Quriosity volme 7 issue 2 by Quantinuum@simsr

Editor’s Note July 2016

Hearty greetings to all! With great excitement, team Quantinuum presents “Quriosity”: the quant magazine of SIMSR in a new ‘avatar’. This newsletter is designed not only to be read, but also to be absorbed. It's perfect for the moments when you're ready to relax, kick off your shoes and get a break from the regular academic stress. It is loaded with current information about people and events that you as a math enthusiast will find of interest. To make it even more affable for our readers, we have redesigned it with a tinge of creativity and innovation. In this issue, we have the main story by Milcah George on “Predictive Analytics in Retail Management” will help you understand what goes on behind the scenes retail shops that helps them make more business. The sub article by Anish Sagar on “Analytics in Politics” will make you wonder if even analytics can be used in politics. We have in our Quant guru section the famous mathematician who has a series named under him “Fibonacci” written by Rupal Doshi. The company in focus this time is going to be Netflix written by Devarshee Ranjan Bora focusing on who they used analytics to create a successful series. The News digest featuring the Joint venture between Air Asia and a B4DH covered by Maheshwaran Kumar. The curiosity update by Arunava Dey covers NASA’s Test of RS-25 Engine for New Space Launch System. Further to stimulate the grey matter in your brain; we bring you the wonders of our regular featuresQuant Fun. So, look around and enjoy reading about the quantitative aspect of world.

Happy Learning, Editorial Team!

CONTENTS 4

Predictive Analytics in Retail Management

Analytics in Politics

Company in focus- NetFlix

News Digest

Quant Guru- FIBONACCI

Curiosity Update

Quant Fun

Quant Connect

COVER STORY July 2016

Predictive Analytics in Retail Management What do you think is common between Strawberry Pop-tarts and a hurricane? The hand of God? There’s a lot more than you would think. It was observed that during Hurricane Charley that hit Florida’s Atlantic coast Walmart stores sales for Strawberry Pop-tarts rose by seven times the normal sales rate. Of course survival gear and canned goods were in good demand, but what surprised Walmart was the demand for beer and strawberry Pop tarts. So what did Walmart do when a few weeks later, the news that Hurricane Frances is hurling along its way reached them? The company leveraged on its ‘predictive technology’ and utilized the data related to the sales of strawberry tarts to its advantage. Using those insights, truckloads of strawberry pop tarts and beer were making their way towards Walmart before the hurricane hit. Three guesses for what was stacked at the entrance the next day. The sales hit a new record and customer satisfaction went sky high. Most stores offer customer value cards to give discounts for certain items they buy. The store in turn monitors the customer’s transactions and get a feel of what items he/she buys and in what frequency. This data is a goldmine for any store that uses data analytics. It can make decisions on what products to stock and in how much quantity to maximize customer satisfaction and sales. Consumer behavior is one of the biggest insights we get from using data analytics in retail. What would have mostly been a dampener for sales was turned into a business opportunity leading to a win-win situation for both customer and the business. Imagine if you come to know that your loved one is pregnant only after a retail shop sends her coupons for maternity wear. Yes… analytics is getting personal by the day. By tracking purchase history, web site visits in addition to data such as age, marital status, ethnicity and much more from its baby registry, leading retail outlet Target used data analytics to formulate a ‘Pregnancy Detection Model’. Based on the analysis of shopping habits of pregnant women from their registry, they were able to identify products purchased and associate them to the term of pregnancy these women were in and in many cases predict their due date to a close approximation. Applying the same algorithm across all shoppers, Target was able to send baby product coupons and promotions to women who didn’t notify it or often anybody else of their pregnancy. With the advancement of big data analytics, tastes, preferences, desires of customers can be unmasked. While this interference may sound scary and intrusive, the vast plethora of business opportunities that can be unearthed would drive any data scientist into a frenzy. The more the data mined, the more the human conscience can be tapped. Businesses that are aware of this trend and are ready to invest in it will be able to produce items better received by customers, reduce their stock pile up, follow the market trends and be in sync with the customer psyche. The earlier the business hops onto this bandwagon, the better the chances of market capitalization. What Charles Darwin said rings true: “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”. -Milcah George Kollenchira PGB (2016-18)

