The impact of macroeconomic leading indicators on inventory management

Forecasting tactical sales is important for long term decisions such as procurement and informing lower level inventory management decisions. Macroeconomic indicators have been shown to improve the forecast accuracy at tactical level, as these indicators can provide early warnings of changing markets while at the same time tactical sales are sufficiently aggregated to facilitate the identification of useful leading indicators. Past research has shown that we can achieve significant gains by incorporating such information. However, at lower levels, that inventory decisions are taken, this is often not feasible due to the level of noise in the data. To take advantage of macroeconomic leading indicators at this level we need to translate the tactical forecasts into operational level ones. In this research we investigate how to best assimilate top level forecasts that incorporate such exogenous information with bottom level (at Stock Keeping Unit level) extrapolative forecasts. The aim is to demonstrate whether incorporating these variables has a positive impact on bottom level planning and eventually inventory levels. We construct appropriate hierarchies of sales and use that structure to reconcile the forecasts, and in turn the different available information, across levels. We are interested both at the point forecast and the prediction intervals, as the latter inform safety stock decisions. Therefore the contribution of this research is twofold. We investigate the usefulness of macroeconomic leading indicators for SKU level forecasts and alternative ways to estimate the variance of hierarchically reconciled forecasts. We provide evidence using a real case study

Modeling Nonlinear Dynamic Systems Using BSS-ANOVA Gaussian Process

Nonlinear dynamic systems are some of the most common variety of systems encountered in the sciences, but are the potentially more onerous to model through system identification than static systems due to their added complexity, sensitivity to initial conditions, and the potential application of new dynamic and nonlinear behavior through any time dependent forcing functions. The BSS-ANOVA Gaussian Process is a Machine Learning method for dynamic system ID that possesses several attributes that make it a natural candidate for this variety of problem. BSS-ANOVA is fully Bayesian, works best for continuous tabular datasets, and fast training and inference times and high model fidelity. The BSS-ANOVA GP is based upon a Karhunen- Loeve (KL) expansion of the basis set of the BSS-ANOVA kernel. This produces ordered, non-parametric, and spectral terms that are capable of utilizing Gibbs sampling during model building. Each of the model’s terms can be viewed as either a main effect of an input or as the interaction between two to three inputs coupled with a weight. These terms can be added iteratively to the model using forward variable selection, beginning with the lowest order effects, until the model’s accuracy is balanced by its complexity via a cost function. For dynamic systems, the GP creates a model of the static derivatives of the system, then integrates. This approach is carried out for three sets of data. The first creates a model of a benchmark dataset concerning the heights of a pair of cascaded tanks fed by a pump provided a random current, viewed here as a forcing function. The second models a synthetic dataset of SIR disease transmission, which has a constant transmissibility input during training and a variable transmissibility for inference. The third models the degradation rate of a solid oxide fuel cell as a function of its operating temperature, current density, and overpotential. The former two datasets are compared to a variety of alternative ML methods. The static derivative problem is compared to the results of a Random Forest, a Residual Neural Network, and an Orthogonalized Additive Kernel (OAK) inducing point GP. The dynamic time series predictions are compared to the GRU and LSTM Recurrent Neural Networks (RNN), as well as SINDy. For the static predictions, the BSS-ANOVA model exceeds the accuracy of the Residual Neural Network and the Random Forest, with lower accuracy than the the OAK GP while being several orders of magnitude faster. SINDy outperformed the BSS-ANOVA model for the synthetic SIR dataset, but was less accurate for the experimental data. Both were more accurate than the RNNs, which failed to capture the behavior of the SIR case entirely. The experimental fuel cell data was used to demonstrate the GP’s capability to identify regions of the input space that would benefit the most from additional data, a method that will continue to be utilized as more fuel cell experiments are conducted

Machine Learning with Metaheuristic Algorithms for Sustainable Water Resources Management

The main aim of this book is to present various implementations of ML methods and metaheuristic algorithms to improve modelling and prediction hydrological and water resources phenomena having vital importance in water resource management

Cross-domain Meta-learning for Time-series Forecasting.

