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Outsourcing: Is it necessary for a busi-ness?
Outsourcing has, in the last couple of decades,become a global phenomenon. To a layman,outsourcing means taking away jobs that couldbe performed by “our own country men”. Lately,to a politician, outsourcing-bashing has become a vote huntingtechnique.Outsourcing refers to the divesture of non-core operationsfrom internal production to an external entity that specializes inthe management of these operations. Outsourcing utilizes ex-perts from outside the entity to perform specific tasks that theentity once performed itself.It is supposed that over the past decade, America has
lost
anaverage of 7.71 million jobs every quarter to outsourcing. Themost alarmist prediction of jobs
lost
to outsourcing, by Forrester Research, estimates that 3.3 million service jobs will be out-sourced between 2000 and 2015—an average of 55,000 jobsoutsourced per quarter, or only 0.71 percent of all jobs lost per quarter. This may sound as pronouncing doom to the labor mar-ket. But this leads to the questions: “how much of a factor is out-sourcing to the countries employment rate? Is this effect negativeor positive?” Reports show that the household employment sur-vey of Americans indicates that there are 1.9 million more Ameri-cans employed since the recession ended in November 2001.There are 138.3 million workers in the U.S. economy today—more than ever before. We may infer here that both outsourcingand employment rates have been on the increase in the pastdecade
1
.The following are some of the reasons for outsourcing:1. Outsourcing means economies of scale to both the
outsourcer
and the
outsourced
.2. Sharing of risks, also coined as
portfolio effects
. A businessentity can add leverage to the portfolio by outsourcing the risk-free asset. Markowitz, an influential economist won the 1990Nobel Prize in Economics in this area.3. Accommodation of peak loads: Businesses are advised toprotect their staff from the fluctuations caused by the
peaks
and
valleys
in demand, by staffing the
valleys
and contracting the
peaks
.Other advantages include reducing the
lead time
, access to alarger talent pool, commodification and operating across timezones which ensure 24-7 service provision.
.
By Wilkistar Otieno (Ph.D. Student, IMSE)
The following is a question and answer ses-sion held with Dr Rajesh Ganesan, an alumnaof IMSE-USF. Dr. Ganesan, graduated with aPh.D. in IE from USF in 2005 and is currentlyan Assistant Professor in the Systems Engi-neering Department at George Mason Univer-sity, Faifax, VA. Dr. Das served as his major Advisor duringhis Ph.D. and M.S. at USF. Dr. Ganesan recently received a$3 Million grant from the NSF’s GK-12 program. During hisstay at USF, Dr. Ganesan served as the project manager for our own GK-12 project at IMSE, USF called STARS.
Could you describe the kind of research areas you areinvolved in at GMU?
I specialize in stochastic control. The most interestingaspect of this research area is its wide spectrum of methods andnumerous applications. Process control is a crucial aspect of many engineering systems such as air transportation, roboticsand nano-manufacturing. Depending on the context, the controlproblem can be perceived as a sequential decision making proc-ess in a stochastic environment. Of particular interest to me is thecontrol of real-world problems that are large-scale, non-linear,complex, adaptive, and stochastic for which process models donot exist. The challenge in these problems is to design innovativemodel-free methods to predict uncertainties and find solutionsthat provide the end user with optimal sequential decisions(control laws), which adapt to the changing environment. Two of my major research application areas include control of semicon-ductor manufacturing processes, and sequential decision makingto effectively manage air traffic flow. In my research, such se-quential decision making or control problems are cast in theframework of stochastic dynamic programming, and solved usingartificial intelligence. Particularly, the solution strategy involves amethod known as reinforcement learning, which falls under theclass of approximate dynamic programming methods. I havetermed such solution algorithms as Intelligent Decision Support(IDS) algorithms.
Describe briefly your doctoral dissertation work.
