Chapter 10:

Modeling and Analysis: Heuristic Search

Methods and Simulation

Learning Objectives for Chapter 10

1. Explain the basic concepts of simulation and heuristics, and when to use them
2. Understand how search methods are used to solve some decision support models
3. Know the concepts behind and applications of genetic algorithms
4. Explain the differences among algorithms, blind search, and heuristics
5. Understand the concepts and applications of different types of simulation
6. Explain what is meant by systems dynamics, agent-based modeling, Monte Carlo,
and discrete event simulation
7. Describe the key issues of model management

CHAPTER OVERVIEW

In this chapter, we continue to explore some additional concepts related to the model
base, one of the major components of decision support systems (DSS). As pointed out in
the last chapter, we present this material with a note of caution: The purpose of this
chapter is not necessarily for you to master the topics of modeling and analysis. Rather,
the material is geared toward gaining familiarity with the important concepts as they
relate to DSS and their use in decision making. We discuss the structure and application
of some successful time-proven models and methodologies: search methods, heuristic
programming, and simulation. Genetic algorithms mimic the natural process of evolution
to help find solutions to complex problems. The concepts and motivating applications of
these advanced techniques are described in this chapter, which is organized into the
following sections:

CHAPTER OUTLINE

10.1 OPENING VIGNETTE: SYSTEM DYNAMICS ALLOWS FLUOR

CORPORATION TO BETTER PLAN FOR PROJECT AND CHANGE
MANAGEMENT
 Questions for the Opening Vignette
A. WHAT WE CAN LEARN FROM THIS VIGNETTE

10.2 PROBLEM-SOLVING SEARCH METHODS

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A. ANALYTICAL TECHNIQUES
B. ALGORITHMS
C. BLIND SEARCHING
D. HEURISTIC SEARCHING
 Application Case 10.1: Chilean Government Uses
Heuristics to Make Decisions on School Lunch Providers
 Section 10.2 Review Questions

10.3 GENETIC ALGORITHMS AND DEVELOPING GA APPLICATIONS

A. EXAMPLE: THE VECTOR GAME
B. TERMINOLOGY OF GENETIC ALGORITHMS
C. HOW DO GENETIC ALGORITHMS WORK?
D. LIMITATIONS OF GENETIC ALGORITHMS
E. GENETIC ALGORITHM APPLICATIONS
 Section 10.3 Review Questions

10.4 SIMULATION
 Application Case 10.2: Improving Maintenance Decision
Making in the Finnish Air Force Through Simulation
 Application Case 10.3: Simulating Effects of Hepatitis B
Interventions
A. MAJOR CHARACTERISTICS OF SIMULATION
B. ADVANTAGES OF SIMULATION
C. DISADVANTAGES OF SIMULATION
D. THE METHODOLOGY OF SIMULATION
E. SIMULATION TYPES
1. Probabilistic Simulation
2. Time-Dependent Versus Time-Independent Simulation
F. MONTE CARLO SIMULATION
G. DISCRETE EVENT SIMULATION
1. Visual Simulation
 Section 10.4 Review Questions

10.5 VISUAL INTERACTIVE SIMULATION

A. CONVENTIONAL SIMULATION INADEQUACIES
B. VISUAL INTERACTIVE SIMULATION
C. VISUAL INTERACTIVE MODELS AND DSS
 Application Case 10.4: Improving Job-Shop Scheduling
Decisions Through RIFD: A Simulation-Based Assessment
D. SIMULATION SOFTWARE
 Section 10.5 Review Questions

10.6 SYSTEM DYNAMICS MODELING

 Section 10.6 Review Questions

10.7 AGENTS-BASED MODELING

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  Application Case 10.5: Agent-Based Simulation Helps
Analyze Spread of a Pandemic Outbreak

Chapter Highlights
Key Terms
Questions for Discussion
Exercises
Teradata University Network (TUN) and Other Hands-On Exercises
 End of Chapter Application Case: HP Applies Management
Science Modeling to Optimize Its Supply Chain and Wins a Major
Award
 Questions for the Case
References

TEACHING TIPS/ADDITIONAL INFORMATION        

The purpose of this chapter is to teach the basics of some key modeling
techniques, particularly with respect to prescriptive analytics. The concept of problem-
solving search is described, including optimization, blind search, and heuristics. Then
genetic algorithms and simulation approaches (including visual, system dynamic, and
agent-based) are described. It is important to stress to students that genetic algorithms are
geared toward finding optimal solutions to problems, whereas simulation techniques are
more experimental in nature. So, whereas genetic algorithms attempt to find the “best”
solution to a problem, simulation techniques essentially allow users to play “what-if”
games. So, it is important to stress the difference between the prescriptive nature of
genetic algorithms vs. the descriptive nature of simulation.

