• Asia pacific journal of information systems
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• v.19 no.2
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• pp.157-178
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• 2009

Corporate credit rating is a very important factor in the market for corporate debt. Information concerning corporate operations is often disseminated to market participants through the changes in credit ratings that are published by professional rating agencies, such as Standard and Poor's (S&P) and Moody's Investor Service. Since these agencies generally require a large fee for the service, and the periodically provided ratings sometimes do not reflect the default risk of the company at the time, it may be advantageous for bond-market participants to be able to classify credit ratings before the agencies actually publish them. As a result, it is very important for companies (especially, financial companies) to develop a proper model of credit rating. From a technical perspective, the credit rating constitutes a typical, multiclass, classification problem because rating agencies generally have ten or more categories of ratings. For example, S&P's ratings range from AAA for the highest-quality bonds to D for the lowest-quality bonds. The professional rating agencies emphasize the importance of analysts' subjective judgments in the determination of credit ratings. However, in practice, a mathematical model that uses the financial variables of companies plays an important role in determining credit ratings, since it is convenient to apply and cost efficient. These financial variables include the ratios that represent a company's leverage status, liquidity status, and profitability status. Several statistical and artificial intelligence (AI) techniques have been applied as tools for predicting credit ratings. Among them, artificial neural networks are most prevalent in the area of finance because of their broad applicability to many business problems and their preeminent ability to adapt. However, artificial neural networks also have many defects, including the difficulty in determining the values of the control parameters and the number of processing elements in the layer as well as the risk of over-fitting. Of late, because of their robustness and high accuracy, support vector machines (SVMs) have become popular as a solution for problems with generating accurate prediction. An SVM's solution may be globally optimal because SVMs seek to minimize structural risk. On the other hand, artificial neural network models may tend to find locally optimal solutions because they seek to minimize empirical risk. In addition, no parameters need to be tuned in SVMs, barring the upper bound for non-separable cases in linear SVMs. Since SVMs were originally devised for binary classification, however they are not intrinsically geared for multiclass classifications as in credit ratings. Thus, researchers have tried to extend the original SVM to multiclass classification. Hitherto, a variety of techniques to extend standard SVMs to multiclass SVMs (MSVMs) has been proposed in the literature Only a few types of MSVM are, however, tested using prior studies that apply MSVMs to credit ratings studies. In this study, we examined six different techniques of MSVMs: (1) One-Against-One, (2) One-Against-AIL (3) DAGSVM, (4) ECOC, (5) Method of Weston and Watkins, and (6) Method of Crammer and Singer. In addition, we examined the prediction accuracy of some modified version of conventional MSVM techniques. To find the most appropriate technique of MSVMs for corporate bond rating, we applied all the techniques of MSVMs to a real-world case of credit rating in Korea. The best application is in corporate bond rating, which is the most frequently studied area of credit rating for specific debt issues or other financial obligations. For our study the research data were collected from National Information and Credit Evaluation, Inc., a major bond-rating company in Korea. The data set is comprised of the bond-ratings for the year 2002 and various financial variables for 1,295 companies from the manufacturing industry in Korea. We compared the results of these techniques with one another, and with those of traditional methods for credit ratings, such as multiple discriminant analysis (MDA), multinomial logistic regression (MLOGIT), and artificial neural networks (ANNs). As a result, we found that DAGSVM with an ordered list was the best approach for the prediction of bond rating. In addition, we found that the modified version of ECOC approach can yield higher prediction accuracy for the cases showing clear patterns.

