W08 Tutorial Exercise

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Simon Fraser University *

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Information Systems

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Dec 6, 2023

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W08 Tutorial Exercise As you work through the tutorial in class, insert your responses to the following questions in this word document. Please then submit one copy per team through Canvas. Name__________________________________ Student Number___________________ Name__________________________________ Student Number___________________ ------------------------------------------------------------------------------------------------------------------------------------ This has slightly more detailed instructions than Exercise 8.3.5 in the text. Answer this one! Exercise 8.3.5. Run the two-node neural network model with all of the remaining variables used as predictors. Use the three newly computed variables (Log.LastDonAmt, Log.AveDonAmt, and New.Region) as in the previous models , not the original variables. Make sure you do not enter the target, MonthGive, or Sample into the predictor list. a) Compare your new model with the MixedCCS2 model by generating lift charts on both the estimation and validation data sets. Copy them into this Word document. Briefly describe your results, comparing the estimation and validation lifts. The lift chart shows a good lift. Both lines meet at the 60% of sample proportion, which means we can have about 90% responses from the targets with only targeting 60% of the total donors. On the Estimation Lift Chart the NNHL2New does a better result while on the Validation Lift Chart the MixedCCS2 does a better result.
Because on the Validation Lift Chart, the logistic regression (MixedCCS2) does a better result, with approximately 40 percentile level. It shows that there is no further nonlinear effects for the neural network to pick up. b) Also compare your validation lift chart with the MixedCCS2 and NNHL2 lift in Figure 8.9. Do you know anything more about the relations in the data that you did not know before generating these last lift charts? The NNHL2.New seems to have a lower percentile level compared to the NNHL2 in Figure 8.9. Also, in the Figure 8.9, the two lines meet at about 40% of Sample Proportion, while they meet at around 60% in the validation lift chart. It means there is a chance to capture the same percentage of responses from targeting less sample, suggested from the lift chart of Figure 8.9. Therefore, the first five predictors suggested a better result. c) A question to challenge your understanding and creativity: Do these results suggest any next steps? (Hint: Can we sell a black box to managers?)
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