FederalExpress - Absolutely! Positively Operations...

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Unformatted text preview: Absolutely! Positively Operations Research: The Federal Express St~ry F1CHARD O. l'viP.sON J PJ'vlES L. MCKENI'JEY W A L E R CARLSON DUNCA...N COPELAND Edwin L. Cox School of Business Southern Jv1ethodist U~iversitv Dallas, Texas 75275 .' Harvard Business 5chool Soldiers Field Boston, Nltlssachusetts 02163 216 West Hilton Drive Bolder Creel:, California 95006 School of Business Administration University of Western Ontario London, On.tario N6li 3K7 Canada Federal Express Corporation has used operations research (OR) to help make its major business decisions slllce its overnight pacLage delivery operations began in 1973. An early failure pointed out the need for scientific analysis. SubsequentlYr a suc- ~essful origin-destination model followed by models to simulate operations r finances, engine use, personal assignments r and route struchrres influenced the conduct of business during peri- ods of substantial growth. There "vvere many false starts between the successes. CEO and founder Frederick W. Smith played a central role in the use of OR at the company: he established a relationship-Vv-ith OR and lTlanagenlent science personnel and this relationship supported the grov~Tth.9-~9-_~~~<;.essgL!h~ . . . . . _ --_ _- ._-"._ .. _----_ . _----_._- __ .,.- . con-tpany. This company is nothing short of being the logistics arm of a whole new society tilat is building up ir, our economy-a society that isn't built around automobile and steel production, but that is buil t up instead around senrice industries and high technology endeavors in electronics and optics and medical science. It is the movement of these support items that Federal Express is all about.-Frederick l'V. 5m i th F rederick w. (Fred).Srnith developed a '';.5ion of a business, brought together the key people ""ho w~':lld_rnc:ke ~p his ini- Cop)'ri~hl C'J 1997. Inslttuu: for upef.:ltions i\ese"rcn and fne MAnag~mcnl 5acnccs oo9:2102m f2702foo17S05.00 Tnis P-'PCT was TclcrC{'d. ... rial mana gemenUeam, and sera ped ..to- gether enough funds to buy the first arr- Gaft for his fleet: rrench-made Dassault TRANSrClRT ATIOI~-AIF. COMf'UTEP':;'-S~'STi:h\ DSIGN AND OPERATION INT:='P.FACSS 27: 2 March-April 1997 (pp, 17-36) MASON, MCKENNEY, CARLSON, COPEL'\ND Falcon-20 twin-engine executive jets. His idea was to provide overnight deliv- ery of small, high-value items, such as pharmaceuticals, aerospace components, and computer parts. An avid pilot, Smith had chosen the Falcons because they best satisfied the constraints the business had to work under. To be successful, the business had to be free to change its routes and schedules rrequently and readily. Civil Aerona uncs Board (CAB)regulations on air cargo at the time, however, did not permit this degree of flexibility. Consequently, the Turboprop planes were too slow....
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This note was uploaded on 02/25/2010 for the course ESI 6314 taught by Professor Vladimirlboginski during the Fall '09 term at University of Florida.

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FederalExpress - Absolutely! Positively Operations...

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