Data Explanation: Same As the Data Used in Practicum 3

Lab for Statistical Decision Theory

Data Explanation:Same as the data used in Practicum 3

Problem 1

For the target TAR1,

(a) Repeat Practicum 2 with exactly the same options used in the practicum.

(b) Write down the profit equation for each decision where p2 is the probability for "Tar1=2" and p1 is the probability for "Tar1=1'? (Note: probability for TAR1=0=1-p1-p2)

(c) Suppose the company can mail all customers without coupon. Create a variable representing the profit of this action. (Note: The revenue for one ordmail is $20 and it cost $0.5 per mail)

(d) Suppose the company can mail all customers with coupon. Create a variable representing the profit for this action. (Note: The coupon worth $2 for each customer who responses and the customer suppose to buy 10% more if there is a coupon.)

(e) Create a variable representing perfect prediction with coupon.

(f) Use variable "CP_tar1_" representing the profit based on the model profit matrix or use ordmail to compute the profit representing the model profit matrix.

(g) Add another Data Source (use data set CAMPSCR), one Score Node, and one SAS code node. You need to make necessary changes in all three nodes. In the SAS code node, you want to produce a summary table that contains the actual class (original value for TAR1), the predicted class, number of cases in each class, profits for (c), (d), (e), and (f).

(h) What is the model performance compare with the perfect prediction with coupon?

(i) What is the model performance comparing with "Mail All without Coupon"?

(j) What is the model performance comparing with "Mail All with Coupon"?

(k) Make your conclusion.

Problem 2

(a) Repeat part (a) in Problem 1 except using the identity profit matrix.

(b) Write the profit equation as in (b) of Problem 1.

(c) Compute the average profit for four different profits given in Problem 1.

(d) Make your conclusion.

Problem 3

We know the proportions for "ordmail=0", "ordmail=1", "ordmail=2" in the sample are about 0.34, 0.21, 0.45, respectively. And the populations in the population are about 0.67, 0.105, and 0.225, respectively. What kind adjustment needs to make? What are the four profits look like with the appreciate adjustment?

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