[2662] in Commercialization & Privatization of the Internet
Settlements
daemon@ATHENA.MIT.EDU (Ken Laws)
Sun Apr 5 11:14:24 1992
Date: Sun 5 Apr 92 08:13:15-PDT
From: Ken Laws <LAWS@ai.sri.com>
To: com-priv@psi.com
In-Reply-To: <199204051355.AA07204@eff.org>
I once read about an experiment in applying statistical theory
to railroad shipping. Freight is routinely handed off from one
carrier to another, and revenues must be prorated between carriers.
This creates an accounting nightmare, of course, but the industry
is used to it.
In the experiment, a certain railroad used random sampling to
estimate the proportion of its freight revenues that had to be
shared with other carriers, or that was due from other carriers.
I don't remember the details, but I believe that the stochastic
method came up with the right answers to within less than $1000
per year, at an "accounting" cost of $2,000 or so. Savings over
full accounting would have been [some very large number, like
$100,000].
The stochastic system was never adopted.
-- Ken Laws
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