• Journal of Intelligence and Information Systems
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• v.16 no.4
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• pp.213-225
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• 2010

Data mining has empowered the managers who are charge of the tasks in their company to present personalized and differentiated marketing programs to their customers with the rapid growth of information technology. Most studies on customer' response have focused on predicting whether they would respond or not for their marketing promotion as marketing managers have been eager to identify who would respond to their marketing promotion. So many studies utilizing data mining have tried to resolve the binary decision problems such as bankruptcy prediction, network intrusion detection, and fraud detection in credit card usages. The prediction of customer's response has been studied with similar methods mentioned above because the prediction of customer's response is a kind of dichotomous decision problem. In addition, a number of competitive data mining techniques such as neural networks, SVM(support vector machine), decision trees, logit, and genetic algorithms have been applied to the prediction of customer's response for marketing promotion. The marketing managers also have tried to classify their customers with quantitative measures such as recency, frequency, and monetary acquired from their transaction database. The measures mean that their customers came to purchase in recent or old days, how frequent in a period, and how much they spent once. Using segmented customers we proposed an approach that could enable to differentiate customers in the same rating among the segmented customers. Our approach employed support vector regression to forecast the purchase amount of customers for each customer rating. Our study used the sample that included 41,924 customers extracted from DMEF04 Data Set, who purchased at least once in the last two years. We classified customers from first rating to fifth rating based on the purchase amount after giving a marketing promotion. Here, we divided customers into first rating who has a large amount of purchase and fifth rating who are non-respondents for the promotion. Our proposed model forecasted the purchase amount of the customers in the same rating and the marketing managers could make a differentiated and personalized marketing program for each customer even though they were belong to the same rating. In addition, we proposed more efficient learning method by separating the learning samples. We employed two learning methods to compare the performance of proposed learning method with general learning method for SVRs. LMW (Learning Method using Whole data for purchasing customers) is a general learning method for forecasting the purchase amount of customers. And we proposed a method, LMS (Learning Method using Separated data for classification purchasing customers), that makes four different SVR models for each class of customers. To evaluate the performance of models, we calculated MAE (Mean Absolute Error) and MAPE (Mean Absolute Percent Error) for each model to predict the purchase amount of customers. In LMW, the overall performance was 0.670 MAPE and the best performance showed 0.327 MAPE. Generally, the performances of the proposed LMS model were analyzed as more superior compared to the performance of the LMW model. In LMS, we found that the best performance was 0.275 MAPE. The performance of LMS was higher than LMW in each class of customers. After comparing the performance of our proposed method LMS to LMW, our proposed model had more significant performance for forecasting the purchase amount of customers in each class. In addition, our approach will be useful for marketing managers when they need to customers for their promotion. Even if customers were belonging to same class, marketing managers could offer customers a differentiated and personalized marketing promotion.

• Journal of dental hygiene science
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• v.14 no.3
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• pp.311-318
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• 2014

The purpose of this study was to look into the perception, experience, treatment of early childhood caries (ECC) and influential factors of perception in order to provide basic data useful for preventing the ECC by examining the relationship between oral health of young children in infancy and mother. In this study, 277 mothers were surveyed who had children in children under 6 years old and visiting the pediatrics, day care center, and pediatric dental clinics located in Daegu and Gyeongsangbuk-do from July 10, 2013 to September 5 of the same year. The results obtained from the survey were analyzed through chi-square test, t-test, and binary logistic regression analysis by using the SPSS 18.0, a statistical program. The results of analysis showed that ECC in children under 6 years old was associated with mother's age, education background of mothers, number of children and monthly income and had a significant correlation with mother's oral health-related knowledge and oral health care of their children. Thus, it would be necessary to develop oral health education programs and implement such oral health education programs at a national level on a regular basis for the mothers of young children in infancy and would-be mothers in order to reduce the ECC in infancy and promote oral health.

