8. Predictive Analytics Methodology
Overview: The Modern Analytics Approach
The goal of predictive analytics is to predict something you do not know from facts that you do know. For example, you may know something about the characteristics of a home—its location, age, square footage, number of rooms, and so forth—but you do not know its market value. You want to know its market value so you can set an asking price. Similarly, you might want to predict whether a patient will develop a certain disease, the monthly minutes a cell phone customer will want to consume, or whether a borrower will make monthly payments on a loan. In each case, you want to use what you know to predict something you need to know.
Predictive analytics drives business ...