Business by numbers

http://www.economist.com/displaystory.cfm?story_id=9795140&fsrc=RSS ^

[lduucckkyy]

ALGORITHMS sound scary, of interest only to dome-headed mathematicians. In fact they have become the instruction manuals for a host of routine consumer transactions. Browse for a book on Amazon.com and algorithms generate recommendations for other titles to buy. Buy a copy and they help a logistics firm to decide on the best delivery route. Ring to check your order's progress and more algorithms spring into action to determine the quickest connection to and through a call-centre. From analysing credit-card transactions to deciding how to stack supermarket shelves, algorithms now underpin a large amount of everyday life.

Their pervasiveness reflects the application of novel computing power to the age-old complexities of business. “No human being can work fast enough to process all the data available at a certain scale,” says Mike Lynch, boss of Autonomy, a computing firm that uses algorithms to make sense of unstructured data. Algorithms can. As the amount of data on everything from shopping habits to media consumption increases and as customers choose more personalisation, algorithms will only become more important.

Solving this “travelling-salesman problem” means a lot to UPS. For its fleet of aircraft in America, the company uses an algorithm called VOLCANO (which stands for Volume, Location and Aircraft Network Optimiser). Developed jointly with the Massachusetts Institute of Technology (MIT), it is used by three different planning groups within UPS—one to plan schedules for the following four to six months, one to work out what kind of facilities and aircraft might be needed over the next two to ten years, and one to plan for the peak season between Thanksgiving and Christmas. Getting the scheduling wrong imposes a heavy cost: flying half-empty planes or leasing extra aircraft is an expensive business. UPS reckons that VOLCANO has saved the company tens of millions of

[Nitro]

The algoritm is for morons...., we sell, you are stupid and buy.... NEXT!!

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The article touches on a whole slew of interesting concepts but throws around too many buzzwords to remain coherent, and then degenerates into a big cheering section for companies that market optimization and data analysis software for various industries.