Generated velocity quantifies how much of a batter's exit velocity -- defined as the speed of a baseball after it is hit by a batter -- is created by the force imparted on the ball by the batter's swing as opposed to the pitch speed. Essentially, generated velocity adds another level of understanding to exit velocity and can be used to determine which players are generating the most force with their swings.
The formula to determine generated velocity, which was created by Alan M. Nathan, Professor Emeritus of Physics at the University of Illinois at Urbana-Champaign, is:
Generated velocity = exit velocity - 0.18*pitch velocity
Watch: Justin Upton produces a generated-velocity figure of 95.7 mph with a homer on an 85 mph pitch.
With a high rate of correlation between the leaderboards for exit velocity and generated velocity, both categories can be used in similar fashion for fantasy purposes.