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Latent variable Gaussian process models: A rank‐based analysis and an alternative approach

Gaussian process (GP) models have been extended to emulate expensive computer simulations with both qualitative/categorical and quantitative/continuous variables. Latent variable (LV) GP models, which have been recently developed to map each qualitative variable to some underlying numerical LVs, have strong physics‐based justification and have achieved promising performance. Two versions use LVs in Cartesian (LV‐Car) space and hyperspherical (LV‐sph) space, respectively. Despite their success, the effects of these different LV structures are still poorly understood. This article illuminates this issue with two contributions. First, we develop a theorem on the effect of the ranks of the qualitative factor correlation matrices of mixed‐variable GP models, from which we conclude that the LV‐sph model restricts the interactions between the input variables and thus restricts the types of response surface data with which the model can be consistent. Second, following a rank‐based perspective like in the theorem, we propose a new alternative model named LV‐mix that combines the LV‐based correlation structures from both LV‐Car and LV‐sph models to achieve better model flexibility than them. Through extensive case studies, we show that LV‐mix achieves higher average accuracy compared with the existing two.