Scribd Logo
Upload

Welcome to Scribd!

  • 451 views

    Data Mining Project

    Uploaded by

    sriec12
    Logistics Regression model is the best suited model for this problem as it has minimum number of predictors, lower error values and maintains linear structure in lift charts compared to Multiple Linear Regression model. Exhaustive search helps in avoiding artificial increase in number of predictors for best results.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Data Mining Project

    Uploaded by

    sriec12
    451 views14 pages
    Logistics Regression model is the best suited model for this problem as it has minimum number of predictors, lower error values and maintains linear structure in lift charts compared to Multiple Linear Regression model. Exhaustive search helps in avoiding artificial increase in number of predictors for best results.

    Original Description:

    A

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Logistics Regression model is the best suited model for this problem as it has minimum number of predictors, lower error values and maintains linear structure in lift charts compared to Multiple Linear Regression model. Exhaustive search helps in avoiding artificial increase in number of predictors for best results.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    451 views14 pages

    Data Mining Project

    Uploaded by

    sriec12
    Logistics Regression model is the best suited model for this problem as it has minimum number of predictors, lower error values and maintains linear structure in lift charts compared to Multiple Linear Regression model. Exhaustive search helps in avoiding artificial increase in number of predictors for best results.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 14

    Decision Mining

    Introduction:
    Data mining, or knowledge discovery, is the computer-assisted process of digging
    through and analyzing enormous sets of data and then extracting the meaning of the data. Data
    Mining is the extraction of hidden, predictive information patterns from large databases. Data
    Mining is especially useful now-a-days when there is massive amount of data and identifying the
    useful portions of it can be a tedious job in itself.
    With data mining we can now try and predict the future trends rather than identifying
    them after they have already taken place. Data mining tools predict behaviors and future trends,
    allowing businesses to make proactive, knowledge-driven decisions. XLMiner is an add-in
    available for MS Excel that allows us to perform Data Mining on the data sets.

    Problem Solving:
    In this project we would like to solve a problem of Southwest in Calculating the Air Fares for
    the new airports introduced, and providing discounts for its customers.

    Using the Dataset we wanted explore the FARE by creating a correlation tables.
    We wanted to explore the categorical predictors by computing the percentage of flights in

    each category, using pivot tables.


    We would like to compare the best model in terms of the predictors between the stepwise
    regression to reduce the number of predictors and exhaustive search instead of stepwise

    regression.
    Predict the average fare on a route using exhaustive search.
    Compare the predictive accuracy of the model.

    Data Description:

    The Dataset Airfares is provided by professor.

    It contains real data that were collected for the third quarter of 1996, in which several

    new airports have opened in major cities, opening the market for new routes.
    The dataset has a total of 639 records; each record consists of 18 attributes or variables.
    In order to price flights on these routes, a major airline collected information on 638 air

    routes in the United States.


    Some factors are known about these new routes. A major unknown factor is whether

    Southwest or another discount airline will travel on these new routes.


    Southwest's strategy of covering only major cities, use of secondary airports,
    standardized fleet, low fares has been very different from the model followed by the older

    and bigger airlines.


    The presence of discount airlines is therefore believed to reduce the fares greatly.

    Data Code:
    S_CODE
    S_CITY
    E_CODE
    E_CITY
    COUPON
    NEW
    VACATION
    SW
    HI
    S_INCOME
    E_INCOME
    S_POP
    E_POP
    SLOT
    GATE
    DISTANCE

    Starting airport's code


    Starting city
    Ending airport's code
    Ending city
    Average number of coupons (a one-coupon flight is a non-stop flight, A
    two-coupon flight is a one stop flight, etc.) for that route
    Number of new carriers entering that route between Q3-96 and Q2-97
    Whether a vacation route (Yes) or not (No).
    Whether Southwest Airlines serves that route (Yes) or not (No)
    Herfindel Index - measure of market concentration
    Starting city's average personal income
    Ending city's average personal income
    Starting city's population
    Ending city's population
    Whether either endpoint airport is slot controlled or not; This is a
    measure of airport congestion
    Whether either endpoint airport has gate constraints or not; This is
    another measure of airport congestion
    Distance between two endpoint airports in miles

    PAX
    FARE (the response)

    Number of passengers on that route during period of data collection


    Average fare on that route

    Excel Sheet-Airfares.xls: (Click on the below excel sheet to view complete data)

    Step-1: To find out the best numerical predictor.


    Scatter plot is used to obtain the correlation between two characteristics. Where
    correlation implies that as one variable changes, the other variable will also change. Scatter plot
    may indicate a cause and effective relationship between the two characteristics. Due to the
    existence of third characteristics (or more), the scatter plot may affect the cause and both
    characteristics of interest.
    Sometimes, though we know that there is good correlation between two characteristics,
    we can use one variable to predict the other, particularly if one characteristic is easy to measure

    and the other isnt. For example, if we prove that weight gain in the first trimester of pregnancy
    correlates well with fetus development, we can use gain as a predictor. The alternative would be
    expensive tests to monitor the actual development of the fetus.