ANALYTICS IN POLITICS July 2016

With everyone’s eyes set on the US presidential election, there is one major guiding force that guides all the decisions taken by a political party, and that is Data Analytics. Data Analytics has been ‘weaponized’ to get one political party an edge over the other. “Part of the reason for the Obama victory was the campaign’s ability to mobilize the vote, and it used a lot of data to do that,” says Alex Black, leader of CSC’s Enterprise Intelligence Practice. In the previous two elections, the campaign team of Obama was credited for his immense success. It was his team of experts that carefully analyzed the data and hence, could identify the right target for them and take their step forward in the right path eventually. The team developed a tool for their campaign called the Optimizer, and it was this tool, which helped them in placing television advertisements in front of the most optimal audiences for the least amount of money.

Figure 1: State wise winning chance In the current election, Deep Root was appointed by the Republican party to compete effectively with Democrats on big data analytics. Deep Root uses the software Alteryx to analyze the huge data at their disposal. Post analysis, they use this data to segment their target audience and with this analysis, they plan how to flash their TV ads for optimal result. In India too, Data Analytics has its wings widespread. Svaniti Initiative is one such organization that aims at providing implementation support in the constituency, research support on key developmental programs and strategic data based insight to aid development strategy.

Figure 2: Rwitwika Bhattacharya, founder of Svaniti Initative Once the government identifies the problem, Svaniti is engaged by them, which in turn deploys its own team to effectively find a solution to that problem. The working of Svaniti is majorly in three steps:   

Data analysis and collection through field work Secure appropriate partners and support to deploy programs and eventually a full-scale solution and hand over controls to local stakeholders Monitor the collect learning and survey effectiveness.

Hence, we must acknowledge the importance of analytics in politics. However, there are still very few people working with the government and doing work related to it. There is definitely going to be an increasing demand of Data Analytics in government space but one must know the understand the use of these analytics. After all, it’s a numbers game. -Anish Saggar PGA (2016-18) 

COMPANY IN FOCUS July 2016

Netflix- where numbers speak through content “There are 33 million different versions of Netflix.” – Joris Evers, Vice President, Head of Communications for Europe, Middle East and Africa Delivering value to the customer has the vision and the mission of every company in the world. Value creation helps companies in creating more revenue and subsequently generate more profit. The companies also keep track if they are generating value by looking into customer engagement. Increased customer engagement can be strategically used to steer the growth of the company. In order to engage customers in more ways than one, the companies need to study customer behaviour. This becomes more and more important when the company is an online platform for delivering video content like Netflix. It delivers valuable content, which engage more and more customers by leveraging their understanding of their customers. Netflix uses Data Analytics extensively to study and understand customer behaviour. Let’s just say that, they did not invest $100 million for House of Cards just because it had a good plot. Anyways, without going into the intricacies behind this deal, let’s look at few ways in which Netflix captures data and how it leverages it to gain meaningful insights about customer behaviour. Netflix tracks many events like when you pause, rewind, or fast forward, Content preferred on a particular day, at what time of the day you watch the video contents etc. The data collected by the Netflix team is used to gain insights into the customer behaviour, which when properly used can be used to predict the likes or dislikes of the customers. It also helps in making the recommendation algorithm more and more accurate which drives customer engagement. However, there are some problems which are pretty vague. For example, defining popularity of the video content is a vague idea in itself. It can be defined over time ranges, across regions and communities and so on and so forth. The video content popular in one part of the globe might even infuriate people from other parts. These type of problems require a holistic way of looking at the situation at hand and coming up with agile, scalable, technologically viable and financially stable solutions. The work of a data analyst doesn’t end in just crunching the numbers. He/she should see to it that the solution is strategically positioned to be implemented by the company and accepted by the customers In order to have 33 million different versions, Netflix leveraged its data to know the customer and alter their version to suit the needs of the customers. For example, Netflix made different trailers for House of Cards, which were shown on the basis of various attributes that you have shown. If you watched Kevin Spacey films, you saw a trailer focusing him. Customers who watched movies starring females saw a trailer featuring the women. David Fincher fans saw the trailer which was made to mark signature touch. Before even doing this, Netflix knew that the British version of “House of cards” was very popular and many people wanted to see Kevin spacey playing the role of “Mr. President of White House”. These insights along with many other factors convinced Netflix to bid heavily for House of Cards where they outbid deep pocketed giants like HBO and AMC. Netflix is a good example of how data empowers organisation to rise to the ever changing demands of the customer. If properly monitored, data also gives pragmatic feedback of the position of the company and also helps in improving the offerings of the company constantly. Organisations have started recognising the power of data driven decision over gut based decision making. Whether Data analytics is here to stay is a big if to the future of corporations in particular and business in general. I guess, only time will tell. -Devarshee Ranjan Bora PGDM-FS (2016-18) 7

