$1 million Marcus gift establishes service enterprise engineering center

University Park, Pa. -- A $1 million gift from Harold and Inge Marcus of Olympia, Wash., has endowed one of the first centers in the country exclusively devoted to the field of service enterprise engineering.

The new Center for Service Enterprise Engineering (CSEE) will be administered through the Harold and Inge Marcus Department of Industrial and Manufacturing Engineering. The CSEE also will serve as a sister center to one established at the Technion, the Israel Institute of Technology. The Marcuses also have donated $1 million to establish the Israeli center.

Service enterprise engineering uses theories and processes native to engineering and applies them to nonengineering problems.

"Service enterprise engineering is a burgeoning field," said Richard Koubek, head of the industrial engineering department. "Wherever there's a process, it can be engineered."

For example, service enterprise engineering can be used to optimize the flow of patients through an operating room or decide how medication is purchased, inventoried and dispensed to patients.

Terry Friesz, the Harold and Inge Marcus chaired professor of industrial engineering and director of the center, said service enterprise engineering operationalizes the theory of revenue management by providing computational schemes for pricing services, allocating resources needed to deliver services and managing demand for services.

"The problem of service pricing is pervasive in our society; it is typified by airline pricing, which is computationally huge," he explained. Determining a ticket price must account for variables such as schedules, fuel prices and seasonal variations.

Friesz added that the service industry has special traits and problems that service enterprise engineering can help solve. How do you inventory the output of a service firm? How do you allocate resources? How do you deal with rejection of demand or overbooking?

"It's about improving processes," he stated.

The department already was the first in the country to offer a track for students in the service enterprise engineering field.

Koubek says a poll of current industrial engineering students indicated that approximately 150 of 300 undergraduate and 75 out of 150 graduate students intended to make service enterprise engineering their primary career thrust.

"The U.S. economy has changed," the department head said. "A large part of it now is service."

Other academic units at Penn State also offer similar programs, including a business-focused version through the Smeal College of Business and an information technology-focused version through the School of Information Sciences and Technology.

Harold and Inge Marcus are among Penn State's most generous donors. Over the years, the couple has given numerous gifts to Penn State, including endowing a dean's chair, the industrial engineering department, faculty positions, a student exchange program with the Technion and Penn State Hillel.

A native of Brooklyn, N.Y., Harold Marcus is a 1949 industrial engineering graduate. He is the president of Hal Marcus Inc. and American Villages Inc., both real estate development and management companies.

Inge Marcus is a native of Copenhagen, Denmark, and holds a bachelor of science in biology from St. Martin's College and a master of science in health sciences from Chapman University. She is a retired assistant professor of biology at St. Martin's.

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Last Updated March 19, 2009