Interfaces current issue

Introduction: The Use of Spreadsheet Software in the Application of Management Science and Operations Research

LeBlanc, L. J., Grossman, T. A. — 2008-09-02

Spreadsheets can play an important role in the MS/OR practitioner's toolkit. This is because they are an effective software development platform, supporting powerful commercial MS/OR add-ins and providing advantages in deploying models to clients. Spreadsheets also provide access to the power of MS/OR for large numbers of unsophisticated end-user modelers. In this special issue, we highlight the benefits of spreadsheet MS/OR across 10 different high-impact applications.

Analyzing Supply Chains at HP Using Spreadsheet Models

Amaral, J., Kuettner, D. — 2008-09-02

To satisfy shifting customer demand for an evolving product offering, every manufacturing company must reconfigure its supply chain network periodically. The network can be simple or complex. It may include suppliers, factories, final assembly locations, and distribution centers. Hewlett-Packard's (HP's) Strategic Planning and Modeling (SPaM) team has helped company executives to analyze numerous supply chain networks using spreadsheets (with and without Visual Basic for Applications (VBA)), spreadsheets with add-ins, custom-written software programs, and packaged software applications. Spreadsheets with and without VBA and add-ins are the most frequently used approach for analyzing supply chain networks. The team employs many advanced spreadsheet and VBA capabilities. It also minimizes unnecessary modeling complexity wherever possible. In this paper, we review why and how we use spreadsheets to analyze supply chains and discuss some of the ways of overcoming their limitations.

Spreadsheet Models for Inventory Target Setting at Procter & Gamble

Farasyn, I., Perkoz, K., Van de Velde, W. — 2008-09-02

Spreadsheet models have been instrumental in helping Procter & Gamble (P&G) to set inventory targets. The Global Analytics group of P&G's Business Analysis Solutions organization, an in-house modeling, decision-support, and consultancy group, created global inventory models. The models determine the best inventory levels and yield the required customer-service levels, subject to the characteristics and constraints of a particular supply chain. These spreadsheet models are easy to use and share. Therefore, they have become the standard tool for setting inventory targets at P&G; hundreds of supply chain planners worldwide now use them. They have contributed to inventory reductions of over $350 million and significant intangible benefits.

Lockheed Martin Space Systems Company Optimizes Infrastructure Project-Portfolio Selection

Gurgur, C. Z., Morley, C. T. — 2008-09-02

Lockheed Martin Space Systems Company spends millions of dollars on the maintenance and modernization of its infrastructure each year. Projects often involve investments that cannot be justified purely in terms of net present value or other classical investment-evaluation methods. The options are also restricted because funds that are not spent within a given time frame must be relinquished. Furthermore, some projects may be delayed and the unplanned carryover of their costs moved into the next fiscal year; this causes the postponement or cancellation of other unrelated projects because of in-budget transfers. In this paper, we used multiattribute utility theory and chance-constrained programming to optimize the selection of infrastructure projects. Our solution ensured the selection of high-value projects to maximize the company's performance. These selections were subject to the constraints that a portfolio did not exceed the available budget and that the carryover of the unspent funds to the next fiscal year did not exceed predetermined limits. We used Microsoft Excel to ensure broad accessibility, transparency, user interaction, improved data collection and asset management, and ease-of-use by managers.

Disseminating Emergency Preparedness Planning Models as Automatically Generated Custom Spreadsheets

Herrmann, J. W. — 2008-09-02

When public health officials requested OR models to help county health departments across the United States create plans for dispensing medications and vaccines during emergencies, we developed capacity planning and queueing network models. We then faced the challenge of distributing these models to people with minimal experience with OR techniques and no resources for acquiring and learning new software. To eliminate the most significant obstacles, we decided to use spreadsheets. We created a spreadsheet application that runs Visual Basic for Applications (VBA) macros to generate customized analytical models without the assistance of an OR professional; thus, users could evaluate a wide variety of plans. Developing spreadsheets for this type of application differs significantly from end-user modeling and typical spreadsheet applications. The software is available on our website for public health emergency preparedness planners to download.

A Spreadsheet Implementation of an Ammunition Requirements Planning Model for the Canadian Army

Hurley, W. J., Balez, M. — 2008-09-02

This paper describes our experience constructing a spreadsheet implementation of a dynamic ammunition requirements model for Canadian Army training. Each year, the Canadian Army offers a variety of training courses and expends approximately $40 million in ammunition costs to run these courses. It was budgeting over $60 million, and this created a number of organizational problems. The Canadian Army needed a planning tool to bring budgeted expenditures into line with actual expenditures. Our 14 MB spreadsheet implementation accomplished this objective, and the Canadian Army is very pleased with the result.

Hypo International Strengthens Risk Management with a Large-Scale, Secure Spreadsheet-Management Framework

Jafry, Y., Marrison, C., Umkehrer-Neudeck, U. — 2008-09-02

We present the solution that Hypo Real Estate Bank International (Hypo) implemented to perform Monte Carlo simulations of its commercial real estate credit risk. The solution uses Risk Integrated's proprietary software, the Specialized Finance System, which is supported by another Risk Integrated technology, the Enterprise Spreadsheet Platform. The platform embeds individual master spreadsheets within a high-performance, server-based, computational-engine architecture; thus, it enables them to be accessed enterprise-wide. The major benefit of this approach is the near-elimination of spreadsheet risk in Hypo's banking system. The solution allows domain experts to have the flexible programming power that spreadsheets provide; however, it does not sacrifice the reliability and auditability expected from traditional business applications.

