Developing a hybrid comparative optimization model for short-term forecasting: an ‘idle time interval’ roadmap for operational units’ strategic planning

Filippou, Miltiades and Zervopoulos, Panagiotis (2011): Developing a hybrid comparative optimization model for short-term forecasting: an ‘idle time interval’ roadmap for operational units’ strategic planning.

Abstract

Data drain and data uncertainties for rival units affect the reliability and effectiveness of strategic plans for individual operational units. This study introduces a stochastic, multi-stage, optimization technique for short-term forecasting that intends to assist policy makers in developing ‘flawless’ plans for their organizations during the idle time interval in which official data and balance-sheet reports of the competitors are unavailable. The developed technique, called SDEANN, draws on the ‘deterministic’ data envelopment analysis (DEA) method, ‘regression-type’ artificial neural networks (ANNs), and the contamination of the outputs of the DEA analysis with statistical noise. Statistical noise represents the bias of a ‘deterministic’ sample optimum production frontier when generalization or the uncertainty of the data used becomes the issue. The SDEANN model respects the monotonicity assumption that prevails in microeconomic theory, uses the DEA definition of efficiency, and addresses the dimensionality issues of ANNs with minimum sample size requirements.

• Item Type: MPRA Paper
• Language: English
• Keywords: forecasting; optimization; efficiency; data envelopment analysis (DEA); artificial neural networks (ANNs); statistical noise
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C63 - Computational Techniques ; Simulation Modeling; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C45 - Neural Networks and Related Topics; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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