The profitability of Google is partly a consequence of the advertising that appears on the top and along the side of search result pages.  Advertisers bid for the presence and positioning of advertising through Google's AdWords program, which associates their advertising with specific search terms.   They also bid for placement on websites that contract with Google for a similar service on their own content-specific sites.  For Analog Devices, a team advised by Professor Eric Friedman devised a bidding strategy, analyzed the impact of positioning, compared the advertising performance of search sites with content-specific sites, and did a competitive analysis.

Credit risk is the risk of loss, incurred by a party that is on the right side of a bet on a market move, due to the losing counterparty's failure to meet its obligations. Depending on the reward, some investors desire credit risk, some do not mind credit risk, and others do not want it—hence markets for derivatives such as Credit Default Swaps and Collateralized Debt Obligations have evolved. The pricing of these credit derivatives depends on effective models, one of which is known as the Incomplete Information (I2) model. Several project teams under the guidance of Visiting Professor Kay Giesecke investigated the I2 model to determine whether it is a good pricing device. This required calibrating the model using actual data including equity prices, option prices, and prices of credit default swaps (a task that entailed an optimization step) and validating the results against data not used in the calibration. The teams, which used different approaches, determined that the I2 approach is a viable pricing tool.

Part shortages impact the operations and maintenance effectiveness of the U.S. Air Force. A team advised by Professors Peter Jackson and Jack Muckstadt developed and tested an integrated real-time capacity and inventory allocation decision model for reparable service parts. The model minimizes total inventory management cost while maintaining the operational effectiveness of the supply chain system. Given the current level of inventory, backorders, and scheduled repairs, it determines what to repair at each location, which locations to supply each day, and what transportation methods to use, recognizing the dynamic aspects of operating activity as well as repair and transportation capacity. The program, based on research by Muckstadt and Jackson, incorporates database, linear programming, and Visual Basic components.

Water resource management is a classical application of simulation and optimization methods. Palisade Corporation, an international leader in risk and decision analysis software, has an interest in employing its expertise in this market, and needs a software prototype to demonstrate to prospective customers. A team advised by Professor Huseyin Topaloglu developed and implemented a model and algorithm to assist in managing specific water basins, like that managed by the Lower Colorado River Authority. The approach handled the necessarily stochastic optimization (since future rainfall is a random process) by sampling from the empirical distribution of historical inflows. The prototype has been implemented as an Excel add-in, which is the primary form in which Palisade delivers its expertise.

Keeping customers waiting on line is rarely desirable for service companies. In the case of a company like Harrah's, people waiting in the line to enter a buffet may represent lost revenue for the company as well as lost time for the customer and reduced customer satisfaction. A joint team from ORIE and Cornell's School of Hotel Administration, advised by Professor Paat Rusmevichientong and Dr. Mark Eisner, analyzed data from buffet transaction systems as well as from onsite timings, suggested improvements in buffet operations to reduce waiting time and validated these hypotheses with simulations. Some of the team's recommendations were implemented even before the project was completed