NEWS DIGEST July 2016

Air Asia in Joint Venture with a Scotland based Big Data Company

Air Asia Berhad is a low cost air carrier which is based out of Kuala Lumpur, Malaysia founded in 20 December 1993 and started their operation in 16 November 1996. It has quite a few subsidiaries as well in Japan, Thailand and Indonesia. The company’s slogan tells us their vision pretty well. “Now Everyone Can Fly” this tells us they are trying to reach with all the group of consumers and make the airline service available for everyone. And they have succeeded in it too. AirAsia Bhd has incorporated a subsidiary company known as MadCience Consulting Sdn. Bhd. Big Data for Humans Ltd is a company started by Peter Ellen. It was launched in October 2014 to give data science as a service to help the retail and travel sector to understand their customer better, what they need and how to sell to them in a better way using Big Data. AirAsia plans to use this service of BD4H to get insights about the passengers and understand their preferences and to work on the action plans besides creating new business opportunities for the group. They plan to establish and build software for service data analytics business in the Asia Pacific region to improve their business. As Ellen in his previous company Maximyser has worked with airline client so AirAsia is looking for good prospects from the Joint Venture. The 50:50 Joint Venture happening will be funded by Debt and AirAsia’s MadCience Consulting Sdn Bhd will be signing a loan note subscription agreement with BD4H to get 1 million loan notes. The interest rates for the loan notes in 8% per annum and it will mature on November 30, 2017. And the joint venture is expected to begin its operation in the fourth quarter of this year.

-Maheshwaran Kumar PGB (2016-18) 8

QUANT GURU July 2016

FIBONACCI Fibonacci, the famous mathematician, who came up with the Fibonacci series, his real name was Leonardo Bonacci. He was also known as Leonardo of Pisa, Leonardo Pisano Bigollo and Leonardo Fibonacci. He was born in Pisa in the year A.D. 1170. He was Italian by origin and was the son of GugleilmoBonacci. GugleilmoBonacci was a wealthy Italian merchant and a consul for Pisa. Fibonacci used to travel with his father to a trading post in Bugia (now known as Bejaia, Algeria) and it was there that he learned about the Hindu-Arabic numeral system. This fascinated him and he travelled extensively around the Mediterranean coastal region, meeting several merchants to learn about their system of arithmetic. This made him realise the advantages of the Hindu-Arabic numeral system. In his book, Liber Abaci, Fibonacci wrote about his father â&#x20AC;&#x201C; When my father, who had been appointed by his country as public notary in the customs at Bugia acting for the Pisan merchants going there, was in charge, he summoned me to him while I was still a child, and having an eye to usefulness and future convenience, desired me to stay there and receive instruction in the school of accounting. There, when I had been introduced to the art of the Indians' nine symbols through remarkable teaching, knowledge of the art very soon pleased me above all else and I came to understand it, for whatever was studied by the art in Egypt, Syria, Greece, Sicily and Provence, in all its various forms. In 1202, Fibonacci completed his book which popularized Hindu-Arabic numeral system in Europe. It was known as Liber Abaci (Book of Abacus or Book of Calculation). This book gained popularity and as a result Fibonacci became famous. He became the guest of Emperor Frederick II, who liked mathematics and science. The Emperor became aware of Fibonacciâ&#x20AC;&#x2122;s work through the scholars at his court, who included Michael Scotus, the court astrologer, Theodorus Physicus, the court philosopher and Dominicus Hispanus. In 1240, the Republic of Pisa honoured Fibonacci by granting him a salary in a decree that recognized him for the services that he had provided to Pisa as an advisor on matters of accounting and instruction to citizens. The method of Indians was introduced by Fibonacci first in his book Liber Abaci. This method is now widely known as the Hindu-Arabic Numeral System. The formation of numbers using the digits 0-9 was first showcased by this book and also the concept of place value. By using these numbers in commercial bookkeeping, this book showed that it was practical and that the value of Arabic numeral system was high. The concepts in the book were also used to convert weights and measures, calculation of interest, moneychanging, and other similar applications. The book was a big hit in Europe then and no books from the 1202 edition are known to exist. Liber Abaci was dedicated to Michael Scotus. He wrote several important texts apart from Liber Abaci. They played a role in reviving ancient mathematical skills and he made contributions of his own to these mathematical skills. Since, he lived in the time before the printing press was invented, his books were handwritten as manuscripts. The only way to have a book written by Fibonacci were to have them handwritten by a scribe. Of all his books, only Liber Abaci, Practica Geometriae, Flos and Liber Quadratorum still exist in later editions. The remaining of his books are now lost. His book on commercial arithmetic Di Minor Guisa is lost and so is his commentary on 9