• Journal of Intelligence and Information Systems
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• v.23 no.1
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• pp.47-67
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• 2017

Steel plate faults is one of important factors to affect the quality and price of the steel plates. So far many steelmakers generally have used visual inspection method that could be based on an inspector's intuition or experience. Specifically, the inspector checks the steel plate faults by looking the surface of the steel plates. However, the accuracy of this method is critically low that it can cause errors above 30% in judgment. Therefore, accurate steel plate faults diagnosis system has been continuously required in the industry. In order to meet the needs, this study proposed a new steel plate faults diagnosis system using Simultaneous MTS (S-MTS), which is an advanced Mahalanobis Taguchi System (MTS) algorithm, to classify various surface defects of the steel plates. MTS has generally been used to solve binary classification problems in various fields, but MTS was not used for multiclass classification due to its low accuracy. The reason is that only one mahalanobis space is established in the MTS. In contrast, S-MTS is suitable for multi-class classification. That is, S-MTS establishes individual mahalanobis space for each class. 'Simultaneous' implies comparing mahalanobis distances at the same time. The proposed steel plate faults diagnosis system was developed in four main stages. In the first stage, after various reference groups and related variables are defined, data of the steel plate faults is collected and used to establish the individual mahalanobis space per the reference groups and construct the full measurement scale. In the second stage, the mahalanobis distances of test groups is calculated based on the established mahalanobis spaces of the reference groups. Then, appropriateness of the spaces is verified by examining the separability of the mahalanobis diatances. In the third stage, orthogonal arrays and Signal-to-Noise (SN) ratio of dynamic type are applied for variable optimization. Also, Overall SN ratio gain is derived from the SN ratio and SN ratio gain. If the derived overall SN ratio gain is negative, it means that the variable should be removed. However, the variable with the positive gain may be considered as worth keeping. Finally, in the fourth stage, the measurement scale that is composed of selected useful variables is reconstructed. Next, an experimental test should be implemented to verify the ability of multi-class classification and thus the accuracy of the classification is acquired. If the accuracy is acceptable, this diagnosis system can be used for future applications. Also, this study compared the accuracy of the proposed steel plate faults diagnosis system with that of other popular classification algorithms including Decision Tree, Multi Perception Neural Network (MLPNN), Logistic Regression (LR), Support Vector Machine (SVM), Tree Bagger Random Forest, Grid Search (GS), Genetic Algorithm (GA) and Particle Swarm Optimization (PSO). The steel plates faults dataset used in the study is taken from the University of California at Irvine (UCI) machine learning repository. As a result, the proposed steel plate faults diagnosis system based on S-MTS shows 90.79% of classification accuracy. The accuracy of the proposed diagnosis system is 6-27% higher than MLPNN, LR, GS, GA and PSO. Based on the fact that the accuracy of commercial systems is only about 75-80%, it means that the proposed system has enough classification performance to be applied in the industry. In addition, the proposed system can reduce the number of measurement sensors that are installed in the fields because of variable optimization process. These results show that the proposed system not only can have a good ability on the steel plate faults diagnosis but also reduce operation and maintenance cost. For our future work, it will be applied in the fields to validate actual effectiveness of the proposed system and plan to improve the accuracy based on the results.

• Journal of Intelligence and Information Systems
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• v.24 no.1
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• pp.167-181
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• 2018

