Tag: machine

Cash Forecasting – Overview

How do ATM’s in general work is a great question to ask? Well banks at times prefer not to manage their ATM’s as it involves a lot of overhead such as transportation of cash, maintenance of ATM machines, rent and most importantly security.

In order to avoid this over head a lot of banks outsource this task. The companies who overtake this responsibility , make their revenue based on every transaction made. Say for every non cash transaction from the ATM managed by them they get x$ and for every cash transaction they get y$  where y>x .

So why do we need to predict cash ?? well these companies rent a place, put their ATM’s at that place keep a service engineer to maintain that machine and pump enough security, but where they need to be careful is interest cost. What interest cost? lets say for today’s date I decided to keep 100$ in my ATM, I would borrow this money from a bank, to whom I would pay interest every day for the cash that is not withdrawn by the customer’s.

The obvious solution for this is to load ATM’s with the smallest amount of money possible, however this leads to two problems, First is loss of revenue from a potential customer, and second one is brand loss, and brand loss is very bad.

That means we do not want to load to much money to avoid paying interest cost on idle money, and neither do we want to put to less in order to avoid loss of revenue and brand loss. In order to find this perfect balance we need to create a forecasting model on how much money to load in the ATM’s, in order to make the business profitable.

One underlying constraint is transportation. We cannot transport and load money in ATM’s on a daily basis to avoid transportation costs, that is why transportation will happen only once in two to three days.


Linear Regression using Tensor Flow

The best thing to do when starting something new is to start doing something simple.

In our case lets do linear regression in which we will try to predict the price of a house with its size. Yes we will use some falsified data but that’s fine.

Well first things first, every thing in tensor flow is in the form of an array, so we begin initialising our data as arrays


Okay so we have area and prices that is our x and y both in the form of a numpy array.

Now the next step is a very crucial step, in this we will determine

  1. Number of iterations
  2. Learning rate
  3. Cost Function

Why the above 3 steps? well we do it to find the smallest error. We make use of Gradient Descent

learning_rate = 0.01
training_epochs = 1000
cost_history = np.empty(shape=[1],dtype=float)

X = tf.placeholder(tf.float32,[None,n_dim])
Y = tf.placeholder(tf.float32,[None,1])
W = tf.Variable(tf.ones([n_dim,1]))

init = tf.initialize_all_variables()

y_ = tf.matmul(X, W)
cost = tf.reduce_mean(tf.square(y_ - Y))
training_step = tf.train.GradientDescentOptimizer(learning_rate).minimize(cost)

Now an important thing to note here is that nothing here was actually executed. Tensor flow objects are only executed when they are explicitly called. So we need to explicitly call it. Till then we need to define place holder for variables that will be a part of it.

So for example we need x,y and w for


Finally let us execute tensor flow

sess = tf.Session()

for epoch in range(training_epochs):
 cost_history = np.append(cost_history,
         sess.run(cost,feed_dict={X: train_x,Y: train_y}))

This will actually train the model and find the cost function.

You can find the code for this on git hub here.

If you are looking for something with a bigger data set , you can find the code for regression on the Boston data set using tensor flow here


Determining Feature Importance For Telecom Data

We have a complete data set  -> Check

Feature engineering done -> Check

How many variables do we have?    20 variables

How many should we ideally use ?   Not more that 10 ideally

How to determine which variables to include and which not to ?   Its simple do Boruta!!

Whats Boruta?

Boruta is a feature selection algorithm. Precisely, it works as a wrapper algorithm around Random Forest. You can read about it here ->  https://www.analyticsvidhya.com/blog/2016/03/select-important-variables-boruta-package/   Analytics vidhya has given a pretty good explanation about it here.

Now keep one important thing in mind we have two train sets 1)Normal train set  2)Smote Train set.

So upon running boruta on the normal train set, boruta confirmed the variables International_Plan,Voice_Mail_Plan ,No_Vmail_Messages,Total_Day_minutes,
Total_Night_Charge , Total_Intl_Minutes,Total_Intl_Calls,Total_Intl_Charge,
No_CS_Calls as important.

