With 37 percent of employed 2003 graduates working in financial services, it's not surprising that this year there are more students majoring in Operations Research and Financial Engineering than in any other department in the engineering school.
And the number of majors is steadily increasing. There are 39 majors in the Class of 2004, 57 in 2005 and 60 in 2006. In a field which generally lacks women, ORFE also has the highest percentage of female majors in the engineering school.
ORFE consists of two disciplines: Operations Research and Financial Engineering.
"Operations research is a set of mathematical methods, a combination of optimization theory, probability, and statistics," said department chair Erhan Çinlar, "Just as calculus solves the problems presented by physics, operations research solves human problems — congestion, traffic, telecommunications and overcrowding."
Financial engineering is an application of operations research. For example, the skills derived from operations research can be used to determine pricing or the terms of contracts.
Although ORFE majors must take upper-level courses in economics and math, ORFE differs significantly from these A.B. departments.
"Where as economists and mathematicians are interested in analysis and understanding and theory, we are interested in design and problem solving," said Çinlar.
Yet ORFE is not "pure engineering." Of the 12 ORFE faculty members, eight have Ph.D.s in Mathematics; only four have degrees in Engineering.
Assistant Dean of the Engineering School Peter Bogucki said, "ORFE is an attractive combination of subject matter: statistics, economics and finance, and optimization method and theory, leading to the Princeton B.S.E. degree that includes basic sciences and math and a significant number of humanities and social sciences. So in one sense it's an analytically and quantitatively rigorous liberal education."
Çinlar attributed the success of ORFE to its appeal for the type of student who chooses to attend Princeton instead of a technical school like MIT or Caltech.
"It's an issue of training versus education," he said. "They [ORFE majors] are attracted to Princeton for the liberal arts. They are the leader type."
ORFE major Katy Milkman '04 said the flexibility is appealing.
"It offers so many electives in computer science, economics, math, and other engineering departments," she said. "ORFE also doesn't have as many requirements or labs, so it seems like ORFE majors are better able to explore other intellectual opportunities at Princeton and have more active social lives."
Despite its success, ORFE only became an independent department four years ago. Operations research was initially coupled with civil engineering because it could be applied to transportation problems.
ORFE splits
The two fields had developed together at Princeton for several decades, but during the 1990s they became increasingly distinct.
"One set of faculty members didn't have so much in common with the other set in terms of their academic interests, the journals they read and published in, and the relevance of their courses," Bogucki said.
In 1999, the Civil Engineering and Operations Research department split. One became Civil and Environmental Engineering and the other Operations Research and Financial Engineering.
Çinlar said the split has been beneficial for both departments. Princeton is one of the few universities that has an ORFE department. "We offer something new, slightly revolutionary," Çinlar said. "We appeal to students who want something exciting."
Flexibility
Chris Kirk '05 said he decided to become an ORFE major because he thought "it gives students a sound business background; it provides a solid understanding of the underlying financial aspects found in all industries."
As a freshman, Nitin Walia '06 was unsure of what engineering department he would concentrate in. Finally, Walia was lured to ORFE by the flexibility of the department and his interest in operations research.
"Operations research is like a set of tools that are broadly applicable even if I don't know what I want to do after I graduate," he said.
With the dire state of the job market, ORFE has received criticism as a pre-professional program, catering to the financial industry's need for graduates with technical degrees.
"I think that the general perception of ORFE students is that many of us are in it 'for the money,' and that's not necessarily true," said Kirk. "Unbelievable as it may seem, some students really like working with statistics, solving probability problems, and finding efficient ways to perform processes."
"Last year's senior ORFE t-shirt proclaimed that ORFEs were 'too cool for Engineering,' and I think that a fairly dominant perception among other engineers," Milkman said. "Other engineers feel that ORFEs aren't legitimate engineers, and I think in a way that would be true. ORFEs are really more like applied mathematicians who prove theorems and write computer code than they are like Mechanical & Aerospace Engineers who build things!"
"The other departments think that ORFE is soft stuff," Cinlar said, "In some sense it's true because our students don't like labs...but our mathematics is as high a level as anything in the Engineering School."
Bogucki warned, however, against viewing ORFE's recent popularity as anything more than a trend.
"The engineering departments go up and down in popularity," he said, "It's rare that they're all uniform in size at any given moment."
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