Commercial interests in natural resources present particular challenges to the modeler, such as price volatility, weather-dependent demand cycles, changing regulations, technological developments, and many other factors. The complexity of modeling these challenges can be daunting, and in fact, undue attention to getting the model “right” can overwhelm the usefulness of the final product. Good model design is instrumental to building simple models of complex systems that can deliver immediate and valuable insight to decision makers.
Good model design allows translating the essential needs of the decision-maker into an efficient and effective tool. The design of the model will determine the time required building it and running it, but also how data-intensive the model will be. Model design also has implications for risk management and decision making.
In this recorded webcast by Dr. Kurt Rinehart, consultant for EpiX Analytics, and Dr Francisco J. Zagmutt, managing partner at EpiX Analytics, the presenters discuss several case studies from their client work where they had to strike a balance between model realism and structural simplicity. They emphasize moments when they were able to exploit realistic assumptions or fundamental statistical theory to simplify the model and still obtain robust results. They also discuss commonly-seen mistakes that can result in systematically misleading models.
About the presenters:
Dr. Kurt Rinehart works as a consultant for EpiX Analytics, applying risk and statistical analysis to projects ranging from spatial forecasting to optimization. Kurt regularly works with clients in mining and oil and gas addressing risk-sensitive decisions in fast-paced scenarios. Dr. Rinehart holds a PhD and MS from the University of Vermont.
Dr Francisco J. Zagmutt is a managing partner at EpiX Analytics. As part of his consulting and research work, Dr. Zagmutt has performed and supervised numerous risk analysis consulting projects in a wide variety of industries worldwide. Francisco also has experience providing expert witness support on trade litigations and participating in international expert working groups. He holds a DVM from the University of Chile, MPVM from the University of California, Davis, and a PhD from Colorado State University. Dr. Zagmutt is also an honorary lecturer at the University of London.