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From Predictive to Prescriptive Analytics

arXiv.org Machine Learning

In this paper, we combine ideas from machine learning (ML) and operations research and management science (OR/MS) in developing a framework, along with specific methods, for using data to prescribe decisions in OR/MS problems. In a departure from other work on data-driven optimization and reflecting our practical experience with the data available in applications of OR/MS, we consider data consisting, not only of observations of quantities with direct effect on costs/revenues, such as demand or returns, but predominantly of observations of associated auxiliary quantities. The main problem of interest is a conditional stochastic optimization problem, given imperfect observations, where the joint probability distributions that specify the problem are unknown. We demonstrate that our proposed solution methods are generally applicable to a wide range of decision problems. We prove that they are computationally tractable and asymptotically optimal under mild conditions even when data is not independent and identically distributed (iid) and even for censored observations. As an analogue to the coefficient of determination $R^2$, we develop a metric $P$ termed the coefficient of prescriptiveness to measure the prescriptive content of data and the efficacy of a policy from an operations perspective. To demonstrate the power of our approach in a real-world setting we study an inventory management problem faced by the distribution arm of an international media conglomerate, which ships an average of 1 billion units per year. We leverage both internal data and public online data harvested from IMDb, Rotten Tomatoes, and Google to prescribe operational decisions that outperform baseline measures. Specifically, the data we collect, leveraged by our methods, accounts for an 88% improvement as measured by our coefficient of prescriptiveness.


READINGS IN ARTIFICIAL INTELLIGENCE

AI Classics

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means--electronic, mechanical, photocopying, recording, or otherwise--without the prior written permission of the publisher.


Mechanisation of Thought Processes

AI Classics

Biology seems to be a science in its own right, or set of sciences having common aims, and so it should have its own language and explanatory concepts; yet when any specifically biological concept is suggested and used as an explanatory concept it seems to be unsatisfactory and even mystical. There are many biological concepts of this kind: Purpose, Drive, elan vital, Entelechy, Gestalten.* Physicists and engineers seem, on the other hand, to have clearly defined concepts having great power within biology.




MACHINE INTELLIGENCE 9

AI Classics

Donald Michie Volumes 1 --7 are published by Edinburgh University Press and in the United States by Halsted Press (a subsidiary of John Wiley & Sons, Inc.) Volumes 8 -- 9 are published by Ellis Horwood Ltd., Publishers, Chichester and in the United States by Halsted Press (a subsidiary of John Wiley & Sons, Inc.) MACHINE INTELLIGENCE 9 New York - Chichester - Brisbane - Toronto First published in 1979 by ELLIS HORWOOD LIMITED Market Cross House, Cooper Street, Chichester, West Sussex, P019 lEB, England The publisher's colophon is reproduced from James Gillison's drawing of the ancient Market Cross, Chichester No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form of by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission. One intelligent approach to prefaces -- is to have the empty preface. The well prepared reader will form a good idea of the technical programme just from looking at the table of contents; together with the names of the authors, this gives him a good idea of what happened at the symposium. I could try to assess the tallcs and direct the reader's attention to the more interesting communications. But I fear this would be too subjective and unfair to the remaining authors -- all of them equally represented in this book. However, recalling that Spring week in Repino, a resort 20 kilometres from Leningrad on the Bay of Finland and unpopulated at that time of year, I have come to the definite conclusion that the scientific meeting was in its own way unique.


Purposive Understanding

AI Classics

For the past ten years we have been working on the problem of getting a computer to understand natural language.



Z.til

AI Classics

This paper describes some work on automatically generating finite counterexamples in topology, and the use of counterexamples to speed up proof discovery in intermediate analysis, and gives some examples theorems where human provers are aided in proof discovery by the use of examples.