There are many algorithms that can be used for the time-series forecasting problem, ranging from simple (e.g. Moving Average) to sophisticated Machine Learning approaches (e.g. Neural Networks). Most of these algorithms require a number of user-defined parameters to be specified, leading to exponential explosion of the space of potential solutions. since the trial-and-error approach to finding a good algorithm for solving a given problem is typically intractable, researchers and practitioners need to resort to a more intelligent search strategy, with one option being to constraint the search space using past experience - an approach known as Meta-learning. Although potentially attractive, Meta-learning comes with its own challenges. Gathering a sufficient number of Meta-examples, which in turn requires collecting and processing multiple datasets from each problem domain under consideration is perhaps the most prominent issue. In this paper, we are investigating the situations in which the use of additional data can improve performance of a Meta-learning System, with focus on cross-domain transfer of Meta-knowledge. A similarity-based cluster analysis of Meta-features has also been performed in an attempt to discover homogeneous groups of time-series with respect to Meta-learning performance. Although the experiments revealed limited room for improvement over the overall best base-learner, the Meta-learning approach turned out to be a safe choice, minimizing the risk of selecting the least appropriate base-learner

Probabilistic and artificial intelligence modelling of drought and agricultural crop yield in Pakistan

Pakistan is a drought-prone, agricultural nation with hydro-meteorological imbalances that increase the scarcity of water resources, thus, constraining water availability and leading major risks to the agricultural productivity sector and food security. Rainfall and drought are imperative matters of consideration, both for hydrological and agricultural applications. The aim of this doctoral thesis is to advance new knowledge in designing hybridized probabilistic and artificial intelligence forecasts models for rainfall, drought and crop yield within the agricultural hubs in Pakistan. The choice of these study regions is a strategic decision, to focus on precision agriculture given the importance of rainfall and drought events on agricultural crops in socioeconomic activities of Pakistan. The outcomes of this PhD contribute to efficient modelling of seasonal rainfall, drought and crop yield to assist farmers and other stakeholders to promote more strategic decisions for better management of climate risk for agriculturalreliant nations

Machine learning for the sustainable energy transition: a data-driven perspective along the value chain from manufacturing to energy conversion