And upon running Boruta on Smote data set, Boruta confirmed all the variables as important, you can find the boruta code below


Feature Engineering On Telecom Data

Although the Telecom data provided by https://www.sgi.com/tech/mlc/db/ has no missing values , there is a landslide of class imbalance.

That is why the only thing we will concentrate in our feature engineering is eliminating class imbalance.

> summary(train$Customer_Left)
False True 
 2850 483

Its Visible that retained customers in our training set is 2850 and customer who left are 483. Because of this I will do oversampling on the customers who left to balance the data set.

Let us assume that I do not over sample , then by even not making any model I can simply say customer retained and still be right 85.8% of the time. In order to break this bias I use a package known as SMOTE(Synthetic minority oversampling technique ) you can read about the research paper published in the Journal of Artificial Intelligence Research 16 (2002) here -> https://www.jair.org/media/953/live-953-2037-jair.pdf

> train$Customer_Left<-as.numeric(train$Customer_Left)
> summary(as.factor(train$Customer_Left))
 1 2 
 483 2850 
> train$Customer_Left[train$Customer_Left==2]<-0
> summary(as.factor(train$Customer_Left))
 0 1 
2850 483  
#here false ->1
# true ->0
> train$Customer_Left<-as.factor(train$Customer_Left)
> ntrain<-SMOTE(Customer_Left~.,train,perc.over=200,k = 3)
> ntrain$Customer_Left<-as.factor(ntrain$Customer_Left)
> summary(ntrain$Customer_Left)
 0 1 
1932 1449

Now we have simply under sampled retained customers from 2850 to 1932 and over sampled customers who left the operator from 483 to 1449.

Now train has been manipulated hence I also had to manipulate test once.

You can see the complete code here ->  https://github.com/mmd52/Telecom_Churn_Analysis/blob/master/FE.R

NOTE-> The libararies.R file consists code that loads packages needed and if they are not installed on your machine it will download and then install them.

Churn Analysis On Telecom Data

One of the major problems that telecom operators face is customer retention. Because of which majority of the Telecom operators want to know which customer is most likely to leave them, so that they could immediately take certain actions like providing a discount or providing a customised plan, so that they could retain the customer.

However accuracy required while building a churn analysis model needs to be very high, imagine if our model has a accuracy of just 75% and the total number of customers who want to leave are just 5% , this leaves a margin of 20% of customers who were wrongly classified as customers who will leave the operator. If an operator has 10000 customers,And 2500 customers are predicted to leave , the operator may have to release lets assume a 1$ credit to all that’s a cost of 2500$, where as credits that required to be released was only for 5% of the customer’s that is a cost of 500$, hence the operator spent 2000$ for no reason. If the operator has high number of customers it would lead to a huge loss.

Coming to the data quotient, there is no freely available telecom data as far as I know available, however the website https://www.sgi.com/tech/mlc/db/ provides data for churn analysis, this data is not real but represents real world scenarios and is good from the perspective of understanding and learning.

The data on the website is classified into train and test has no NA’s means no feature engineering as such to be done before running models on it.

Now comes the question of which models to run on it. Some would say since we need very high accuracy hence we will run xgboost or random forest, however the downside we have here is that we cannot explain to the operator on what basis is XGBOOST or random forest determining why will the customer leave him. Even if we manage to explain its very complicated and will not be accepted.

Because of this we will have to take support on models that can be easily explained to the customer. This leaves us with two models for classification .i.e. customer leaves -> 0 or customer is retained -> 1. So the models are Logistic regression and decision tree.

Why Logistic Regression ?  well because we can explain to the operator why customer is leaving him thanks to the logit equation.

Why Decision Tree? well because there is a neat flow of how our tree makes decision by breaking variables and deciding yes and no based on entropy and impurity.

Further in this post category I will show feature engineering to Running models, to interpretation.

The data available from the website is a bit complex to save to a CSV file so if you need you can download the train and test data from below.

Also explanation of variables is not provided as it is fairly simple.


