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21 May 2024 | Posted by angela.tuduri

Predictive Model Development | Approach and Methods

In the era of Big Data, the ability to predict future events has become an invaluable tool for businesses and organizations of all types. Predictive models are capable of analyzing large data sets and identifying patterns that allow anticipating trends and making more informed decisions.  

In this article, we will explore the development of predictive models, delving into the most commonly used approaches and methods.  

MASTER OF SCIENCE IN BIG DATA | LA SALLE-URL

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What are predictive models?  

Predictive models are statistical or machine learning tools that are trained on historical data to forecast future events. These models are based on the idea that past events contain valuable information that can be used to predict what will happen in the future.  

How do predictive models work?  

The development of a predictive model involves a series of steps:  

  1. Data collection: The first step is to collect a set of data that is relevant to the problem you want to solve. This data can come from a variety of sources, such as internal databases, surveys, sensors, or social networks.  

  1. Data preparation: Data must be cleaned and prepared before it can be used to train the model. This involves removing outliers, handling missing data and transforming variables as needed. 

  1. Model selection: There are different types of predictive models, each with its own strengths and weaknesses. Some of the most common models include linear regression, decision trees, artificial neural networks, and time series models.  

  1. Model training: The model is trained on the prepared data set. This process involves adjusting the model parameters so that it can learn patterns in the data.  

  1. Model evaluation: Once trained, the model is evaluated on a different data set to estimate its performance. This is important to ensure that the model is generalizable and can accurately predict future events.  

  1. Model implementation: The final model is implemented in the desired application or process. This may involve integrating it into an existing software system or creating a new application from scratch. 

Approaches to the development of predictive models  

There are two main approaches to predictive model development:  

  • Rule-based approach: This approach is based on the creation of rules or heuristics that define how data should be classified or predicted. The rules can be based on expert knowledge or data analysis.  

  • Data-driven approach: This approach uses machine learning techniques to train a model from the data. The model learns to identify patterns in the data and make predictions without the need for explicit rules.  

Methods for developing predictive models  

There are several methods for developing predictive models. Some of the most common methods include:  

  • Linear regression: this method is used to predict continuous values. It can be used to predict the price of a house or the demand for a product.  

  • Decision trees: This method is used to classify data into categories, such as classifying customers as high or low credit risk.   

  • Artificial neural networks: Used to model complex relationships between variables, artificial neural networks are useful for prediction problems that are difficult to solve with traditional methods.  

  • Time series models: Helps predict future events in a time sequence. It can predict stock prices or electricity demand. 

The choice of the appropriate method will depend on the specific problem to be solved, the available data and the available resources.  

Related education 

Predictive modeling is a powerful tool that can help companies and organizations make better decisions, improve efficiency and reduce risk. Developing predictive models involves a series of steps and decisions, but with the right approach and method, you can create a model that is accurate and useful for your intended application.  

With the Master's Degree in Big Data Engineering from La Salle-URL you will be trained both from a technological and analytical point of view and you will be trained in state-of-the-art technologies for the management of large volumes of data. 

MASTER OF SCIENCE IN BIG DATA | LA SALLE-URL

BOOST YOUR FUTURE!

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