Is it worth going back to school to get an MBA

Over and over I have debated looking for an MBA program that would excite my interest for business and with enough technical emphasis. As an engineer I feel like some of the business math courses would be interesting but mathematically slow.

There is also the debate that taking two years off would be too great of an investment of time and money that may never pay off. Today Yahoo brought to light this debate when discussing a bachelors degree vs just a high school education in their featured article http://finance.yahoo.com/news/What-Best-Investment-Stocks-atlantic-4214432520.html

Your opinion on this debate will be worth hearing. In the mean time I’ll work on a cost benefit analysis between the options.

Computational Statistics

One of my favorite books is Statistical Computing with R by Maria L. Rizzo where she describes computational statsics as an area within statistics that uses computational, graphical and numerical approches to solve statistical problems. Computational statistics encompasses exploritory data analysis, Monte Carlo methods, and data partitioning.

In her book she says “The inceasing interest in massive and streaming data sets, and high dimensional data arising in applications of biology and engineering, for example, demand improved and new computational approaches for multivariate analysis and visualization.”

In my current company, my possition gives me the opportunity to analize a constant stream of manufacturing observations as they relate to several thousand engineering variables. This exciting opportunity will allow me to implement many of the same multivariate methods and design of experiments that can be applied to finance and quantitative trading.

Custom Product Development and Prototyping

Lately I’ve had a couple of product ideas that I’ve wanted to move forward with and explore the possibility of building an e-commerce site around each. These products fit a very niche market but they also may involve more extensive product development. Certainly it would also be ideal to have a working prototype for photos and videos on the site. However I don’t think it will be necessary to have an inventory or even a perfected product before I begin selling pre orders.

I have had some success working with a product outsourcing agency that helps find manufacturers in china and then delivers the products to you with their markup included. Unfortunately at this stage of the product life cycle there is still extensive engineering and development before I can go on. Of course I’ll also need to market and test the demand of this niche audience for their interest in the product.

Assuming that sufficent demand exists to persue a prototype my suggestion is to reach out to engineering programs on college campuses. For example BYU-Idaho provides students in mechanical engineering with a senior capstonewhere they draw on their previous years of experience to design and manufacture a prototype. These projects are frequently sponsored by individuals and companies. My next project requires some engineering know-how but some of the major benefits that I see include:

  • Engineering drawings using professional CAD software
  • A working prototype
  • Small teams of budding engineers working to meet my criteria and specifications
  • Tapping into the knowledge of professors and industry advisers
  • Supporting the american educational system
  • Quick turnaround time since semester projects last at most 4 months

So if you are ready to take the plunge into a new product or new market and want to hedge your risk by only producing one or two prototypes before manufacturing, try college campus programs like BYU-Idaho’s mechanical engineering senior capstone.

Engineering Data Analysis

Hadley Wickham gave an excelent presentation earlier this month at Google Tech. I found this talk on http://www.r-statistics.com/2011/06/engineering-data-analysis-with-r-and-ggplot2-a-google-tech-talk-given-by-hadley-wickham/ He focused on domain specific languages and the use of R as the programming language in data analysis.

Transform
subset
mutate
arrange
summarize
*
by operator (ddply)
+
join
match_df

He also gave an excelent example for a real data set including the R code.

His conclusions:
A programming language gives you: reproducibility, automation, communication, but has a learning curve
R gives you: freedom, a community, connectivity, building blocks, but the community can be prickly and it is slow (relative to other languages).
Thoughtful DSLs should make it easir to solve common data analysis problems.

Breaking the Time Value Curve

We’ve all noticed that there exits a relationship between time and money. Teens learn quickly that society puts a price tag on their time starting at a minimum wage. Depending on the location, additional skills, the industry, and several other variables this minimum wage might differ. At any rate, one hours work might afford them one hamburger at the restaurant, or one movie ticket at the theater, etc.

