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Stochastic Modelling & Its Applications

This document discusses stochastic modeling and its applications. It defines stochastic processes as collections of random variables representing the evolution of random systems over time. Some key points: - Stochastic models use random variables to estimate probabilities and outcomes. - Applications include Monte Carlo simulations in finance, insurance risk modeling, and telecommunications network modeling. - Specific models discussed include token ring networks, fluid flow traffic models, and stochastic differential equation models for in vitro fertilization.

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Diksha Saini
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107 views19 pages

Stochastic Modelling & Its Applications

This document discusses stochastic modeling and its applications. It defines stochastic processes as collections of random variables representing the evolution of random systems over time. Some key points: - Stochastic models use random variables to estimate probabilities and outcomes. - Applications include Monte Carlo simulations in finance, insurance risk modeling, and telecommunications network modeling. - Specific models discussed include token ring networks, fluid flow traffic models, and stochastic differential equation models for in vitro fertilization.

Uploaded by

Diksha Saini
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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STOCHASTIC MODELLING & ITS APPLICATIONS

PRESENTED BY – DIKSHA SAINI(068), RUCHI AGGARWAL(103), SHUBHAM


JAIN(509) & MUKUL BANSAL(091)
STOCHASTIC PROCESS

 A stochastic process or sometimes random process is a collection of


random variables. Representing the evolution of some system of random
value over time.
 This is the probabilities counterpart is a deterministic process. Instead of
describing a process which can only evolve in one way, in a stochastic or
random process there is some indeterminacy : even if the initial condition
is known, there are several direction in which the process may evolve.
MATHEMATICAL
REPRESENTATION
Given a probability space ( Ω,F,P) and a measurable space ( S,€), an S-
valued Stochastic process is a collection of S- valued random variables
on Ω , indexed by a totally ordered set T(time) . That is, a stochastic
process X is a collection.
{Xt: t £ T}
Where each Xt is an S- valued random variables on Ω. The space S is then called the
state space of the process.
STOCHASTIC MODELLING
A method of function in which one or more variables within the
model are random. Stochastic modeling is for the purpose of
estimating the probability of outcome within the forecast to predict
what condition might be like under different situation. The random
variables are usually constrained by historical data, such as past
market return.
REAL LIFE APPLICATION
 The Monte Carlo simulation is an example of a stochastic model used
in finance.
 When used in portfolio evaluation, multiple simulations of the
performance of the portfolio are done based on the probability
distributions of the individual stock returns.
 A statistical analysis of the result can then help determine the
probability thet the portfolio will provide the desired performance.
 Stochastic modelling as applied to the insurance industry,
telecommunication, traffic, control etc.
TELECOMMUNICATION
Telecommunication, science and practice of transmitting
information by electromagnetic means. Modern telecommunication
centres on the problems involved in transmitting large volumes of
information over long distances without damaging loss due to noise
and interference.
The basic components of a modern digital telecommunications
system must be capable of transmitting voice, data, radio, and
television signals.
 Telecommunications systems, see the articles telephone, telegraph
TOKEN RINGS
Consider N independent and identical users that are
arranged logically in the form of a ring.
In this model at most one user is allowed to generating a
message over the cable or ring.
• When the users with a message to transmit receivers the free
token, the users holds on to the token and transmits the
message onto the ring or cable.
• Frame circles the ring and is removed by the transmitting
station.
• Each station interrogates passing frame, if destined for
station, it copies the frame into local buffer.
• Once the users completes transmission, the busy token is
converted into a free token and passed along the ring.
RE- INSERTING TOKEN ON THE
RING
Choices

• After station has completed transmission of the frame.


• After leading edges of transmitted frame has returned
to the sending station.
TRAFFIC MODELS

Traffic flowing through the networks can be classified into several types. Depending on the
network segment, all messages are broken down into either packets or cells.

