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Location! Location! Location!

January 24, 2012 by Ron Averill

Brick row housesWhat are the three most important things to consider when buying a house? Location. Location. Location. The repetition intentionally over-emphasizes this point:  if the location of your new real estate purchase is not good, then the details of the home don’t really matter.

A spacious kitchen and updated bathrooms are nice, but even a perfect house located near the end of a busy airport runway will not bring a high value in the real estate market. For this reason, many savvy investors buy the worst house in a great neighborhood and then upgrade it to suit their tastes, rather than buying the best house in a mediocre neighborhood.

So should you spend money to improve your current residence, or use those funds to move to a different neighborhood altogether? Clearly, the answer depends on the quality of your current location.

Engineers face a similar dilemma when performing optimization. “Should we perform a local optimization to refine our existing design, or expand our search in hope of finding a more globally optimal solution?” As with real estate, the answer depends on the location of your existing design within the overall design space.

A local optimum usually lies within the same neighborhood as the current design. The designs in this neighborhood have similar features and perform in a similar manner, but small differences in these features might have a big impact on the overall level of performance.

On the other hand, a global optimum might be located in a different neighborhood of the design space. Not every design in this neighborhood is necessarily better than the current design, but a different layout or combination of features gives designs in this neighborhood much greater potential to perform at a higher level. The best design in this neighborhood will perform better than the best design in any other neighborhood. Even sub-optimal designs in this neighborhood are often superior to the best designs in surrounding areas.

So unless you are really confident that fine tuning your current design will provide the design performance you seek, a global search is often the best way to achieve a high return on your optimization investment.

The very best approach, of course, is to perform both global and local optimization at the same time. In this way, broader exploration helps you to find the right neighborhood, while local optimization helps to uncover the real potential of those “diamond in the rough” designs in new neighborhoods.

Modern hybrid adaptive optimization algorithms are built upon this important concept of doing global and local optimization simultaneously, and these algorithms have proven to generate superior designs faster than other algorithms can on most problems.

Just as the smartest real estate investor knows how to prosper in any real estate market, the savviest optimization algorithm knows how to explore both globally and locally to find the best design in the shortest time.