My dissertation research was focused on testing a machine learn-ing based control strategy. The control problem is modelled as aMarkov decision process (MDP), and solved using a stochasticapproximation method known as reinforcement learning (RL).The approach also incorporates data filtering using waveletbased multiresolution analysis to extract significant process de-viations. The controller's performance was tested on a multivari-ate chemical mechanical planarization (CMP) process of semi-conductor wafer polishing. Results showed that the RL basedcontroller outperforms the EWMA based controllers for stronglyautocorrelated processes, and disturbances like temporarychanges in the mean. The innovative part of this research lies inharnessing the potentials of wavelets and reinforcement learningto enhance the design and use of model-free control systems.
See Alumna on page 2.
V olu m e 1, Issue 3 F all 2007
I nsid e t his iss ue:
S u r v i va l p red ic t io n mode l s D i sc re te E ve n t S y s te m s Mode l i n g
A Newsletter from Student Chapter of INFORMS @ IMSE, USF
AlumniCommittee column
News Feature
Alumni
(Continued from Page 1)
Based on your experience, what courses do you thinkIMSE Ph.D. students must take from outside our depart-ment that will serve them well in the future as academi-cians or in Industry?
The courses must cover both depth and breadth. Somecourses are needed for research purpose and one should gointo depth in such courses. Courses must cover significantbreadth such as core IE, statistics, mathematics, computer languages, economics (particularly if you are dealing with cost-benefit analysis or pricing in your dissertation), and those spe-cific to research (application-domain-related such as OR, Bio,finance, etc..).
Other than courses, is there something you wish youlearnt as a student?
I learnt Matlab which is an important scientific computinglanguage, I wished I had also learnt a few others such as C++and JAVA. I also wish that in addition to the nanomanufactur-ing applications which I studied in my dissertation, I shouldhave also simultaneously developed at least two other applica-tion domains for my research methods. It is possible that theuniversity that hires you may not have the entire necessary labinfrastructure and often you will have to find new applicationarrears that are of national interest.
Some tips while interviewing on-site for an aca-demic position:
Read the faculty pages before going and connect with theindividual faculty. Ask about their research and expressyour interest to collaborate by finding a common groundbetween your research and theirs during the conversation.If you know that there is nothing in common then talk aboutthe university, cost of living, the local school district, com-mute etc. Find out from the dept chair about the goals of thedepartment (new research areas) and any concerns suchas enrollment, funding that are presently there. Also checkhow supportive the dean is to your new department. Askthe dean about tenure process and what his/her advisewould be to a new faculty. Ask about the vision that thedean has for the school and for your dept. Many times theinterview includes dinner(s). Don't go overboard on alco-holic beverages. It's better to abstain or limit to just a bit of it. Your 1 hour presentation is key. Keep some time for Qand A. Talk about future research goals, teaching, fundingsources for your research and possible collaborators in your slides. The research part should be a good balance be-tween descriptive and mathematical aspects.
Responses for this column were solicited by Vishnu Nanduri (Ph.D. Candi-date, IMSE, USF) via email. INFORMS USF would like to thank Dr. RajeshGanesan for his contribution to the OR Times.
Put yourself in the following situation, youare facing a terminal illness, God (or who-ever you believe in or don’t believe in)forbid, and you have the chance of beinginformed with a 95% confidence or higher about how much longer you will live. If Iam asked to choose, I would prefer toknow and have time to share with myloved ones and maybe spend some potential savings (if thedisease has not left me bankrupt) traveling or doing some-thing that I had always wanted to do. On the other hand, Ihave heard people saying that they would prefer not toknow, and thus, avoid the associated anxiety and stress.Whatever your opinion is, there are more peopleinterested in accurately knowing when you will be passingaway in case you got a terminal illness. Who? You areprobably wondering. Well, the answer is hospice providersand the usual suspect, the government (which is not a badthing). The New York Times on November 27
th
reports thathundreds of hospice providers across the country are fac-ing “the catastrophic financial consequence (a 60 patienthospice had to pay the government $900,000) of whatwould otherwise seem a positive development: their pa-tients are living longer than expected”.The government-sponsored Medicare Hospice Pro-gram was originally designed for those with less than sixmonths to live (these six months calculated using actuarialsurvival according to the type of disease and probably rely-ing heavily in the subjective opinion of physicians). Nowa-days, sick people are living longer and the survival variabil-ity within patients suffering from the same illness cannot beentrusted to physicians who usually based their judgmentin the last case they have seen or in the most commoncase they have seen.How can we, Industrial Engineers, help? The avail-ability of big databases, namely Cancer Registries at statelevel and the latest developments regarding the identifica-tion of genetic markers for a host of diseases provide afavorable backdrop to make use of data mining techniquesto build prediction models based on significant factors(demographic, treatment-related, behavioral, genetic, etc)related to survival for each disease.The road is still bumpy though, databases do notprovide all the measurements you would desire, in particu-lar for some interesting biomarkers, and even though thereis consensus between practitioners about some factorsrelated to survival for particular diseases, these is noagreement for some others. But, that is exactly the reasonthey need Industrial Engineers. Therefore, an accuratesurvival predictive model besides adding an extra decisionfor terminal patients to make (about knowing or not howlonger they will live), it will also help hospice providers andthe government to reassess their budget and make thenecessary adjustments.
