Merrill Lynch wins corporate/government O.R. prize

May 22, 2001

Merrill Lynch's successful introduction of its new brokerage service, which lets clients choose from a range of traditional and online investing for a single fee, resulted in its selection as winner of the Franz Edelman Award for Achievement in Operations Research and the Management Sciences at the Hyatt Regency La Jolla yesterday.

As of year-end 2000, Merrill Lynch U.S. Private Client assets reached $83 billion in the new offer.

The Institute for Operations Research and the Management Sciences (INFORMS®) presented the award for a project entitled "Pricing Analysis for Merrill Lynch Integrated Choice."

"Thanks to excellent analysis by a team of operations researchers, Merrill Lynch confidently introduced its Integrated Choice pricing option," said Donald R. Smith of Lucent Technologies, chair of the award committee.

In late 1998, the advent of electronic trading threatened the core of Merrill Lynch's value proposition - to provide guidance through a Financial Advisor. In response, management decided to create a new offering to provide investors with more choices. A team developed models to evaluate different combinations of product structures and prices. The models showed that revenue at risk to Merrill Lynch ranged from $200 million to $1 billion. Through the team's analysis, this risk was mitigated. The resulting Integrated Choice strategy enabled Merrill Lynch to take the marketplace initiative.

In 1997, Merrill Lynch U.S. Private Client was presented the INFORMS Prize, which is awarded to firms that have effectively integrated operations research into organizational decision making.

The Merrill Lynch team includes Stuart Altschuler, Donna Batavia, Jeff Bennett, Russ Labe, Bonnie Liao, Raj Nigam, and Je Oh. The six finalists for the award, all of whom are recognized by the prize committee, are U.S. Army Recruiting; NBC; The Jan de Wit Lírios Company, Brazil; OnStar; Samsung, and the winner. Additional information about the contestants is online at

The competition was held at a new INFORMS conference, "Optimizing the Extended Enterprise in the New Economy." This is the 30th year that the prestigious $15,000 competition has been held. The award is jointly sponsored by INFORMS and CPMS, the Practice Section of INFORMS. The INFORMS Edelman Award recognizes outstanding implemented work that has had a significant, positive impact on the performance of the client organization.

The judges of the Edelman competition were Dr. Smith; Peter C. Bell, Richard Ivey School of Business, University of Western Ontario; Joseph Discenza, SmartCrane; Howard Finkelberg, BBDO; H. Newton Garber, Garber Associates; Stephen C. Graves, Massachusetts Institute of Technology; Terry P. Harrison, Pennsylvania State University; and Grace Lin, IBM.
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 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 INFORMS website is at

Institute for Operations Research and the Management Sciences

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