Lec1Intro_DesStat

Lec1Intro_DesStat - ORIE 270 Engineering Probability and...

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The Greatest Scope More Details EDA Describing sample data Title Page 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 sid [email protected] August 23, 2007
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The Greatest Scope More Details EDA Describing sample data Title Page 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.
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The Greatest Scope More Details EDA Describing sample data Title Page 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.
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The Greatest Scope More Details EDA Describing sample data Title Page 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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