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 AD3491 FUNDAMENTALS OF DATA SCIENCE AND ANALYTICS
UNIT V Notes

PART A

1. What Is Predictive Analytics?

The term predictive analytics refers to the use of statistics and modeling techniques to make
predictions about future outcomes and performance. Predictive analytics looks at current and
historical data patterns to determine if those patterns are likely to emerge again. This allows
businesses and investors to adjust where they use their resources to take advantage of possible
future events. Predictive analysis can also be used to improve operational efficiencies and
reduce risk

2. Understanding Predictive Analytics.

Predictive analytics is a form of technology that makes predictions about certain unknowns in
the future. It draws on a series of techniques to make these determinations, including artificial
intelligence (AI), data mining, machine learning, modeling, and statistics.3 For instance, data
mining involves the analysis of large sets of data to detect patterns from it. Text analysis does
the same, except for large blocks of text

3. Predictive models are used for all kinds of applications, including:

 Weather forecasts
 Creating video games
 Translating voice to text for mobile phone messaging
 Customer service
 Investment portfolio development

All of these applications use descriptive statistical models of existing data to make predictions
about future data

4. What is mean by Forecasting?

Forecasting is essential in manufacturing because it ensures the optimal utilization of resources
in a supply chain. Critical spokes of the supply chain wheel, whether it is inventory
management or the shop floor, require accurate forecasts for functioning.
Predictive modelling is often used to clean and optimize the quality of data used for such
forecasts. Modelling ensures that more data can be ingested by the system, including from
customer-facing operations, to ensure a more accurate forecast.

5. Define Credit.
Credit scoring makes extensive use of predictive analytics. When a consumer or business
applies for credit, data on the applicant's credit history and the credit record of borrowers with
similar characteristics are used to predict the risk that the applicant might fail to perform on any
credit extended.

6. Define Underwriting.
Data and predictive analytics play an important role in underwriting. Insurance companies
examine policy applicants to determine the likelihood of having to pay out for a
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future claim based on the current risk pool of similar policyholders, as well as past events that
have resulted in pay-outs. Predictive models that consider characteristics in comparison to data
about past policyholders and claims are routinely used by actuaries.

7. What is mean by Marketing?

Individuals who work in this field look at how consumers have reacted to the overall economy
when planning on a new campaign. They can use these shifts in demographics to determine if
the current mix of products will entice consumers to make a purchase.

Active traders, meanwhile, look at a variety of metrics based on past events when deciding
whether to buy or sell a security. Moving averages, bands, and breakpoints are based on
historical data and are used to forecast future price movements

8. Predictive Analytics vs. Machine Learning

A common misconception is that predictive analytics and machine learning are the same things.
Predictive analytics help us understand possible future occurrences by analyzing the past. At its
core, predictive analytics includes a series of statistical techniques (including machine learning,
predictive modelling, and data mining) and uses statistics (both historical and current) to
estimate, or predict, future outcomes

9. What is the Decision Trees?

If you want to understand what leads to someone's decisions, then you may find decision trees
useful. This type of model places data into different sections based on certain variables, such as
price or market capitalization. Just as the name implies, it looks like a tree with individual
branches and leaves. Branches indicate the choices available while individual leaves represent a
particular decision.

Decision trees are the simplest models because they're easy to understand and dissect. They're
also very useful when you need to make a decision in a short period of time
10. Define Regression.
This is the model that is used the most in statistical analysis. Use it when you want to determine
patterns in large sets of data and when there's a linear relationship between the inputs. This
method works by figuring out a formula, which represents the relationship between all the
inputs found in the dataset. For example, you can use regression to figure out how price and
other key factors can shape the performance of a security

11. Define Neural Networks.

Neural networks were developed as a form of predictive analytics by imitating the way the
human brain works. This model can deal with complex data relationships using artificial
intelligence and pattern recognition. Use it if you have several hurdles that you need to
overcome like when you have too much data on hand, when you don't have the formula you
need to help you find a relationship between the inputs and outputs in your dataset, or when you
need to make predictions rather than come up with explanations.