When covering genetic algorithms in class, it is useful to play the Vector game as
an exercise (the Vector game is described in section 10.3). After covering the concepts
underlying evolutionary theory (reproduction, crossover, mutation, and elitism or survival
of the fittest) and explaining the rules of the game, you can break the students into pairs.
One student of the pair thinks of a six-digit string of 1s and 0s. The second presents four
guesses, which the first evaluates based on the number of correct digits (the fitness
function). The second then selects the best two and applies reproduction, crossover, and
mutation for the next generation of guesses. Have your teams continue this process until
correct solutions are found. You can then compare the number of generations required vs.
what would have been required by chance (an average of 32 given 6 digits). You should
find that the majority of teams find solutions considerably faster than the random-guess
approach.

When covering simulation, you can work through a simple simulation by hand—
for example, modeling waiting times and customers turned away at a barber shop with
two barbers, two more chairs in the waiting area, and any distribution of arrival and
service times you choose. Such a simulation can easily be done using a standard six-sided
die to generate random numbers or by any of several other “low-tech” methods. If you
have access to and are familiar with a simulation package, showing students how this

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simulation is programmed for that package will bring home the lessons of what
simulation is really about.

Most of the application cases in this chapter involve applications of simulation to

real-world problems. These are useful for giving further illustrations of how what-if
analysis can be used. Have students read and discuss these cases during class. You can
also assign additional readings of the articles cited in the chapter to deepen their
understanding of the material.

ANSWERS TO END OF SECTION REVIEW QUESTIONS      

Section 10.1 Review Questions

1. Explain the use of system dynamics as a simulation tool for solving complex
problems.

System dynamics is a methodology and simulation-modeling technique for

analyzing complex systems using principles of cause and effect, feedback loops,
and time-delayed and nonlinear effects. System dynamics fosters the
understanding of business processes by creating “what-if” analyses of the impact
of both expected and unexpected changes in project plans. As a simulation-
modeling technique, it falls under the same general category with other simulation
modeling techniques (Monte Carlo, discrete/continuous event, probabilistic,
agent-based). The objective of system dynamics is to study the overall behavior of
a system, focusing on the interplay between the system's components over time. A
key feature of system dynamics involves identifying and diagramming causal
loops in a system.

2. In what ways was it applied in Fluor Corporation to solve complex problems?

At Fluor, system dynamics was used to analyze changes in project plans over
time, and the company was able to save $10 million by predicting future impact
of changes to a mining project. Fluor’s use of system dynamics helped the
company understand the dynamics of the different situations that could warrant
changes to project plans. Using the original project plan, industry standards, and
company references as input, their system dynamics model simulated the correct
amounts and timing of other factors like staffing, project progress, and effects on
productivity. The resultant system provided reports on project impacts as well as
helping to perform cause–effect diagnostics.

3. How does a what-if analysis help a decision maker to save on cost?

Through the use of what-if analysis stemming from their system dynamics
modeling approaches, Fluor’s customers were able to perform “what-if” analysis
even before a project was started so the project performance could be gauged. The

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 model explained why certain effects were realized based on impact to the project
plan. Fluor’s model was used to analyze and save $10 million in the future impact
of changes to a mining project, as well as saving $10 million when the project
team used the model to redesign the process of reviewing changes so that the
speed of the company’s definition and approval procedures was increased.

4. In your own words, explain the factors that might have triggered the use of system
dynamics to solve change management problems in Fluor Corporation.

Fluor had experienced situations of reduced efficiencies, friction with their

clients, and legal ramifications in previous projects. This is because project
changes were collated and reported at a later period and the burden of cost
allocated to the stakeholder responsible, leading to late surprises regarding project
costs and schedules.

5. Pick a geographic region and business domain and list some corresponding
relevant factors that would be used as inputs in building such a system.

Fluor’s business domain is engineering and construction, and it is a worldwide

company. System dynamics have also been used for modeling impact in other
domains, such as electronic health records in hospital settings, In principal, any
complex system with multiple interacting components acting over time can be
modeled using the system dynamic approach.

