The term cost function plays an important role in the fields of artificial intelligence, big data and smart data as well as Industry and Factory 4.0. A cost function is a type of calculation formula that is used in many digital applications to measure the difference between a desired result and the actual result.
You can think of the cost function as a measuring tape that checks how "well" or "badly" a computer or machine model works. The aim is to keep these costs as low as possible so that machines, robots or AI models work as accurately and efficiently as possible.
A simple example from industrial production: A robot should always fill exactly 100 grams of a powder. The cost function now measures how far the actual weight of each filling is from the ideal value of 100 grams. The greater the deviation, the higher the "cost". The robot automatically adjusts its settings so that the cost function - i.e. the error - becomes smaller.
Cost functions therefore help companies to optimise processes, minimise errors and thus save costs. They are a central tool for modern, data-driven technologies.
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