Quote from: K-Dog on Nov 30, 2024, 10:41 AMWhat are the variables and how do they relate to each other. Can you write the relationship as an equation?
A) Indeed. The Word document of documentation has 127 pages. 42374 words. Pages 94 to 127 are a detail of the more important variables. The file management of outputs chapter is about 6 pages long. All variables are not contained in that document, but more the concepts of their use.
B) To which relationship do you refer? Because when it comes to the producing nations of the world, grouped into regions with assumptions of correlation, across the required product streams, demand/price relationships in the sectors, forward looking assumptions in changing variables with different rates of change, using various statistic techniques to create the best fit probability density functions to most of these moving parts, and so on and so forth. So...which relationship do you have in mind? But generally, no, equations are not utilized for relationships....probability density functions are.
As there are often no analytic solutions to the multiplication/division/addition/subtraction of disparate probability functions, a simulator is the only way to put them together to form a master output distribution of price from all of these underlying uncertainties, relationships and correlations.
As just one simple example, if you take two distributions, 1) a shifted, truncated lognormal of oilfield occurrence probability of field sizes classes and 2) a trianglular distribution of potential number of fields remaining generated from another process, you can't analytically solve for 3) the mean expected field size distribution of the resulting multiplicative combination of the two.
Probability work is just so cool, but once the engineers bump into the non analytic nature of some of these types of statistics issues, they just want to spit. You can't blame them, they are designed for precision. Amusingly, even though they themselves are tied up in the certainty, they can't avoid the uncertainty and are absolutely affected by it.
Have you ever heard of the asymmetrical stop-loss function?
True story. Being introduced around the office one day back when I started, the boss introduced me to the engineering group. The head cock of the walk was detailing how his refinery calculations had turned out to be within 0.2253546% of optimal, and the others were going around the room introducing what they did and doing the standard chest puffery of engineering precision and accomplishment, and then, me being the new guy, they offered the expected..."so...what do YOU do...?" and then 6 pairs of eyes are all just daring you to be a bigger stud then them.
I glanced around, couldn't resist the urge I display so often online and said..."well....I'm a DAMN good guesser". There were 3 snickers, fury from the eyes of Mr Cock of the walk, and the guy beside me burst out laughing. He then said...you guessed it...."well....isn't that why when we draw up the perfect bridge design to hold the designed weight....WE DOUBLE EVERYTHING when we're done!"
The asymmetrical stop loss function.
True story.