Section 10.2 Review Questions

1. What is a search approach?

A search approach is a general method, or a category of closely related methods,

used to find the best solution to a problem based on some criterion. The criterion
usually involves maximizing or minimizing a numeric value.

2. List the different problem-solving search methods.

Analytical techniques, algorithms, blind searching, and heuristic searching

3. What are the practical limits to blind searching?

Practical limits are the time and computer resources available for the search.

4. How are algorithms and heuristic search methods similar? How are they
different?

The similarity is that they are both search approaches by the above definition (see
Question 1 above).

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The difference is that algorithms always find a solution, if one exists within the
constraints of the method, and that solution can always be proven to be
mathematically optimal. Heuristic search methods may or may not find one. If
one is found, it may or may not be “best” by the stated criteria. Their advantages
over algorithms are that they can be used for some problems that lack applicable
algorithms, and they are often faster.

(This answer uses the term “algorithm” within the context of solving business
problems. The term has a more general meaning: “an explicit numerical step-by-
step procedure that produces a solution to a known problem.” Some algorithms do
not involve optimization, as an algorithm to calculate square roots. Others apply
to areas where no mathematical optimum exists, for example, Google’s search
algorithm mentioned in the text. There is no way to know if the pages it finds are
best for a particular purpose, since people will disagree on what “best” means in
this context. A person searching for “diamonds,” wanting information on
gemstones, might find its answers useful, but the same results would be less
useful to someone in need of information on baseball parks, geometric shapes, or
the suit in a deck of cards.)

Section 10.3 Review Questions

1. Define genetic algorithm.

A genetic algorithm is a machine learning heuristic search technique for finding

approximate solutions to optimization-type problems that are too complex to be
solved with traditional optimization methods. It applies the steps of the biological
process of evolution and the principle of “survival of the fittest” in order to
determine the best solution to a problem.

2. Describe the evolution process in genetic algorithms. How is it similar to

biological evolution?

The evolution process in genetic algorithms involves many elements similar to

biological evolution. First is the notion of “mating” in which portions of two
individuals (in GA these are potential solutions) are mixed together to produce an
offspring, similar to how genes of individual organisms are mixed. Second is the
notion of mutation, which can result either in “death” or in a more optimal
solution. Third is the notion of survival-of-the-fittest in which only the most
adaptive individuals survive to mate and produce offspring in the next generation.

3. Describe the major genetic algorithm operators.

The major genetic algorithm operators include: reproduction (creating new

generations of improved solutions), crossover (random exchange of segments of
strings from previous solution candidates to produce new ones), mutation

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 (random and arbitrary changes to solutions string elements), and elitism (the
survival-of-fittest principle). Elitism is implemented through application of a
fitness function, which determines the “best” solutions of a given generation.

4. List major areas of genetic algorithm application.

Genetic algorithms have been applied to dynamic process control, rule

optimization induction, discovery of new connectivity topologies, simulation of
biological models of behavior and evolution, complex design of engineering
structures, pattern recognition, scheduling, transportation and routing, layout and
circuit design, telecommunication, and graph-based problems.

5. Describe in detail three genetic algorithm applications.

 Vehicle routing

 Bankruptcy prediction

 Web searching

6. Describe the capability of Evolver as an optimization tool.

Evolver (from Palisade Corp., palisade.com) is an optimization add-in for Excel.

It uses a genetic algorithm to solve complex optimization problems in finance,
scheduling, manufacturing, and other problem domains. The Palisade web site
states capabilities for model definition, optimization, and reporting features. It
also includes a developer kit for integrating with software applications.

Section 10.4 Review Questions

1. List the characteristics of simulation.

 An imitation of reality rather than a representation of it

 A technique for conducting experiments
 Fewer simplifications than with most other methods
 Descriptive rather than normative; users can use simulation results to
search if desired
 Usually used for problems too complex for numerical optimization
methods

2. List the advantages and disadvantages of simulation.

Advantages:
 The theory is fairly straightforward.

