In the early 1970s, many researchers were trying to apply mathematical 
programming to business problems. The transportation problem was often 
discussed as an application that would benefit from computerization. 
Why? I think it is because this type of problem can be formulated 
quantitatively and because such problems are often complex enough to 
benefit from using a model. Also, the allocation of transportation 
resources among competing uses is of interest to business 
decision-makers in a number of different industries. In general, 
real-world transportation problems are often important! 

We have seen many different software programs for solving transportation 
problems, but the basic need remains the same. Managers want help in 
allocating a scarce resource. The basic problem formulation (cf., 
Hitchcock, 1941) has been adapted and expanded to a number of 
situations. A major application is scheduling airline routes. The 
following examples help explain why solving transportation problems are 
important to airlines. 

David Field in USAToday on April 19, 1999 explained briefly how airlines 
make decisions about adding flights.  Continental Airlines bases its 
route and schedule decisions on daily ticket data. Continental uses a 
computer program developed by American Airlines' Sabre unit. Field 
quoted Robert Merz, director of network operations at United, "You 
schedule to maximize profit ..."

At about the same time, Jessica Davis reported in InfoWorld that using 
the "Broadbase data mart, United's staff of 60 analyst/schedulers, 
typically MBA/economists, can load 'what if' scenarios -- testing 
whether a new flight to Chicago would be more profitable using a larger 
or a smaller aircraft". She noted schedulers take into consideration 
passenger demand, constraints of airports, the maintenance needs of the 
aircraft, the cost of flying individual aircraft, crew resources, and 
other factors.

Davis quoted Bob Bongiorno, United Airline director of research and 
development, "Scheduling is the single most important thing we do at 
this airline." Bongiorno said "We've got to fly to the right places with 
the right frequency at the right times to make money."

Recently, Southwest Airlines implemented CALEB(TM) Technologies' 
CrewSolver DSS to reduce the cost from traffic control delays and 
mechanical and weather-related disruptions. For more information, check 
the April 9, 2001 press release from CALEB Technologies at 
DSSResources.COM.

So using Model-Driven DSS to solve transportation problems can improve 
profitability!! On a cautionary note Professor N. K. Kwak noted almost 
30 years ago that "mathematical programming provides quantitative bases 
for management decisions -- bases with which management manipulates and 
controls various activities to achieve the optimal outcomes of business 
problems. Management can make better and more effective judgment by use 
of mathematical programming.  However, it is no substitute for the 
decision maker's ultimate judgment." (p. 6)

References

Davis, J. L. "United overhaul brings decision-making down to earth", 
InfoWorld, March 1, 1999.

Field, D. "Airlines pursue the trail of bucks", USAToday, April 19, 1999 
at URL http://www.usatoday.com/life/travel/business/1999/t0419ad.htm.

Hitchcock, F. L. "Distribution of a Product from Several Sources to 
Numerous Localities", The Journal of Mathematics and Physics, vol. 20, 
August 1941, pp. 224-230.

Kwak, N. K.  Mathematical Programming with Business Applications.  New 
York: McGraw-Hill, Inc., 1973.