 PACKETS :
The length or size of a packet ranges anywhere from 60 bytes to 1500 bytes and generally follows
a bimodal distribution.
 ATM CELLS :
The length of ATM cells is fixed at 53 bytes.
HIERARCHICAL NETWORKS

• Telecommunication networks are typically hierarchical in nature. Some frequently used Stochastic
models for traffic flow are explained below :

Traffic can be classified into FOUR Levels


1. APPLICATION LEVEL – The traffic generated by an application, say, http or telnet or ftp which can vary
significantly based on the protocols they follow.
2. SOURCE LEVEL – Each workstation or computer can be thought of as a source that generates traffic. This
traffic comprises of the traffic generated by different applications that are running on the source.
3. AGGREGATE LEVEL – Several computer, printers, etc. are connected together to form a Local Area Network
(LAN). The traffic on the LAN pipe is the aggregated traffic that is multiplexed from all the sources.
4. BACKBONE LEVEL – The LANs are connected together by means of a backbone and this forms the
Metropolitan Area Network (MAN) or the Wide Area Network (WAN). The traffic on the MAN/WAN pipe is the
combination of the traffic from several LANs.
FLUID-FLOW TRAFFIC MODELS

• In the fluid-flow models it is assumed that traffic is in the form of fluid which flows through a
pipe at different rates at different times.
• For eg. Fluid flows at rate r(1) bytes per second for a random amount of time t 1, then flows at rate
r(2) bytes per second for a random amount of time t2, and so on.
• This behavior can be captured as a discrete stochastic process that jumps from one state to
another whenever the traffic flow rate changes.
• This can be formalized as a stochastic process {Z(t), t≥0} that is in state Z(t) at times t. Fluid
flows in the pipe at rate r(Z(t)) at time t.
AGGREGATE DYNAMIC STOCHASTIC MODEL
FOR ATS
An aggregate stochastic model for an Air Traffic System (ATS) is developed. Specifically, using a
stochastic description of an ATS based on Poisson processes, we construct a stochastic dynamic
model for aircraft counts in regions of an airspace.
As an example, the developed model is used to represent Center counts in the United States ATS.
We also discuss parameter determination in the model, present some analyses of the model, and
evaluate our methodology.
Finally, two extensions of the basic model —a hierarchical model that represents aircraft counts in
regions of various sizes at multiple time scales, and a model that incorporates stochastic
disturbances such as thunderstorms.
WIRELESS NETWORK MODELS

• Wireless networks are becoming increasingly complex and ubiquitous. To be able to understand, configure, and,
more importantly, to design future generations of wireless networks, we must resort to network models that
accurately consider the specific features of the wireless networks under study.
• In modern wireless networks, their different entities can interact among themselves in complex patterns that can
involve a wide range of relationships that can even change dynamically.
• Among the available tools useful for modelling wireless networks, we can highlight graph theory, and more
specifically, the recent scientific advances in this field like multilayer graph theory as multiple layers or multiple
types of edges enable a much more accurate modelling of wireless networks.
• The goal of this Special Issue is to provide readers with original and high-quality research articles as well as
review articles that present state-of-the-art research results related to wireless network models. This is especially
challenging for wireless networks, because in addition to the different subsystems that make up a wireless
network, usually wireless networks cannot be studied in isolation, as they can share the same wireless spectrum.
POTENTIAL TOPICS INCLUDE BUT ARE NOT LIMITED
TO THE FOLLOWING:

• Models of wireless networks including, but not limited to: WLANs, cellular networks, 5G networks, WPANs, heterogeneous
networks, radio cognitive networks
• Interactions between wireless networks
• Graph metrics in wireless networks
• Multilayer graphs for wireless network modelling
• Multiple access models
• Energy consumption models of wireless networks
• Complex networks in wireless communications
• Game-theoretic wireless network models
• Wireless network graph models of real settings
CONCLUSION

• The approach to develop a stochastic model for the superovulation stage in IVF in terms
of Ito form of stochastic differential equations (SDE) is a novel aspect of the study and the
results look very promising. The approach used for stochastic model development involving a
novel parameter estimation procedure is an added contribution in this work and can eliminate a
lot of computation difficulties in development of SDE models.
• Predictions obtained from the stochastic model are inclusive of the patient’s uncertainty and
noise in clinical data and hence match better as compared to deterministic results for the study
done on five selected patients with high ‘growth term (G)’ value.

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