Database Reference
In-Depth Information
Click the Run button when you're done and you get a report similar to the one shown in Figure 14-15.
Figure 14-15: Results of the Prediction Calculator report.
The Prediction Calculator report facilitates the high-level scoring system that will be used to score
predictions at the individual case level. The relevant question that can be answered by the report is
“how high of a score should an individual case have in order to proceed?” The report provides the fol-
lowing components: Interactive cost and profit inputs, Score Breakdown, Data table, Profit for Various
Score Thresholds, Cumulative Misclassification Cost for Various Score Thresholds. We discuss each of
these in the following sections.
Interactive cost and profit inputs
In the upper left of the Prediction Calculator report (refer to Figure 14-15) you see the base calcula-
tion premise that includes values for profits and costs. This section allows you to specify how much
profit can be gained from a true prediction, and on the flip side, how much a false prediction will
cost.
Profits are associated with correct (true) predictions of the outcome state, which can be positive or
negative. As a general rule, a positive outcome state is the desired outcome and leads to direct profit,
while a negative outcome state simply means that you did not reach the desired positive outcome
state. As expected, profits associated with true predictions vary widely depending on the scenario,
which follows naturally when considering the enormous variability in economic profit between dif-
ferent kinds of products and services.
Costs associated with false predictions are called misclassification costs and also vary widely. For exam-
ple, misclassification costs in targeted mail campaigns are probably small compared to misclassifica-
tion costs associated with loan approvals, which in turn may be very small compared to misclassification
costs associated with medical diagnoses.
 
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