Optimal Trading of ETFs: Spreadsheet Prototypes and Applications to Client-Server Applications

Kumiega, A., Van Vliet, B. — 2008-09-02

This paper presents an application of an Excel spreadsheet-development methodology used by quantitative analysts and traders in financial markets. The spreadsheet used regression and Excel's Solver to determine the optimal investment of a firm's risk capital. The proprietary methodology used to develop real-time trading tools and its repetitive design structure allowed the firm to become a market-maker exchange traded fund (ETF) rapidly. By adhering to the methodology, the firm's documentation of user requirements, data inputs, calculations, and user interfaces, and a full prototype using Excel, made incremental growth possible and provided a solid foundation for conversion into coded software. Rapid development gave the firm the opportunity to derive revenue from market-making activities in new investment products; these would become a major source of revenue. This methodology, which the authors presented in 2001 at the International Conference on Software Quality in Pittsburgh, Pennsylvania, and its implementation led to the development of a complete trading-system development methodology.

Spreadsheet Decision-Support Tools: Lessons Learned at Hewlett-Packard

Olavson, T., Fry, C. — 2008-09-02

Spreadsheet tools are an inexpensive and flexible way to provide analytical support for repeated decisions. However, good modeling and analysis alone are not enough to create an effective tool. Using examples from Hewlett-Packard in forecasting, planning, procurement, and product management, we discuss lessons learned for creating reusable spreadsheet tools to support fact-based decision making. These lessons pertain to the entire life cycle of tool development: Before starting development, what role should analytics play in solving your business problem? Is a spreadsheet tool an appropriate solution? During development, are you partnering with end users to discover key insights and building a simple tool to capture those insights without unneeded complexity? Can you develop an OR champion in the process? When handing off a tool, are you providing a complete solution including roles and responsibilities, processes, and metrics? Ensuring that spreadsheet tools have maximum impact in an organization requires smart decision making before the first prototype is drafted, customer-focused management during development, and a complete handoff to users.

Spreadsheet Model Helps to Assign Medical Residents at the University of Vermont's College of Medicine

Ovchinnikov, A., Milner, J. — 2008-09-02

This paper describes a spreadsheet model that MBA students enrolled in an MS course constructed to replace the manual method of assigning medical residents in radiology to on-call and emergency rotations at the University of Vermont's College of Medicine. Although it contains more than 10,000 variables, the model was easy to build and solve by practitioners who are "lightly educated" in OR/MS. Based on this group's work, we discuss an approach that end-user practitioners can take to create spreadsheet optimization models. We also provide several observations and argue that spreadsheet models can provide an alternative scheduling method for problems of a smaller scope. Despite the major advances in personnel-scheduling methodologies and software, manual scheduling is still the predominant method used for such smaller-scope problems.

Integrating Excel, Access, and Visual Basic to Deploy Performance Measurement and Evaluation at the American Red Cross

Pasupathy, K. S., Medina-Borja, A. — 2008-09-02

The American Red Cross (ARC) is one of the world's largest nonprofit social service organizations. ARC has a network of approximately 1,000 chapters in the United States and its territories; each is responsible for a specific geographic jurisdiction in which ARC provides an array of social services. ARC is under pressure to demonstrate to the public how it is responsible and accountable for the resources it uses to deliver these services and the outcomes it achieves. Its decision makers are challenged to make accurate decisions to improve resource utilization and service-delivery processes. We designed and developed a system that uses data envelopment analysis to make resource-allocation recommendations that help ARC managers evaluate the performance of chapters at various levels. We used Microsoft Excel for the model formulation and reporting. This paper describes its use, in conjunction with Premium Solver, Visual Basic for Applications, and Microsoft Access, to formulate 4,000 linear-programming models. The system performs the analysis and uses Excel to display the results visually. We also discuss the benefits to ARC, lessons learned, and potential future improvements.

Practice Abstracts

Denton, B. T. — 2008-09-02

The goal of "Practice Abstracts" is to present interesting, topical, and novel applications of operations research methodology to a wide range of industrial applications. "Practice Abstracts" are intended to provide Interfaces readers with short (2–4 page) descriptions of the most relevant aspects of operations research-based projects, in a form that is accessible to academics and practitioners in other organizations. Contributions should be sent for evaluation to the editor of "Practice Abstracts," Brian T. Denton, Edward P. Fitts Department of Industrial and Systems Engineering, North Carolina State University, 370 Daniels Hall, 111 Lampe Drive, Raleigh, North Carolina 27695-7906 (bdenton@ncsu.edu).

Practice Abstracts

Denton, B. T. — 2008-09-02

Book Reviews

Lev, B. — 2008-09-02

In Book Reviews, we review an extensive and diverse range of books. They cover theory and applications in operations research, statistics, management science, econometrics, mathematics, computers, and information systems. In addition, we include books in other fields that emphasize technical applications. However, we do not review software. To submit a book for review, please send it to me at the above address. Although we cannot review all books because of space limitations, we do list all books that we receive. We commission all book reviews and do not accept unsolicited reviews. To become a reviewer, please send me your name, address, and specific areas of expertise. We encourage readers to suggest books for review or to ask publishers to send copies of such books. The authors or editors of books we review in this issue are David L. Applegate, Robert E. Bixby, Vasek Chvátal, William J. Cook, Paolo Brandimarte, Chetan S. Sankar, and Karl-Heinz Rau.

Contributors

2008-09-02

No abstract available.

INFORMS Meeting Calendar

2008-09-02

No abstract available.