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Unformatted text preview: Further suggestions for doing Spline problems 1-3 on page 96 1) If there are several levels, try to write the most complicated quantitative model for the level that is most complicated. For example if we had y=profit and x 1 job size and we had 3 engineers J,S and A and the relationships between y and x 1 were first order, second order and third order for J,S,A respectively, we would want to first focus on writing a third order relationship between y and x 1 as reflected in the data for A. 2. In our problem x 2 takes on the values A and B. We can NOT use x 2 in an equation for E(y) directly, rather we need to define a new variable(s) that has NOT been used before, dummy (0/1) variable(s) for the qualitative variable x 2 (like perhaps, if x 3 has not been used, x 3 = 1 if B, 0 otherwise). 3. When we have a KNOT, we want to define a 0/1 variable to handle terms above and below the knot and include this in the equation so that you write one equation for E(y), not a separate equation for E(y) for values below the KNOT and...
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This document was uploaded on 11/01/2011 for the course MANAGEMENT 385 at Rutgers.
- Fall '10