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Week 6- Effect Interpretation.pdf - BUS445 Customer...

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BUS445Customer AnalyticsEffect Interpretation
RoadmapStorytelling with DataCCS part 1Discussion of Week 05 Quiz QuestionsEffect InterpretationActivityLoan Default caseBUS445 Fall 2022Customer Analytics
You are smart and experienced managers at Canadian Cancer SocietyThe charity has engaged a team of analytics consultants, at a heftydiscount rate since this is a charity, although not free, to work on theMonthly Giving upselling problem.You haveno technical background, but are knowledgeable about thedonation businessThe proportion of donations that go to managing the charity is publicknowledge, and it is important to keep that number low so that donorsfeel their money is going to the cause, not to management, andespecially not to consultants.Some of you are likely to beskepticalthat this is money well spent.The consultants spent some time with one of the managers two weeksago to learn about the charity (business understanding) and theavailable data (data understanding), but have not met the rest of you.Audiences play a role too …
CrossIndustryStandardProcess forDataMining(CRISP-DM)BusinessUnderstandingDataUnderstandingDataPreparationModelingEvaluationDeploymentSupervisedLearningW4: LogisticRegressionContinuousvs. BinaryW5: ModelAssessmentW6: Non-linear Effect
What we learned from the ReadingReality vs. Mental Models vs. Empirical Models:Different people have different abstraction of therealityRelationship shape: Increase vs. decrease;increasing vs. decreasing ratesFunctional form: ln(x), exp(x) vs. x + x^2, + x^3 + …Interaction effect: Amplifying, inhibiting orsegmenting the focal effectsMulticollinearity: Not all of the correlated predictorswould appear to be significantConfounding factor: Omitted variable bias
A Model: Abstraction of Reality
A Verbal ModelSales of a new product often start slowly as“innovators” in the population adopt theproduct.The innovators influence“imitators,” leading to accelerated salesgrowth. As more people in the populationpurchase the product, sales continue toincrease but sales growth slows down.
The Boxes and Arrows ModelPattern of Sales Growthof New ProductFixedPopulation SizeImitatorsInnovatorsTiming ofPurchasesby InnovatorsTiming of Purchasesby ImitatorsInnovatorsInfluenceImitators
The Graphical ModelCumulativeSalesof aProductTimeFixed Adopting Population Size
The Mathematical Modelof Innovation Adoptionwhere:xt=Total number of people who have adoptedproduct by timetN=Adopting Population sizea,b=Constants to be determined.The actualpath of the curve will depend on these constantsdxtdt=(a+bxt)(Nxt)

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