INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Executive Post Graduate Programme in Management

Course Outline

Course Code and Course Title Predictive Analytics

Course type Elective
Pre-requisites (if any) Quantitative Techniques
Course Credit 2
Total no. of sessions 16
Session Duration 75 minutes
Quarter VII
Year and Batch 2nd Year, AY 2023-24, EPGP 14
Sections (if any)

Instructor(s) Prof. Soumya Roy

Contact Details 0495-2809106(Off), soumya@iimk.ac.in
Office Faculty Block 1, Room No. 6
Consultation Hours Through Appointment

Introduction
The recent rise of analytics has resulted in a great demand for business analysts and the
trendwill only continue to rise. Predictive analytics is one of the important aspects of
business analytics. It is all about offering actionable business predictions through interesting
and meaningful patterns in data. It has been proven to be incredibly useful in industries such
as banking, insurance, telecom, retail, travel, healthcare etc. and has shown immense
positive impact on business decision making. Many companies are showing their inclinations
towards predictive analytics to thrive and compete against their competitors. The course
involves extensive hands-on exercises with different predictive analytic techniques using
statistical software R. The course will begin with exploratory data analysis followed by in-
depth discussion of predictive analytic tools with their applications in various domains.

Learning Outcomes/Course Objectives

At the end of the course, the students would be able to

 Develop an understanding and advanced knowledge about various business scenarios

where analytical tools can be applied.
 Study complex real-world business problems and issues using various analytical tools
and frameworks. (PLO 4.1, Emphasized)
 Evaluate the performance of various data analytical tools through efficient

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 implementation in R to determine the best course of managerial action for decision-
making.
 Communicate the results effectively to influence business decisions.

Textbooks and Learning Materials

Text Book
 Sanjiv Jaggia, Kevin Lertwachara, Alison Kelly, Leida Chen (2023). Business Analytics:
Communicating with Numbers. McGraw Hill Education. [Ref 1]
 James, G., Witten, D., Hastie, T., & Tibshirani, R. (2013). An Introduction to Statistical
Learning: with Applications in R. New York: Springer-Verlag.
(web: https://www.statlearning.com/) [Ref 2]

Reference Books

 Siegel, E. (2016). Predictive Analytics. Wiley.

 Hyndman, R. J. &Athanasopoulos, G. (2016). Forecasting: Principles and Practice.

Otexts. (web: https://www.otexts.com/fpp3/)
 Seema Acharya (2018). Data Analytics using R. McGraw Hill Education

Additional Readings (if any):

Readings:
1. How to Design a Business Experiment (HBSP). Oliver Hauser and Michael Luca (2015).
(https://hbsp.harvard.edu/product/H02FSL-PDF- ENG?
Ntt=HOW+TO+DESIGN+A+BUSINESS+EXPERIMENT&itemFindingMethod=Search)

2. When to Act On a Correlation and When Not To. (HBSP). David Ritter (2014).
(https://hbsp.harvard.edu/product/H00Q1X-PDF- ENG?
Ntt=When+to+Act+On+a+Correlation+and+When+Not+To&itemFindingMethod=Searc h)

3. Analytics for Marketers (HBSP). Fabrizio Fantini and Das Narayandas

(https://hbsp.harvard.edu/product/R2303E-PDF-ENG?activeTab=include-
materials&itemFindingMethod=#educator-copy)

4. Are People Analytics Dehumanizing Your Employees? (HBSP). David De Cremer and Jakob
Stollberger (https://hbsp.harvard.edu/product/H072TA-PDF-ENG?activeTab=include-
materials&itemFindingMethod=#educator-copy).

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5. Using Analytics to Prevent Customer Problems Before They Arise (HBSP). Bruce D.
Weinberg and Paul D Berger (https://hbsp.harvard.edu/product/H04CZM-PDF-ENG?
Ntt=analytics)

6. How a German Manufacturing Company Set Up Its Analytics Lab (HBSP). Niklas Goby,
Tobias Brandt, Dirk Neumann (https://hbsp.harvard.edu/product/H04MRJ-PDF- ENG?
Ntt=how%20a%20german)

7. Data Science and the Art of Persuasion (HBSP). Scott Berinato

(https://hbsp.harvard.edu/product/R1901K-PDF- ENG?Ntt=data%20science%20and%20the
%20art%20of%20persuasion)

Cases:
1. Healthcare Analytics: Vanderbilt University Medical Center- Elective Surgery Schedule
(HBSP). Lauren E. Cipriano et al. (2015) (https://hbsp.harvard.edu/product/W15166-PDF-
ENG?Ntt=2.%09Healthcare+Analytics%3A+Vanderbilt+University+Medical+Center-
+Elective+Surgery+Schedule&itemFindingMethod=Search)

2. GoodBelly: Using Statistics to Justify the Marketing Expense (HBSP). Hyun-Soo Ahn (2012)
(https://hbsp.harvard.edu/product/W92C52-PDF- ENG?
activeTab=overview&itemFindingMethod=#reviews-section)

3. HR Analytics at Scaleneworks (HBSP). Rahul Kumar and U. Dinesh Kumar (2016).

(https://hbsp.harvard.edu/product/IMB551-PDF- ENG?
Ntt=3.%09HR+Analytics+at+Scaleneworks+-
+Behavioral+Modeling+to+predict+renege&itemFindingMethod=Search)

4. The Indian Premier League: Gauging Player Performance (HBSP). Soumya Roy et
al. (2022).(https://hbsp.harvard.edu/product/W25528-PDF- ENG?
activeTab=overview&itemFindingMethod=)

