”and “optimization,” Bell and his colleagues generated so much enthusiasm that MBA students requested an advanced class (see [1] and [2].) I’d like to share an informal study in New York City that confirmed that this approach is exactly what students of all business disciplines need.
INFORMS in the News
New Japanese Leader Boasts O.R. Background
At the end of August, operations researchers in Japan and across the world awoke to the announcement that an operations researcher had become the head of state of a G-8 country. Yukio Hatoyama, set to become the prime minister of Japan in September (after press time), earned his Ph.D. at Stanford in O.R. His Ph.D. advisor was the late Gerald Lieberman. His ascendancy gives further testimony to the strengths that operations researchers bring to decision-making in government and business.
Was It Something I Said
Feedback & Reflections
I received a lot of responses to my last column, which discussed the State of California’s budget situation, its impact on higher education funding in this state, and my (largely unrelated) decision to leave state funded San Francisco State University for the University of San Francisco, a private, Jesuit University located right across town.In addition to several notes that asked if we were hiring here at USF (not at the moment, by the way), I also received a thoughtful e-mail from Dr. Ellen Jordan. Some 25 years ago, Ellen had made a transition similar to mine, moving from a large state university to Mount Olive College in North Carolina, where she is now vice president for academic affairs and professor of quantitative studies. I appreciated Ellen’s note very much, not only because she expressed that she was touched by my last column (you should all know that this kind of thing gets me every time!) but also because of her thoughtful comments about how financial management in a large state bureaucracy (where money comes – or fails to come – from some monolithic omnipotent external entity) is fundamentally different than in a small, tightly focused, customer-driven organization (where regular financial scrutiny is a part of the culture simply because it has to be). The money quote from her e-mail:“Sometimes thinking we are not a business lets us hide our problems. Our ivory towers need cleaning and our attitude needs adjustment.” Well said,Dr. Jordan.
Forum
Social Causes of the Financial Crisis
Although there are many discussions on the economics behind the current financial crisis, there are very few discussions on the social causes of the crisis. Here we point out at least three of them. We believe that without fixing social causes that lead to the crisis, just by focusing on economic policies alone will not solve the current problems.
PuzzlOR
Connected and Infected
Disease can spread quickly in a globalized world where increased travel raises the opportunity for transmission. Figure 1 shows a modified map of the world divided into five areas. The arrows show the potential path for the spread of disease. For example, the Blue area can transmit infections directly to the Red and Violet areas but not to the Yellow or Green areas. Each area can also transmit disease to its own population, indicated by the arrows that circle back onto themselves.
ORacle
The Fisherman’s Parable
The day at sea had been warm and pleasant, with light breezes, and the fishing had been good. The OR/MS analyst, his wife and the others in the group on the boat were enjoying themselves. In mid-afternoon, though, they were disappointed when the boat captain suddenly announced, “Sorry, folks, we need to cut this short and head for shore. We’re in for some bad weather.”