Information Technology Reference
In-Depth Information
Predicting the orbits of the planets dates back to Johannes Keppler, who was
born in 1571 and died in 1630. Keppler used the very precise observations of the
astronomer Tycho Brahe as the basis of his calculations.
During World War II, the advent of operations research formalized some of the
math used for predictive analytics and provided real-world benefits for the Allied
forces in terms of optimizing logistics and dealing with complex military problems
such as convoy sizes versus submarine attacks.
Computers and software sped up calculations and began to add new forms. For
example, parametric software cost-estimating tools originated in the 1970s, and a
number of them are discussed in this topic.
Banks and financial institutions also use predictive analytics for dealing with
the risks of various kinds of investments, including consumer loans. However, the
financial crises of 2008 showed flaws in the algorithms, and several major disrup-
tions of the stock market confirm the fact that predictive analytics are not perfect
by any means.
More than a dozen predictive analytic companies are cited in this topic in vari-
ous decades, with the more recent decades showing a trend toward expansion of
the topics being predicted. Now, predictive analytics are common for banks, insur-
ance, hedge funds, and any business sector where large sums of money are subject
to external risks.
As most readers who pay attention to national and state affairs know, the fed-
eral government and the political parties don't seem to have a clue as to the costs
and benefits of new federal programs such as “Obamacare.”
For example, Obamacare will increase patient loads by about 30% but will not
increase the numbers of physicians, dentists, or nurses. It is a mathematical cer-
tainty that some new patients will not be accepted by physicians, that some spe-
cialists will be overbooked, and that elective procedures will have much longer
waiting times. The higher costs for some medical procedures have already led to
some hospitals to refuse to perform basic procedures such as obstetrics childbirth,
because they lose money on every baby. Nobody in either party bothered to calcu-
late such obvious phenomena.
As this topic is written, an increasing number of interesting predictive analytic
groups are providing increasingly sophisticated services and models to corporate
clients. However, government agencies lag the civilian sector in use of predictive
analytics by at least 10 years, with the exceptions of military planning and some
Search WWH ::
Custom Search