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Predictive Analysis: Group # 2

Predictive analysis uses mathematical and statistical models to analyze historical data patterns to predict future behavior. Predictive models help make real-time decisions about individual transactions, such as when to secure an account or disconnect service. They also identify characteristics of risky or fraudulent customers. Common examples include weather forecasts that predict the probability of rain to inform decisions like whether to bring an umbrella. There are three main types of predictive analysis models: predictive models that forecast individual customer behavior, descriptive models that segment customers into groups, and decision models that predict outcomes of complex decisions, relationships, and processes.

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Asit Mohanty
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54 views7 pages

Predictive Analysis: Group # 2

Predictive analysis uses mathematical and statistical models to analyze historical data patterns to predict future behavior. Predictive models help make real-time decisions about individual transactions, such as when to secure an account or disconnect service. They also identify characteristics of risky or fraudulent customers. Common examples include weather forecasts that predict the probability of rain to inform decisions like whether to bring an umbrella. There are three main types of predictive analysis models: predictive models that forecast individual customer behavior, descriptive models that segment customers into groups, and decision models that predict outcomes of complex decisions, relationships, and processes.

Uploaded by

Asit Mohanty
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Predictive Analysis

Group # 2
Defination
• Predictive Analytics use mathematical and statistical
means to evaluate historical data patterns in order to
make predictions about future behavior
• Predictive models are often embedded in processes to
assist in making real-time decisions about individual
customer transactions such as when to secure an account
with a deposit or when to disconnect for non-payment
• Predictive analytics also helps identify characteristics of
customers such as what a risky customer looks like or what
a fraudulent transaction looks like etc.
• Quick decisions need to be made while balancing
many variables
• You know what your customers have done in the past
but you don’t know what they will do in the future
• Making bad decisions is costly, making good
decisions is rewarding
• You need a consistent decision process
• You deal with a large number of rules that guide or
influence your decision making.
Everyday Example

• “There’s a 60% chance of


rain tomorrow”
• Using historical weather
data and current weather
patterns, a forecast for the
near future is developed
• The forecast is whether or
not it will rain.
• The probability of rain is
60%
• The decision is should I
carry an umbrella or not?
Common examples
Type Of Predictive Analysis
Predictive Models
Analyze past performance to predict the likelihood of an
individual customer to exhibit a specific behavior in the future
• Use historical data to identify patterns

Descriptive Models
Descriptive models identify different relationships between
customers to group or segment for marketing or treatment
• Use transaction history to group customers or products

Decision Models
Decision models predict outcomes of complex decisions,
relationships, products and processes
• Use all known data and relationships between that data to predict
a response

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