12. What are the Benefits of Predictive Analytics?

There are numerous benefits to using predictive analysis. As mentioned above, using this type
of analysis can help entities when you need to make predictions about outcomes when there are
no other (and obvious) answers available.9
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Investors, financial professionals, and business leaders are able to use models to help reduce
risk. For instance, an investor and their advisor can use certain models to help craft an
investment portfolio with minimal risk to the investor by taking certain factors into
consideration, such as age, capital, and goals.9

There is a significant impact to cost reduction when models are used. Businesses can determine
the likelihood of success or failure of a product before it launches. Or they can set aside capital
for production improvements by using predictive techniques before the manufacturing process
begins

13. Criticism of Predictive Analytics.

The use of predictive analytics has been criticized and, in some cases, legally restricted due to
perceived inequities in its outcomes. Most commonly, this involves predictive models that
result in statistical discrimination against racial or ethnic groups in areas such as credit scoring,
home lending, employment, or risk of criminal behaviour.

A famous example of this is the (now illegal) practice of redlining in home lending by banks.
Regardless of whether the predictions drawn from the use of such analytics are accurate, their
use is generally frowned upon, and data that explicitly include information such as a person's
race are now often excluded from predictive analytics.

14. How Does Netflix Use Predictive Analytics?

Data collection is very important to a company like Netflix. It collects data from its customers
based on their behaviour and past viewing patterns. It uses information and makes predictions
based to make recommendations based on their preferences. This is the basis behind the
"Because you watched..." lists you'll find on your subscription.

15. What Is Data Analytics?

Data analytics is the science of analysing raw data to make conclusions about that information.
Many of the techniques and processes of data analytics have been automated into mechanical
processes and algorithms that work over raw data for human consumption

16. What are the various steps of Data Analysis?

The process involved in data analysis involves several different steps:

1. The first step is to determine the data requirements or how the data is grouped. Data may
be separated by age, demographic, income, or gender. Data values may be numerical or
be divided by category.
2. The second step in data analytics is the process of collecting it. This can be done through
a variety of sources such as computers, online sources, cameras, environmental sources,
or through personnel.
3. Once the data is collected, it must be organized so it can be analyzed. This may take
place on a spreadsheet or other form of software that can take statistical data.
4. The data is then cleaned up before analysis. This means it is scrubbed and checked to
ensure there is no duplication or error, and that it is not incomplete. This step helps
correct any errors before it goes on to a data analyst to be analyzed

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 PART B

1. How do you solve the least square problem in Python? What is least square method in Python?
2. What is the goodness-of-fit test?

Employers want to know which days of the week employees are absent in a five-day work week.
Most employers would like to believe that employees are absent equally during the week.
Suppose a random sample of 60 managers were asked on which day of the week they had the
highest number of employee absences. The results were distributed as in the table below. For the
population of employees, do the days for the highest number of absences occur with equal
frequencies during a five-day work week? Test at a 5% significance level.

Day of the Week Employees were Most Absent

Monday Tuesday Wednesday

9 Number of Absences 15 12 9

3. One study indicates that the number of televisions that American families have is distributed
(this is the given distribution for the American population) as in the table.

Number of Televisions Percent

10

1 16

2 55

3 11

4+ 8

The table contains expected (E) percents.

A random sample of 600 families in the far western United States resulted in the data in this
table.

Number of Televisions Frequency

0 66

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Number of Televisions Frequency

1 119

2 340

3 60

15
4+
Total = 600

The table contains observed (O) frequency values.

At the 1% significance level, does it appear that the distribution “number of televisions” of far
western United States families is different from the distribution for the American population
as a whole?

4. Explain in detail about time series analysis with example.

5. Describe Regression using Stats Models.

6. Explain multiple regression with an example.

7. What is the nonlinear relationships and types .Difference between linear and non linear
relationship

8. Describe logistic regression in detail.

9. Explain in detail serial correlation and autocorrelation.

https://www.investopedia.com/terms/s/serial-

correlation.asp#:~:text=Serial%20correlation%20is%20the%20relationship,it%20may%20not%20be%

20random.

https://corporatefinanceinstitute.com/resources/data-science/autocorrelation/

10) Describe in detail Introduction to survival analysis.

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 CONNECT WITH US

CONNECT WITH US

WEBSITE: www.eduengineering.net

TELEGRAM: @eduengineering
-

INSTAGRAM: @eduengineering

 Regular Updates for all Semesters

 All Department Notes AVAILABLE
 Handwritten Notes AVAILABLE
 Past Year Question Papers AVAILABLE
 Subject wise Question Banks AVAILABLE
 Important Questions for Semesters AVAILABLE
 Various Author Books AVAILABLE