Over the past decade, deep learning has been in spotlight among various machine learning algorithms. In particular, CNN(Convolutional Neural Network), which is known as the effective solution for recognizing and classifying images or voices, has been popularly applied to classification and prediction problems. In this study, we investigate the way to apply CNN in business problem solving. Specifically, this study propose to apply CNN to stock market prediction, one of the most challenging tasks in the machine learning research. As mentioned, CNN has strength in interpreting images. Thus, the model proposed in this study adopts CNN as the binary classifier that predicts stock market direction (upward or downward) by using time series graphs as its inputs. That is, our proposal is to build a machine learning algorithm that mimics an experts called 'technical analysts' who examine the graph of past price movement, and predict future financial price movements. Our proposed model named 'CNN-FG(Convolutional Neural Network using Fluctuation Graph)' consists of five steps. In the first step, it divides the dataset into the intervals of 5 days. And then, it creates time series graphs for the divided dataset in step 2. The size of the image in which the graph is drawn is $40(pixels){\times}40(pixels)$, and the graph of each independent variable was drawn using different colors. In step 3, the model converts the images into the matrices. Each image is converted into the combination of three matrices in order to express the value of the color using R(red), G(green), and B(blue) scale. In the next step, it splits the dataset of the graph images into training and validation datasets. We used 80% of the total dataset as the training dataset, and the remaining 20% as the validation dataset. And then, CNN classifiers are trained using the images of training dataset in the final step. Regarding the parameters of CNN-FG, we adopted two convolution filters ($5{\times}5{\times}6$ and $5{\times}5{\times}9$) in the convolution layer. In the pooling layer, $2{\times}2$ max pooling filter was used. The numbers of the nodes in two hidden layers were set to, respectively, 900 and 32, and the number of the nodes in the output layer was set to 2(one is for the prediction of upward trend, and the other one is for downward trend). Activation functions for the convolution layer and the hidden layer were set to ReLU(Rectified Linear Unit), and one for the output layer set to Softmax function. To validate our model - CNN-FG, we applied it to the prediction of KOSPI200 for 2,026 days in eight years (from 2009 to 2016). To match the proportions of the two groups in the independent variable (i.e. tomorrow's stock market movement), we selected 1,950 samples by applying random sampling. Finally, we built the training dataset using 80% of the total dataset (1,560 samples), and the validation dataset using 20% (390 samples). The dependent variables of the experimental dataset included twelve technical indicators popularly been used in the previous studies. They include Stochastic %K, Stochastic %D, Momentum, ROC(rate of change), LW %R(Larry William's %R), A/D oscillator(accumulation/distribution oscillator), OSCP(price oscillator), CCI(commodity channel index), and so on. To confirm the superiority of CNN-FG, we compared its prediction accuracy with the ones of other classification models. Experimental results showed that CNN-FG outperforms LOGIT(logistic regression), ANN(artificial neural network), and SVM(support vector machine) with the statistical significance. These empirical results imply that converting time series business data into graphs and building CNN-based classification models using these graphs can be effective from the perspective of prediction accuracy. Thus, this paper sheds a light on how to apply deep learning techniques to the domain of business problem solving.

• Journal of Intelligence and Information Systems
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• v.19 no.2
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• pp.101-123
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• 2013

Recently due to the advancements of science and information technology, the socio-economic business areas are changing from the industrial economy to a knowledge economy. Furthermore, companies need to do creation of new value through continuous innovation, development of core competencies and technologies, and technological convergence. Therefore, the identification of major trends in technology research and the interdisciplinary knowledge-based prediction of integrated technologies and promising techniques are required for firms to gain and sustain competitive advantage and future growth engines. The aim of this paper is to understand the recent research trend in management of technology (MOT) and to foresee promising technologies with deep knowledge for both technology and business. Furthermore, this study intends to give a clear way to find new technical value for constant innovation and to capture core technology and technology convergence. Bibliometrics is a metrical analysis to understand literature's characteristics. Traditional bibliometrics has its limitation not to understand relationship between trend in technology management and technology itself, since it focuses on quantitative indices such as quotation frequency. To overcome this issue, the network focused bibliometrics has been used instead of traditional one. The network focused bibliometrics mainly uses "Co-citation" and "Co-word" analysis. In this study, a keywords network analysis, one of social network analysis, is performed to analyze recent research trend in MOT. For the analysis, we collected keywords from research papers published in international journals related MOT between 2002 and 2011, constructed a keyword network, and then conducted the keywords network analysis. Over the past 40 years, the studies in social network have attempted to understand the social interactions through the network structure represented by connection patterns. In other words, social network analysis has been used to explain the structures and behaviors of various social formations such as teams, organizations, and industries. In general, the social network analysis uses data as a form of matrix. In our context, the matrix depicts the relations between rows as papers and columns as keywords, where the relations are represented as binary. Even though there are no direct relations between papers who have been published, the relations between papers can be derived artificially as in the paper-keyword matrix, in which each cell has 1 for including or 0 for not including. For example, a keywords network can be configured in a way to connect the papers which have included one or more same keywords. After constructing a keywords network, we analyzed frequency of keywords, structural characteristics of keywords network, preferential attachment and growth of new keywords, component, and centrality. The results of this study are as follows. First, a paper has 4.574 keywords on the average. 90% of keywords were used three or less times for past 10 years and about 75% of keywords appeared only one time. Second, the keyword network in MOT is a small world network and a scale free network in which a small number of keywords have a tendency to become a monopoly. Third, the gap between the rich (with more edges) and the poor (with fewer edges) in the network is getting bigger as time goes on. Fourth, most of newly entering keywords become poor nodes within about 2~3 years. Finally, keywords with high degree centrality, betweenness centrality, and closeness centrality are "Innovation," "R&D," "Patent," "Forecast," "Technology transfer," "Technology," and "SME". The results of analysis will help researchers identify major trends in MOT research and then seek a new research topic. We hope that the result of the analysis will help researchers of MOT identify major trends in technology research, and utilize as useful reference information when they seek consilience with other fields of study and select a new research topic.