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    0

    Scatter Plot of Numerical Predictor (New) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    .00

    5000.00

    10000.00

    15000.00

    Scatter Plot of Numerical Predictor (HI) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    $15,000$20,000$25,000$30,000$35,000$40,000$45,000

    Scatter Plot of Numerical Predictor (S_Income) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

    Scatter Plot of Numerical Predictor (E_Income) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    0

    5000000

    10000000

    Scatter Plot of Numerical Predictor (S_POP) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    0

    5000000

    10000000

    Scatter Plot of Numerical Predictor (E_POP) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    0

    500

    1000

    1500

    2000

    2500

    3000

    Scatter Plot of Numerical Predictor (Distance) Vs Response (Fare)

    FARE
    $400.00
    $350.00
    $300.00
    $250.00

    FARE

    $200.00
    $150.00
    $100.00
    $50.00
    $0.00
    0

    10000 20000 30000 40000 50000 60000

    Scatter Plot of Numerical Predictor (Pax) Vs Response (Fare)

    By plotting scatter plots of all numerical predictor with response (Fare), we can say that
    the numerical variable Distance has a best correlation with the response (Fare). Therefore, we
    consider Distance as a Numerical Predictor.

    Step-2: To find the categorical predictor.


    Pivot table is a reporting tool that sorts and sums independent of the original data layout
    in spreadsheets, by dragging and dropping columns to different rows, columns, or summary
    positions. It can automatically sort, count, total or give the average of the data stored in one table
    or spreadsheet. The result is obtained in the form of summarized data, which will be available in
    the pivot table.
    Pivot table is a flexible tool for displaying data by rearranging the data in a variety of
    different ways. It is easy and useful to any reader of a report which is generated with pivot table
    and the reader can decide what to look at from which perspective just by dragging and dropping
    fields graphically. Pivot table can be used to geographically switch the placement of rows and
    columns. This can be used to automatically reorganize data.

    Pivot Table: (Click on the below excel sheet to view the complete data)

    Pivot Table of the Categorical Variables (Vacation, SW, Slot, Gate) and Response (Fare)
    After plotting Pivot table by dragging and dropping, we can say that the one with the
    highest total between the categories is the best Categorical variable. Therefore, we can say that
    Slot is the best Categorical variable in response to Fare.

    Step-3: To find the best suited model


    Multiple linear regression analysis is a model used to find the linear relationship between
    a quantitative dependent variables and a set of predictors. It is mainly used for selecting
    modeling step and the performance assessment depending on the goal.

    MLR Excel Sheet: (Click on the below excel sheet to view the complete MLR data)

    From the above result set we can say that using predictors that are uncorrelated with the
    dependent variable increases the variance of predictions. Therefore, we try to drop the actually
    correlated predictor with the dependent variable to increase the average error of predictors.

    Step-4: To find result set of Exhaustive Search


    Exhaustive search is used to evaluate subsets, for the moderate values of predictors. This search

    avoids the artificial increase in

    R2 , which will result in increase in number of predictors.

    Therefore, we use another criteria Mallows

    cp

    , which is full model with unbiased data but yet

    reduces the number of predictors for best result.


    Excel sheet of logistics regression model and its output: (Click on the below excel sheet to
    view the complete LR data)

    Step-5: Deciding the best suited model


    In order to avoid a perfect predictive model with loosely fitted data and a good explanatory
    model with low predictive accuracy. It is a very important step to be taken, to choose the
    modeling process to be used in the analysis. The model is treated as a good one when it has a

    minimum number of predictions. When

    R2

    is higher, the number of predictions increases,

    which indirectly effects the performance of the model.


    Comparison of Lift and Decile Charts
    MLR

    LR

    Lift chart (training dataset) Lift chart (training dataset)


    Cumulative
    FARE when
    sorted using
    predicted
    values

    40000
    30000
    20000
    Cumulative
    10000
    0
    200
    0 400

    Cumulative
    FARE using
    average

    # cases

    Cumulative
    SW when
    sorted using
    predicted
    values

    50
    40
    30
    20
    Cumulative
    10
    0
    100
    0 200

    Cumulative
    SW using
    average

    # cases

    Decile-wise lift chart (training dataset)


    Decile-wise lift chart (training dataset)
    2
    1.5
    Decile mean / Global mean

    1
    0.5

    3
    2.5
    2
    1.5
    Decile mean / Global mean
    1
    0.5
    0

    0
    Deciles
    Deciles

    Therefore by comparing RMSE, Average Errors, Lift Charts and Decile Wise Charts of
    both the model training dataset, we conclude that the model with minimum number of predictors
    performs perfectly.
    The RMSE value, Average Error Value is small for Logistics Regression model in
    comparison with MLR output. We also see from the lift charts that LR output maintains a linear
    structure.

    Finally we state that the Logistics Regression Model is the best model for calculating
    airfares in Southwest for newly introduced airports.

    Conclusion:
    We conclude that the data mining techniques are one of the best techniques which are
    used to find the perfectly suited model for an particular requirement. It is an easy software tool,
    which is available in the market for obtaining the best result set. By comparing the obtained
    result set of the two models we conclude that Logistics Regression (Exhaustive Search) is a best
    suited model for this particular problem.

    You might also like