Lec1Intro_DesStat

Lec1Intro_DesStat - The Greatest Scope More Details EDA...

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Unformatted text preview: The Greatest Scope More Details EDA Describing sample data Title Page JJ II J I Page 1 of 28 Go Back Full Screen Close Quit ORIE 270 Engineering Probability and Statistics Lecture 1: Introduction Sidney Resnick School of Operations Research and Information Engineering Rhodes Hall Cornell University Ithaca NY 14853 USA http://www.orie.cornell.edu/ ∼ sid sir1@cornell.edu August 23, 2007 The Greatest Scope More Details EDA Describing sample data Title Page JJ II J I Page 2 of 28 Go Back Full Screen Close Quit 1. Why you can’t live without prob & stat Basis for the scientific method, management science, decision making, intelligent empiricism. Tidbits: • Fact based decision making. • Scientific decision making. • In God we trust; everyone else bring data. Conclusion: • Hunches can be wrong, • Intuition can be fooled, • Instincts may be immature or just wrong. The Greatest Scope More Details EDA Describing sample data Title Page JJ II J I Page 3 of 28 Go Back Full Screen Close Quit Positive societal contribution & ubiquity: • Drug testing: Drug companies are not allowed to market a drug until it it proven safe and effective 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 com- pany employs statisticians to supervise the clinical trial; the FDA employs statisticians to review the drug company results. • Digital network traffic: Fundamentally different from POTS=plain old telephone traffic. Prize winning Bellcore study (1993) statis- tically analyzed data network traces and concluded they exhibit characteristics not compatible with telephone models. Probabil- ity models were then constructed to explain the anomolies and describe relationships. • Risk managment: Governmental bodies set standards which control risk. – Hydrology: 10,000 year flood. 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. The Greatest Scope More Details EDA Describing sample data Title Page JJ II J I Page 4 of 28 Go Back Full Screen Close Quit – Environment: City is ruled out of compliance with EPA reg- ulations if pollutant concentration exceeds a specified level more than 5% of the days in a year; that is, the standard is set so the prob of exceeding the standard is 5%. • Politics and political forcasting: USA TODAY headline; Tues Aug 24, 2004 (courtesy Yahoo) Bush, Kerry still tied in Fla. Most Floridians are satisfied with the way President Bush (news- web sites) responded to Hurricane Charley, according to a USA TODAY/CNN/Gallup Poll. But that has not changed the dy- namic of the presidential race, which remains a virtual tie between Bush and Democrat John Kerry in the critical Southern state....
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Lec1Intro_DesStat - The Greatest Scope More Details EDA...

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