What is predictive modeling?
predictive modeling is a strategy that includes the creation or selection of a model in an effort to project possible results associated with the action. This approach can be used in a number of situations such as creating goals for companies and other organizations, investment portfolio management or working and maintenance of customer relationships. The idea is usually to look closely at the resources at hand, identify a model that represents the possible use of these resources, and to predict what will probably occur if this particular use is actually implemented.
When used on investment activity, predictive modeling will get an investor to consider the impact of the acquisition or sale of assets on its investment portfolio. Several questions need to be addressed, for example, how well the asset integrates with other assets already in the portfolio. The investor will also want to consider how the portfolio will be affected if it is done in violation of the investor's expectation and what long -term benefits of holding the assetMenai in terms of achieving the goals set by the investor. By creating a model and then screening possible results, it is much easier to make informed decisions about any purchasing or sales activities.
Since it concerns the company's structural organization, predictive modeling can be used to prevent decisions that have a long -term negative impact on business profitability. For example, if the company is considering removing certain positions in the structure of the company, it is possible to create a model that shows the company organization without these positions. Using the idea of predictive modeling, it is possible to assign duties to positions that remain in the structure and project how well the undere the Under will perform a new approach. If the results are considered acceptable, the company can continue changes. If the expected result seems to be counterproductive, the business can leaveAccess and look for other ways to reduce expenses.
The concept of predictive modeling can also be used in terms of management with customers. Here is the idea to consider what type of impact will have some changes in the product lines, delivery options or order processes on the current clientele. If the model has to do with the implementation of an online order system that provides immediate order confirmation and speeds up the transport process, there is a great chance that changes will be strengthened with customers. If most of the existing clients are not for online ordering, changes may actually damage existing relationships, especially if the implementation makes other possibilities of ordering with more cumbersome habits. By predicting possible results, it is possible to avoid any changes that are likely to harm customer relationships, as well as to identify the changes that will strengthen these relationships and possibly to increase profits.