Question: Data Mining for Business Analytics: Concepts, Techniques, and Applications in R Answer the following questions for the transaction data model in Textbook 5.1: a. Calculate

Data Mining for Business Analytics: Concepts, Techniques, and Applications in R

Answer the following questions for the transaction data model in Textbook 5.1: a. Calculate the sensitivity and specificity of the model. b. Another analyst comments that you could improve the accuracy of the model by classifying everything as nonfraudulent. If you do that, what is the error rate? c. Assume that the cost from failing to identify a fraudulent transaction is 10 times of the cost from classifying a non-fraudulent transaction as fraudulent. Is the method proposed by the analyst in part b better than the data mining model in problem 1? Show necessary calculations to support your result.

DATA MINING FOR BUSINESS ANALYTICS CONCEPTS, TECHNIQUES, AND APPLICATIONS IN R Galit Shmueli Peter C. Bruce Inbal Yahav. Nitin R. Patel Kenneth C. Lichtendahl Jr. WILEY

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