Tuesday, March 3, 2009

big-M and log-normal

The terms big-M (in MIP modeling) and log-normal (the statistical distribution) are examples of concepts where the name has unintended, misleading connotations.

In MIP models a big-M constant should really be chosen as small as possible (for an example see here). I have seen many models where innocent students write something like M=10000000000 causing all kind of problems. Of course if this constant would have been called small-m, we probably would not have seen this as often.

The log-normal distribution is not formed by taking the logarithm of a normally distributed random variable (e.g. this posting). I suspect a better name like exp-normal distribution would have prevented this misconception.