Hmmm, here's to wishing AIG had Wargammers

I listen to a number of Podcasts. TED Talks, EconTalk, Stuff you missed in History Class, FLOSS Weekly, etc. There is one podcast that overall has not been very interesting since it seems like each episode is mainly a book review. But of it's collection of book reviews, there was one that stood out from the rest. The podcast is named "The Invisible Hand". The specifc podcast that caught my interest was the book, Wargaming for Leaders: Strategic Decision Making from the Battlefield to the Boardroom. While this podcast was generally interesting since it described how the consulting firm Booz Allen Hamilton ran simulations in a gaming style for each business case, there was a specific example that makes you slap your forhead and cringe. The client for Booz Allen Hamilton asked for various cases that included real estate as a factor. For fun the Booz Allen Hamilton consultant modeled the banking industry's loans and risk transfer with insurance and it's impact if housing prices dropped. As per the model built, the whole thing collapsed as soon as housing prices dropped by $1. What was the client's reaction ? "Good thing that will never happen".

Yikes !! I wonder if AIG had wargammers talking with the actuaries if we the US tax payers would have 80% ownership of AIG today ? Well, it's all an academic excersise now. Have any of you used a simulation to prevent any problems ?

The Invisible Hand podcast web site
MP3 file for Wargaming for Leaders...

OpenOpt, got some code to "run".

I made a little progress on OpenOpt. I got some code to "run". Now I need to spend some time to find how it can give me the same results as the same model in Excel. My latest OpenOpt Post shows my current state.

OpenOpt and I started following someone's Blog

So I carved out a little more time to work with OpenOpt. I ran a built-in example named lp_1.py, since it was a Linear Programming example. By default the example script calls on a solver that is not included with the install of OpenOpt . Below is the line of code. The funny part is read the comment next to it and ponder why would this line be the default?

r = p.solve('cvxopt_lp') # CVXOPT must be installed

Any way you can see my current progress here.

On my journey to find why the example problem did not work by default, I found another blog that has similar interests to mine. Except this blogger seems to have experience in Operations/Decision Science vs. where I am just at the beginning of this journey. So I added myself as a follower to his blog: http://industrialengineertools.blogspot.com/

A good example of where we seem to be of similar interest is this article: http://industrialengineertools.blogspot.com/2009/02/does-software-hinder-innovation-in.html
I look forward to catching up with some of his other posts and future content.

Attempting OpenOpt

I decided to try using Python with OpenOpt, but I ran into a little issue with the module. You can see the bug report I filed with the OpenOpt forum. While on the forum site I found there are discussions for Linear problems, Network (mathematical not digital) problems, and Stochastic problems. These are all topics covered under Operations Management. After I get my OpenOpt install figured out, I will start with reviewing the Linear problems to see how I can build skills and participate in the forum.

Python Numpy/Scipy OpenOpt

I am still making slow progress on reading and comprehending The Science of Decision Making given various time constraints. But progress is being made. As I am building my Linear Programing (LP) knowledge I decided to seek out how I could perform LP with Python. For now, the OpenOpt library seems to be the most documented way. Here is an example of using the library for LP. Since my current book focuses on Excel, I am looking to transfer the example from the book to Python to compare the results. I know I keep repeating myself on what I plan to do, but blogging about this has the following advantages: 1) Let's you know I have not lost interest 2) Allows me to keep a document of my developing thoughts in a central place 3) Forces me to think through my plan to build operations management skills.