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 Time can be compressed a great deal, quickly giving a manager some feel
as to the long-term effects of many policies.
 Simulation is descriptive rather than normative. This allows a manager to
pose what-if questions. Managers can use trial-and-error quickly, at little
expense, accurately, and with low risk.
 A manager can experiment to determine which decision variables and
which parts of the environment are really important, and with different
alternatives.
 An accurate simulation model requires intimate knowledge of the
problem, thus forcing its builder to interact with the manager. This leads to
better understanding of the problem and the potential decisions available.
 The model is built from the manager’s perspective.
 No generalized understanding is required of the manager; as every
component in the model corresponds to part of the real system.
 Simulation can handle a wide variety of problem types, such as inventory
and staffing, as well as higher-level managerial functions, such as long-
range planning.
 Simulation can include most real complexities of problems;
simplifications are not needed. For example, it can use real probability
distributions rather than approximate theoretical ones.
 Simulation automatically produces many important performance
measures.
 Simulation is often the only DSS modeling method that can readily handle
relatively unstructured problems.
 Simulation generally can include the real complexities of problems;
simplifications are not necessary.
 Simulation automatically produces many important performance
measures.
 Simulation is often the only DSS modeling method that can readily handle
relatively unstructured problems.
 There are some relatively easy-to-use simulation packages. These include
add-in spreadsheet packages, influence diagram software, Java-based (and
other Web development) packages, and visual interactive simulation
systems.

Disadvantages:
 An optimal solution cannot be guaranteed, though relatively good ones are
generally found.
 Simulation model construction can be a slow and costly process, although
newer modeling systems are easier to use than ever.
 Solutions and inferences from a simulation study are usually not
transferable to other problems because the model incorporates unique
problem factors. It doesn’t generalize.

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  Simulation is sometimes so easy to explain to managers that analytic
methods are often overlooked. (This is not a disadvantage of the method,
but a practical caution about using it.)
 Simulation software sometimes requires special skills because of its
complexity. Some simulation packages require the model developer to be,
in effect, a programmer.

3. List and describe the steps in the methodology of simulation.

The steps are shown in Figure 10.4. They are:

 Define the problem
 Construct the simulation model
 Test and validate the model
 Design the experiments
 Conduct the experiments
 Evaluate the results
 Implement the results

4. List and describe the types of simulation.

Important types of simulation include probabilistic simulation, time-dependent

and time-independent simulation, and visual simulation.

Probabilistic simulation is simulation where one or more of the independent

variables is described by a statistical distribution.

Time-dependent and time-independent simulations are distinguished by whether

or not it is important, in order to model the system correctly, to know exactly
when events occur.

Visual simulation is the graphical display of computerized results and is one of

the most successful developments in computer-human interaction and problem
solving.

Section 10.5 Review Questions

1. Define visual simulation and compare it to conventional simulation.

Visual simulation uses graphical representation to show the situation to the end
user. It does everything a conventional simulation does, which is any technique
for conducting experiments (such as what-if analyses) with a digital computer on
a model of a management system, but does it using visually pleasing and
informative representation.

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Visual interactive simulation is a type of visual simulation in which input is

provided directly to the visual representation of the system, with results visible
immediately or nearly so.

2. Describe the features of VIS (i.e., VIM) that make it attractive for decision
makers.

The main attraction of VIS (VIM) is the graphical display. This type of interaction
can help managers learn about the decision-making situation, though some people
respond to graphical displays better than others. Non-technical managers, who
may not understand a situation from data in tables or graphs, can grasp what goes
on in a visual presentation easily.

3. How can VIS be used in operations management?

According to the text, VIS (VIM) “has been used in several operations
management decisions.” Examples given there include plant operations and
waiting lines. The two are related, as waiting line buildup indicates an unbalanced
plant. With VIS, a manager can see work in progress piling up at one stage of a
process—which is far less expensive than watching it pile up in the real factory!

4. How is an animated film like a VIS application?

An animated film is (with modern animation techniques; this question is not about
hand-drawn animations of a few decades ago) a computer-generated
representation of a physical system, as is a VIS application. While some animated
films use computers simply to generate final artwork and to fill in the gaps
between key frames created manually, others use complex algorithms to simulate
realistic motion of animated people or animals, calculate trajectories of physical
objects, and determine what happens when two objects interact (e.g., a vehicle
hitting a wall). These are true VIS applications, even if their purpose is not to
support management decision making.

Section 10.6 Review Questions

1. What is the key difference between system dynamics simulation and other
simulation types?

Whereas discrete-event and agent-based simulation models are most appropriate

for middle or low levels of abstraction, considering individual elements of a
system, systems dynamics is more appropriate for aggregate analysis at a higher
level of abstraction.

2. What is the purpose of a causal loop diagram?

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 Causal loop diagrams show the relationships between variables in a system. This
is a qualitative step in which the processes, variables, and relationships within the
conceptual model are identified. Causal loop diagrams can be transformed into
mathematical equations that represent the relations among variables.

