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developed by Jim Georges. Additional contributions were made by Bob Lucas, Mike Patetta, and Will Potts. Editing and
production support was provided by the Curriculum Development and Support Department.Table of Contents
Course Description .............................................................................................................v
Prerequisites.....................................................................................................................vi
General Conventions........................................................................................................vii
Chapter 1 Introduction to Predictive Modeling .........................................................1-1
1.1 Starting the Analysis .............................................................................................1-3
1.2 Preparing the Tools ..............................................................................................1-15
1.3 Constructing a Predictive Model .........................................................................1-23
1.4 Adjusting Predictions ...........................................................................................1-43
1.5 Making Optimal Decisions...................................................................................1-49
1.6 Parametric Prediction ..........................................................................................1-62
1.7 Tuning a Parametric Model .................................................................................1-72
1.7 Comparing Predictive Models..............................................................................1-82
1.8 Deploying a Predictive Model ............................................................................1-101
1.9 Summarizing the Analysis.................................................................................1-112
Chapter 2 Flexible Parametric Models .......................................................................2-1
2.1 Defining Flexible Regression Models ....................................................................2-3
2.2 Constructing Neural Networks............................................................................2-14
2.3 Deconstructing Neural Networks........................................................................2-25
Chapter 3 Predictive Algorithms ................................................................................3-1
3.1 Constructing Trees .................................................................................................3-3
3.2 Constructing Trees ...............................................................................................3-23
3.3 Applying Decision Trees.......................................................................................3-28
Appendix A Exercises.................................................................................................... A-1
A.1 Introduction to Predictive Modeling..................................................................... A-3
A.2 Flexible Parametric Models .................................................................................. A-9
A.3 Predictive Algorithms ......................................................................................... A-13
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