Hybrid model using logit and nonparametric methods for predicting micro-entity failure

Following the calls from literature on bankruptcy, a parsimonious hybrid bankruptcy model is developed in this paper by combining parametric and non-parametric approaches.To this end, the variables with the highest predictive power to detect bankruptcy are selected using logistic regression (LR). Subsequently, alternative non-parametric methods (Multilayer Perceptron, Rough Set, and Classification-Regression Trees) are applied, in turn, to firms classified as either “bankrupt” or “not bankrupt”. Our findings show that hybrid models, particularly those combining LR and Multilayer Perceptron, offer better accuracy performance and interpretability and converge faster than each method implemented in isolation. Moreover, the authors demonstrate that the introduction of non-financial and macroeconomic variables complement financial ratios for bankruptcy prediction

A Framework for the Verification and Validation of Artificial Intelligence Machine Learning Systems

An effective verification and validation (V&V) process framework for the white-box and black-box testing of artificial intelligence (AI) machine learning (ML) systems is not readily available. This research uses grounded theory to develop a framework that leads to the most effective and informative white-box and black-box methods for the V&V of AI ML systems. Verification of the system ensures that the system adheres to the requirements and specifications developed and given by the major stakeholders, while validation confirms that the system properly performs with representative users in the intended environment and does not perform in an unexpected manner. Beginning with definitions, descriptions, and examples of ML processes and systems, the research results identify a clear and general process to effectively test these systems. The developed framework ensures the most productive and accurate testing results. Formerly, and occasionally still, the system definition and requirements exist in scattered documents that make it difficult to integrate, trace, and test through V&V. Modern system engineers along with system developers and stakeholders collaborate to produce a full system model using model-based systems engineering (MBSE). MBSE employs a Unified Modeling Language (UML) or System Modeling Language (SysML) representation of the system and its requirements that readily passes from each stakeholder for system information and additional input. The comprehensive and detailed MBSE model allows for direct traceability to the system requirements. xxiv To thoroughly test a ML system, one performs either white-box or black-box testing or both. Black-box testing is a testing method in which the internal model structure, design, and implementation of the system under test is unknown to the test engineer. Testers and analysts are simply looking at performance of the system given input and output. White-box testing is a testing method in which the internal model structure, design, and implementation of the system under test is known to the test engineer. When possible, test engineers and analysts perform both black-box and white-box testing. However, sometimes testers lack authorization to access the internal structure of the system. The researcher captures this decision in the ML framework. No two ML systems are exactly alike and therefore, the testing of each system must be custom to some degree. Even though there is customization, an effective process exists. This research includes some specialized methods, based on grounded theory, to use in the testing of the internal structure and performance. Through the study and organization of proven methods, this research develops an effective ML V&V framework. Systems engineers and analysts are able to simply apply the framework for various white-box and black-box V&V testing circumstances

A Back Propagation Neural Network Model with the Synthetic Minority Over-Sampling Technique for Construction Company Bankruptcy Prediction

Improving model accuracy is one of the most frequently addressed issues in bankruptcy prediction. Several previous studies employed artificial neural networks (ANNs) to improve the accuracy at which construction company bankruptcy can be predicted. However, most of these studies use the sample-matching technique and all of the available company quarters or company years in the dataset, resulting in sample selection biases and between-class imbalances. This study integrates a back propagation neural network (BPNN) with the synthetic minority over-sampling technique (SMOTE) and the use of all of the available company-year samples during the sample period to improve the accuracy at which bankruptcy in construction companies can be predicted. In addition to eliminating sample selection biases during the sample matching and between-class imbalance, these methods also achieve the high accuracy rates. Furthermore, the approach used in this study shows optimal over-sampling times, neurons of the hidden layer, and learning rate, all of which are major parameters in the BPNN and SMOTE-BPNN models. The traditional BPNN model is provided as a benchmark for evaluating the predictive abilities of the SMOTE-BPNN model. The empirical results of this paper show that the SMOTE-BPNN model outperforms the traditional BPNN

Robust regression with imprecise data

We consider the problem of regression analysis with imprecise data. By imprecise data we mean imprecise observations of precise quantities in the form of sets of values. In this paper, we explore a recently introduced likelihood-based approach to regression with such data. The approach is very general, since it covers all kinds of imprecise data (i.e. not only intervals) and it is not restricted to linear regression. Its result consists of a set of functions, reflecting the entire uncertainty of the regression problem. Here we study in particular a robust special case of the likelihood-based imprecise regression, which can be interpreted as a generalization of the method of least median of squares. Moreover, we apply it to data from a social survey, and compare it with other approaches to regression with imprecise data. It turns out that the likelihood-based approach is the most generally applicable one and is the only approach accounting for multiple sources of uncertainty at the same time

Regression-clustering for Improved Accuracy and Training Cost with Molecular-Orbital-Based Machine Learning