3. How are relationships between two variables represented in a causal loop

diagram?

A link between two elements shows that changes in one element lead to changes
in the other one. The direction of the link shows the direction of influence
between two elements. The sign of each arrow shows the direction of change
between each pair of elements. Feedback processes in the causal loops are the key
components by which a variable re-affects itself over time through a chain of
causal relationships.

Section 10.7 Review Questions

(This section has no review questions.)

ANSWERS TO APPLICATION CASE QUESTIONS FOR DISCUSSION  

Application Case 10.1: Chilean Government Uses Heuristics to Make Decisions on
School Lunch Providers

1. What were the main challenges faced by JUNAEB?

Reduction of suppliers due to Chilean economic conditions put strain on the

school meal policy and system. Disparities between territorial units (TUs) led to a
need to configure new regional configurations.

2. What operation research methodologies were employed in achieving homogeneity

across territorial units?

JUNAEB utilized the analytic hierarchy process (AHP), local search heuristics,
cluster enumeration, and integer linear programming (ILP) approaches. AHP was
used for determining initial weights of characteristics for each TU in each region.
Search heuristics were used to find homogenously attractive TUs for a region.
Cluster enumeration and ILP were used to minimize differences between cluster
attractiveness.

3. What other approaches could you use in this case study?

There are many approaches to optimization, including blind search (exhaustive or

partial), heuristic search, or genetic algorithms. Simulation approaches could also
be employed.

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Application Case 10.2: Improving Maintenance Decision Making in the Finnish Air
Force through Simulation

(This application case has no discussion questions.)

Application Case 10.3: Simulating Effects of Hepatitis B Interventions

1. Explain the advantage of operation research methods such as simulation over

clinical trial methods in determining the best control measure for Hepatitis B.

Clinical trials are more costly, and there is a time delay in Hepatitis B onset that
complicates analysis via clinical trials.

2. In what ways do the decision and Markov models provide cost-effective ways of
combating the disease?

The Markov model helps measure the economic and health benefits of various
possibilities of screening, treatment, and vaccination, helping decision makers to
select the most cost-effective strategy.

3. Discuss how multidisciplinary background is an asset in finding a solution for the

problem described in the case.

By bringing in experts from medical, management science, and engineering

backgrounds, the right blend of knowledge and skills were combined to foster
creative and innovative solutions to a complicated problem. Decision support
models are effective for solving problems in a wide variety of domains, including
medicine and epidemiology.

4. Besides health care, in what other domain could such a modeling approach help
reduce cost?

This modeling approach is also used widely in business, for example in solving
operations problems such as supply chain, marketing, production, and scheduling.
There are applications in many other domains, including economics, biology, and
even music composition and baseball analysis.

Application Case 10.4: Improving Job-Shop Scheduling Decisions Through RFID:

A Simulation-Based Assessment

(This application case has no discussion questions.)

Application Case 10.5: Agent-Based Simulation Helps Analyze Spread of a

Pandemic Outbreak

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1. What are the characteristics of an agent-based simulation model?

ABM is a bottom-up approach to modeling complex systems, utilizing an

“adaptive learning” property rather than “optimizing.” It is characterized by a set
of autonomous decision-making units called agents that individually evaluate
their situation and make decisions on the basis of a set of predefined behavior and
interaction rules. ABM is suitable for understanding evolving and dynamic
systems.

2. List the various factors that were fed into the agent-based simulation model
described in the case.

Factors included an individual’s age, residence, level of general interaction with

other members of population, number of individuals in each household,
distribution of households, and behavioral aspects involving daily commutes,
attendance at schools, and asymptotic time period of disease.

3. Elaborate on the benefits of using agent-based simulation models.

ABMs are better at dealing with heterogeneous behavior, and they allow each
member of the population to be simulated individually. These models enhance the
support for policy decision making.

4. Besides disease prevention, in which other situations could agent-based

simulations be employed?

Agent-based simulations can be used for many applications. ABMs have been
used to simulate flocks of birds, social dynamics of science, traffic jams and
crowd behavior, ant colonies, financial contagion, movements of ancient
societies, housing segregation and other urban issues, and operations management
problems. ABMs are viable for business problems in which many interrelated
factors, irregular data, and high uncertainty and emergent behaviors exist,
interactions between agents are complex, discrete, or nonlinear, and the
population is heterogeneous.

