Enterprise optimization
Enterprise Optimization (EO) is "a systematic process of planning, integrating, coordinating and executing all dimensions of enterprise activities for best-possible mission-focused results" [1]. It is a sub-field of Management Science. The purpose of EO is to answer the basic question "What do we need to do to earn best-possible profits under continually changing market conditions?"
As a practical field of management Enterprise Optimization is both a science and an art [2].
Science
Linear programming (LP), originally developed and commonly used for optimal allocation of scarce resources, is the primary mathematical tool of Enterprise Optimization. Enterprise Optimization defines 5 types of resources: Capital, Procurement options, Sales opportunities, Production capabilities, and Information [3]. EO can be thought of as the optimization of the procurement and the use of these resources [4].
History
The first known application of Linear Programming for the purposes of enterprise optimization was a computerized LP system for an Oregon forest products company in 1967. The term "Enterprise Optimization" was coined by Eugene L, Bryan, PhD in 1970.
Applications
Enterprise Optimization has been widely applied in the forest [1], plywood, and sawmill industries since 1970s. It has also been applied in the food [2], steel [3], and other manufacturing industries.
- ^ Bryan, Eugene L.; Bielat, Andrew C. (2013). The BestPossible Enterprise.
- ^ Management as both Science and Art
- ^ Bryan, Eugene L (2003). BestPossible Profits: Guidebook for Forest Products Companies.
- ^ Bielat, Andrew C.; Bryan, Eugene L. Profit Hawks: Capture the Profits Being Lost Every Day to the Complexity of Your Business.