Browsing by Author "Zakaryazad, Ashkan"
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Conference paperPublication Metadata only Profit-based artificial neural network (ANN) trained by migrating birds optimization: a case study in credit card fraud detection(World Academy of Science, Engineering and Technology, 2015) Zakaryazad, Ashkan; Duman, Ekrem; Kibekbaev, Azamat; Industrial Engineering; DUMAN, Ekrem; Zakaryazad, Ashkan; Kibekbaev, AzamatA typical classification technique ranks the instances in a data set according to the likelihood of belonging to one (positive) class. A credit card (CC) fraud detection model ranks the transactions in terms of probability of being fraud. In fact, this approach is often criticized, because firms do not care about fraud probability but about the profitability or costliness of detecting a fraudulent transaction. The key contribution in this study is to focus on the profit maximization in the model building step. The artificial neural network proposed in this study works based on profit maximization instead of minimizing the error of prediction. Moreover, some studies have shown that the back propagation algorithm, similar to other gradient–based algorithms, usually gets trapped in local optima and swarm-based algorithms are more successful in this respect. In this study, we train our profit maximization ANN using the Migrating Birds optimization (MBO) which is introduced to literature recently.ArticlePublication Metadata only A profit-driven Artificial Neural Network (ANN) with applications to fraud detection and direct marketing(Elsevier, 2016-01-26) Zakaryazad, Ashkan; Duman, Ekrem; Industrial Engineering; DUMAN, Ekrem; Zakaryazad, AshkanThe rapid growth in data capture and computational power has led to an increasing focus on data-driven research. So far, most of the research is focused on predictive modeling using statistical optimization, while profit maximization has been given less priority. It is exactly this gap that will be addressed in this study by taking a profit-driven approach to develop a profit-driven Artificial Neural Network (ANN) classification technique. In order to do this, we have first introduced an ANN model with a new penalty function which gives variable penalties to the misclassification of instances considering their individual importance (profit of correctly classification and/or cost of misclassification) and then we have considered maximizing the total net profit. In order to generate individual penalties, we have modified the sum of squared errors (SSE) function by changing its values with respect to profit of each instance. We have implemented different versions of ANN of which five of them are new ones contributed in this study and two benchmarks from relevant literature. We appraise the effectiveness of the proposed models on two real-life data sets from fraud detection and a University of California Irvine (UCI) repository data set about bank direct marketing. For the comparison, we have considered both statistical and profit-driven performance metrics. Empirical results revealed that, although in most cases the statistical performance of new models are not better than previous ones, they turn out to be better when profit is the concern.Master ThesisPublication Embargo Profit-driven non-linear classification with applications to credit card fraud detection, churn prediction, direct marketing, and credit scoring(2015-11) Zakaryazad, Ashkan; Duman, Ekrem; Duman, Ekrem; Danış, Dilek Günneç; Ağaoğlu, M.; Department of Industrial Engineering; Zakaryazad, AshkanThe rapid growth in data capture and computational power has led to an increasing focus on data-driven research. So far, most of the research is focused on predictive modeling using statistical optimization where it is aimed to minimize the number (or, the weighted number) of incorrectly classified records, while profit maximization has been given less priority. It is exactly the central issue that is addressed in this study by taking a profit-driven approach to develop a well-known non-linear classification technique (Artificial Neural Network) which maximizes the total profit earned by model implementation. Therefore, the focus is shifted from a statistical optimization to profit maximization.\\ Classification which is one of the most common prediction problems, have traditionally been tackled by the data mining (DM) algorithms. The objective taken in these algorithms is a statistical one where it is aimed to minimize the number (or, the weighted number) of incorrectly classified records. In traditional cost-sensitive classification, the error of mislabeling a minor class record (False Negative) could be larger than the error of mislabeling a major class record (False Positive). This approach is useful especially where there is a high imbalance between the classes. However, this does not cope for the situations where the costs of mislabeling the instances or the profits gained from correctly labeled instances are variable (i.e., changing from instance to instance). The central objective here is to maximize the total net profit gained from applying the classification models using individual (case-based) profits and costs of each of the instances. This approach has been used in four application areas: Credit Card Fraud detection, Churn Prediction, Direct Marketing and Credit Scoring.