Sunday, April 1, 2018

Big data, an example

PGE has a machine that looks at payment history. Some houses have a long time steady usage of energy,  never abscond, and at the extreme may be two months late. The machine compares the lost interest  to the transaction costs of late payment notifications. The machine simply sets the past due period, for this house, to two months instead of two weeks, figuring the two week notices are a waste of money, payment is coming anyway. This is  the new AI in action.

This example has signs of measuring the recall stream, that reverse flow which bounds the matching error.  PGE's rule is to have a rule, a machine, the machine needs to know a bit about defaults to maintain its own  stability.nIfnot, in this case, PGE may, suddenly, spend way to much processing late notices, and all the liabilities of reverse flow.

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