Part III

In the end, it's super important to be the guy who
OWNS a business and SELLS the results. E.g., for
optimization, maybe develop the software for free,
show the results and the savings, and then ask to
get paid a fraction of the savings. Let's see, long
ago one commercial airline was spending $89 million
a month on jet fuel. I can believe $200 million a
month now, also for FedEx. From a fast Google, get
to

http://www.transtats.bts.gov/fuel.asp

with data for US airlines

2013 April 847.5 2,432.4

or 847.5 million gallons costing $2,432.4 million
dollars in April, 2013.

Save 15% of $200 million a month and get paid 20% of
the savings and get paid $6 million a month, from
just one customer. And it's an easy sale: Take
case A, what they are doing now, and cost it out.
Then take case B, from optimization. Then compare
costs. Simple. Compelling. Maybe not still
compelling now, but would have been for much of the
history of FedEx.

But, for my doing an in-house effort, Smith didn't
take the work very seriously. Right, in the next
year I might have burned off $50,000 in VM/CMS time
sharing computer charges. Right. But jet fuel is
expensive, too.

> it does appear that Simplex is covered

Yes, of course, the course will have to, but the
introductory lecture didn't emphasize that.

In a sense, simplex is dirt simple -- just
elementary row operations very much like in Gaussian
elimination but, using the 'reduced costs', selected
to make money at each iteration in, if you wish, a
'greedy' way. But there's more, e.g., some
surprising points about moving along edges of a
closed convex set, from an intersection of finitely
many closed half spaces, from extreme point to
extreme point. For the course, discrete and
combinatorial optimization, really should know
simplex quite well; it promises to be the core of
the course. Also, again, simplex is worst case
exponential!

For the career prospects of the course, only a tiny
fraction of college courses have good, immediate,
direct career contributions. So, I can't be
offended that the OP's course does not have really
good career contributions. But I am offended that
the OP tried to claim that his optimization was so
important that there would be good career prospects.
Sure, Bixby (of C-PLEX) bought a nice house in
Houston, but mostly I'm still looking for the
yachts, or even the nice houses, of optimization
experts. Heck, even job ads would be reassuring.

I have one of the best Ph.D. degrees in
optimization, and it has been essentially useless
for my career. The core reason is, the business
guys with the projects and budgets don't understand
optimization, have no respect for it, and don't want
to bet part of their careers on it. There's usually
little or no downside for ignoring optimization.
For pushing a project in optimization and failing,
there's a lot of downside. For being successful,
there will likely be resentment, attacks from other
managers who feel threatened, etc. and otherwise no
great upside. So optimization projects are about as
popular as a skunk at a garden party.

One final war story: Long the dean of engineering
at MIT was T. Magnanti, an expert in optimization.
Once he gave a Goldman Lecture at Hopkins on
optimization of the design of large IP networks.
From some old Bell Labs data (from some work likely
close to the book with the cartoon), optimization
should be able to save ballpark 15% of network
capital expense; worthwhile money if can get it.

So, at one time there was a start up in Plano, TX
attacking this problem. At the time, so was I. So,
the TX people flew me down for an interview. They
had some venture funding, and it may be that some of
the people who met me were the venture partners.
The company's main optimization guy from SMU had
just bowed out. The CEO was a former IBM guy, and
they flew me down partly because of my role at FedEx
and also because I'd been at IBM's Watson lab.

So, I arrive. I'm met at the door by the CEO, the
IBM guy. Right away he scowls, and I never see him
again. Why? Because I didn't know his name (I'd
had no communications with him), and my handshake
was not impressive enough. He desperately needed
some good expertise in optimization, e.g., in a back
room had a high end PC with a copy of C-PLEX
gathering dust while his people were trying total
enumeration, but he wanted nothing to do with me.
I'm not that hard to take, not even while tired from
a plane trip and driving from the Dallas airport to
Plano.

The point was, he was convinced that his IBM white
shirt and IBM salesman handshake were what were
crucial for his company and that my background in
optimization was, well, whatever but likely not
really good like a handshake. He had no respect for
optimization. Soon he was 'promoted' to just a
Board slot.

My background in optimization? Did I mention
Goldman? He was the Chair of the committee that
approved my Ph.D. research. On the committee was C.
ReVelle, world expert in optimization for facility
location (mentioned by the OP). Also on the
committee was J. Cohon, world expert in
multi-objective optimization and long President at
CMU. My research was from a suggestion in three
words by G. Nemhauser, world expert in optimization.
One paper I'd published solved some long outstanding
questions in the Kuhn-Tucker conditions in
optimization and solved a problem stated in the
famous paper by Arrow, Hurwicz, and Uzawa. I went
through one of the best Ph.D. programs in
optimization on the planet. Still, the CEO in TX
wanted nothing to do with me. And, really, after my
Ph.D., neither did FedEx.

When I left FedEx, I'd saved the company twice and
for more had identified, formulated, done good
first-cut progress on, and presented the three
optimization problems, fleet scheduling, fuel
buying, and vertical flight planning. All I needed
was a little consulting money and a good VM/CMS time
sharing account from my home in Maryland, but that
was not enough to get Smith impressed. So, I lost,
and so did Smith and FedEx.

In business, optimization is a Rodney Dangerfield
field -- it "don't get no respect". So, if exploit
optimization, then do it for your own company or
sell just the results based on the savings obtained:
Since the 'suits' are convinced that optimization
can't save much, when the contract is signed they
will believe that they won't have to pay much. When
they have to pay $6 million a month, they will be
surprised and pleased by how much they are saving
but bitter and furious at the $6 million a month
they are signed up to pay.

There is a secret in business: To get paid well
without too much resentment, jealousy, etc. from
others, get paid in ways that others don't really
know how much you are making. So, if some big
company has to pay you $6 million a month, even if
you are saving them $30 million a month, they likely
will be torqued; but if can get the $6 million a
month from several ad networks from running many
millions of ads, then no one will get torqued.