Book X on Euclid’s Elements which contained a numerical treatment of irrational numbers which Euclid had approached from a geometric point of view. Practica Geometriea was written in A.D. 1220 and was dedicated to Dominicus Hispanus. It contained a large selection of geometry problems arranged into 8 chapters with theorems based on Euclid’s Elements and Euclid’s On Divisions. In addition to geometrical theorems with precise proofs, the book included practical information for surveyors, including a chapter on how to calculate the height of tall objects using similar triangles. The final chapter presented what Fibonacci called geometrical subtleties:Among those included is the calculation of the sides of the pentagon and the decagon from the diameter of circumscribed and inscribed circles; the inverse calculation is also given, as well as that of the sides from the surfaces. ... To complete the section on equilateral triangles, a rectangle and a square are inscribed in such a triangle and their sides are algebraically calculated... The Fibonacci series is the most famous work of Leonardo FibonacciA certain man put a pair of rabbits in a place surrounded on all sides by a wall. How many pairs of rabbits can be produced from that pair in a year if it is supposed that every month each pair begets a new pair which from the second month on becomes productive? In the series of Fibonacci numbers, each number is the sum of the previous two numbers. The series did not start with 0, 1, 1, etc as most series do but it starts with 1, 1, 2 etc. The calculation is carried up till the thirteenth place (fourteenth in modern counting), i.e. 233. In some manuscripts the series goes on till 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, and 377. The golden ratio, the limit of the ratio of consecutive numbers in this sequence, was not spoken by Fibonacci. The Fibonacci Quarterly is a modern journal devoted to studying mathematics related to the Fibonacci series. Fibonacci's influence was more limited than one might have hoped and apart from his role in spreading the use of the Hindu-Arabic numerals and his rabbit problem, Fibonacci's contribution to mathematics has been largely overlooked. Direct influence was exerted only by those portions of the "Liber abaci" and of the "Practica" that served to introduce Indian-Arabic numerals and methods and contributed to the mastering of the problems of daily life. Here Fibonacci became the teacher of the masters of computation and of the surveyors, as one learns from the "Summa" of Luca Pacioli ... Fibonacci was also the teacher of the "Cossists", who took their name from the word 'causa' which was first used in the West by Fibonacci in place of 'res' or 'radix'. His alphabetic designation for the general number or coefficient was first improved by Viète ... Fibonacci's work in number theory was almost wholly ignored and virtually unknown during the Middle Ages. Three hundred years later we find the same results appearing in the work of Maurolico. He died in the year A.D. 1250, in Pisa. He was thought to be the most talented Western mathematician of the middle Ages. Many mathematical concepts are named after Fibonacci because of a connection to the Fibonacci numbers, like – Brahmagupta-Fibonacci identity, the Fibonacci search technique and the Pisano period. -Rupal Doshi PGDM-FS (2016-18)

