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System reliability is defined as the probability of satisfactory performance of a system under stated conditions for a specified period of time. According to this definition, four parameters, including probability, satisfactory performance, specific conditions, and time should be exactly characterized to evaluate the system reliability accurately. However, due to the uncertainty involved in real situations, it is hardly possible to assess the aforementioned parameters precisely. In this article, two general and distinct approaches, including Zadeh's extension principle and modification of fuzzy parametric programming (FPP), are proposed to take into account such uncertainty in a famous reliability problem called the overspeed protection system. According to Zadeh's extension principle, a pair of nonlinear programming problems is formulated to compute α‐level cuts of fuzzy system reliability. The membership function of fuzzy system reliability can then be constructed analytically by numerating different values of α. This fuzzy system reliability presents flexibility for further system analysis. In the second approach, from a different point of view, a variant of FPP is improved that provides a crisp value as a system reliability measure. The rewarding point of the latter procedure is to handle the problem in a computationally easier way.

A major part of the balance sheets of the largest U.S. banks consists of credit card portfolios. Hence, managing the charge-off rates is a vital task for the profitability of the credit card industry. Different macroeconomic conditions affect individuals’ behavior in paying down their debts. In this paper, we propose an expert system for loss forecasting in the credit card industry using macroeconomic indicators. We select the indicators based on a thorough review of the literature and experts’ opinions covering all aspects of the economy, consumer, business, and government sectors. The state of the art machine learning models are used to develop the proposed expert system framework. We develop two versions of the forecasting expert system, which utilize different approaches to select between the lags added to each indicator. Among 19 macroeconomic indicators that were used as the input, six were used in the model with optimal lags, and seven indicators were selected by the model using all lags. The features that were selected by each of these models covered all three sectors of the economy. Using the charge-off data for the top 100 US banks ranked by assets from the first quarter of 1985 to the second quarter of 2019, we achieve mean squared error values of 1.15E−03 and 1.04E−03 using the model with optimal lags and the model with all lags, respectively. The proposed expert system gives a holistic view of the economy to the practitioners in the credit card industry and helps them to see the impact of different macroeconomic conditions on their future loss.

Hierarchical time series demands exist in many industries and are often associated with product, time frame, or geographic aggregations. Traditionally, these hierarchies have been forecasted using top-down, bottom-up, or middle-out approaches. The question we aim to answer is how to utilize child-level forecasts to improve parent-level forecasts in a hierarchical supply chain. Improved forecasts can be used to considerably reduce the logistics costs, especially in e-commerce.We propose a novel multi-phase hierarchical (MPH) approach. Our method involves forecasting each series in the hierarchy independently using machine learning models, then combining all forecasts to allow a second phase model estimation at the parent level. Sales data from MonarchFx Inc. (a logistics solutions provider) is used to evaluate our approach and compare it to bottom-up and top-down methods. Our results demonstrate an 82-90% improvement in forecast accuracy using the proposed approach. Using the proposed method, supply chain planners can derive more accurate forecasting models to exploit the benefit of multivariate data.