Weekly Question #6: Decision Trees

Leave your response as a comment on this post by Friday, June 23, 2017 at 11:59 PM. Remember, it only needs to be three or four sentences. For these weekly questions, I’m mainly interested in your opinions, not so much particular “facts” from the class! If you sign in using your AccessNet ID and password you won’t have to fill in the name, email and captcha fields when you leave your comment.

Answer one of the two questions below (not both):

  1. Name and describe a business question that you could answer using a decision tree. What data would you collect to perform the analysis? Don’t use an example we’ve covered in class.
  2. What advice would you give someone regarding how to select the right predictor variables for a decision tree analysis?

19 Responses to Weekly Question #6: Decision Trees

  • A decision tree could be used to help businesses find out which products in their company are the most profitable among consumers . The decision tree can answer questions on whether age plays a factor, or socioeconomic status. Will a product be more popular among one race or another? Cultures and Values? These questions can determine product profitability as well as how the company should target, place, and market certain products. The most important key component is choosing predictors that will influence the most positive (least error) outcome.

  • A decision tree can be used to get better estimates on what type of people are more likely to purchase store brand types of comestibles. Some good variables to use in this decision tree could be the income and whether or not the individual has children.

  • A decision tree could be used to decide whether to buy new software, build new software, or stay with the old program. Some data the could be collected would be if the software meets the company’s needs or not. Also if it is in the budget or not.

  • A decision tree could be used to understand the chance a person would buy a certain product from a business. One needs to collect data by getting information from previous customers and observe on what they buy. On picking the right predictor variable, one should pick the variable that creates the least amount of mistakes, or error.

  • The questions would be should we write off an account payable or invoice. The decision tree could break down the factors or predictors that would help the business in knowing whether they should still expect payment or write it off and move on. To select the predictors you would want to use information that directly relates to repayment like how long has the account been past due, have they not paid in the past, how large is the balance, etc.

  • 1. Where should a hospital devote resources to prevent Hospital Acquired Infections (HAIs)? The data I would collect are patient ID, diagnosis, procedure, equipment used, HAI acquired (Y/N), Type of HAI, if acquired.
    2. I would advise to think first of the most direct variables related to the business problem at hand. If HAI’s are your business problem, you could choose the patient’s age, however HAI’s affect patients across all ages-therefore age is likely not a direct cause of HAIs. Instead focus on the process inputs like the procedure and equipment which are more likely to have a direct impact on the patient’s likelihood of contracting an HAI.

  • A question most, if not all, businesses can ask is “who is purchasing our product/service most frequently”. This question can guide marketing efforts in order to focus on gaining new consumers in the same demographic as their current customers. This also works in trying to market to those who buy infrequently and gaining new customers.

  • One business question we could answer is whether or not a person would eat at a new vegan restaurant. We could use factors such as gender, age, income, martial status, lifestyle, kids, etc. Some advice on choosing the right predictors is to chose the ones that are statistically significant. Basically, chose the relevant predictors that make a difference in the output. If a factor, such a person’s first name, has no effect on whether he or she will eat at the restaurant, then it shouldn’t be included in the decision tree.

  • Like steam, decision tree can help company to know what kind of games is most popular. About the data, we may need to gather data in these ways: type of games, the price of games, age of the customers for each kind of game, the quality of the games etc. In my opinion, the price of the games is the first thing we need to collect because it is the most important limitation for customers to chose the games.

  • Use decision tree to decide whether to deliver gym advertisements to people’s e-mail. We may use the data about their salary, age, height, weight and their work time, etc. In my opinion, salary is the first factor to be considered to be the predictors.
    When we chose predictors, we should think about what factors can divide different groups significantly and properly.

  • (1) A possible business question that can be answered through a decision tree could be whether a company wants to expand by opening up a new business location. The predictor variables that I think would be needed are: how is the economy looking for the location you are interested in (that city perhaps), population in the location in which your business is interested, the demand for your product in that location, and what business competition would look like in that area.

    (2) I think these predictors would be a good start for the decision tree but it would ultimately depend on more specific parameters depending on the business and where they aspire to reach as far as their goals are. I think the advice necessary for this situation would be to narrow down the specifics for that individual business and their market environment.

  • I would think a good example of using decision trees would be helping a school district decide if there needed to be more public school added to a particular district.
    Business questions: Do more public schools (K-12) need to be added to the school district of Philadelphia County?

    Possible predictors/variables wold be: Census data: household income, household members, ages of each; proximity to a public school for the household; proximity to private schools for the household; availability of bus routes (public/private) among others.

    I would advise the collector of data to avoid obtaining information irrelevant to the analysis. Things such as SSN, Name and other personal information are irrelevant to this analysis. Also to canvas the designated area as completely as possible, using the most up to date census information. Outdated data will skew the results as population keeps growing and census screen are done only every 10 or so years.

  • 1. A business question that could be answered using a decision tree would be finding out where the best place is to put a restaurant location. The data I would collect would be average income of surrounding neighborhoods, the population of the neighborhood, the number of hotels in the area, the volume of cars passing by, foot traffic volume, are shopping stores near by?
    2. My advice of picking the right predictors would be to split the predictors until you only get one statistically significant outcome but make sure the predictors are relevant to the answering the main questions.

  • A decision tree could be used when asked: Should I send my advertisement via email/
    The data I would use is age, income, phone carrier with details ( could be null).
    I would use age because many elderly would rather receive an advertisement through the mail. Income is important to decide whether they have the capability to check their email daily. Phone carrier details are important to see whether they can check their email regularly on the go.

    To pick the right predictors you should split them until you get one statistically significant outcome.

  • A decision tree could be used to find which city someone should move to. The data needed for this could be job type, income, level of education, age, married, and number of children. To select the best predictor you should keep splitting until the data is together and the data is not so different from one another.

  • A business problem that can be answered by decision tree is when an insurance campany wants to find out what kind of customers would buy their new insurance. The data needed is age, income, education, whether they bought insurance before, and married or not.

  • You can use a decision tree to decide what type of start ups you want to invest money into. You would collect information on areas such as likely profitability, costs, time until becoming profitable, and would it be a positive impact on the view of the company. My advice for selecting the right predictors is to be aware of the issue at hand and only select such predictors that would directly affect the outcome of the decision you are making.

  • Hi Everyone!

    The question I would use a decision tree for is whether to continue to allow a customer to operate on credit. The data that would be necessary is the length of time the customer has been active, the amount spent by the customer on a monthly basis, the frequency of orders, the amount of days payments are outstanding, current outstanding debt, credit rating, and the types of products being bought. Based on the information a decision tree could predict whether the customer would continue to pay their bills or whether the customer will likely default on their debt.

    Have a great summer!

  • Decision trees are a good way to display events and actions. A business deciding whether or not to go through with a project could benefit from a decision tree to visualize the pros and cons of the project, such as profits/expenses, competitors’ action, or what happens if the project fails.

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