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When Stefanos Zenios was studying for his doctorate at the Massachusetts Institute of Technology, his supervisor set him a challenge: work out whether it would be possible to cut the cost of testing for HIV, the virus that causes Aids, by pooling all the blood samples taken from a single community.

The young postgraduate was studying neither medicine nor biochemistry. His PhD was in operations research (OR), the discipline that uses mathematical models and statistics to study human systems.

It is a sign of the times that Prof Zenios is now one of the brightest rising stars at Stanford University’s highbrow Graduate School of Business. Once seemingly headed for irrelevance, OR is making a something of comeback.

“We live in a world that is increasingly rich in data and increasingly rich in computational power,” observes the 35 year old.

Thus Companies have started to use OR techniques to model not only their supply chains (long the main province of OR in business) but also the behaviour of customers and competitors. Government agencies are calling on OR specialists to study the spread of diseases and ­strategies for prevention or cure.

Prof Zenios, 35, grew upand went to school in Cyprus, where he also took private English lessons to expand his educational horizons. The extra study paid off with a place at Britain’s Cambridge University, where he read mathematics.

But the young student was never interested in maths for its own sake. He was drawn to the applied side – probability, statistics and computer science. He recalls: “I was fascinated by the idea that you could use the discipline of mathematics to say something about systems designed by humans.”

This practical outlook led to MIT, academic home to Jay Forrester, one of the founding fathers of OR, and then to Stanford, in California. Last year, he was elected a full professor in the business school.

For the record, the HIV-testing project did not lead to a breakthrough. But the exercise opened Prof Zenios’s eyes to the way OR techniques could be used to address issues of public health. His academic ­reputation is founded ona series of studies examining alternative rules for distributing the scarce supply of human kidneys available for transplant among patients on dialysis.

Why focus on health rather than, say, poverty or business efficiency? “Obviously, health issues are very important,” says Prof Zenios. “I also thought it would be easy to work with practitioners who are trained in scientific method.”

And so it is, he adds, if you can find the right collaborator. His research partner for the work on kidney transplants is Lainie Ross, a University of Chicago doctor and medical ethicist who shares his fascination with statistics.

Collaboration with an ethicist underlines the fact that Prof Zenios is dealing with more than abstract numbers. The essence of OR is that it looks for solutions that are not only efficient but also practical. In medicine this can be especially complex.

Says Prof Zenios says: “If you are looking at a supply chain it is fairly easy to define what the objective is. But in healthcare there are many more stakeholders. You need to think about fairness as well as efficiency.”

About 15,000 kidney transplants are performed each year in the US. But this is fewer than half of the 40,000 or so patients who are awaiting transplants. A shortage of suitable organs is to blame. Even if a relative is willing to donate a kidney, a mismatch of blood types often scuppers the plan.

The system would be more efficient, reasoned Prof Zenios, if the organs offered by family members were not lost to the system. He first tried to fashion an exchange programme in which pairs of donors and patients would swap kidneys to make more matches. But OR modelling revealed that such an live donor exchange would result in only 1 per cent more ­transplants.

So Prof Zenios looked at another idea: if a family member donates a kidney to the pool, the transplant candidate to whom they are related moves up the waiting list and receives the first available kidney that matches.

Friends or relatives can, in effect, “buy” a priority position on the waiting list by donating an organ. The modelling in this case showed that the system could decrease waiting time by 15 per cent.

One of the lessons Prof Zenios draws from the experience is that OR researchers must collaborate closely with practitioners if they expect to be taken seriously: “Physicians want to know not only that something works but also why it works. You need to understand the clinical detail.”Even so, this is controversial work. Prof Zenios and Dr Ross spent months devising a complex system for ranking transplant candidates that took into account factors including health condition, age, imminence of total kidney failure and blood type.

While the Zenios/Ross system has not been adopted in full, their research approach has been hugely influential. The notion that OR can be used to model the likely impact of heathcare policies and protocols has spread to other corners of the medical community

The same goes for operations researchers in business. It is no secret that after its heyday in the 1950s and 60s, OR suffered from a tendency to look inward. Energy was expended arguing over the finer points of methodology rather than taking OR techniques out into the world.

Prof Zenios’s work shows what might be achieved if OR is applied rigorously yet pragmatically to real problems. To underline the point, at Stanford he is helping to lead a pioneering course that brings together medical, engineering and MBA students. Teams of students identify a medical need, design a medical device to meet the need and develop a business plan to bring the device to market.

Says Prof Zenios: “Operations research should be interdisciplinary and it should be practical.”

The same could be said of all business education.

Copyright The Financial Times Limited 2017. All rights reserved.
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