It occurred to me today, in a meeting where we were talking about a pricing model for a complex of services, that that’s another application for statistics.<\/p>\n
If you have a complex thing that you want to give to your customers as a simple thing, you don’t want to have a complex price associated with it. Your cost to produce the thing is a function of many variables you know, many variables you have a vague idea about, and many variables you don’t even know about yet. You can’t hand that massive cost function (times 1.15) to your customer, you need to simplify it to 0-3 or so variables for them, while making sure you can still make money.<\/p>\n
There are statistical methods around that can let you model a complex space with a simple one, while putting (probabilistic) bounds on the error. Good thing to think about; it gives a way to make a factored, principled argument about pricing that doesn’t suffer from overestimation (like interval-based methods tend to) or unbounded error (like ad-hoc methods tend to).<\/p>\n","protected":false},"excerpt":{"rendered":"
It occurred to me today, in a meeting where we were talking about a pricing model for a complex of services, that that’s another application for statistics. If you have a complex thing that you want to give to your customers as a simple thing, you don’t want to have a complex price associated with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-94","post","type-post","status-publish","format-standard","hentry","category-general","author-admin"],"_links":{"self":[{"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/posts\/94","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/comments?post=94"}],"version-history":[{"count":0,"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/posts\/94\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/media?parent=94"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/categories?post=94"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ourada.org\/blog\/wp-json\/wp\/v2\/tags?post=94"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}