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LEAST SQUARE METHOD

OPERATIONS RESEARCH ASSIGNMENT 10/01/2017

PRESENTED BY GROUP 7

SAMEEKSHA SHARMA 1602166


SONAKSHI JAIN 1602195
SUPRAGYA SAURABH - 1602207
RUTVIK TIDKE 1602213
VAISHALI WASADE 1602225

Introduction:
The Least Square Method is a technique often used in regression analysis to
determine the line of best fit which would explain the relation between two
variables. The method utilizes the input of multiple pairs of data points, one
corresponding to independent variable and the other corresponding to a
dependent variable. The line obtained as a result of the analysis can be
further utilized to predict the value of dependent variable for a corresponding
independent variable.

The term Least Square fundamentally implies that the line of best fit is
such that the sum of the squares of distances of all input points from the said
line of best fit is minimum.

Advantages:

This method is extremely effective when the variables under study


exhibit linear or near-linear relationship.
If the study is for a sufficiently short-range in a process, then the
method is effective because short-ranges display linear/near-linear
relationship between the variables.
The solution obtained using this method in suitable scenarios is
extremely likely to be close to the correct solution.

Disadvantages/Drawbacks:

Over long ranges in a process, the relationship between the variables


might not be linear/near-linear, and in such scenarios, the solutions
obtained by the least square method will be incorrect.
Presence of outliers can severely affect the line of best fit obtained
using the method of least squares.
Because of this, using this system calls for accurate and precise
measurement systems to obtain the data for independent and
dependent variables, which might be a costly affair.

Applications

Least square method is used in multiple disciplines and contexts, to carry out
the regression. Some of the typical applications are:

For forecasting demand in a manufacturing/operations context


Creating and evaluating financial models vis--vis real time data
For extrapolation of experimental data
For estimations in short-range processes
For examining and explaining the relationship between variables

2
For predictions of dependent variables by changing suitably the
independent variables