Exploiting Qualitative Information for Decision Support in Scenario Analysis

The development of scenario analysis (SA) to assist decision makers and stakeholders has been growing over the last few years through mainly exploiting qualitative information provided by experts. In this study, we present SA based on the use of qualitative data for strategy planning. We discuss the potential of SA as a decision-support tool, and provide a structured approach for the interpretation of SA data, and an empirical validation of expert evaluations that can help to measure the consistency of the analysis. An application to a specific case study is provided, with reference to the European organic farming business

Experimental Design for Sensitivity Analysis, Optimization and Validation of Simulation Models

This chapter gives a survey on the use of statistical designs for what-if analysis in simula- tion, including sensitivity analysis, optimization, and validation/verification. Sensitivity analysis is divided into two phases. The first phase is a pilot stage, which consists of screening or searching for the important factors among (say) hundreds of potentially important factors. A novel screening technique is presented, namely sequential bifurcation. The second phase uses regression analysis to approximate the input/output transformation that is implied by the simulation model; the resulting regression model is also known as a metamodel or a response surface. Regression analysis gives better results when the simu- lation experiment is well designed, using either classical statistical designs (such as frac- tional factorials) or optimal designs (such as pioneered by Fedorov, Kiefer, and Wolfo- witz). To optimize the simulated system, the analysts may apply Response Surface Metho- dology (RSM); RSM combines regression analysis, statistical designs, and steepest-ascent hill-climbing. To validate a simulation model, again regression analysis and statistical designs may be applied. Several numerical examples and case-studies illustrate how statisti- cal techniques can reduce the ad hoc character of simulation; that is, these statistical techniques can make simulation studies give more general results, in less time. Appendix 1 summarizes confidence intervals for expected values, proportions, and quantiles, in termi- nating and steady-state simulations. Appendix 2 gives details on four variance reduction techniques, namely common pseudorandom numbers, antithetic numbers, control variates or regression sampling, and importance sampling. Appendix 3 describes jackknifing, which may give robust confidence intervals.least squares;distribution-free;non-parametric;stopping rule;run-length;Von Neumann;median;seed;likelihood ratio

Making inferences with small numbers of training sets

A potential methodological problem with empirical studies that assess project effort prediction system is discussed. Frequently, a hold-out strategy is deployed so that the data set is split into a training and a validation set. Inferences are then made concerning the relative accuracy of the different prediction techniques under examination. This is typically done on very small numbers of sampled training sets. It is shown that such studies can lead to almost random results (particularly where relatively small effects are being studied). To illustrate this problem, two data sets are analysed using a configuration problem for case-based prediction and results generated from 100 training sets. This enables results to be produced with quantified confidence limits. From this it is concluded that in both cases using less than five training sets leads to untrustworthy results, and ideally more than 20 sets should be deployed. Unfortunately, this raises a question over a number of empirical validations of prediction techniques, and so it is suggested that further research is needed as a matter of urgency