According to the special report Global Warming of 1.5 °C of the IPCC, climate action is not only necessary but more than ever urgent. The world is witnessing rising sea levels, heat waves, events of flooding, droughts, and desertification resulting in the loss of lives and damage to livelihoods, especially in countries of the Global South. To mitigate climate change and commit to the Paris agreement, it is of the uttermost importance to reduce greenhouse gas emissions coming from the most emitting sector, namely the energy sector. To this end, large-scale penetration of renewable energy systems into the energy market is crucial for the energy transition toward a sustainable future by replacing fossil fuels and improving access to energy with socio-economic benefits. With the advent of Industry 4.0, Internet of Things technologies have been increasingly applied to the energy sector introducing the concept of smart grid or, more in general, Internet of Energy. These paradigms are steering the energy sector towards more efficient, reliable, flexible, resilient, safe, and sustainable solutions with huge environmental and social potential benefits. To realize these concepts, new information technologies are required, and among the most promising possibilities are Artificial Intelligence and Machine Learning which in many countries have already revolutionized the energy industry. This thesis presents different Machine Learning algorithms and methods for the implementation of new strategies to make renewable energy systems more efficient and reliable. It presents various learning algorithms, highlighting their advantages and limits, and evaluating their application for different tasks in the energy context. In addition, different techniques are presented for the preprocessing and cleaning of time series, nowadays collected by sensor networks mounted on every renewable energy system. With the possibility to install large numbers of sensors that collect vast amounts of time series, it is vital to detect and remove irrelevant, redundant, or noisy features, and alleviate the curse of dimensionality, thus improving the interpretability of predictive models, speeding up their learning process, and enhancing their generalization properties. Therefore, this thesis discussed the importance of dimensionality reduction in sensor networks mounted on renewable energy systems and, to this end, presents two novel unsupervised algorithms. The first approach maps time series in the network domain through visibility graphs and uses a community detection algorithm to identify clusters of similar time series and select representative parameters. This method can group both homogeneous and heterogeneous physical parameters, even when related to different functional areas of a system. The second approach proposes the Combined Predictive Power Score, a method for feature selection with a multivariate formulation that explores multiple sub-sets of expanding variables and identifies the combination of features with the highest predictive power over specified target variables. This method proposes a selection algorithm for the optimal combination of variables that converges to the smallest set of predictors with the highest predictive power. Once the combination of variables is identified, the most relevant parameters in a sensor network can be selected to perform dimensionality reduction. Data-driven methods open the possibility to support strategic decision-making, resulting in a reduction of Operation & Maintenance costs, machine faults, repair stops, and spare parts inventory size. Therefore, this thesis presents two approaches in the context of predictive maintenance to improve the lifetime and efficiency of the equipment, based on anomaly detection algorithms. The first approach proposes an anomaly detection model based on Principal Component Analysis that is robust to false alarms, can isolate anomalous conditions, and can anticipate equipment failures. The second approach has at its core a neural architecture, namely a Graph Convolutional Autoencoder, which models the sensor network as a dynamical functional graph by simultaneously considering the information content of individual sensor measurements (graph node features) and the nonlinear correlations existing between all pairs of sensors (graph edges). The proposed neural architecture can capture hidden anomalies even when the turbine continues to deliver the power requested by the grid and can anticipate equipment failures. Since the model is unsupervised and completely data-driven, this approach can be applied to any wind turbine equipped with a SCADA system. When it comes to renewable energies, the unschedulable uncertainty due to their intermittent nature represents an obstacle to the reliability and stability of energy grids, especially when dealing with large-scale integration. Nevertheless, these challenges can be alleviated if the natural sources or the power output of renewable energy systems can be forecasted accurately, allowing power system operators to plan optimal power management strategies to balance the dispatch between intermittent power generations and the load demand. To this end, this thesis proposes a multi-modal spatio-temporal neural network for multi-horizon wind power forecasting. In particular, the model combines high-resolution Numerical Weather Prediction forecast maps with turbine-level SCADA data and explores how meteorological variables on different spatial scales together with the turbines' internal operating conditions impact wind power forecasts. The world is undergoing a third energy transition with the main goal to tackle global climate change through decarbonization of the energy supply and consumption patterns. This is not only possible thanks to global cooperation and agreements between parties, power generation systems advancements, and Internet of Things and Artificial Intelligence technologies but also necessary to prevent the severe and irreversible consequences of climate change that are threatening life on the planet as we know it. This thesis is intended as a reference for researchers that want to contribute to the sustainable energy transition and are approaching the field of Artificial Intelligence in the context of renewable energy systems

Hybrid Advanced Optimization Methods with Evolutionary Computation Techniques in Energy Forecasting

More accurate and precise energy demand forecasts are required when energy decisions are made in a competitive environment. Particularly in the Big Data era, forecasting models are always based on a complex function combination, and energy data are always complicated. Examples include seasonality, cyclicity, fluctuation, dynamic nonlinearity, and so on. These forecasting models have resulted in an over-reliance on the use of informal judgment and higher expenses when lacking the ability to determine data characteristics and patterns. The hybridization of optimization methods and superior evolutionary algorithms can provide important improvements via good parameter determinations in the optimization process, which is of great assistance to actions taken by energy decision-makers. This book aimed to attract researchers with an interest in the research areas described above. Specifically, it sought contributions to the development of any hybrid optimization methods (e.g., quadratic programming techniques, chaotic mapping, fuzzy inference theory, quantum computing, etc.) with advanced algorithms (e.g., genetic algorithms, ant colony optimization, particle swarm optimization algorithm, etc.) that have superior capabilities over the traditional optimization approaches to overcome some embedded drawbacks, and the application of these advanced hybrid approaches to significantly improve forecasting accuracy