5. Keeping up with the Shelves: Swaroop's Ordering Conundrum (Case Centre). Soumya Roy
et al. (2022). (https://www.thecasecentre.org/products/view?id=187814)

Technology and Software

The course will be delivered under the environment of the statistical software R,
which is powerful and free.
• R can be downloaded at the link below: http://www.cran.r-project.org/
• R studio is a free platform for both writing and running R, available
atwww.rstudio.org. Some students find it friendlier than basic R (especially in
windows OS).
• The learning curve is very steep. Students can become proficient in a few weeks.
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 Some manuals are very helpful to learn R, e.g., http://cran.r-
project.org/manuals.html
• Limited software instruction, in-class demonstration, and code to accompany
lectures and assignments. We do not assume that you have used R in a previous
class. However, this is not a class on R. Like any language, R is only learned by
doing. You should install R as soon as possible and familiarize yourself with basic
operations.
• Additional resources: Youtube intros to R, e.g., the series from Google Developers.

Other Resources (Journals, Internet Websites)

Journals
Management Science (web: https://pubsonline.informs.org/journal/mnsc)
Marketing Science (web: https://pubsonline.informs.org/journal/mksc)
INFORMS Journal on Applied Analytics (web:
https://www.informs.org/Publications/INFORMS-Journals/INFORMS-Journal-on-Applied-
Analytics)
Computational Statistics and Data Analysis (web:
https://www.journals.elsevier.com/computational-statistics-and-data-analysis/)
The R Journal (web: https://journal.r-project.org/)
Journal of Statistical Software (web: http://www.jstatsoft.org/index)

Internet Websites
http://analytics-magazine.org/
https://www.informs.org/Community/Analytics
https://www.kaggle.com/
http://www.r-bloggers.com/
http://blog.revolutionanalytics.com/r/
http://chance.amstat.org/
http://www.statslife.org.uk/significance
https://fivethirtyeight.com/

Pedagogy – Learning Process

The course is a mix of lectures, case discussions, hands on training with statistical software R. The
predictive analytic methods/techniques will be discussed in each session led by the instructor with
elaborate data analysis followed by student led case discussions in a variety of industry settings.
Students must bring their laptop in each class. Homework and assignments will be assigned to the
students at regular intervals.

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Evaluation Components/Assessment of Student Learning

Assessment Weight Remarks PLO Tested

Tool
End term Exam 50% This component will evaluate students’ ability to PLO 4.1
understand various predictive analytics methods
and to apply them in the context of business
problems. The ability to interpret the R output will
also be evaluated.
Class 30% This component will judge students’
Participation responsiveness and ability to adapt to the new
methods and techniques.

Project 20% “Projects” will be assigned to the students in

groups.
The groups will be decided on the first session
itself. Each group will identify a relevant project
topic and provide a detailed analysis using the
predictive analytics methods discussed in the
class.
Project will help students demonstrate their ability
in handling the complex business problems.

Session Plan

Session* Module* Topic** Chapter No.

1 Introduction to Analytics Paradigm, Types of Supplemental
Predictive Analytics Problems in Analytics, Prediction Materials
Effect
2 Introduction to R Installing R, Installing R package, Chapter 2 of Ref 2,
Loading R package, Reading Data Sets Supplemental
in R, Basic Mathematical Operations Materials
in
R
3-4 Data Visualization Data Visualization, Descriptive Chapter 2 of Ref 2,
and Basic Statistics Statistics, Demo using R Supplemental
Materials

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5-9 Linear Models: Linear regression, Model building Chapters 6 & 7 of
Predictive Analytics through Dummy, Polynomial and Ref 1,
Interaction variables, Model Chapter 3 of Ref 2.

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 using Linear validation, Model Diagnostics,
Regression Multicollinearity, Model deployment,
Demo using R

10 Cross-Validation Training Error Rate and Test Error Chapter 7 of Ref 1,

Rate, Hold-out Sample, Validation Set Chapter 5 of Ref 2
Approach, Demo using R

11-14 Classification Logistic Regression, Sensitivity and Chapter 8 of Ref 1,

Problem: Specificity, ROC curve, Demo using R Chapter 4 of Ref 2
Generalized Linear
Models
15-16 Time Series Time Series Components, Modeling Supplemental
Forecasting Time Series Data using Box– Materials
Jenkins method, Forecasting, Demo
using R

End Term Examination

* Tentative
** Each topic will be first demonstrated using caselet.
*** Supplemental Materials will be provided, whenever required.

Additional Instructions (if any):

 The End-term examinations will be for 120/150 minutes.

*ACCSB Sub Goal 4.1 to be accessed in the course: Critically examine organizational
problems and issues, using various analytical tools and frameworks.

Group Project:
A project proposal containing the project title, objectives, data source, etc., should be
submitted for approval on or before the completion of eighth session. Once the topic for the
project is decided, each group should start working on the project. Each group should
regularly share the progress in the project work with the instructor and submit an interim
report at the end of the thirteenth class. The deadline for submission of the final project
report will be intimated at the end of the penultimate session. The length of the final project
report should be at least four pages but no more than ten pages (A4 size, font size 12). The
final report must contain the following:

 A title of the project with introduction and motivation for the problem
 Data Source(s)

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  Exploratory Analysis and Descriptive Statistics
 Detailed Discussion on the Application of business analytics methods
 Results
 Conclusion

Data Source (s), Tables and graphs and R codes should be provided in the “Appendix”
section of the report. Each group should submit a soft copy (preferably in PDF format) of the
project report along with the relevant data set through Moodle. Each report must include
the names of all the group members along with the group number. Each member of the
group should contribute in the preparation of the final report.