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organizations and in modeling their behavior. The four developed control methods and applied them to microeconomics by computing variables for production, inventories and the labor force in a firm. Their solutions were in the form of linear decision rules where production, for example, at a point in time was made a linear function of past inventory levels. The four were eager not only to develop the theory and mathematics of this subject but also to demonstrate how their ideas could be put to work in an actual enterprise. So they searched around in
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background at M.I.T. Franco
Modigliani had worked on consumption and production smoothing. Jack Muth, with an undergraduate degree in industrial engineering and was interested in applying engineering methods in economics. Herb Simon was dedicated to determining how managers actually made decisions in
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in the 1950s and set out to develop quantitative and computerized decision methods for business and industry. Holt further claims that, "ooking back, all members of the team would likely agree that their GSIA years were among the most interesting and exciting of their careers."
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until they found a paint factory that was willing to supply them data. The result was one of the earliest uses of control methods in economics, namely Holt, Modigliani, Muth and Simon (1960).
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All of these developments with optimal linear decision rules can be thought of today as optimal feedback rules which are computed using dynamic programming methods on
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In his paper from 2002, Charles C. Holt describes how a young but very distinguished-to-be group of economists (himself,
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After the completion of the paint-factory work, Holt (1962) turned his attention to the use of linear decision rules in
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Holt, Charles C. (2004). "Forecasting seasonals and trends by exponentially weighted moving averages".
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256:(Fall 2010). "The Holt-Winters Approach to Exponential Smoothing: 50 Years Old and Going Strong".
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Holt, Charles C. (1962). "Linear
Decision Rules for Economic Stabilization and Growth".
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Carnegie
Institute of Technology, Pittsburgh Office of Naval Research memorandum no. 52.
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19:(21 May 1921 – 13 December 2010) was Professor at the Department of Management at the
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Charles C. Holt, Franco
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Forecasting Trends and
Seasonals by Exponentially Weighted Averages,
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185:"Learning How to Plan Production, Inventories, and Work Force"
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148:Planning Production, Inventories, and Work Force
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103:models. He developed a model that was
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333:Fellows of the Econometric Society
323:McCombs School of Business faculty
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107:in the criterion function and
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43:(1944). He later earned a
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139:Charles C. Holt (1957),
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87:Holt had come from an
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126:systems that yield
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79:(GSIA) at
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