Simafore provides tools and expertise to:
The Analytics Compass Blog is aimed at two types of readers:
individuals who want to build analytics expertise and
small businesses who want to understand how analytics can help them improve their business performance.
If you fall into one of these categories, join hundreds of others and subscribe now!
In part 1 we gave a brief introduction to logistic regression and indicated when it might be appropriate to use it in business analytics settings. Probably the best definition of Logistic regression is this " ... a mathematical modeling approach in which the best-fitting, yet least-restrictive model is desired to describe the relationship between several independent explanatory variables and a dependent dichotomous response variable".
In this previous article we described how to construct basic tools such as the "confusion matrix" and Lift/Gain charts for evaluating classification models used for business analytics and predictive analytics. In this article we describe another common evaluation tool - the Receiver Operating Characteristics (ROC) chart and its Area Under Curve (AUC).
The process of developing models for advanced business analytics deployment follows a process that is similar to this diagram.