The NLS-based nonlinear grey Bernoulli model with an application to employee demand prediction of high-tech enterprises in China

Abstract

Purpose

The purpose of this paper is to propose a new method based on nonlinear least squares (NLS) for solving the parameters of nonlinear grey Bernoulli model (NGBM(1,1)) and to verify the proposed model using the case of employee demand prediction of high-tech enterprises in China.

Design/methodology/approach

First of all, minimising the square sum of fitting error of grey differential equation of NGBM(1,1) is taken as the optimisation target and the parameters of classic grey model (GM(1,1)) are set as the initial value of parameter vector. Afterwards, the structural parameters and power exponents are solved by using the Gauss-Newton iteration algorithm so as to calculate the parameters of NGBM(1,1) under given rules for ceasing the algorithm. Finally, by taking the employee demand of high-tech enterprises in the state-level high-tech industrial development zone in China as examples, the validity of the new method is verified.

Findings

The results show that the parameter estimation algorithm based on the NLS method can effectively identify the power exponents of NGBM(1,1) and therefore can favourably adapt to the nonlinear fluctuations of sequences. In addition, the algorithm is superior to the GM(1,1) model, grey Verhulst model, and Quadratic-Exponential smoothing algorithm in terms of the simulation and prediction accuracy.

Research limitations/implications

Under the framework of solving parameters based on NLS, various aspects of NGBM(1,1) remain to be further investigated including background value, initial condition and variable structural modelling methods.

Practical implications

The parameter estimation algorithm based on NLS can effectively identify the power exponent of NGBM(1,1) and therefore it can favourably adapt to the nonlinear fluctuation of sequences.

Originality/value

According to the basic principle of NLS, a new method for solving the parameters of NGBM(1,1) is proposed by using the Gauss-Newton iteration algorithm. Moreover, by conducting the modelling case about employees demand in high-tech enterprises in China, the effectiveness and superiority of the new method are verified.

Citation

Pei, L., Li, Q. and Wang, Z. (2018), "The NLS-based nonlinear grey Bernoulli model with an application to employee demand prediction of high-tech enterprises in China", Grey Systems: Theory and Application, Vol. 8 No. 2, pp. 133-143. https://doi.org/10.1108/GS-11-2017-0038