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Bestfit a program published by palisade software

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Unformatted text preview: nd @RISK Excellent software exists to help a decision analysis fit theoretical distributions to data. BestFit, a program published by Palisade Software. Providing a way for an analyst to fit theoretical distributions to subjective assessments elicited from experts. 18 CHAPTER 10. USING DATA Slide No. 36 ENCE 627 ©Assakkaf Software for Fitting Distributions: BestFit and @RISK Fitting distributions to the half-way house data with BestFit. Read procedure of BestFit with @RISK packages in book pages 405 – 411. CHAPTER 10. USING DATA Summary Slide No. 37 ENCE 627 ©Assakkaf We have seen some ways in which data can be used in the development of probabilities and probability distributions for decision analysis. The basis of constructing histograms and empirically based CDFs. Use of data to estimate parameters for theoretical distributions. 19 CHAPTER 10. USING DATA References Slide No. 38 ENCE 627 ©Assakkaf 1. Berry, D. (1995). Statistics: A Bayesian Perspective, Belmont, CA: Duxbury. 2. Chatterjee, S., and B. Price (1977) Regression Analysis by Example. New York: Wiley. 3. DeGroot, M. (1970) Optimal Statistical Decisions. New York: McGraw-Hill. 4. Draper, N., and H. Smith (1981) Applied Regression Analysis, 2nd Ed. New York: Wiley. 5. Neter, T., W. Wasserman, and M. Kutner (1989). Applied Linear Regression Models, 2nd Ed. Homewood., IL: Irwin. 6. Olkin,I., L.J. Gleser, and C. Derman (1980) Probability Models and Applications. New York: Macmillan. 7. Raiffa, H., and R. Schlaifer (1961) Applied Statistical Decision Theory. Cambridge, MA: Harvard University CHAPTER 10. USING DATA Slide No. 39 ENCE 627 ©Assakkaf Using Data to Model Relationships Using Data to Model Relationships 20 CHAPTER 10. USING DATA Slide No. 40 ENCE 627 ©Assakkaf Using Data to Model Relationships We use data to try to understand the relationships that exist among different phenomena in our world. Examples: – Causes of Cancer – Sales Revenue – Economic Conditions – Natural Processes CHAPTER 10. USING DATA Slide No. 41 ENCE 627 ©Assakkaf Using Data to Model Relationships Note: 1. The motivation for studying relationships among phenomena that we observe is to gain some degree of control over our world. In many cases we hope to make changes in those areas where we have direct control in order to accomplish a change in another area. 2. We will focus on the problem of using data on a number of auxiliary variables (which we will denote as X1, …, Xk) to determine the distribution of some other variable of interest (Y) that is related to the x’s. 21 CHAPTER 10. USING DATA Slide No. 42 ENCE 627 ©Assakkaf Using Data to Model Relationships 3. Y is sometimes called a response variable or dependent variable, because its probability distribution changes in response to changes in the X’s. 4. The X’s sometimes are called explanatory variables or independent variables, because they can be used to help explain the changes in Y. CHAPTER 10. USING DATA Slide No. 43 ENCE 627 ©Assakkaf Using Data to Model Relationships – The use of data to understand relationships is not trivial. Consider the influence diagrams. • The brute force approach would require obtaining enough data to estimate the conditional distribution for the particular variable of interest (Y...
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