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Using Binary Variables to Represent Logical Conditions in Optimization Models
Ovchinnikov, Anton S.Technical Note DARDEN-QA-0786-EDecision AnalysisLogical conditions that link different elements of a business decision are very common in managerial practice. For example, a firm can ship only to and from warehouses that are open; patients needing MRIs can only get service in clinics that have MRI equipment; regarding an old power plant, one can decide to close it or retrofit it, but one obviously cannot retrofit a closed plant. The list goes on. In quantitative modeling of such situations, a ...Starting at €8.20
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Modeling Discrete Choice: Categorical Dependent Variables, Logistic Regression, and Maximum Likelihood Estimation
Ovchinnikov, Anton S.Technical Note DARDEN-QA-0779-EDecision AnalysisThis technical note introduces business students to the concepts of modeling discrete choice (e.g., a consumer purchasing brand A versus brand B) using logistic regression and maximum-likelihood estimation. It draws the analogy between modeling discrete choice and building a regression model with a dummy dependent variable and on an example illustrates the need for estimating the probability of a choice rather than the choice itself, which leads ...Starting at €8.20