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16 February 2025

Stochastic process model (Glossary)

Artificial intelligence Industry and Factory 4.0 Automation Big data and smart data Digital transformation AI Glossary

The term "stochastic process model" is particularly at home in the fields of big data and smart data, artificial intelligence as well as Industry and Factory 4.0. A stochastic process model is a method used to describe processes in which chance and uncertainty play a role. This means that not everything can be planned or predicted, but development always has a certain "chance factor".

In practice, stochastic process models are used, for example, to predict machine failures in a factory or to analyse how a customer moves through an online shop. The model helps to find patterns and calculate probabilities - even if individual steps are uncertain or unclear.

A simple example: a production robot can work or fail on any given day. A stochastic process model can be used to calculate the probability of the robot breaking down in a week or how often it should be serviced. In this way, stochastic process models help companies to make better decisions, assess risks and optimise processes - even with incomplete information.

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Sanjay Sauldie

Sanjay Sauldie is a digital strategist, speaker and developer of the transruption toolkit, which companies can use to make their digital transformation measurable, human and sustainable. With kiROI - the AI-based approach to value creation in the digital age - he helps self-employed people and companies to integrate artificial intelligence into their processes in a practical way. With his outstanding marketing strategy iROI, he has already led countless companies to greater visibility and thus more profits. He combines digital innovation with disruptive thinking models for a sustainable business strategy. He studied mathematics and computer science at the University of Cologne, completed a Master of Science in Digital Disruption at the University of Salford (UK) and a Design Thinking programme at MIT/EMERITUS Singapore. As a multiple award-winning expert - including the Golden Web Award and the Innovation Award of the Initiative Mittelstand - he advises SMEs and corporations. His motto: "Digitalisation is not an end in itself - it must serve people."

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