This illustrates very well that things have an intrinsic value. The hamburger is sold for the price it is because of what it is made of and the cost of the time invested making it into it’s final consumable state plus or minus market factors like supply and demand as well as customer perceived value and so on. However, even though this is the price tag, the price goes beyond that for the consumer because he too must invest the time and other costs to attain the item. I’ve noticed that as time becomes more and more of an valuable to the consumer, then the intrinsic value of any item becomes less important and the cost of acquisition. Expecially when we consider that acquisition includes in many cases travel, decision making, the transaction, consuming or using, and in other cases possessing and maintenance.

So as time becomes more and more valuable to an individual the cost of items to that individual goes up as well and there is only one way to stop the cost from growing. The individual must break the time and money connection. Time cannot be so intimately tied to the amount of money the individual can make thereby determining the amount of items he can acquire. I know of two ways to do this.

The first way to adjust the dependence on time and money is to become educated and skilled in the work that you do. This makes it possible for you to accomblish things faster and to be sought after for what you do. This however only changes the slope of the time value curve. It is what makes the price that you pay for an item like a burger nearly irrelevant to the rest of the time that you spend with that transaction.

There is only one way to break the time value curve and that is to leverage people who have a lower time to money value than you do. For example if a task needs to be done and someone else can do it as good as you for less than your cost of you doing it yourself then do it. Even if they can do it in half the time or twice as long. As long as they can do it as good as you need it done for less than it would have cost you to do it yourself. This is a great justification for having a home cleaning service. If a family maintains the order and organization then it could easily be justified that spending the 2-4 hours on a saturday deep cleaning the home is not worth the price tag of a cleaning crew even if they can do it in 1 hour as long as the price you pay the cleaning crew is less then the total cost to do it yourself. A generic consumer price equation might look like

benefits of having service or item + time saved by not doing it ourselves + other benefits doing things that couldnt be done without it or because it took the pace of – tag price paid – other costs associated with getting – opportunities lost by having = cost to the individual

If the cost is negative then it is always a good idea to get that item or service. If it isn’t a good idea but it is still negative then you aren’t including all the benefits or disadvantages or maybe you are incorrectly valuing your time. For the cleaning example, many families, mine included, find that if we choose to have a cleaning service the cost for cleaning would be too great because we would miss the opportunities to teach our children the value of hard work and we also might have a disconnect from the impact of our actions.

Unfortunately this can be taken to the extreme. For example how do you value your relaxation time? and is time spent with some people more valuable then spent with others? Time at work vs time at home? And ultimately now you’ll have to decide if thinking about this topic and reading this post was even worth your time? Your input, references, and extended evaluation of this topic is important to me and part of the reason that I wrote the post at all however, you’ll have to ask yourself, what value do you place on submitting a comment below?

Update: a really good article http://www.fourhourworkweek.com/blog/2009/04/24/on-the-shortness-of-life-an-introduction-to-seneca/

High Speed Traders Are Changing Wall Street

There is no dobut about it that the stock market is changing with advances in algorithmic trading. Last year’s 60 minutes article on cbs is a great introduction to how high speed traders are changing wall street.

Personally, I dont even look at it as a bet on the quality of the company or the fundamentals of that industry. Instead, to me it is a bet on the percieved quality and traders’ reactions to market moving news.

Since I don’t work in the finance industry I don’t have a lot of conversations with coworkers about topics like this. However, today the topic of high speed trading came up in lunch and it was interesting for me to listen to average people discuss opinions about things like technical vs. fundamental stock valuation, unfare advantages that “everyone else” gets because they may have a faster computer, access to markets not constrained to the 9:30am to 4:00pm ET New York Stock Exchange, and other insider edges. My opinion: It is all out there for the taking just capitalize on the advantages that you have and make it happen.

