DAO Web Page of Fame

Celebrating Summer Successes Since 2006

  INDUCTEE:  Michael Lorence

YEAR:   2006

CATEGORY: Regression

 


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."