SE388 WPR 1 Flashcards

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Questions and Answers

When does the Flaw of Averages appear?

When there is no variability in data

When using averages to describe uncertain numbers (correct)

When making predictions without data

When calculations are performed using median values

What is a Monte Carlo simulation?

A method of testing a model by sending thousands of inputs to see if there is an effect on the outputs.

What does lagged information refer to?

Receiving information that influences decision-making too late.

How is risk defined?

A subjective feeling towards the likelihood of a negative outcome. Signup and view all the answers

What is risk attitude?

One's capacity to assume risk. Signup and view all the answers

How is uncertainty defined?

An objective measurement of an unknown outcome. Signup and view all the answers

What does an uncertain number depend on?

Random variables. Signup and view all the answers

What is the weak form of the Flaw of Averages?

Trying to estimate an uncertain number with its average. Signup and view all the answers

What two concepts are highlighted in Mindle 1?

The difference between uncertainty and risk, and the idea that an uncertain number is a shape (distribution). Signup and view all the answers

What happens to the shape of a combination of uncertain numbers?

It approaches a normal distribution. Signup and view all the answers

How does Mindle 3 relate to diversification?

Increasing the number of investments increases the likelihood of an average outcome. Signup and view all the answers

What does Mindle 4 illustrate?

An average input won't necessarily result in a correct average output. Signup and view all the answers

What does Jensen's Inequality explain regarding average values?

If linear, average value equals the formula at the average output; if convex, it overestimates. Signup and view all the answers

What is highlighted in Mindle 5?

Uncertainties can be interrelated. Signup and view all the answers

In terms of the Flaw of Averages, what should be avoided when estimating project timelines?

Assuming that all tasks will take the average time. Signup and view all the answers

The expression E[f(X)] ≠ f(E[X]) is used to illustrate _____ of Averages.

Strong Flaw Signup and view all the answers

What concept does the Flaw of Extremes relate to?

The tendency for individual estimates to combine in ways that can lead to gross miscalculations. Signup and view all the answers

Study Notes

Flaw of Averages

Flaw of Averages arises when averages are inaccurately used to describe uncertain metrics, leading to flawed planning.
Example includes the statistician drowning in a river while checking average safety, illustrating that average assumptions can mislead.

Monte Carlo Simulation

Functions as a stress test by inputting many variations to assess how outcomes are affected, akin to shaking a ladder for stability.

Lagged Information

Refers to receiving delayed information that hinders effective decision-making, exemplified by a pilot overly reliant on outdated speed readings.
Proactive monitoring of key elements (e.g., environmental changes) improves model accuracy.

Risk and Uncertainty

Risk is subjective; the perceived likelihood of negative outcomes varies among individuals.
Uncertainty, in contrast, is an objective assessment of unpredictable results.
Uncertain numbers are tied to randomness and fluctuate over time.

Jensen's Inequality

If a function is linear, the average of inputs equates directly to outputs at the average level.
In convex functions, the average input results in a higher output than calculated from the average.
For concave functions, average inputs yield lower outputs than predictions.

Mindle Concepts

Mindle 1 distinguishes between risk (subjective) and uncertainty (objective); uncertain numbers represent a distribution shape.
Mindle 2 posits that uncertain numbers can yield a normal distribution when combined.
Mindle 3 emphasizes that increased investment diversification leads to a higher likelihood of average outcomes and reduces extreme results.

Application of Flaw of Averages

Strong Form of the Flaw of Averages suggests that plans based on average assumptions often misestimate realities, such as project timelines.
Accurate assessments require consideration of variability in research task completion times, not just reliance on averages.

Total Cost Model and Distributions

Adding several uncertain variables may yield a narrower eventual distribution, contrary to the assumption of increased variance.
Understanding the dynamics of combining distributions is critical for effective modeling of uncertain scenarios.

Investment Diversification

Diversification reduces risk and extreme outcomes, effectively mitigating the likelihood of severe losses.
While it provides stability, it may also limit the potential for significant profits.

Practical Implications of Uncertain Estimates

Reliance on overly optimistic estimates (sandbagging) can distort projections, particularly when combining numbers from multiple uncertain sources.
As more uncertain estimates combine, the overall risk decreases; this highlights the importance of accurate, independent assessments in forecasting uncertain needs, like ammunition supply.

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Description

This quiz covers fundamental concepts in SE388, focusing on critical ideas such as the Flaw of Averages and Monte Carlo Simulation. Each flashcard presents key definitions with practical examples to enhance understanding. Perfect for reviewing essential topics in software engineering.