CURIOSITY UPDATES July 2016

1. NASA Marches on with Test of RS-25 Engine for New Space Launch System NASA engineers conducted a successful developmental test of RS-25 rocket engine No. 0528 July 29, 2016, to collect critical performance data for the most powerful rocket in the world – the Space Launch System (SLS). The engine roared to life for a full 650-second test on the A-1 Test Stand at NASA’s Stennis Space Center, near Bay St. Louis, Mississippi, marking another step forward in development of the SLS, which will launch humans deeper into space than ever before, including on the journey to Mars. Four RS-25 engines, joined with a pair of solid rocket boosters, will power the SLS core stage at launch. The RS-25 engines used on the first four SLS flights are former space shuttle main engines, modified to operate at a higher performance level and with a new engine controller, which allows communication between the vehicle and engine. 2. Five Years Post-Launch, Juno Is at a Turning Point Five years after departing Earth, and a month after slipping into orbit around Jupiter, NASA's Juno spacecraft is nearing a turning point. On July 31 at 12:41 p.m. PDT (3:41 p.m. EDT), Juno will reach the farthest point in its orbit of Jupiter for the first time, known as “apojove,” 5 million miles (8.1 million kilometres) from the giant planet. After that point, Jupiter's gravitational grip on Juno will cause the spacecraft to begin falling back toward the planet for another pass, this time with its scientific eyes wide open.The spacecraft is currently executing the first of two long orbits prior to beginning its science mission. Each capture orbit is nearly two months long -- quite the wait for the mission's eager team of scientists -but it's nothing compared to the long wait the team endured on the trek to Jupiter.

Juno launched on Aug. 5, 2011. The spacecraft took a long, looping path around the inner solar system to set up an Earth flyby, in which our planet's gravity flung the spinning probe onward toward Jupiter.Juno arrived at Jupiter on July 4, firing its main rocket engine as planned for 35 minutes. The flawless manoeuvre allowed Jupiter's gravity to capture the solar powered spacecraft into the first of two 53.4-day-long orbits, referred to as capture orbits. Following the capture orbits, Juno will fire its engine once more to shorten its orbital period to 14 days and begin its science mission. -Arunava Dey PGDM-FS (2016-18) 11

QUANT FUN JULY 2016

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References: A) Air Asia in Joint Venture with a Scotland based Big Data Company: 1. http://www.thestar.com.my/business/business-news/2016/07/29/airasia-in-jv-to-developregional-data-analytics-business/ 2. http://in.reuters.com/finance/stocks/AIRA.KL/key-developments/article/3415280 3. https://techcrunch.com/2015/09/10/big-data-for-humans/ 4. https://en.wikipedia.org/wiki/AirAsia 5. Image source: https://www.flickr.com/photos/atom-uk/8011373032

QUANT CONNECT July 2016

Quantinuum, the Quant forum of KJ Somaiya Institute of Management Studies and Research aims to empower students and professionals alike to organize and understand numbers and, in turn, to make good and rational decisions as future managers. The newsletter published monthly consists of a gamut of articles for readers ranging from beginners to advanced learners so as to further enrich the young minds understand the contributions made to the field of mathematics along with a couple of brainracking sections of Sudoku to tickle the gray cells. For any further queries and feedback, please contact the following address: KJ Somaiya Institute of Management Studies and Research, Vidya Nagar, VidyaVihar, Ghatkopar East, Mumbai -400077 Mentor Prof. N.S.Nilakantan (+919820680741) â&#x20AC;&#x201C; Email â&#x20AC;&#x201C; nilakantan@somaiya.edu

TEAM LEADERS

Bharat Bhushnam (+91 70457 81029) Vatsal Mehta (+91 98219 87294) Bharat Gupta (+91 98116 13264)

Team Leaders

Aditi Mehta (+91 97570 99599) Arunava (+917720093053) Anish Sagar (+919981944441) Maheshwar Kumar (+919566173411) Milcah George (+917406186087) Rupal Doshi (+919831427640)

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