Predictive Analytics

Which of the following best describes predictive modeling?

• A process marketers use to evaluate how factors influence future behavior

• A process of building models that predict the future for businesses

• A predictive analytics process that creates a statistical model of future behavior

The goal of predictive analytics is to study the past but ultimately to generate predictions about the future.

• True

• False

Answer explanation

Predictive analytics gives data analysts a way to connect past events with potential future business outcomes.

A predictive model makes use of ________.

• current data

• historical data

• both current and historical data

• assumptions

Predictive analytics uses statistics and ____ to determine future performance.

• Algorithmic techniques

• Modeling techniques

• System development and design techniques

• None of the mentioned above

Answer explanation

Predictive analytics uses statistics and modeling techniques to determine future performance. Predictive models help make weather forecasts, develop video games, translate voice-to-text messages, customer service decisions, and develop investment portfolios. Predictive models include decision trees, regression, and neural networks.

Companies use predictive analytics models to forecast inventory, manage resources, and operate more efficiently.

• True

• False

Answer explanation

Companies use predictive analytics models to forecast inventory, manage resources, and operate more efficiently. By dividing a customer base into specific groups, marketers can use predictive analytics to make forward-looking decisions to tailor content to unique audiences.

Predictive analytics is a process harnesses ____, often massive, data sets into models.

• Storage

• Network

• Heterogeneous

• None

Answer explanation

The process harnesses heterogeneous, often massive, data sets into models that can generate clear, actionable outcomes to support achieving that goal, such as less material waste, less stocked inventory, and manufactured product that meets specifications.

Amongst which of the following is / are true with reference to predictive modeling

• A tool used in predictive analytics

• A process that uses data mining and statistics to develop models

• Examine current and historical datasets for underlying patterns

• All of the mentioned above

Answer explanation

Predictive modeling, a tool used in predictive analytics, is a process that uses data mining and statistics to develop models that examine current and historical datasets for underlying patterns and predict the probability of an outcome. The predictive modeling process starts with data collection, then a statistical model is formulated, predictions are made, and the model is revised as new data becomes available.

Amongst which of the following is / are the correct workflow of predictive analytics,

• Clean the data → Develop a predictive model → Import data → Integrate the model

• Import data → Clean the data → Develop a predictive model → Integrate the model

• Clean the data → Develop a predictive model → Import data → Integrate the model

• None of the mentioned above

Answer explanation

Before to do predictive analytics, we should follow some sequence. This is like Import data from varied sources, such as web archives, databases, and spreadsheets, Clean the data by removing outliers and combining data sources, develop an accurate predictive model based on the aggregated data using statistics, curve fitting tools, or machine learning and integrate the model into a load forecasting system.

Predictive Analytics is same as forecasting

• True

• False

Answer explanation

Predictive Analytics goes beyond forecasting

How do you handle missing or corrupted data in a dataset?

• Drop missing rows or columns

• Replace missing values with mean/median/mode

• Assign a unique category to missing values

• All of the above