Paper On Using Various Classifier Algorithms and Scaling Up Accuracy Of A Model


Revised Approach To UCI ADULT DATA SET

If you have seen the posts in the uci adult data set section, you may have realised I am not going above 86% with accuracy.

An important thing I learnt the hard way was to never eliminate rows in a data set. Its fine to eliminate columns having NA values above 30% but never eliminate rows.

Because of this I had to redo my feature engineering. So how to fix my missing NA values , well what i did was , I opened my data set in excel and converted all ‘?’ mark values to ‘NA’

This would make feature engineering more simple. The next step is to identify columns with missing values, and see if their missing values were greater than 30% in totality.

In our case type_employer had 1836 missing values

occupation had a further 1843 missing values

and country had 583 missing values.

So what I did was , I predicted the missing values with the help of other independent variables(No I didnt add income here for predicting them). Once my model was made i used it to replace the missing values in the columns. Thus i had a clean data set with no missing values.

I admit the predictions were not that great , but they were tolerable.

Because of which when I ran the following models my accuracy skyrocketed

  1. Logistic Regression -> 85.38%
  2. Random Forest(Excluding variable country)  -> 87.11%
  3. SVM -> 85.8%
  4. XGBOOST with 10 folds -> 87.08%

Continue reading “Revised Approach To UCI ADULT DATA SET”

Extreme Gradient Boosting

The term ‘Boosting’ refers to a family of algorithms which converts weak learner’s to strong learners.

How would you classify an email as SPAM or not? Like everyone else, our initial approach would be to identify ‘spam’ and ‘not spam’ emails using following criteria. If:

  1. Email has only one image file (promotional image), It’s a SPAM
  2. Email body consist of sentence like “You won a prize money of $ xxxxxx”, It’s a SPAM
  3. Email from known source, Not a SPAM

Above, we’ve defined multiple rules to classify an email into ‘spam’ or ‘not spam’. But, do you think these rules individually are strong enough to successfully classify an email? No.

Individually, these rules are not powerful enough to classify an email into ‘spam’ or ‘not spam’. Therefore, these rules are called as weak learners.To convert a weak learner to a strong learner, we’ll combine the prediction of each weak learner to form one definitive strong learner.

Continue reading “Extreme Gradient Boosting”

Stacking on Numeric Data Sets

As is human nature we always want to get a better prediction , if possible some would pray for a full 100%.

Anyways ignoring the Hypothetical, We have run a number of common models like

1)Logistic Regression

2)Random Forest


so now the question arises, whether we can give it a tad bit push for a better accuracy?

Continue reading “Stacking on Numeric Data Sets”

Logistic Regression,Random Forest,SVM on Numerical Data Set

So its been a long time. We have finally got the data just as how we want it.

Great so data is ready and we already have a bit of knowledge on logistic Regression and Random Forest.

So going ahead first with Logistic Regression-


on executing this magic line I lie with an accuracy of 80% . Naaaaah , not what we wanted.

so going ahead with Random Forest

bestmtry <- tuneRF(training_data[,-14], as.factor(training_data[,14]),
ntreeTry=100, stepFactor=1.5, improve=0.01, trace=TRUE, plot=TRUE, dobest=FALSE)
rf.fit <- randomForest(income ~ ., data=training_data,
mtry=4, ntree=1000, keep.forest=TRUE, importance=TRUE, test=x_test)

Yes !!

this returned finally an 86 % , it looks like we are doing great. We finally did it!!!!!!

Trying out SVM now.

But wait what is SVM- Support vector machines?

Think of all the data points plotted in space that we cant visualise.But imagine if we had 2D data, then in very vague terms SVM would make lines for us that would help us clearly classify whether a data point belongs to the group 50K and above or 50K and below.

So SVM has hyperplanes these planes are calculated in such a way that they are equidistant from both the classes.

In SVM a plane with maximum margin is a good plane and a plane with minimum margin is a bad plane.

With that said you can find the code for random forest and logistic regression here ->


and for svm here->

SVM code