Effects of Uncertainty


In optimization a major source of uncertainty is in the “givens,” which are the coefficient values that represent forecast conditions and are the basis for the optimization. Because of these “givens,” uncertainty is usually not obvious or expected. For example, basis-type givens in an application could be the expected number of customers, the price of electricity, the composition of raw material from a mine, and the time duration per day that a person will be on the computer. Another category of givens is the assumptions about conditions. These could include ambient temperature or humidity, the competition’s introduction of new products or pricing, or customer buying trends. In classic word problems, the givens are exactly, precisely specified and have no uncertainty.

25.2Sources of Error and Uncertainty
25.3Significant Digits
25.4Estimating Uncertainty on Values
25.5Propagating Uncertainty on DV Values
25.6Implicit Relations
25.7Estimating Uncertainty in DV* and OF*
Topics: Uncertainty

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