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Journal : International Journal of Basic and Applied Science

Advancing Decision-Making: AI-Driven Optimization Models for Complex Systems Sihotang, Hengki Tamando; Sihotang, Jonhariono; Simbolon, Agata Putri Handayani; Panjaitan, Firta Sari; Simbolon, Roma Sinta
International Journal of Basic and Applied Science Vol. 13 No. 3 (2024): Dec: Optimization and Artificial Intelligence
Publisher : Institute of Computer Science (IOCS)

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.35335/ijobas.v13i3.581

Abstract

Effective decision-making in complex systems requires optimization models that balance multiple competing objectives, such as cost efficiency, time constraints, and adaptability to dynamic environments. This research proposes an AI-driven optimization model utilizing the Pareto optimization algorithm to enhance decision-making accuracy and system resilience. The model was tested in a logistics scenario, demonstrating a 10% reduction in operational costs and a 36% decrease in time deviations while improving adaptability to real-time disruptions. Unlike traditional static models, the proposed framework dynamically adjusts to external factors, optimizing resource allocation and route planning in real-world conditions. The findings highlight the model’s capability to bridge the gap between theoretical AI advancements and practical applications in industries such as supply chain management, urban transportation, and disaster response logistics. While computational requirements and data availability pose challenges, future research should explore computational efficiency enhancements, broader industry applications, and sustainability integration. This study contributes to the advancement of AI-based multi-objective optimization, providing a scalable and adaptable solution for complex decision-making in dynamic environments
Early warning systems for financial distress: A machine learning approach to corporate risk mitigation Judijanto, Loso; Sihotang, Jonhariono; Simbolon, Agata Putri Handayani
International Journal of Basic and Applied Science Vol. 13 No. 1 (2024): June: Basic and Aplied Science
Publisher : Institute of Computer Science (IOCS)

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.35335/ijobas.v13i1.470

Abstract

This research explores the development of an early warning system for corporate financial distress using machine learning techniques to address key challenges in corporate risk mitigation. The main objective is to enhance predictive accuracy by integrating financial and non-financial data, addressing class imbalance, and ensuring model interpretability. The research design involves the formulation of a new machine learning model, leveraging cost-sensitive learning and feature selection, and is tested with a numerical example using logistic regression. Methodologically, the study adopts a data-driven approach that incorporates diverse financial ratios, macroeconomic variables, and market sentiment indicators to predict corporate distress. The numerical results from a basic logistic regression model demonstrate poor performance, especially in handling class imbalance, revealing limitations in traditional statistical models. However, the research suggests that machine learning methods, particularly ensemble learning with cost-sensitive algorithms, offer superior predictive accuracy and practical applicability. The study concludes that integrating advanced techniques and diverse datasets leads to more reliable early warning systems, with significant implications for corporate governance and financial risk management. Future research should explore more sophisticated machine learning models and extend real-world applications across various industries and economic conditions.