It Doesn't Add Up

Abstract:Some economists believe that today’s financial crisis may have been the result of leaders in business and government ignoring some basis quality control rules, particularly the order of operations, or PEMDAS, which ensures accurate calculation. As a result, flawed arithmetic practices may have misguided leaders who were acting on bad data. Quality science can deliver correct and orderly analysis through vector analysis applied to a data …

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{yeah, I'm behind on my reading a bit...}

Well, I read this article, and I'm thinking there *must* be *something* of import here - but I can't figure it out. Yes, all math classes from elementary school on up taught the order of operations - but is it worth an article in QP? And for the life of me I can't "see" its connection to vectors.

But, I've not given up - going to check out the references on spreadsheet errors...
--Wayne G. Fischer, PhD, 11-27-2009

John: I had the same "Huh?" moment. We may be looking at an editing mistake. Mr Sloan may have meant that we square the average (a^2) when we use it with the square of the raw data (b^2) to determine variation (c^2), but honestly I am a bit lost on all this.

--Matt Rowe, 07-31-2009

Call me slow, but I understood this article just enough to feel that there is something very important here. Some of the statements made in the article did not have any evidence or definition behind them, which threw me off. I have asked for help understanding it from another source. I am intrigued by a wrap-up statement too.

"Competent teachers get their students up to speed with vector analysis, and their students usually complete their first breakthrough projects in four days time. Bottom-line results speak for themselves."

What students? What types of projects? What specific results?

Article gets 3 stars for intriguing me but lacks some detail I need to get beyond that.

Looking forward to learning more.
--Matt Rowe, 07-31-2009

The article brings out an important issue. The calculations based on averages may be misleading because it does not consider the variation in the data. The author is right: Variance is used in accounting merely to indicate a difference, and it confuses many people. Table 1 is confusing ... page 46 last sentence "The difference between the actual dollars spent must equal to budget target." It doesn't say the difference between actual dollars spent and what (may be average). Also what do you mean by budget target? Is it variance? Please explain...The representation of variation and ANOVA using vectors was excellent. Overall, a very informative article.
--Robin Francis, 07-26-2009

Consider this from the article:

"To find the length of the data's average vector, you must square the average and then take the square root of it: 4 squared = 16. The square root of 16 is 4. The length of the data average vector is 4."

All I can say is "huh?" You squared a number and then took the square root of the result to get back the original number. Why would anyone ever do that?

There were other problems, too, such as the author equating ANOVA with vector analysis. Notice that the references do not include a book on vector or matrix analysis.

Maybe there's a good idea buried here, but the author needs to do a much better job of explaining it.
--John Pustaver, 07-13-2009

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