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assignment_2.docxPredictive Modeling
Introduction and Purpose of Assignment
Predictive modeling is the use of predictors that have been determined to influence future outcomes in order to create a statistical model. There is no one form of predictive modeling. It can be simple – using a linear equation – or more complex using sophisticated software.
Objectives
· Apply predictive modeling to an organizational question. (2.3)
Theory and Context
Predictive analytics involves using information from historical data to identify patterns in order to determine possibilities for the future. Regression and trend analyses are both examples of predictive analytics.
Resources
The Corporate Genie. (2014, March 20). What is predictive analytics data mining [Video
file]? Retrieved from https://www.youtube.com/watch?v=FOATC8ARHNs
Queensland Government. (1995-2007). Trend analysis for business improvement. Retrieved from https://www.business.qld.gov.au/_designs/content/guide-printing2?parent=53485&SQ_DESIGN_NAME=print_layout
wikiHow to do trend analysis in Excel. (n.d.). Retrieved from http://www.wikihow.com/Do-Trend-Analysis-in-Excel
Instructions
1. Assume that for a given company, net profit will increase when sales increase. In this scenario, the linear relationship exists between sales (the independent variable) and net profit (the dependent variable).
2. Develop a trend and linear regression analysis for a public company of your choice.
a. Map the past 10 years of sales and net profit data.
b. Predict future values for the next two years for the dependent variable (net profit).
i. The website “Introducing Predictive Marketing: The Next Stage of Business Optimization” above provides information on the calculations.