Design of Experiments

We conduct experiements to improve process performance and product quality. The company’s default analysis method of choice has always been to use an ANOVA to pick the best setting among a small set of options. To be correct, this would be considered a one factor experiment however typically it is viewed as a way of choosing the best of a set of recipes where the recipe may actually change more than one factor at a time.

Since the beginning of the year when I came on board there has been a big push to use correct application of DOE especially when changing more than one factor at a time. Fundamentally this methodology invovles predicting a regression model that describes the response(s) as a function of the variable factors of choice.

There has been some resistance within the company, but we are excited to be moving forward and soon begin analyzing some of our first few experiments. Jinu Antony’s book Design of Experiments for Engineers and Scientists is a brief but excelent resource. Chapter 4 gives a great introduction to the methodology starting with the barriors to successful exeriment design. It continues with a breif, but sufficently comprehensive outline for practical experimetal methodology from start to finish. Chapter 8 is also a great chapter “Some useful and practical tips for making your industrial experiments successful.”

It is in secton 8.1.9 that this book introduces the question “How many exprimental runs are required to identify significant effect(s), given the current process variation?” This has been a question on my mind since we have started partly because we are limited by our process and because of the way things are done at the company. These constraints encourage us to limit the total count of all samples of all variables and levels in an experiment to 25 or if necessary multiples of 25.

Here at the company I have caused quite the debate about how to answer this question. I’ll present my solutions in detail later on. Unfortunately I have not found an all inclusive method to precisely determine the sample size because there are so many ways to design an experiment. Certianly your confidence (alpha and beta) come into play along with historic variation due to natural processes. The response and it’s detectability are also dependant on how small of a delta relative to the noise as well as the distribution of the response.

Furthermore, when we conduct experiments it would be ideal to identify critical responses that are expected to move or at least ones that we would like to determine if they moved or not. Alternatively the approach has typically been to run an experiment and then test ALL responses that we measure. The count of all these responses is on the order of 1000+. To my understanding, the main objective is to first determine which group best meets the needs of the experimenter’s goals and objectives then observe all other responses to ensure they don’t deviate beyond the current process variation. If there are any shifts or unexpected changes in any of the responses then their anticipated changes and trade offs can be understood.

Soon I’d also like to go into more detail about the challenges of DOE with multiple responses. I’ll also include solutions I’ve found so for for weighting and automatically selecting which responses are significant and worth investigating further. I’d also like to compare this process with experimental analysis using ANOVA. Hopefully I can establish a statistically sound method that is easy enough to follow for any of the company’s employees that have time constraints or who currently lack the depth of academic understanding.

Public Radio

If there is one thing that I enjoy about my 35 minute commute each way to work it is listening to public radio. I am especially loving Marketplace.org. It doesn’t come on until 5:30 pm so some days I even take a little extra time to finish up things at work so i can time my commute just right so I’m listening to the entire segment for that day.

I’m adding it for the time being to one of my top links to the left so I can review the site’s top articles when I’m just surfing online. Part of what I really enjoy about the radio version is that they embelish the stories to help draw a mental picture. It is a nice change from tv or other similar media that is so visually stimulating. Way to go public radio, you have my support!

Prospectives of a new Ecommerce Adventure

I get excited by the possibilities that a new ecommerce website brings. Lately I’ve been helping my wife set up her new baking blog Sugar and Spice and All Things Iced. That has been a real adventure but mainly due to cooking restrictions on home based bakeries and of course the enevitable problem of being unable to meet demand, she has decided to make it just a blog about her baking projectes for now. It should prove to be very inspirational to others and motivational for her. We are excited.

In the midst of this I came accross two magento sites that appear to be successfully marketing the online community with baked sugar cookies and even cupcakes, both of which seem to be a shipping nightmare! Here are the sites I’ve found:

I have seen several other websites who also follow similar models including custom candybars. Likewise there are several home based businesses who may or may not be shipping their cookies legally. Despite these hurdles there appears to be avery appealling market and an exciting internet business opportunity that may be in our future.