Machine learning (ML) in the representation of molecular-orbital-based (MOB) features has been shown to be an accurate and transferable approach to the prediction of post-Hartree-Fock correlation energies. Previous applications of MOB-ML employed Gaussian Process Regression (GPR), which provides good prediction accuracy with small training sets; however, the cost of GPR training scales cubically with the amount of data and becomes a computational bottleneck for large training sets. In the current work, we address this problem by introducing a clustering/regression/classification implementation of MOB-ML. In a first step, regression clustering (RC) is used to partition the training data to best fit an ensemble of linear regression (LR) models; in a second step, each cluster is regressed independently, using either LR or GPR; and in a third step, a random forest classifier (RFC) is trained for the prediction of cluster assignments based on MOB feature values. Upon inspection, RC is found to recapitulate chemically intuitive groupings of the frontier molecular orbitals, and the combined RC/LR/RFC and RC/GPR/RFC implementations of MOB-ML are found to provide good prediction accuracy with greatly reduced wall-clock training times. For a dataset of thermalized geometries of 7211 organic molecules of up to seven heavy atoms, both implementations reach chemical accuracy (1 kcal/mol error) with only 300 training molecules, while providing 35000-fold and 4500-fold reductions in the wall-clock training time, respectively, compared to MOB-ML without clustering. The resulting models are also demonstrated to retain transferability for the prediction of large-molecule energies with only small-molecule training data. Finally, it is shown that capping the number of training datapoints per cluster leads to further improvements in prediction accuracy with negligible increases in wall-clock training time.Comment: 31 pages, 10 figures, with an S

A novel improved model for building energy consumption prediction based on model integration

Building energy consumption prediction plays an irreplaceable role in energy planning, management, and conservation. Constantly improving the performance of prediction models is the key to ensuring the efficient operation of energy systems. Moreover, accuracy is no longer the only factor in revealing model performance, it is more important to evaluate the model from multiple perspectives, considering the characteristics of engineering applications. Based on the idea of model integration, this paper proposes a novel improved integration model (stacking model) that can be used to forecast building energy consumption. The stacking model combines advantages of various base prediction algorithms and forms them into “meta-features” to ensure that the final model can observe datasets from different spatial and structural angles. Two cases are used to demonstrate practical engineering applications of the stacking model. A comparative analysis is performed to evaluate the prediction performance of the stacking model in contrast with existing well-known prediction models including Random Forest, Gradient Boosted Decision Tree, Extreme Gradient Boosting, Support Vector Machine, and K-Nearest Neighbor. The results indicate that the stacking method achieves better performance than other models, regarding accuracy (improvement of 9.5%–31.6% for Case A and 16.2%–49.4% for Case B), generalization (improvement of 6.7%–29.5% for Case A and 7.1%-34.6% for Case B), and robustness (improvement of 1.5%–34.1% for Case A and 1.8%–19.3% for Case B). The proposed model enriches the diversity of algorithm libraries of empirical models

DEEP LEARNING OF NONLINEAR DYNAMICAL SYSTEM

A data-driven approach, such as neural networks, is an alternative to traditional parametric-model methods for nonlinear system identification. Recently, long Short- Term Memory (LSTM) neural networks have been studied to model nonlinear dynamical systems. However, many of these contributions are made considering that the input to the system is known or measurable, which often may not be the case. This thesis presents a method based on LSTM for output-only modeling, identification, and prediction of nonlinear systems. A numerical study is performed and discussed on Duffing systems with various cubic nonlinearity

Learning nonlinear monotone classifiers using the Choquet Integral

In der jüngeren Vergangenheit hat das Lernen von Vorhersagemodellen, die eine monotone Beziehung zwischen Ein- und Ausgabevariablen garantieren, wachsende Aufmerksamkeit im Bereich des maschinellen Lernens erlangt. Besonders für flexible nichtlineare Modelle stellt die Gewährleistung der Monotonie eine große Herausforderung für die Umsetzung dar. Die vorgelegte Arbeit nutzt das Choquet Integral als mathematische Grundlage für die Entwicklung neuer Modelle für nichtlineare Klassifikationsaufgaben. Neben den bekannten Einsatzgebieten des Choquet-Integrals als flexible Aggregationsfunktion in multi-kriteriellen Entscheidungsverfahren, findet der Formalismus damit Eingang als wichtiges Werkzeug für Modelle des maschinellen Lernens. Neben dem Vorteil, Monotonie und Flexibilität auf elegante Weise mathematisch vereinbar zu machen, bietet das Choquet-Integral Möglichkeiten zur Quantifizierung von Wechselwirkungen zwischen Gruppen von Attributen der Eingabedaten, wodurch interpretierbare Modelle gewonnen werden können. In der Arbeit werden konkrete Methoden für das Lernen mit dem Choquet Integral entwickelt, welche zwei unterschiedliche Ansätze nutzen, die Maximum-Likelihood-Schätzung und die strukturelle Risikominimierung. Während der erste Ansatz zu einer Verallgemeinerung der logistischen Regression führt, wird der zweite mit Hilfe von Support-Vektor-Maschinen realisiert. In beiden Fällen wird das Lernproblem imWesentlichen auf die Parameter-Identifikation von Fuzzy-Maßen für das Choquet Integral zurückgeführt. Die exponentielle Anzahl von Freiheitsgraden zur Modellierung aller Attribut-Teilmengen stellt dabei besondere Herausforderungen im Hinblick auf Laufzeitkomplexität und Generalisierungsleistung. Vor deren Hintergrund werden die beiden Ansätze praktisch bewertet und auch theoretisch analysiert. Zudem werden auch geeignete Verfahren zur Komplexitätsreduktion und Modellregularisierung vorgeschlagen und untersucht. Die experimentellen Ergebnisse sind auch für anspruchsvolle Referenzprobleme im Vergleich mit aktuellen Verfahren sehr gut und heben die Nützlichkeit der Kombination aus Monotonie und Flexibilität des Choquet Integrals in verschiedenen Ansätzen des maschinellen Lernens hervor