Predictive Analytics Essay

1658 WordsApr 22, 20147 Pages
Predictive Analytics When surfing the web, most shoppers have been to Amazon.com, used yahoo.com, or even paid a few bills. Have you ever noticed that on these popular sites that it will suggest things that you might like? The website somehow remembers what you looked up before and tries to ask you about similar items. It’s almost as if the website has a mind of its own. Can you recall getting car insurance and the salesman asks you about your driving record. Ever wonder why they ask these types of questions? Have you ever been to a doctor for a checkup and they ask about family history? If the doctor sees a little spike in your blood pressure or sees that your iron count is low he will ask if anybody else in your family has the same thing. These questions are asked because it is a technique they use to see how the future trends will go. It is a great way to predict more than likely what is going to happen and is a safe route to take. The techniques used for these kinds of offers are something called predictive analytics. Predictive analytics has been around a long time and used by many salesman throughout the years and will continue to be used in the future. Predictive analytics is concerned with the prediction of the future probabilities or trends by data mining. The key element of predictive analytics is the predictor, a variable that can be measured for an individual or the other entity to predict future behavior. For example, an insurance company is likely to take into consideration potential driving safety predictors such as age, gender, and driving record when issuing car insurance policies. When multiple predictors are combined they are put into a predictive model, which, may be used to foresee future probabilities with a certain level of reliability. In predictive modeling, data is collected, a statistical model is formulated, predictions are made and

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