Scenario: You are working for Company X as a Data Scientist. Company X has been commissioned by an insurance company to develop a tool to optimize their marketing efforts. Your objective is to determine which set of customers the marketing firm should contact to maximize profit.
• The cost of marketing to a particular customer is $30. This cost is paid regardless of whether the customer responds to our marketing or not.
• Only if a customer responds to our marketing, do we earn a profit.
• Profit does NOT include the marketing cost.
• Total Profit = Average profit per responding Customer * Number of customers responding – Number of customers to whom you marketed * $30
• Y variable = responded (i.e., column V in “training.candidate.xlxs”)
• X variables = everything else
• Profit variable is in column “W” of the “training.candidate.xlxs” and not in the testing data
Data: The insurance company has provided you with a historical data set (training.candidate.xlxs). The company has also provided you with a list of potential customers to whom to market (testingCandidate.xlxs). From this list of potential customers, you need to determine yes/no whether you wish to market to them.