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All Blog Posts Tagged 'operational' (5)

Reconciling Opposing Performance Metrics Using Operational Simulations

Sometimes when dealing with performance metrics, there are contradictory signals.  For instance, although both are desirable, it is common for efficiency and efficacy to be in opposition.  An agent in a call centre can handle lots of calls while at the same time getting few sales; this is especially true if the agent’s main objective is to do lots of calls.  This is a highly efficient person albeit unsuccessful in terms of expanding the business.  Conversely, another agent by spending a…

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Added by Don Philip Faithful on May 6, 2018 at 3:30am — No Comments

Seduction of Success

The following simulation is based on a presentation that I attended in the 1990s.  I was an investment junkie back then.  I sat down, and I listening to people speak about their ideas on making money - on television and sometimes live.  The presenter in this case was trying to explain that investment success is sometimes a matter of chance.  He had people in the audience stand up.  He asked them to guess heads or tails.  Those that were correct continued to the next round - to guess again -…

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Added by Don Philip Faithful on March 31, 2018 at 11:00am — 2 Comments

Deconstructing Symbolic Expression

I sometimes ask myself while musing over the need for a particular service, "I wonder if this is commercially viable?" If the service is routine and the required software is rather inexpensive, perhaps there is little need for a company to outsource. I cannot think of any company that would routinely outsource work normally performed on a spreadsheet. I suspect that decades ago some companies hired specialists to handle spreadsheets; this seems much less likely today in light of the…

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Added by Don Philip Faithful on July 2, 2016 at 7:07am — No Comments

Formulating the Metrics of Phenomena

In recent blogs, I have been distinguishing between quantitative data and narrative data. I believe that I separated the two forms relatively well. Although I originally focused on the differences in data in order to give narrative "its own space," actually there can be a symbiotic relationship between the two types of data. In my last blog, I said that quantitative data can be incorporated into narrative data. In my submission today, I will be discussing how the narrative can be used to…

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Added by Don Philip Faithful on May 7, 2016 at 6:39am — No Comments

Estimating Operational Risk Capital: the Challenges of Truncation, the Hazards of MLE, and the Promise of Robust Statistics

J.D. Opdyke and Alex Cavallo

In operational risk measurement, the estimation of severity distribution parameters is the main driver of capital estimates, yet this remains a non-trivial challenge for many reasons.  Maximum likelihood estimation (MLE) does not adequately meet this challenge because of its well-documented non-robustness to modest violations of idealized textbook model assumptions, specifically that the data are independent and identically distributed (i.i.d.), which is…

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Added by J.D. Opdyke on February 10, 2012 at 7:30pm — No Comments

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