Mike Lorence showed L-3 Vertex Aerospace how to use logistic
regression and decision analysis to decide which projects to pursue.
In the words of Bobby Floyd, Major General (retired) U. S. Air
Force, Vice President for Business Development at L-3 Vertex
Aerospace:
"Mike Lorence worked as a summer intern for L-3 Communications
Vertex Aerospace in Madison, Mississippi. L-3 Vertex had $ 1.3B in
revenue in 2005. One of the toughest decisions we make is
determining what opportunities we pursue. I challenged Mike to
develop a methodology that  would
help us make a better decision; a decision based on data and less on
'it feels right'!
Mike mined data, including both quantitative and qualitative data,
based upon our bidding history. Then using a logistic regression
model, he built an algorithm that predicts the probability of
winning a specific opportunity. He then used Crystal Ball to derive
a risk adjusted Net Present Value (NPV) for opportunities using that
probability of winning. Due to his efforts, we now have a vehicle
that "quantifies" our process. The L-3 Vertex Leadership Team was
impressed and very appreciative of Mike’s contribution to our
organization." |
