Assume that you have incoming college freshmen, so you might have access to their high school courses and grades, as well as their results on a placement test offered by your college. Also, assume that these are students who will need to progress along this sequence for their major (in chemistry or economics, e.g.) and will take the course in which they're placed during their first semester.
What are some effective methods to assess the abilities of incoming students and properly place them into these courses? Should you incorporate other data (e.g. high school courses and grades)? When designing a placement test, what are some considerations to be made to make it a good and effective test? What kinds of questions should be asked, and how should they be scored? What would you make you more apt to "bump up" a student beyond their placement, if they asked for it?
I am interested both in research about these questions (although I suspect it might be limited) as well as personal anecdotes/opinions/recommendations, especially if you were involved in designing and implementing a placement test.