Lect1_2700_s09 - ENGRD 2700 Engineering Probability and...

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The Greatest Scope More Details EDA Describing sample data Title Page ± ² ± ² Page 1 of 25 Go Back Full Screen Close Quit ENGRD 2700 Engineering Probability and Statistics Lecture 1: Introduction David S. Matteson School of Operations Research and Information Engineering Rhodes Hall, Cornell University Ithaca NY 14853 USA dm484@cornell.edu January 20, 2009
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The Greatest Scope More Details EDA Describing sample data Title Page ± ² ± ² Page 2 of 25 Go Back Full Screen Close Quit 1. Why you can’t live without prob & stat Basis for the scientiFc method, management science, inteligent empiricism. Tidbits: ±act based decision making. ScientiFc decision making. In God we trust; everyone else bring data. Conclusion: Hunches can be wrong, intuition can be fooled, instincts may be im- mature or just wrong. Positive societal contribution; ubiquity: Drug testing: Drug companies are not allowed to market a drug until it it proven safe and e²ective via clinical trials. (Living link with history: SIR1 was part of the largest public health clinical trial ever–the Salk polio vaccine clinical trial.) The drug company employs statisticians to supervise the clinical trial; the ±DA employs statisticians to review the drug company results. Digital network trafc: ±undamentally di²erent from POTS=plain old telephone tra³c. Prize winning Bellcore study (1993) statistically analyzed data network traces and concluded they exhibit characteristics not compatible with telephone models. Probability models were then constructed to explain the anomolies.
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The Greatest Scope More Details EDA Describing sample data Title Page ± ² ± ² Page 3 of 25 Go Back Full Screen Close Quit Risk managment: Governmental bodies set standards which control risk. Hydrology: 10,000 year food. Build the dam so high that water will exceed the height once per 10,000 years. (Small quantile estimation to the cognoscenti.) Finance: Value at risk–the banks risk reserve needs to be high enough to cover a loss so big that it occurs with probability 1/10,000. Environment: City is ruled out o± compliance with EPA regulations i± pollutant concentration exceeds a speci²ed level more than 5% o± the days in a year; that is, the standard is set so the prob o± exceeding the standard is 5%. Weather prediction: Chance o± rain tomorrow is 53%. What does this mean? But image problems persist: Pick your ±avorite quote: ”There are lies, damn lies and statistics.” –Sir Winston Churchill ”There are three kinds o± lies: Lies, Damn Lies, and Statistics.” –Benjamin Disraeli ”You can use statistics to prove anything.” –Homer Simpson ”He uses statistics as a drunken man uses a lamppost - ±or support rather than illumination.” –Andrew Lang
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The Greatest Scope More Details EDA Describing sample data Title Page ± ² ± ² Page 4 of 25 Go Back Full Screen Close Quit ”Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.
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Lect1_2700_s09 - ENGRD 2700 Engineering Probability and...

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