The purpose of this assignment is to analyze whether or not a model should be deployed based on performance measures and cost. There are two parts to this assignment, and you will submit a separate Word document for each part.
Part 1 For the first part of the assignment, refer to the “Evaluating Models” resource when answering Questions 3-4. Address the following questions in complete sentences and include relevant calculations in the submission.
Question 1: The textbook describes a situation where a false positive is worse than a false negative. Describe a situation from the medical field (e.g., screen testing for a virus) where a false negative would be worse than a false positive. Explain why it would be worse.
Question 2: In a typical churn model, in which interceding with a potential churner is relatively cheap but losing a customer is expensive, which error is more costly, a false negative or a false positive (where positive = customer predicted to churn)? Explain.
Question 3: Contingency Tables for three different customer churn models are provided in the “Evaluating Models” resource. Recall that “churn” represents a measure of customer attrition (0 = Customer did not leave; 1 = Customer leaves). Using the “Questions 3 and 4 Template” as a starting point, calculate the following for each churn model using Microsoft Excel: Accuracy Overall Error Rate Sensitivity Specificity False Positive (FP) Rate False Negative (FN) Rate Proportion of True Positives Proportion of True Negatives Proportion of False Positives Proportion of False Negatives Based on your answer to the previous two questions in this assignment, choose the best model and defend your selection. Include relevant calculations.
Question 4: The Estimated Costs Table found in the “Evaluating Models” resource shows the estimated costs associated with each outcome. Using “Questions 3 and 4 Template” as a starting point, calculate the costs associated with each model from the previous exercise. Include relevant calculations. Based on this analysis, which model would you choose to implement, and why? If the success rate of the intervention could be increased to 30% without increasing the cost of the intervention, what effect do you think that would have on your conclusion? Include all relevant calculations.
Part 2 For the second part of the assignment, write a 250-word executive summary that explains your analysis of the models from the “Evaluating Models” resource. Determine the best model based on the totality of your analysis. Make recommendations about whether or not the model should be deployed based on cost. When considering deployment, remember to factor the cost of not deploying any model and include this in your deployment rationale. General Requirements: Submit the two Word documents and your Microsoft Excel file to your instructor. Get Statistics homework help for you today