First Top Operations Research Award To South American Company: Finalists Include Major Co's And Small Southern School District

April 29, 1998

MONTREAL, April 29 - The Institute for Operations Research and the Management Sciences (INFORMS) today announced presentation of the 1998 Franz Edelman Award for Achievement in Operations Research and the Management Sciences to Bosques Arauco S.A., which represents a consortium of five Chilean timber companies.

This is the first time that top honors have gone to a South American competitor.

"By utilizing operations research, Bosques Arauco developed tools that enabled them to improve efficiency while having a positive impact on workers' lives and the ecology of their forest plantations," said Stephen Strauss of AT&T Labs, the chairman of INFORMS's Franz Edelman competition. "Perhaps the most interesting part of this work is the cooperation that has been demonstrated between competitors in the forest industry, not only in Chile but also in several other countries, including Brazil and South Africa."

The other finalists were Sears, the catalog giant; Cerestar, Europe's leading manufacturer of made-to-order wheat and corn-based starch products; Grantham, Mayo, Van Otterloo & Co., LLC, an investment firm; Maritrans, Inc., an oil transport company; Pacific Lumber Company; and a small school district, the Johnston County, North Carolina Public Schools. The Edelman Award recognizes outstanding work in operations research that has had a significant impact on the performance of the client organization. The winner receives a $10,000 first prize. The finalists receive an additional $5,000 in awards.

This is the 27th year that the prestigious competition has been held. The award is jointly sponsored by INFORMS and CPMS, the Practice Section of INFORMS.

$17 million annual savings

Timber is Chile's second largest industries. Bosques Arauco's consortium partner firms are Forestal Arauco, Forestal Mininco, Forestal Bío-Bío, and Forestal Millalemu.

The impact of these systems has been organizational and financial, with Bosques Arauco reporting a total saving of $5 million a year over a total annual timber production of $140 million. Since the implementation of the technology in 1989, the five major firms report minimum annual savings of $17 million. Equally impressive, those sections impacted by the work have reported up to 25% savings in operational costs.

The Chilean consortium developed five different systems designed by a team from the University of Chile. The systems include -Bosques Arauco S.A.'s winning study is entitled "Use of Operations Research Systems in the Chilean Forest Industries." The authors are Jorge Serón, Chief Executive Officer of Bosques Arauco; and Dr. Andrés Weintraub, Dr. Rafael Epstein, and Dr. Ramiro Morales of the University of Chile's Department of Industrial Engineering.

The judges of the 1998 Edelman competition were Mr. Strauss; Joseph Discenza of Wagner & Associates; Howard Finkelberg of BBDO; H. Newton Garber of Garber Associates; Steven Graves of the Massachusetts Institute of Technology; Yoshiro Ikura of Saitech; Rick Rosenthal of the Naval Postgraduate School; and Michael Rothkopf of Rutgers University. The Institute for Operations Research and the Management Sciences (INFORMS) is an international scientific society with 12,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work primarily in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications.

The Canadian Operations Research Society (CORS), founded in 1958, works to advance the theory and practice of operations research. Its primary purpose is to stimulate and promote contacts between those interested in operations research. CORS members are employed across Canada in various industries, government, and academia.
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Institute for Operations Research and the Management Sciences

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