• Journal of Intelligence and Information Systems
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• v.27 no.4
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• pp.73-95
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• 2021

This study uses Node2vec graph embedding method and Light GBM link prediction to explore undeveloped export candidate countries in Korea's food and beverage industry. Node2vec is the method that improves the limit of the structural equivalence representation of the network, which is known to be relatively weak compared to the existing link prediction method based on the number of common neighbors of the network. Therefore, the method is known to show excellent performance in both community detection and structural equivalence of the network. The vector value obtained by embedding the network in this way operates under the condition of a constant length from an arbitrarily designated starting point node. Therefore, it has the advantage that it is easy to apply the sequence of nodes as an input value to the model for downstream tasks such as Logistic Regression, Support Vector Machine, and Random Forest. Based on these features of the Node2vec graph embedding method, this study applied the above method to the international trade information of the Korean food and beverage industry. Through this, we intend to contribute to creating the effect of extensive margin diversification in Korea in the global value chain relationship of the industry. The optimal predictive model derived from the results of this study recorded a precision of 0.95 and a recall of 0.79, and an F1 score of 0.86, showing excellent performance. This performance was shown to be superior to that of the binary classifier based on Logistic Regression set as the baseline model. In the baseline model, a precision of 0.95 and a recall of 0.73 were recorded, and an F1 score of 0.83 was recorded. In addition, the light GBM-based optimal prediction model derived from this study showed superior performance than the link prediction model of previous studies, which is set as a benchmarking model in this study. The predictive model of the previous study recorded only a recall rate of 0.75, but the proposed model of this study showed better performance which recall rate is 0.79. The difference in the performance of the prediction results between benchmarking model and this study model is due to the model learning strategy. In this study, groups were classified by the trade value scale, and prediction models were trained differently for these groups. Specific methods are (1) a method of randomly masking and learning a model for all trades without setting specific conditions for trade value, (2) arbitrarily masking a part of the trades with an average trade value or higher and using the model method, and (3) a method of arbitrarily masking some of the trades with the top 25% or higher trade value and learning the model. As a result of the experiment, it was confirmed that the performance of the model trained by randomly masking some of the trades with the above-average trade value in this method was the best and appeared stably. It was found that most of the results of potential export candidates for Korea derived through the above model appeared appropriate through additional investigation. Combining the above, this study could suggest the practical utility of the link prediction method applying Node2vec and Light GBM. In addition, useful implications could be derived for weight update strategies that can perform better link prediction while training the model. On the other hand, this study also has policy utility because it is applied to trade transactions that have not been performed much in the research related to link prediction based on graph embedding. The results of this study support a rapid response to changes in the global value chain such as the recent US-China trade conflict or Japan's export regulations, and I think that it has sufficient usefulness as a tool for policy decision-making.