Predictive Analysis

Posted in Information Technology & Systems, Total Reads: 725
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Definition: Predictive Analysis

Predictive analysis refers to the observation and analysis of the historical and current data to predict the future probabilities and trends. In this method of data mining, information is gathered, a statistical relationship is established to explain the possible relationships between the variables and the model is verified as and when more data becomes available.


Ex: Marketing and Operations- Demand forecasting of an item given its previous consumption pattern over the years and identifying the consumer preferences and the potential for cross-selling.


Finance- Credit scoring- Given a consumer’s credit history, financial stability and the loan amount applied for, the company can estimate his credit worthiness and the capacity to fulfil debt.

 

Variable(s) by name predictoris used to predict the future trends.


Ex: While insuring a car, the insurance company takes into account the age of the person, his driving record and the model of the car to issue the policy.


Some of the popular softwares available for predictive analysis are- SPSS Statistics (IBM), Dynamics CRM Analytics (Microsoft) and Predictive Analytics Suite (SAS)


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