Category Archives: Analytics
Gangs and Covid
Detecting a Slots Payout Difference of 2%
Most businesses use statistics and analytics to one degree or another, but there is only one industry that is built solely on this discipline. This week we look at the casino business – in particular, the odds on slots. Slot machines are a casino’s best friend. Able to run 24/7 with consistently-sized bets, slots realizeContinue reading “Detecting a Slots Payout Difference of 2%”
Data Analytics
Terminology in Data Analytics As data continue to grow at a faster rate than either population or economic activity, so do organizations’ efforts to deal with the data deluge, and use it to capture value. And so do the methods used to analyze data, which creates an expanding set of terms (including some buzzwords) usedContinue reading “Data Analytics”
Matching Algorithms
Some applications of machine learning and artificial intelligence are recognizably impressive – predicting future hospital readmission of discharged patients, for example, or diagnosing retinopathy. Others – self-driving cars, for example – seem almost magical. The matching problem, though, is one where your first reaction might be “What’s so hard about that?” For example, to takeContinue reading “Matching Algorithms”
Instructor Spotlight: Cliff Ragsdale
Cliff T. Ragsdale teaches several courses for the Institute in the area of operations research, based on his best selling text “Spreadsheet Modeling and Decision Analysis.” One of Cliff’s special talents is making his subject, which can be quite challenging technically, widely accessible. His courses do not have flashy bells and whistles, but are consistently ratedContinue reading “Instructor Spotlight: Cliff Ragsdale”
Industry Spotlight: Consulting
When a new technology arrives, consulting companies can quickly add staff and expertise to build institutional capacity centered around the technology in ways companies focused on delivering their own products and services cannot. Large consulting companies like Booz Allen and McKinsey, as well as smaller analytics-centric firms like Elder Research, thus constitute a significant jobContinue reading “Industry Spotlight: Consulting”
Industry Spotlight: Package Delivery Business
Nothing better illustrates the encroachment of data science and analytics on the older “economy of tangible things” than the business of delivering packages. The use of analytics in package delivery is not new. Companies like UPS and Fedex are longtime users of operations research methods like optimization and simulation to route inter-city shipments, site newContinue reading “Industry Spotlight: Package Delivery Business”
Industry Spotlight: Credit Scoring
In the U.S., credit scoring is dominated by three companies – Experian, TransUnion and Equifax, employing roughly 30,000 people. An important player in the scoring methodology is FICO, previously Fair Isaac Corporation, and the scores are typically called “FICO scores.” Credit scoring is the oldest application of predictive modeling, fulfilling a need that has beenContinue reading “Industry Spotlight: Credit Scoring”
Industry Spotlight: Automotive
The auto industry serves as a perfect exemplar of three key eras of statistics and data science in service of industry: Total Quality Management (TQM) First in Japan, and later in the U.S., the auto industry became an enthusiastic adherent to the Total Quality Management philosophy. Fundamentally, TQM is all about using data to improveContinue reading “Industry Spotlight: Automotive”
Feature Engineering and Data Prep – Still Needed?
It is a truism of machine learning and predictive analytics that 80% of an analyst’s time is consumed in cleaning and preparing the needed data. I saw an estimate by a Google engineer that 25% of the time was spent just looking for the right data. A big part of this process is human-driven featureContinue reading “Feature Engineering and Data Prep – Still Needed?”
Job Spotlight: Risk Analyst
Many jobs are centered around risk management. If you’re looking through job postings, of course, you’ll see lots of jobs whose purpose is to make sure that nothing bad happens – the equivalent of locking the doors and closing the windows. More interesting from a statistical perspective are the jobs that assume that bad thingsContinue reading “Job Spotlight: Risk Analyst”
Problem of the Week: The Value of Bedrooms
Question: You work for an internet real-estate company, building statistical models to predict home price on the basis of square footage, number of bedrooms, number of bathrooms, property type (single family home, townhouse, multiplex), and age. Surprisingly, you find the coefficient for bedrooms is negative, meaning that adding bedrooms decreases value. What might account forContinue reading “Problem of the Week: The Value of Bedrooms”
Statistically Significant – But Not True
If you are looking for the Feature Engineering blog post, you can find it here: https://www.statistics.com/feature-engineering-data-prep-still-needed/ In 2015, at an Alzheimer’s conference, Biogen researchers presented dramatic brain scans showing that the antibody aducanumab effectively cleared out plaque in the brain, plaque that was associated with Alzheimer’s disease. Their study involved 166 patients in a randomized,Continue reading “Statistically Significant – But Not True”
Industry Spotlight – Precision Agriculture
The application of analytics to agriculture has given rise to what is called “precision agriculture”, a science that seeks to take advantage of and use detailed information that is local in time and place. Tractors and farm equipment are being equipped with sensors and software that allow them to respond automatically to external data, andContinue reading “Industry Spotlight – Precision Agriculture”
Industry Spotlight: Credit Scoring
In the U.S., credit scoring is dominated by three companies – Experian, TransUnion and Equifax, employing roughly 30,000 people. An important player in the scoring methodology is FICO, previously Fair Isaac Corporation, and the scores are typically called “FICO scores.” Credit scoring is the oldest application of predictive modeling, fulfilling a need that has beenContinue reading “Industry Spotlight: Credit Scoring”
Industry Spotlight: The IRS is Watching You
The IRS (U.S. Internal Revenue Service) has been using computers to choose tax returns for audit since 1962. Early on, the selection was rule-based, but the IRS turned to statistical modeling in 1969, using the oldest predictive analytics model in the toolbox – discriminant analysis. Discriminant analysis, a linear classification technique, was first proposed byContinue reading “Industry Spotlight: The IRS is Watching You”
Industry Spotlight: Package Delivery
Nothing better illustrates the encroachment of data science and analytics on the older “economy of tangible things” than the business of delivering packages. The use of analytics in package delivery is not new. Companies like UPS and Fedex are longtime users of operations research methods like optimization and simulation to route inter-city shipments, site newContinue reading “Industry Spotlight: Package Delivery”
Ethical Practice in Data Mining
Prior to the advent of internet-connected devices, the largest source of big data was public interaction on the internet. Social media users, as well as shoppers and searchers on the internet, make an implicit deal with the big companies that provide these services: users can take advantage of powerful search, shopping and social interaction toolsContinue reading “Ethical Practice in Data Mining”
Industry Spotlight: Customer Segmentation
Are you “young and rustic?” Or perhaps a “toolbelt traditionalist?” These are nicknames given to customer segments identified by market research firm Claritas, with its statistical clustering tool. Long before the advent of individualized product recommendations, business sought to segment customers into distinct groups on the basis of purchase behavior, demographic variables, and geography, toContinue reading “Industry Spotlight: Customer Segmentation”