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Risk model

As explained in Machine Learning System Design

A structured description of the threats, failure scenarios, and undesirable outcomes that a system should prevent or mitigate.

A risk model answers “What are we protecting from?” by describing the worst scenarios, limitations, and undesirable consequences a system should prevent or mitigate. Replace vague goals such as “incorrect model prediction” with detailed scenarios aligned across stakeholders. Treat these risks as nonfunctional requirements: they shape how the system must operate, not merely what it should do. section 2.3

Dynamic pricing

A technically sophisticated pricing algorithm optimized revenue, margin, or traffic in real time. Risk analysis changed the design because identical items could not receive different prices for people in the same city when sold online, even though location-based differences were acceptable. The lesson is practical: examine consequences and constraints before celebrating an algorithmic design. section 2.3

Initial design for the dynamic pricing system
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Compare the initial pricing-system design with the final design to see how identified risks and limitations reshape an apparently capable solution. section 2.3

How Machine Learning System Design covers it

How deep it goes
Defines the question and demands stakeholder-aligned scenarios, stopping short of prescribing a formal modeling method.
Examples
Uses a real-time dynamic pricing system whose design changed after discriminatory pricing risks were identified.
What it assumes
Assumes familiarity with system design and distinguishes functional requirements from nonfunctional requirements.
What you can do after
Evaluate/understand system proposals by identifying concrete failure scenarios and consequences before implementation.
How it connects
Connects nonfunctional requirements, defensive strategy, system design, and dynamic pricing.

This explainer was generated by Manning's knowledge graph from the text of Machine Learning System Design. The section links point to the parts of the book it draws on.