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ANALYSIS
Of the article
“A Predictive Analytics
Primer”
By Thomas H Davenport
Thomas
H.
Davenport
Predictive Analytics
Predictive
Analytics
“Predict future
using data from
the past.”
Predictive Analytics
Predictive Analytics
Data
Statistics
Assumptions
The DATA:
Lack of good data is the most
common barrier to all of the
organizations seeking to employ
predictive analytics.
Predictive Analytics
The STATISTICS:
Regression analysis in its
various forms is the primary
tool that organizations use for
predictive analytics.
Predictive Analytics
Predictive Analytics
nalyst hypothesizes that a set of 
independent variables (say, gender, 
income, visits to a website) are 
statistically correlated. The analyst 
performs a regression analysis to see just 
how correlated each variable is.
Predictive AnalyticsPredictive AnalyticsPredictive Analytics
The ASSUMPTIONS:
The big assumption in
predictive analytics is,
“that the future will continue
to be like the past.”
Predictive Analytics
Predictive Analytics
What can make 
assumptions invalid?
Predictive Analytics
If your model was created several years
ago, it may no longer accurately predict
current behavior. The greater the elapsed
time, the more likely customer behavior
has changed.
“Changing time can
make assumptions go
invalid.”
Predictive Analytics
“Excluded Variable”
If the analyst didn’t include a key
variable in the model, and that variable
has changed substantially over time.
Predictive Analytics
anagers should always ask analysts
what the key assumptions are, and
what would have to happen for them to
no longer be valid. And both managers
and analysts should continually monitor
the world to see if key factors involved
in assumptions might have changed
over time.
Predictive Analytics
“Certain questions a manager must
ask his analyst.”
● Can you tell me something about the source of
data you used in your analysis?
● Are you sure the sample data are representative
of the population?
● Are there any outliers in your data distribution?
How did they affect the results?
● What assumptions are behind your analysis?
● Are there any conditions that would make your
assumptions invalid?
­ Vaibhav Srivastav
   B.I.E.T. Jhansi

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