1 Reinforcement learning and business optimization: core concepts

 

This chapter covers

  • What is reinforcement learning for business optimization?
  • What are business optimization problems?
  • Challenges in business optimization problems and limitations in the classical solutions
  • How reinforcement learning can help to overcome solution limitations
God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference

Reinhold Niebuhr, Reformed theologian

Even the most powerful businesses have limited resources. In this way, the simple yet important wisdom of a good manager is to understand the strengths and weaknesses of what a business can control, as well as to recognize the opportunities and threats in the environment that surrounds it. And just like the creatures that have lasted millions of years through evolution—not by being the strongest, but by being the most adaptable—a key for a business to survive the brutal competition filled with uncertainties is how well it understands those uncertainties and acts accordingly, based on the limited resources it has.

1.1 What reinforcement learning really enables?

1.2 Different types of business analysis

1.3 Business optimization definition

1.4 Examples of business optimization problems

1.5 Challenges in business optimization problems

1.6 Classical business optimization models

1.6.1 Operations research

1.6.2 Stochastic simulation

1.6.3 System dynamics

1.6.4 Game theory

1.7 Reinforcement learning for business optimization

1.8 Limitations in classical models and reinforcement learning

1.9 Summary