Operations research & Economic (OR (subject (stochastic modeling ,…
Operations research & Economic
the study of economic agents (ex. firms)
used for estimating the parameter of economic models
analyzes data using statistical methods in order to test or develop economic theory.
An example of the application of econometrics is to study the income effect using observable data. An economist may hypothesize that as a person increases his income, his spending will also increase. If the data show that such an association is present, a regression analysis can then be conducted to understand the strength of the relationship between income and consumption and whether or not that relationship is statistically significant - that is, it appears to be unlikely that it is due to chance alone.
developed prior to and during WW II
goal: improving military operations through the use of mathematics
provide tools to analyze the operations of and assist in decision making in organization
max profit ; min cost/loss
OE + E
strong connections between microeconomics and OR