ANSWERS TO END OF CHAPTER QUESTIONS FOR DISCUSSION   

1. Compare the effectiveness of genetic algorithms against standard methods for
problem solving, as described in the literature. How effective are genetic
algorithms?
Genetic algorithms have their limitations. They require expertise in programming
and statistics in order to be useful techniques. They have the danger of converging
on local maxima, and therefore missing the globally optimal solution. Coming up

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with initial data conditions can be challenging. Nevertheless, for heuristic

applications, genetic algorithms can be preferable to blind search, which is
computationally demanding, or other optimization methods which may not have
the flexibility and adaptiveness of Gas.

2. Describe the general process of simulation.

The steps are shown in Figure 10.4. They are:

 Define the problem
 Construct the simulation model
 Test and validate the model
 Design the experiments
 Conduct the experiments
 Evaluate the results
 Implement the results

3. List some of the major advantages of simulation over optimization and vice versa.

Advantages: Simulation can deal with realistic, complex situations (it models
risk), simulation theory is straightforward, time is compressed, there is no need
for restrictive assumptions, and it fits how managers think (models are built from
the manager’s perspective).

Disadvantages: An optimal solution is not guaranteed; construction can be slow;

and simulation software is often not user-friendly, requiring programming.

4. What are the advantages of using a spreadsheet package to perform simulation

studies? What are the disadvantages?

Advantages: Ease of use because most managers understand the structure of

spreadsheets.

Disadvantages: (For complex simulations) slow running time and the fact that the
spreadsheet metaphor does not incorporate facilities for many types of
simulations, so the developer must work around the limitations of the tool to
construct these. In those cases, using a simulation package would be more
straightforward.

5. Compare the methodology of simulation to Simon’s four-phase model of decision

making. Does the methodology of simulation map directly into Simon’s model?
Explain.

Both start off with a problem identification phase, called Intelligence in Simon’s
model. Simon’s design phase corresponds to Steps 2–4 of the simulation model:
constructing it, testing and validating it, and designing the experiment.

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 Conducting simulation experiments and evaluating the results would be Simon’s
choice phase. Finally, both have an implementation phase.

6. Many computer games can be considered visual simulation. Explain why.

Many computer games simulate a fictional (realistic or fantasy) environment and

the action that takes place in it. They use visual presentation to show the progress
of the simulation. This enhances the understanding of the environment and how
the game is played, often providing immediate feedback as to the success or
failure of a player action.

7. Explain why VIS is particularly helpful in implementing recommendations

derived by computers.

Implementation is a process of human change. People must be motivated to

change. They are more likely to accept change if they see its benefits. VIS makes
it possible to see those benefits.

ANSWERS TO END OF CHAPTER APPLICATION CASE QUESTIONS  

1. Describe the problem that a large company such as HP might face in offering
many product lines and options.

The something-for-everyone approach drives sales, but at what cost? At what

point does the price of designing, manufacturing, and introducing yet another new
product, feature, or option exceed the additional revenue it is likely to generate?
Just as important, what are the costs associated with too much or too little
inventory for such a product, not to mention additional supply chain complexity,
and how does all of that impact customer satisfaction?

2. Why is there a possible conflict between marketing and operations?

Marketing and sales always wanted more—more SKUs, more features, more
configurations— and for good reason. Providing every possible product choice
was considered an obvious way to satisfy more customers and generate more
sales.

Supply chain managers, however, always wanted less. They wanted less to
forecast, less inventory, and less complexity to manage. The drivers (on the
supply chain side) were cost control.

3. Summarize your understanding of the models and the algorithms.

1 produced an analytically driven process for evaluating new products for

introduction,

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2 created a tool for prioritizing existing products in a portfolio, and

3 developed an algorithm that solves the problem many times faster than previous
technologies, thereby advancing the theory and practice of network optimization.

4. Perform an online search to find more details of the algorithms.

Open-ended answer and will be dependent upon the students’ online search
results.

5. Why would there be a need for such a system in an organization?

A very large organization requires tenacity and skill to bring about major changes
in the processes of a company.

6. What benefits did HP derive from implementation of the models?

The RCO software algorithm was developed as part of HP Labs’ “analytics”

theme, which applies mathematics and scientific methodologies to help decision
making and create better-run businesses. Analytics is one of eight major research
themes of HP Labs, which last year refocused its efforts to address the most
complex challenges facing technology customers in the next decade. The RCO
algorithm is an example of an innovation that helps drive efficiency with
businesses and our customers.

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