Operations Research for Social Good: A Practitioner’s Introduction Using SAS and Python
By Natalia Summerville and Rob Pratt
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About this ebook
Advance your knowledge of operations research and social good!
Recent technological developments allow data analytics practitioners to solve large problems better and faster with state-of-the-art artificial intelligence (AI) tools. At the same time, humanity faces overarching challenges such as the climate crisis, child malnutrition, systemic racism, and global pandemics, among others. Operations Research for Social Good: A Practitioner’s Introduction Using SAS and Python showcases operations research (OR) methodologies typically required in engineering curricula to applications targeted to make this world a better place.
Designed for data scientists, analytics and operations research practitioners, and graduate-level students interested in learning optimization modeling with applied use cases, this book provides the skills to model and solve OR problems with both SAS and Python as well as practical tools and tips to bridge the gap between academic learning and real-world implementations based on Data4Good initiatives.
Natalia Summerville
Natalia Summerville is the Director of Applied Data Science in the Strategy and Innovation Division at Memorial Sloan Kettering Cancer Center. Her team develops data analytics products to support hospital strategy and innovations in care delivery, as well as cutting-edge cancer research. Previously, she led a team of Operations Research and Machine Learning experts at SAS, building analytical engines for customers across industries such as Health Care, Life Sciences, Retail, and Manufacturing. Natalia has been teaching undergrad and grad-level classes in Operations Research, Data Analytics, and Machine Learning since 2005, and she is currently an Adjunct Professor at Duke University. She is deeply passionate about the Data4Good movement and has been collaborating with many non-profit and mission-driven organizations to implement data analytics for social good. She is a board member within the “Pro-Bono Analytics” committee and is part of the “Franz Edelman Award” committee at INFORMS.
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Operations Research for Social Good - Natalia Summerville
Chapter 1
Introduction: Mathematical Optimization and the Data4Good Movement
Data4Good is a broad initiative, encompassing many types of analytics implementations for nonprofit organizations and/or organizations with missions that focus on the greater good. Examples of Data4Good projects include humanitarian logistics supporting disaster relief, cancer treatment innovation, equitable access to children’s playgrounds, and deforestation forecasting, among many others. Typically, these implementations are performed by data scientists and analytics professionals on a pro bono/volunteer basis due to limited budgets available for analytics within these organizations. Over the last decade, the Data4Good movement has been significantly expanding, motivating more and more analytics professionals to bring their skills to support mission-driven organizations.
However, most of these applications focus on descriptive/diagnostic analytics, sometimes on predictive analytics, and rarely on prescriptive analytics. Traditionally, only analytically mature organizations built end-to-end prescriptive analytics engines that included optimization models. This is mostly due to the specific (and scarce) mathematical expertise required to properly formulate optimization models that often need PhD-level skills, available data to support these formulations, and established processes to incorporate new decision-making support systems that focus on user adoption and end value. Despite the reduced number of optimization projects in Data4Good (as opposed to descriptive and predictive modeling projects), we are firm believers that optimization tools can be key to help these mission-driven organizations make better decisions and be more efficient in using their very limited resources.
In this book, we introduce optimization modeling concepts that can help any organization be more efficient but with Data4Good applications. All applications discussed in this book come from proven real-life implementations, albeit often simplified for teaching purposes.
We hope that by studying this book, you will not only familiarize yourself with optimization modeling and scripting (in both SAS and Python) but also learn heartwarming applications where optimization can make this world a better place.
Chapter 2
Mathematical Optimization Landscape
Mathematical optimization provides organizations with actionable insights and results that are fundamentally geared toward improving organizational efficiency. This value-driven focus places optimization on top of Prescriptive Analytics, a field that generates the highest competitive advantage to those organizations who decide to use their data to build and implement optimization tools. But before we dive into definitions and specific characteristics of mathematical optimization, let’s review the three main Advanced Analytics areas and how they relate to each other.
2.1 Areas of Advanced Analytics
Advanced Analytics is typically classified into three (or four, depending on the source) categories based on their usage and competitive advantage for the organization. These areas are Descriptive/Diagnostic (some authors split these two into separate categories), Predictive, and Prescriptive, as shown in Figure 2.1.
Figure 2.1: Areas of Advanced Analytics
Descriptive/Diagnostic Analytics
Descriptive and/or Diagnostic Analytics focuses on using data analysis to understand what has happened and why it has happened. Besides basic data analysis techniques such as scatter plots and correlation analysis, the most used Advanced Analytics models include:
Clustering (Unsupervised Machine Learning) to understand groups of observations and their similarities
Network Analytics to describe patterns in interconnected data
Regression Analysis (Supervised Machine Learning) to understand causal relationships
For example, we might want to understand the differences between groups of patients based on their molecular characteristics from lab tests using clustering techniques. We might also be interested in identifying the most relevant production settings that influence key quality metrics in wallboard manufacturing using regression models.
Predictive Analytics
Predictive Analytics uses statistical analysis to forecast future states. Besides naïve forecasting techniques such as year-over-year and moving averages, some typical forecasting models are:
ARIMA models (Time Series Forecasting) to derive historical patterns from past sequential data and predict future observations by using those historical patterns
Recurrent Neural Networks (Supervised Machine Learning) to predict future states based on previous states and their interactions
For example, time series models would forecast weekly product sales for a specific grocery store or expected daily arrivals for labor and delivery unit in a