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Operations Research, Financial Engineering, Management Science, and Industrial Engineering

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[Stanford University]

 

 

- Operations Research

Operations research (OR) is a discipline that deals with the application of advanced analytical methods to help make better decisions. OR often considered to be a sub-field of mathematical sciences. Disciplines that are similar to, or overlap with, OR includes statistical analysis, management science, game theory, optimization theory, artificial intelligence and network analysis. All of these techniques have the goal of solving complex problems and improving quantitative decisions. 

The field of OR provides a more powerful approach to decision making than ordinary software and data analytics tools. Employing OR professionals can help companies achieve more complete datasets, consider all available options, predict all possible outcomes and estimate risk. Additionally, OR can be tailored to specific business processes or use cases to determine which techniques are most appropriate to solve the problem.  

 

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[New York City, New York - Civil Engineering Discoveries]

- Management Science

In 1967 Stafford Beer characterized the field of management science as "the business use of operations research". Like operational research itself, management science (MS) is an interdisciplinary branch of applied mathematics devoted to optimal decision planning, with strong links with economics, business, engineering, and other sciences. It uses various scientific research-based principles, strategies, and analytical methods including mathematical modeling, statistics and numerical algorithms to improve an organization's ability to enact rational and meaningful management decisions by arriving at optimal or near optimal solutions to complex decision problems. Management scientists help businesses to achieve their goals using the scientific methods of operational research. 

The management scientist's mandate is to use rational, systematic, science-based techniques to inform and improve decisions of all kinds. Of course, the techniques of management science are not restricted to business applications but may be applied to military, medical, public administration, charitable groups, political groups or community groups.  

Management science is concerned with developing and applying models and concepts that may prove useful in helping to illuminate management issues and solve managerial problems, as well as designing and developing new and better models of organizational excellence. 

The application of these models within the corporate sector became known as management science.

 

- Financial Engineering 

Financial engineering is the use of mathematical techniques to solve financial problems. Financial engineering uses tools and knowledge from the fields of computer science, statistics, economics, and applied mathematics to address current financial issues as well as to devise new and innovative financial products. 

The most popular computer languages leveraged by financial engineers include: Python, Java, C++, Scala. However, it is important for aspiring financial engineers to be able to go above and beyond straightforward coding mastery. To complement their programming abilities, financial engineers should also be able to demonstrate higher level computer science skills, including advanced modeling and mathematics. Additionally, artificial intelligence (AI) has become an increasingly important technology for financial engineers as they seek to understand, model, and predict volatile financial markets.

Financial engineers work at the intersection of data science and the financial industry. For this reason, it is important for aspiring financial engineers to be well-read on market trends and current events regarding the world economy. Subscriptions to publications like The Financial Times, The Economist, and the Wall Street Journal all provide a solid foundation of news coverage and analysis that can be incorporated into financial predictions and modeling.

 

- Industrial and Systems Engineering

Industrial engineering is an engineering profession that is concerned with the optimization of complex processes, systems, or organizations by developing, improving and implementing integrated systems of people, money, knowledge, information and equipment. Industrial engineering is central to manufacturing operations. 

Industrial engineers use specialized knowledge and skills in the mathematical, physical and social sciences, together with the principles and methods of engineering analysis and design, to specify, predict, and evaluate the results obtained from systems and processes.

Systems Engineering is a transdisciplinary and integrative approach to enable the successful realization, use, and retirement of engineered systems, using systems principles and concepts, and scientific, technological, and management methods. 

The goal of all Systems Engineering activities is to manage risk, including the risk of not delivering what the customer wants and needs, the risk of late delivery, the risk of excess cost, and the risk of negative unintended consequences.  One measure of utility of Systems Engineering activities is the degree to which such risk is reduced.  Conversely, a measure of acceptability of absence of a System Engineering activity is the level of excess risk incurred as a result.

 

 

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