Lec32 Regression models 2010 (1)

# Lec32 Regression models 2010 (1) - Lec.32 Lec.32 Regression...

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1 Lec.32: Lec.32: Regression Models Regression Models CEE 3040 Uncertainty Analysis in Engineering (with thanks to Prof. Linda Nozick)

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2 In This Unit… In This Unit… Motivational Example: Natural Gas Line Investment Decision An Overview of Regression Analysis Single variable regression (12.1) Estimating model parameters (12.2) Example from my freight energy research Regression of energy consumption and freight value (Time permitting) Later in the week: Lecs. 33 & 34… Analysis of Variance (ANOVA) Multivariate and nonlinear regression
Readings for this Unit Main Reading: Devore, J. (2009) Chap.12, “Simple Linear Regression and Correlation.” Supplemental Reading: C. Khisty, and J. Mohammadi, Part of Chapter 9 in Fundamentals of Systems Engineering titled: “Regression and Correlation Analysis”, pp. 268-283. Source of some of images in this Powerpoint show Soft copy available in Blackboard

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4 A Motivational Example: A Motivational Example: Decision Support for Decision Support for Managed Network Managed Network Expansion of Gas Services Expansion of Gas Services
5 NATURAL GAS DISTRIBUTION NATURAL GAS DISTRIBUTION Production to consumption region at high pressure Citygates . Pressure reduced, Mercaptan added, filtered Distribution mains. Citygate residential area, 10-20 cm dia. Service laterals. Main Individual customer, 1-5 cm dia. For residential, 47% of bill from distribution Distribution main construction

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6 MANAGED EXPANSION MANAGED EXPANSION Planning managed expansion Where to build new distribution mains given limited annual budget? What order to build new mains? Project goal: Development of Decision Support System to help major gas utility with managed expansion Applicable to other utilities
7 CHALLENGES CHALLENGES Many alternatives Many possible locations for new mains Many ways to reach a prospect Dynamic Construction phases Costs & revenues incurred over time Uncertain costs & revenue Prospect B A Path A2 Path A1 Path B Existing mains

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REGRESSION MODELLING: REGRESSION MODELLING: CONCEPTUAL LEVEL CONCEPTUAL LEVEL Objective: Predict future values of dependent variable Known: Values for independent variables Some knowledge of influence of independent on dependent variables 8
9 CASE OF GAS ESTIMATION ESTIMATION WHAT WE WANT TO ESTIMATE (DEPENDENT) WHAT WE WANT TO ESTIMATE (DEPENDENT) Therms used in one year Therms used in one year WHAT WE KNOW (INDEPENDENT) WHAT WE KNOW (INDEPENDENT) Home size (sq. ft.) Home size (sq. ft.) Number of rooms Number of rooms Home value (\$) Home value (\$) Single- or multi-family Single- or multi-family Household member count Household member count Owner/renter Owner/renter Age of head of household Age of head of household

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CLASS DISCUSSION: CLASS DISCUSSION: EXAMPLES OF APPLICATIONS EXAMPLES OF APPLICATIONS FILL IN 10
CLASS DISCUSSION: CLASS DISCUSSION: EXAMPLES (CON’D) EXAMPLES (CON’D) 11

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12 An Overview of Regression An Overview of Regression Analysis Analysis
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