- Category: Predictive Modeling Resources
- Published on Saturday, 01 January 2011 00:00
- Written by Joomla!
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Predictive modeling is the area of data analytics concerned with forecasting probabilities and trends. A predictive model is made up of a number of predictors, or variables, that are likely to influence future behavior or results. In marketing, for example, a customer's gender, age, and purchase history might predict the likelihood of a future sale.
Predictive modeling techniques are often iterative involving the collection of data, the formulation of a statistical model, and the approximation of an outcome. The process is refined and validated as more data becomes available. The model may employ a simple linear equation or a complex artificial intelligence algorithm, mapped out by sophisticated software.
Predictive modeling algorithms are used widely in information technology (IT). Applications of predictive modeling include: spam filtering, customer relationship management (CRM), capacity planning, disaster recovery, engineering, meteorology, insurance risk, credit score, and marketing.