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Comment by _fourzerofour

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Comment by _fourzerofour

I can tell a story. I used to work for a HVAC installation company, pretty small in terms of staff but we subcontracted a lot. Initially brought on as a mechanical engineering intern, but moved on to sales engineering when I found an interesting statistical relationship.

A large factor in quotes to clients was the underlying cost of air conditioning equipment in our niche, and often a game of sales intel was played between suppliers and competing contractors (like us) for a given job site. Favorites were picked, and we could get royally screwed in a quote, losing the sale to the end-customer.

Fortunately, we had years of purchasing information. It turns out that as varied as air conditioners are across brands and technical dimensions, when you have years of accounts' line items and unused quotes, you don't get a dimensionality issue. Since we operated in a clear-cut niche, this was especially true. We could forecast, within a margin of error of two per cent, exactly what any of our suppliers would quote us (or our competitors!) for a job long before they could turn it around. Huge strategic advantage.

This was the watershed moment for me when I realized even basic multiple linear regression was a scarily powerful tool when used correctly.

Replies _fourzerofour · 2020-07-03
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