By Patricio Rocha (Ph.D. Stu-dent, IMSE)
The Case for Survival Prediction Models
2
Demand responsive transportation
(DRT) is a variable route service of passengers or freight from spe-cific origin(s) to destination(s) in response to the request of users. Typically, DRT systems are consid-ered complimentary to the existing public transportation systems where passengers from lower densityareas use DRT service as transportation to transit centers or to other transfer stations. Other highly dy-namical and complex applications of DRT cover the domains of dynamically dispatching of cargo trucks,chartered planes, and courier services. Examples of mission critical applications of DRT are transporta-tion of people with disabilities, military aero-medical evacuation of patients to medical treatment facilitiesand routing vehicles in large-scale emergencies.DRT operational planning encompasses the methods to provide efficient service to the passengers and to the systemoperators. These methods cover the assignments of vehicles to transportation requests under various constraints such asenvironmental conditions, traffic limitations, preferences of the passengers, and operation limitations.Recent approaches of DRT operational planning are based on “closed information loop” and achieve a higher level of automation, increased flexibility and efficiency. Advance in the information and communication technologies, such as theInternet, mobile communication devices, GIS, GPS, Intelligent Transportation Systems has led to a significantly complexand highly dynamical decision making environment. The online service allows real time information gathering and concur-rent communication of the customers with several vehicles. These technological advances change the manner in whichDRT is planned where passengers’ assignments to the vehicles and the fleet’s routing are made in real time. Intelligentand effective use of the available information in such complex decision making environment requires the use of formalmodeling and control approaches which are robust, modular, and decentralized.In my research we propose the representation of DRT systems as a Discrete Event System (DES) where the modelcaptures both the low level dynamics (such as infrastructure conditions, current status of vehicles) and high level dynam-ics (such as service demand requests) of system evolution in a modular manner. The mathematical foundation of DESTheory facilitates logical analysis of these complex systems and provides the necessary framework for the development of planning tools for real time scheduling and decision making.This study is focused in the application of Supervisory Control Theory based on Finite Automata in DRT real time plan-ning. The developed approach is capable in finding the non-blocking behavior of a DES that represents DRT operation.The algorithm is based on the following three groups of elements:
plant
– the model of DRT system to be controlled,
speci-fications
– the constraints of the passengers’ and fleet’s behaviors, and synthesis of
supervisory controller
– the requiredsequence of events of the desired system operation. Two Case Studies are presented based on air-taxi service operationand on emergency aero-medical evacuation. Centralized, modular and decentralized supervisory control architectures aredeveloped with discussions for deriving inferences for obtaining real time solutions.
By Daniel Yankov (Ph. D. Student, Daniel is advised by Dr. Ali Yalcin).Column solicited and organized by Diana Prieto, Ph.D. student, IMSE.
IMSE Students at the INFORMS annual conference in Seattle, WA, Nov 3-7, 2007
Research Corner
Discrete Event System Modeling of Demand Responsive Transportation Systems
3
L to R: Ozan Ozcan (Ph.D. student, IMSE), Dr. Kingsley Reeves(Asst. Prof, IMSE), Arka Bhattacharya, and Swati Verma(IMSE students)Wilkistar Otieno (Ph.D student IMSE)
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