# ASS3 - Assignment #3 Model Selection and Assessment Due...

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Assignment #3 Model Selection and Assessment 1 Due Date: February 28, 2011 Problem 1 (Target Marketing) Suppose that the revenue generated if the target responds is r and the cost of sending out a letter is c. (a) Set up the profit matrix. (1 Point) (b) What is the Bayes cut-off probability if no adjustment needed? (1 Point) (c) What is the Bayes cut-off probability if adjustment is needed? (1 Point) Assume the adjusted Confusion Matrix Predicted Class Target Not True Class Response 1 1 N TP 1 1 N FN 1 .. N No Response 0 0 N FP 0 0 N TN (d) What is the calculated profit in part (c)? (1 Point) Problem 2 (Consider the Opportunity Cost) Suppose the revenue from a responder is r and the cost for an individual mailing is c. Since the company can use the budget for something more profitable than this marketing, you can convince the management team only if the ratio ±²³´µ¶³²±¶·¸¹´º´²»¶¼½¾ ¹²ºµ¶³²±¶·¸¹´º´²»¶¿½¿ is greater than a fixed number . You can only consider the adjusted case. (a) What is the Bayes cut-off probability when adjustment is needed? (1 Point)

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## This note was uploaded on 09/22/2011 for the course STA 6714 taught by Professor Staff during the Spring '11 term at University of Central Florida.

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ASS3 - Assignment #3 Model Selection and Assessment Due...

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